Court Opinion

ID: 5081451
Source: CourtListenerOpinion
Date Created: 2021-10-01 12:35:09.002929+00
Date Added: 2024-06-11T08:20:14.135891
License: Public Domain

COHEN, Justice,
dissenting on Motion for Rehearing.
This hard case confounds us again. Of course, we are in good company, along with *633a distinguished federal court of appeals. First Nat’l Bank v. Pursue Energy Corp., 784 F.2d 659 (5th Cir.1986), vacated by, 799 F.2d 149 (5th Cir.1986). Pursue involved the same legal issue, the identical lease provision, and comparable controversy on the panel. At last, however, that court decided the issue on the merits, something we have not yet done in two attempts.
The parties agree on little, except that 1) this lease is not ambiguous, 2) it needs to be authoritatively construed by the Texas Supreme Court, and 3) they do not want a new trial to determine which clause applies. I agree with both of them on these three points. Thus, I vote to reverse the judgment, to hold that royalties are payable under the gas clause, subsection 3(b)(1), and to remand the cause for trial on damages for breach of contract, for conversion, and for all other claims that appellants assert. My reasons are stated in my opinion on original submission. See Schwartz I, 727 S.W.2d 289, 290-93 (Tex.App.—Houston [1st Dist.] 1987, writ ref'd n.r.e.); see also Tex.Nat.Res.Code § 86.002(8) (Vernon Supp.1992) (defining sour gas as “gas”). I would sustain points of error 3, 5 through 17, and 19 through 21. I would overrule points of error 1, 2, 4, and 18 because I agree with appellee that the law of the case doctrine does not apply here. It does not apply because, on original submission in Schwartz I, I was able to gamer only one vote, mine, for my position. Now, on rehearing five years later, that is still the case. At least, I have been able to hold my own.
The majority’s decision ordering a new trial to determine which lease clause applies is unpopular with the parties, to say the least. Schwartz says:
The only extrinsic fact that is relevant is not in dispute. Hydrogen sulfide is produced at the well head and sulfur is not produced at the well head. Hydrogen sulfide is gas and hydrogen sulfide is not a synonym for sulfur.... Both parties have argued that custom and usage is not material.... This court is forcing the parties to try this case on an ambiguity theory that both parties contend is incorrect_ It is respectfully submitted that neither party has any clue as to what type of evidence to present, what objections to make, or what issues to present to the jury. The vast majority of the evidence that was presented by both sides was not disputed.
Prairie Producing Company is not happy, either. It says:
The court’s opinion ... will result in a retrial of this case. This is most unfortunate because the case begs for resolution by our supreme court, an unlikely event based on this court’s decision to remand. ...
At trial, the parties agreed at the close of the evidence that there was no disputed fact issue except reasonable attorney’s fees. Appellants did not propose or submit a jury issue asking what industry custom is or which royalty clause applies, either in the pretrial order or at the close of the evidence. Both sides moved for an instructed verdict. On this record the trial judge properly rendered an instructed verdict_ The facts the parties developed at trial were offered as context for interpreting the lease, not as extrinsic evidence to create or explain an ambiguity. ... Appellants have never cited a single authority that would admit evidence of industry custom on these facts.... Both sides were surprised by the court’s finding that the lease is ambiguous and there is a fact issue to be resolved.
Let us have mercy on these parties. They have suffered enough. The public interest, as well as the private interest of the litigants, is best served by a decision on the merits because a finding that the lease is ambiguous sets no precedent. It will lead to litigation in many other cases. Under these circumstances, any decision we-could reach is better than none at all.
Prairie is right when it says this case begs for resolution by the Texas Supreme Court. I was surprised and disappointed when the supreme court refused to decide this issue in 1987, on writ of error from Schwartz I. Clauses like this have been used in Texas mineral leases for at least 60 *634years. See Sun Oil Co. v. Madeley, 626 S.W.2d 726, 727-28 (Tex.1981). Schwartz declares that there are tens of thousands of such leases in force in Texas, and it is obviously no coincidence that the Mississippi lease construed by the Fifth Circuit in Pursue is identical to this one. The widespread use of this particular provision is suggested by the fact that these leases are printed (not typed) on paper prominently displaying the name “Pound Printing and Stationery Company.”
This is an important case. Although I originally joined the majority opinion, I now think we should resolve this issue on its merits. Then, the supreme court should decide who is right.
I respectfully dissent.