Court Opinion

ID: 9346333
Source: CourtListenerOpinion
Date Created: 2022-12-19 00:09:42.664304+00
Date Added: 2024-06-11T17:15:26.046837
License: Public Domain

Opinion filed December 15, 2022

                                                   In The

            Eleventh Court of Appeals
                                               __________

                                        No. 11-21-00033-CV
                                            __________

     RUSTIC NATURAL RESOURCES LLC (F/K/A RUSTIC
   RESOURCES, LLC), RUSTIC LAND HOLDINGS, LLC, AND
    TORTOISE HOLDINGS, LLC, Appellants/Cross-Appellees
                                                       V.
              DE MIDLAND III LLC AND ENDEAVOR ENERGY
                RESOURCES, L.P., Appellees/Cross-Appellants

                            On Appeal from the 142nd District Court
                                    Midland County, Texas
                                Trial Court Cause No. CV54515

                                               OPINION
        This appeal concerns the interpretation and application of the terms of a
mediated settlement agreement (MSA) executed by Appellants (the Rustic parties)
and Appellees, DE Midland III LLC and Endeavor Energy Resources, L.P. 1 After

        1
            For ease of reference, we also refer to Appellants, collectively, as either “Rustic” or “the Rustic
parties.”
the execution of the MSA, the parties continued to negotiate the inclusion of other
conditions to their agreement. However, a dispute arose over proposed conditions,
including the execution of a stipulation and cross-conveyance (stipulation) between
Appellants and Endeavor, as well as the specific terms of several joint operating
agreements (JOAs) which the MSA required that the parties execute to govern their
future relationships. After the parties’ post-MSA negotiations failed, Appellees filed
a joint motion for summary judgment to enforce the MSA. The trial court granted
the motion and entered judgment in favor of Appellees. In its judgment, the trial
court further ordered Appellants to execute the versions of the stipulation and JOAs
proposed by Appellees.
      Appellants appeal the trial court’s grant of summary judgment in favor of
Appellees. In three issues, Appellants contend: (1) the trial court erred when it
granted summary judgment and found that the parties were bound by the MSA,
despite the plain intent of the parties to continue negotiating essential terms of the
MSA, which left unresolved a multitude of critical issues related to mineral interest
ownership and the rights and remedies of the parties; (2) the MSA merely constitutes
an “agreement to agree” because it left the essential terms of the agreement open to
further negotiation; and (3) the trial court impermissibly supplied the missing
essential terms of the agreement and imposed upon Appellants a deal to which they
did not agree. Additionally, Appellees filed a conditional cross-appeal in which they
urge us to consider the merits of the underlying title dispute in the event that we hold
that the MSA is unenforceable. For the reasons discussed below, we reverse and
remand.
                       I. Factual and Procedural Background
      The underlying dispute that resulted in the execution of the MSA involves the
ownership of certain mineral interests. Appellants claim mineral interest ownership

                                           2
in certain depths under thirty-nine tracts of land located in Midland County. The
origins of this title dispute concern a complicated web of farmout agreements and
assignments that were executed in the 1960s and 1970s. Each disputed tract is
subject to a farmout agreement with a continuous drilling program. Under the terms
of the continuous drilling programs, if the farmee drills a well on a tract, the farmee
earns an assignment of that tract for depths that extend to 100 feet below the total
depth of each well drilled on the tract by the farmee.
      Appellants’ predecessors-in-interest—we refer to them as the Baxter Group—
held interests in the subject tracts. Through a series of farmout agreements and
subsequent assignments, the Baxter Group conveyed its rights and interests to
John L. Cox.
      The Baxter Group first executed a farmout agreement with Cox.               This
instrument, referred to as the 1969 Baxter Group/Cox Farmout, concerned nineteen
of the subject tracts. Soon after this, the Baxter Group assigned “all of their right,
title and interest” in the nineteen farmout tracts, from “the surface of the ground to
the base of the Wolfcamp formation” to Cox. This instrument, referred to as the
First Baxter Group/Cox Assignment, recited that the parties were executing a single
blanket assignment for their convenience, rather than a separate assignment for each
tract drilled upon as per the terms of the continuous drilling program of the farmout
agreement. This assignment further included a “Reassignment Clause,” which
provided that upon completion of the continuous drilling program, Cox would
reassign any interests for the interval between the depth of 100 feet below the total
depth drilled on each tract and the base of the Wolfcamp formation. It is undisputed
that Cox drilled and completed wells on all nineteen tracts, but often not to the base
of the Wolfcamp formation. Thus, under the terms of the continuous drilling
program, Cox arguably left “unearned” some intervals between 100 feet below the

                                          3
total drilling depth and the base of the Wolfcamp formation. Because the Baxter
Group had already conveyed their interests via the First Baxter Group/Cox
Assignment, they did not execute any further assignments to Cox for these tracts
after a well was successfully drilled.
      Next, for the remaining twenty tracts that are in dispute, the Baxter Group
executed two other assignments to Cox (referred to as the Second and Third Baxter
Group/Cox Assignments).          These two assignments differed from the First
Assignment in one significant respect: they covered interests from “the top of the
Spraberry formation down to the base of the Wolfcamp formation,” rather than from
“the surface of the ground to the base of the Wolfcamp formation.” It is undisputed
that Cox drilled and completed wells on all twenty tracts as well, but often not to the
base of the Wolfcamp formation. Again, because the Baxter Group had already
assigned their interests in the farmout tracts to Cox, via the Second and Third
Assignments, from “the top of the Spraberry formation down to the base of the
Wolfcamp formation,” they did not execute any further assignments to Cox after a
well was subsequently drilled.
      Decades later, in 2018, the successors-in-interest to John L. Cox—JM Cox
Resources, L.P., Alpine Oil Company, and James Kelly Cox—executed an
assignment purporting to convey Cox’s interests in the tracts to DE Midland. DE
Midland then executed an assignment purporting to convey some of its interests in
the tracts to Endeavor. In the underlying suit, Appellants’ primary claim is that by
drilling wells on these tracts, Cox failed to earn title to all of the depths which Cox’s
assignment to DE Midland (and therefore DE Midland’s assignment to Endeavor)
purported to convey.
      In 2018, Endeavor filed suit against JM Cox Resources, L.P., Alpine Oil
Company, James Kelly Cox, and Texas Settlers Resources, Inc. for trespass to try

                                           4
title and to remove a cloud on its title. Appellants intervened in the case and also
asserted claims for trespass to try title and to quiet title. Soon thereafter, Endeavor
nonsuited the Cox Defendants and Texas Settlers. Appellants then amended its
Petition in Intervention and joined DE Midland and Endeavor as defendants to its
title claims.
       In their operative pleading, Appellants claimed (1) title to certain depths in all
thirty-nine farmout tracts and (2) title to all depths claimed by the farmees in twenty-
six of the farmout tracts. Throughout the trial court proceedings, the parties referred
to these two distinct types of claims as the “Unearned Depths” claims and the
“Terminated Depths” claims. As to the “Unearned Depths” claims, Appellants
claimed title to depths ranging from 100 feet below the total depth of any well drilled
by Cox to the base of the Wolfcamp formation. In that regard, Appellants asserted
that Cox never earned an ownership interest in those depths, and therefore his
successors-in-interest (DE Midland and Endeavor) never acquired title to those
depths. As to the “Terminated Depths” claims, Appellants asserted that other
interests as to certain depths which Cox did earn have since fully terminated under
the terms of the farmouts and assignments.
       The parties filed extensive motions for summary judgment. Appellees each
filed motions for summary judgment challenging Appellants’ “Terminated Depths”
claims, and Endeavor filed a motion for partial summary judgment challenging
Appellants’ “Unearned Depths” claims, which DE Midland adopted. Appellants
filed a motion for summary judgment based on contract interpretation. Although the
trial court held a hearing on these motions, it did not rule on them. While these
motions were still pending, the parties proceeded to mediation and executed the
MSA at issue in this appeal.

                                            5
      The MSA contains only seven paragraphs, spanning two pages.                The
controversy before us primarily turns on the language in the first two paragraphs,
which require the execution of several additional key documents by an agreed
deadline—the stipulation and cross-conveyance, and the JOAs. We examine the
language of the MSA in our analysis below.
      After the parties executed the MSA, they commenced negotiating the terms
of the stipulation and the JOAs.        These negotiations were contentious and
necessitated three agreed extensions of the original agreed deadline for the execution
of the JOAs and the stipulation and cross conveyance between Appellants and
Endeavor. The parties’ negotiations ultimately failed. As a result, Appellees filed a
joint motion for summary judgment to enforce the terms of the MSA. Appellants
filed a response, and after a hearing, the trial court granted Appellees’ joint motion
and denied all other relief not granted in its order. Further, the trial court ordered
Appellants to execute the most recent versions of the disputed documents that were
prepared and proposed by Appellees. This appeal followed.
                                    II. Analysis
      A. Standard of Review – Summary Judgment
      We review a trial court’s grant of a summary judgment de novo. Concho Res.,
Inc. v. Ellison, 627 S.W.3d 226, 233 (Tex. 2021) (citing Valence Operating Co. v.
Dorsett, 164 S.W.3d 656, 661 (Tex. 2005)). To prevail under the traditional
summary judgment standard, the movant has the burden to establish that there is no
genuine issue of material fact and that it is entitled to judgment as a matter of law.
TEX. R. CIV. P. 166a(a), (c); ConocoPhillips Co. v. Koopmann, 547 S.W.3d 858, 865
(Tex. 2018); Provident Life & Accident Ins. Co. v. Knott, 128 S.W.3d 211, 216 (Tex.
2003). If the movant establishes its summary judgment burden, the burden shifts to
the nonmovant to present evidence that raises a genuine issue of material fact that

                                          6
would preclude the grant of summary judgment. Amedysis, Inc. v. Kingwood Home
Health Care, LLC, 437 S.W.3d 507, 510–11 (Tex. 2014); M.D. Anderson Hosp. &
Tumor Inst. v. Willrich, 28 S.W.3d 22, 23 (Tex. 2000).
      To determine if a genuine issue of material fact exists, we review the evidence
in the light most favorable to the nonmovant, and we indulge every reasonable
inference and resolve any doubts in the nonmovant’s favor. KMS Retail Rowlett,
LP v. City of Rowlett, 593 S.W.3d 175, 181 (Tex. 2019); Knott, 128 S.W.3d at 215.
We credit evidence that is favorable to the nonmovant if reasonable jurors could do
so, and we disregard contrary evidence unless reasonable jurors could not. Samson
Expl., LLC v. T.S. Reed Props., Inc., 521 S.W.3d 766, 774 (Tex. 2017); Mann
Frankfort Stein & Lipp Advisors, Inc. v. Fielding, 289 S.W.3d 844, 848 (Tex. 2009).
The evidence raises a genuine issue of material fact if “reasonable and fair-minded
jurors could differ in their conclusions in light of all the evidence presented.”
Goodyear Tire & Rubber Co. v. Mayes, 236 S.W.3d 754, 755 (Tex. 2007).
      B. Governing Law
      Our interpretation of the parties’ MSA is governed by contract law, including
the principles of contract construction. See TEX. CIV. PRAC. & REM. CODE ANN.
§ 154.071 (West 2019); Shamrock Psychiatric Clinic, P.A. v. Tex. Dep’t of Health &
Human Servs., 540 S.W.3d 553, 560 (Tex. 2018); Loya v. Loya, 526 S.W.3d 448,
451 (Tex. 2017).     The presence of ambiguities and the interpretation of an
unambiguous contract are questions of law that we review de novo. URI, Inc. v.
Kleberg Cnty., 543 S.W.3d 755, 763 (Tex. 2018); MCI Telecomms. Corp. v. Tex.
Utils. Elec. Co., 995 S.W.2d 647, 650–51 (Tex. 1999). We enforce unambiguous
contracts as written. Bluestone Nat. Res. II, LLC v. Randle, 620 S.W.3d 380, 387
(Tex. 2021). When a dispute exists concerning a contract’s meaning, we must
ascertain and give effect to the parties’ expressed intent, and objective

                                         7
manifestations of intent control. See id.; URI, 543 S.W.3d at 763–64. As such, we
presume that the parties intended “what the words of their contract say,” and we
interpret the contract’s language according to its “plain, ordinary, and generally
accepted meaning.” URI, 543 S.W.3d at 764.
      An ambiguity does not arise simply because the parties to an agreement
advance differing interpretations. Rosetta Res. Operating, LP v. Martin, 645 S.W.3d
212, 219 (Tex. 2022) (citing Apache Deepwater, LLC v. McDaniel Partners, Ltd.,
485 S.W.3d 900, 904 (Tex. 2016)). If we determine that the agreement’s language
can be given a certain or definitive legal meaning or interpretation, the agreement is
not ambiguous, and we will construe it as a matter of law. Barrow-Shaver Res.
Co. v. Carrizo Oil & Gas, Inc., 590 S.W.3d 471, 479 (Tex. 2019) (citing El Paso
Field Servs., L.P. v. MasTec N. Am., Inc., 389 S.W.3d 802, 806 (Tex. 2012)).
      Because we do not consider extrinsic evidence in determining whether a
contract is ambiguous, nor in construing a contract that we have determined to be
unambiguous, we examine the contract “as a whole in light of the circumstances
present when the contract was entered.” Nat’l Union Fire Ins. Co. v. CBI Indus.,
Inc., 907 S.W.2d 517, 520 (Tex. 1995); see Lewis v. E. Tex. Fin. Co., 146 S.W.2d
977, 980 (1941). Even if a contract is unambiguous as a matter of law, we may still
consider the objective facts and circumstances surrounding the context of the parties’
contract as an aid in the construction of the contract’s language. Barrow-Shaver,
590 S.W.3d at 483–84; URI, 543 S.W.3d at 767–68; Kachina Pipeline Co. v. Lillis,
471 S.W.3d 445, 450 (Tex. 2015). “While ‘evidence of circumstances can be used
to inform the contract text and render it capable of only one meaning, extrinsic
evidence can be considered only to interpret an ambiguous writing, not to create
ambiguity.’” Barrow-Shaver, 590 S.W.3d at 483 (quoting Lillis, 471 S.W.3d at
450); URI, 543 S.W.3d at 763 (“In construing an unambiguous contract or in

                                          8
determining whether an ambiguity exists, courts may not seek the parties’ intent
beyond the meaning the contract language reasonably yields when construed in
context.”).
      An agreement to enter into contracts in the future is enforceable if the
agreement addresses all of its essential terms with “a reasonable degree of certainty
and definiteness.” Fischer v. CTMI, L.L.C., 479 S.W.3d 231, 237 (Tex. 2016).
Whether a settlement agreement fails for lack of essential terms is a question of law
unless the agreement is ambiguous, or the surrounding facts and circumstances
demonstrate a factual issue. See Gen. Metal Fabricating Corp. v. Stergiou, 438
S.W.3d 737, 744 (Tex. App.—Houston [1st Dist.] 2014, no pet.) (citing McCalla v.
Baker’s Campground, Inc., 416 S.W.3d 416, 418 (Tex. 2013)).
      Although it is difficult to definitively establish which terms of the agreement
are essential, “a contract must at least be sufficiently definite to confirm that both
parties actually intended to be contractually bound.” Fischer, 479 S.W.3d at 237;
see Fort Worth Indep. Sch. Dist. v. City of Fort Worth, 22 S.W.3d 831, 846 (Tex.
2000); T.O. Stanley Boot Co. v. Bank of El Paso, 847 S.W.2d 218, 221 (Tex. 1992).
Notably, however, “[i]t is a rule universally recognized that if an instrument admits
of two constructions, one of which would make it valid and the other invalid, the
former must prevail.” Fischer, 479 S.W.3d at 239 (quoting Dahlberg v. Holden, 238
S.W.2d 699, 701 (Tex. 1951)). Material and essential terms are those that the parties
“would reasonably regard as vitally important ingredients of their bargain.” Id. at
237 (internal quotations omitted). Whether a contract contains all essential terms
should be determined on a case-by-case basis, and the “primary purpose” of the
contract governs our determination.      Barrow-Shaver, 590 S.W.3d at 481–82.
Therefore, a “court may uphold an agreement by supplying missing terms but may
not create a contract where none exists and, generally, may not interpolate or

                                          9
eliminate essential terms.” Jennings v. Jennings, 625 S.W.3d 854, 862 (Tex. App.—
San Antonio 2021, pet. denied).
      When parties to a purported agreement agree to leave some terms unresolved,
the critical issue for determining the agreement’s enforceability is whether the
parties intended for their agreement to be binding and enforceable even in the
absence of an agreement on the remaining, unresolved terms, or whether they
intended for their agreement to have no legal significance until an agreement on the
remaining terms is reached. See Stergiou, 438 S.W.3d at 748 & n.9 (collecting
cases). The question of the parties’ intent in this context is typically a fact issue.
See Foreca, S.A. v. GRD Dev. Co., 758 S.W.2d 744, 746 (Tex. 1988) (citing Scott v.
Ingle Bros. Pacific, Inc., 489 S.W.2d 554, 555–57 (Tex. 1972)); Stergiou, 438
S.W.3d at 749. However, in cases where “the intent is clear and unambiguous on
the face of the agreement,” a court may determine the intentions of the parties as a
matter of law. Hardman v. Dault, 2 S.W.3d 378, 380 (Tex. App.—San Antonio
1999, no pet.); see Jennings, 625 S.W.3d at 863; Stergiou, 438 S.W.3d at 749.
      C. The Parties’ Intent to be Bound Raises a Fact Question
      The parties present a myriad of arguments in support of their respective
interpretations of the MSA. Nevertheless, the crux of this appeal is the content of
the model form JOAs to which the MSA refers. Paragraph Two of the MSA clearly
specifies that the parties shall execute JOAs “based on” the model form; however,
with the exception of five specific conditions identified in the MSA, the MSA does
not elaborate further as to what other terms or conditions shall be contained in the
contemplated JOAs. This silence is fatal to Appellees’ arguments.
      JOAs are complex documents which govern the day-to-day operations of
operators and non-operators. Here, we conclude that the language of the MSA is
ambiguous as to (1) the parties’ intent regarding the content of the model form JOAs

                                         10
referred to in the MSA that the parties were required to execute and (2) the remaining
terms and conditions that the parties intended to include in the JOAs. The MSA
requires the execution of JOAs “based on” the 2015 AAPL Model Form JOA. The
MSA further enumerates five specific conditions that must be included in the JOAs.
After executing the MSA, the parties attempted for months, but ultimately were
unable, to negotiate what additional terms and conditions should be included in the
JOAs.
        For the MSA to be an intelligible agreement, the 2015 AAPL Model Form
JOA requires that the parties must, at the very least, agree (1) to populate several
fields and (2) to select various “options.” Though the parties may disagree as to the
significance these terms may have on the effectiveness of the JOAs or to the primary
purpose of the MSA itself, it is unavoidable that without these terms, the JOAs (and
consequently the MSA itself) cannot be intelligible, enforceable contracts.
        A contract is ambiguous when two reasonable interpretations are possible.
When we determine whether a contract is ambiguous, and in construing the contract
itself, we may refer to the surrounding circumstances. The parties to this dispute are
sophisticated actors and they are undoubtedly familiar with the model form JOA
which is referenced in the MSA. As we have said, the model form JOA requires that
certain fields be populated and that certain “options” be selected in order for the JOA
to become an intelligible contract. In this instance, it is unclear from the plain
language of the MSA whether the parties intended for the “based on” language to
allow for one party to the agreement to unilaterally populate the required fields and
select the “options” required by the form. A reasonable alternative construction
could be that, considering the “based on” language, the parties intended that the
MSA was merely an “agreement to agree” (which is not an enforceable agreement)
and that no binding, enforceable agreement would exist until the JOAs, and all of its

                                          11
essential terms, had been negotiated, agreed-to, and executed. Either of these
constructions is reasonable, and each reading leads to a different result with respect
to our construction of the MSA. Therefore, because the intent of the parties is not
“clear and unambiguous,” a question of fact exists.
      Appellees argue that, when read in its proper context, the plain language of
the MSA indicates that the parties intended for it to be a binding and enforceable
agreement, even though some unresolved, “nonessential” terms would be negotiated
in the future. See McCalla, 416 S.W.3d at 418 (holding that agreements to enter into
future contracts are enforceable if they contain all essential terms); Fischer, 479
S.W.3d at 238 (“[An] agreement that contains all of its essential terms is not
unenforceable merely because the parties anticipate some future agreement.”).
Although, in certain contexts, an MSA with similar language could be read in the
manner Appellees now advance on appeal, in this case, at least some terms or
required changes that were left unaddressed in the JOAs that the parties were
required to execute are essential to the enforceability of the parties’ agreement.
Barrow-Shaver, 590 S.W.3d at 481–82.
      As we have noted, the parties to the MSA are familiar with the model form
JOA and what its use entails; they are sophisticated members of the oil and gas
industry. See id. at 483 (“We can consider the surrounding circumstances, however,
including the fact that negotiations took place between sophisticated parties in this
commercial oil and gas context.”). From the inception of this dispute, the parties
were represented by experienced oil and gas attorneys in an arm’s-length transaction.
Id. at 484. After significant motion practice in the district court, they proceeded to
mediation, which in turn resulted in the execution of the MSA by each party to this
case and their counsel. See id. Considering that these parties have significant
experience in oil and gas matters, it seems implausible that they were not intimately

                                         12
familiar with the model form JOA and what its terms and use would require. It
seems equally implausible that either party would execute an MSA without the
inclusion of all the essential terms of the parties’ agreement.
      Appellees contend that the unaddressed terms of the JOA were not essential
to the primary purpose of the MSA, which they argue resolved the underlying title
dispute and concluded the related litigation. Although we understand Appellees’
position—not only were the remaining JOA terms not included in the MSA itself,
but they were also specifically accounted for by their relegation to the model form—
we cannot ignore the fact that properly executed JOAs are inarguably essential to
the parties’ MSA, and that enforceable, intelligible JOAs cannot be achieved without
the parties’ mutual agreement and assent as to at least some of the remaining, and
essential, unresolved JOA terms.
      Based on the circumstances before us, we conclude that the MSA is
ambiguous as to the parties’ intent with respect to the meaning of the requirement in
Paragraph Two that the JOAs be “based on” the model form JOA. This language
raises a question of material fact. As such, the trial court erred when it granted
Appellees’ joint motion for summary judgment and enforced the MSA.
Accordingly, we sustain Appellants’ first and second issues.
      For similar reasons, we also sustain Appellants’ third issue. Appellants
complain in their third issue that the trial court’s final order impermissibly directed
them to enter into agreements (the JOAs) to which they did not assent. We agree.
Therefore, even if the MSA’s language did not raise a genuine issue of material fact,
the trial court erred when it ordered Appellants to execute the versions of the JOAs
that were prepared and tendered by Appellees.
      As we discussed above, the model form JOA requires the inclusion of certain
terms and the selection of certain “options” in order for it to constitute an intelligible

                                           13
contract. Appellees made various changes and unilaterally selected four “options”
in the JOA versions, changes and “option” selections to which Appellants did not
agree. The trial court’s final order directed Appellants to execute these versions of
the JOAs. But, even assuming arguendo that the MSA itself is enforceable, the trial
court’s authority to order Appellants to execute these versions of the JOAs is limited
to the scope of the MSA and the terms recited within it. See Fischer, 479 S.W.3d at
242 (“[C]ourts cannot rewrite the parties’ contract or add to or subtract from its
language.”); XTO Energy Inc. v. Smith Prod. Inc., 282 S.W.3d 672, 680 (Tex.
App.—Houston [14th Dist.] 2009, pet. dism’d) (refusing to rewrite or add to JOAs
based on a previous version of the model form and enforcing the agreements as
written).
      The MSA requires that five enumerated terms shall be included in the JOAs
and that the JOAs shall be “based on” the model form. Importantly, the MSA does
not authorize either party to unilaterally complete or select “options” in the model
form in order to render it an intelligible contract, and thus bind all parties to the
unilateral choices that were made; however, this is precisely what Appellees did in
the versions of the JOAs that they prepared and tendered to the trial court. Here, the
trial court’s final order effectively directs Appellants to execute a contract to which
Appellants have not agreed. The trial court had no authority or discretion to do so,
and it may not supply essential terms or conditions that are absent from the parties’
agreement. See Fischer, 479 S.W.3d at 242; XTO Energy, 282 S.W.3d at 680.
Accordingly, we sustain Appellants’ third issue.
      D. Appellees’ Cross-Appeal
      Finally, we turn to Appellees’ conditional cross-appeal. As Cross-Appellants,
Endeavor and DE Midland argue that we should render judgment in their favor on
the underlying merits dispute—regarding title to the “Terminated Depths” Claims

                                          14
and “Unearned Depths” Claims—which, according to Cross-Appellants and their
interpretation of the MSA, the parties have purportedly settled. Cross-Appellants
addressed these claims in their motions for summary judgment which, significantly,
the trial court did not rule on.
       As Cross-Appellees, Rustic argues that we do not have jurisdiction to consider
DE Midland and Endeavor’s conditional cross-appeal because (1) denied motions
for summary judgment are not final and appealable and (2) the trial court did not
grant, or rule on, any cross-motion for summary judgment that would otherwise be
considered “final” for appellate purposes; therefore, Cross-Appellants’ motions for
summary judgment remain interlocutory. Conversely, Cross-Appellants contend
that the trial court’s grant of their joint motion for summary judgment to enforce the
MSA provides us with jurisdiction to review and address the merits of the motions
for summary that they claim the trial court denied. We agree with Rustic.
       An order denying summary judgment is not final and appealable; such a denial
means that a fact issue exists, or the movant has not carried its burden to prove the
required elements as a matter of law. See Cincinnati Life Ins. Co. v. Cates, 927
S.W.2d 623, 625 (Tex. 1996). However, when both sides move for summary
judgment and the trial court grants one motion and denies the other, the denial is
reviewable as part of the appeal from the granted motion. See Valence Operating
Co. v. Dorsett, 164 S.W.3d 656, 661 (Tex. 2005); Apcar Inv. Partners VI v. Gaus,
161 S.W.3d 137, 139 (Tex. App.—Eastland 2005, no pet.). Ordinarily, however,
when cross-motions for summary judgment are involved, the parties must have
sought final judgment relief in their cross-motions before a court of appeals may
reverse and render the trial court’s final judgment. CU Lloyd’s of Tex. v. Feldman,
977 S.W.2d 568, 569 (Tex. 1998); accord Bowman v. Lumberton Indep. Sch. Dist.,
801 S.W.2d 883, 889 (Tex. 1990).

                                         15
      The general rule is that we can only review the denial of a motion for summary
judgment when both parties in their cross-motions have moved for final judgment
and one such motion is granted by the trial court. See Fed. Deposit Ins. Corp. v.
Lenk, 361 S.W.3d 602, 611–12 (Tex. 2012) (citing Valence Operating Co., 164
S.W.3d at 661). Further, and in this circumstance, the parties each must have moved
for summary judgment “on the same issues.” Id. at 612.
      Cross-Appellants contend that because the trial court stated in its order
granting their joint motion for summary judgment to enforce the MSA that it was a
final, appealable order and that “all relief requested in this matter not expressly
granted herein” was denied, their motions for summary judgment that addressed the
merits of the underlying title dispute are no longer interlocutory and are appealable.
They argue that in Lenk, a case cited by Rustic, the Texas Supreme Court did not
announce a rule that appellate review of a summary judgment denial is only proper
when the parties moved for summary judgment on the same issues. It is true that the
court in Lenk noted that the language of the trial court’s order in that case disposed
of all issues in the case. Id. But the court also noted that the issue in dispute was
also necessarily disposed of when the trial court ruled in one party’s favor. Id.
      Here, the trial court’s summary judgment ruling in favor of Cross-Appellants
only concerned whether the MSA was enforceable. In fact, the MSA and its
enforceability by their nature precluded any disposition as to the merits of the
underlying title dispute—in other words, the enforceability of the MSA and the
merits of the case are separate and independent considerations. If the trial court had
ruled that the MSA was unenforceable, it should have then considered Cross-
Appellants’ pending motions for summary judgment on the merits (which the trial
court never ruled on) as the next dispositive issues. However, because the trial court
ruled in favor of enforceability, there was no need to turn to the merits.

                                          16
      Cross-Appellants also cite to Baker Hughes in support of their proposition that
we have jurisdiction to review their “merits” motions. Baker Hughes, Inc. v. Keco
R. & D., Inc., 12 S.W.3d 1, 5 (Tex. 1999). In that case, the Texas Supreme Court
held that a court of appeals may review a previously denied motion for summary
judgment that would otherwise support the grant of summary judgment on appeal as
an alternative basis for affirming the trial court’s judgment. Id. at 5–6 (citing Cates,
927 S.W.2d at 624–26). Cross-Appellants’ argument is not persuasive.
      In this case, the challenge to the trial court’s grant of summary judgment only
concerns the enforcement of the MSA, not the merits of the underlying dispute that
was purportedly settled by the MSA. Unlike in Baker Hughes, where review of the
summary judgment denial could have resulted in an affirmation of the trial court’s
judgment, Cross-Appellants’ pre-MSA motions for summary judgment on the
“merits” cannot provide a basis for affirming the trial court in this appeal. See Baker
Hughes, 12 S.W.3d at 2–4. According to Cross-Appellants, the claims addressed in
their pre-MSA motions were purportedly settled by the parties, voluntarily, through
the MSA. Nevertheless, the course of this litigation was derailed and redirected
when the parties notified the trial court that they had reached a settlement but later
failed to consummate the remaining details of the settlement, which resulted in the
parties returning to the trial court to present their interpretations of the MSA itself.
      It is significant that the trial court’s ruling regarding the enforceability of the
MSA does not in any manner touch upon the claims that were purportedly settled
and released by the MSA. Rather, the trial court’s judgment is predicated on entirely
different issues and grounds when compared to the arguments raised by Cross-
Appellants in their “merits” motions. Yet, Cross-Appellants insist that the trial
court’s judgment should preclude any further factfinding and rulings by the trial
court on the merits of their underlying motions. They further point to judicial

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economy as another reason for us to review, what they argue are, denied motions;
however, we disagree with Cross-Appellants’ assertion that a remand is not
necessary here. See TEX. R. APP. P. 43.3.
        Furthermore, even if we did possess the discretion to review Cross-
Appellants’ “merits” motions, we decline to do so because the trial court neither
issued a substantive ruling nor signed an order addressing the merits of these
motions.       See Cates, 927 S.W.2d at 626.                   Accordingly, we overrule Cross-
Appellants’ cross-point.
                                      III. This Court’s Ruling
        We reverse the judgment of the trial court and remand this cause to the trial
court for further proceedings consistent with this opinion.

                                                           W. STACY TROTTER
                                                           JUSTICE

December 15, 2022
Panel consists of: Bailey, C.J.,
Trotter, J., and Wright, S.C.J. 2
Williams, J., not participating.

        2
          Jim R. Wright, Senior Chief Justice (Retired), Court of Appeals, 11th District of Texas at Eastland,
sitting by assignment.

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