Court Opinion

ID: 9396998
Source: CourtListenerOpinion
Date Created: 2023-05-24 06:08:43.37036+00
Date Added: 2024-06-11T17:19:20.690931
License: Public Domain

Supreme Court of Texas
                            ══════════
                             No. 21-0509
                            ══════════

  Finley Resources, Inc., Finley Production Co., L.P. and Petro
                     Canyon Energy, LLC,
                              Petitioners,

                                    v.

Headington Royalty, Inc. and Headington Energy Partners, LLC,
                              Respondents

   ═══════════════════════════════════════
              On Petition for Review from the
       Court of Appeals for the Fifth District of Texas
   ═══════════════════════════════════════

      JUSTICE BOYD, concurring.

      I find no fault with the Court’s conclusion that the term
“predecessors” as used in this acreage-swap agreement refers only to
“corporate predecessors.” Ante at ___. For all the reasons the Court
explains, including “the linguistic and grammatical context in which”
the term is used, id. at ____, I find that construction to be perfectly
reasonable.
      But Finley’s proposed construction—that the term includes
“predecessors in interest” or “predecessors in title”—is also quite
reasonable. After all, the agreement refers broadly to all “predecessors,”
not specifically to “corporate predecessors,” and as the Court itself
concedes, “[c]ommonly understood, ‘predecessor’ could fairly embrace all
the capacities Finley claims to hold” as predecessor “broadly means
someone who precedes another.” Id. at ___. The Court apparently finds
that construction to be unreasonable although it never actually says so.
To the extent it does, I must respectfully disagree. All the contextual
and circumstantial clues the Court relies on certainly help make
Headington’s construction reasonable, and perhaps even more
reasonable than Finley’s construction, but they do not make Finley’s
construction unreasonable.
      Because both proposed constructions are reasonable, the term is
ambiguous. See URI, Inc. v. Kleberg County, 543 S.W.3d 755, 765 (Tex.
2018) (citing Columbia Gas Transmission Corp. v. New Ulm Gas, Ltd.,
940 S.W.2d 587, 589 (Tex. 1996); Nat’l Union Fire Ins. Co. of Pittsburgh,
Pa. v. CBI Indus., Inc., 907 S.W.2d 517, 520 (Tex. 1995)). The ambiguity
exists not just because the parties interpret the term differently but
because both parties’ interpretations are reasonable. See id.; Piranha
Partners v. Neuhoff, 596 S.W.3d 740, 743–44 (Tex. 2020). And it exists
despite the parties’ agreement that the term is unambiguous. See URI,
543 S.W.3d at 763 (citing Samson Expl., LLC v. T.S. Reed Props., Inc.,
521 S.W.3d 766, 787 (Tex. 2017); Progressive Cnty. Mut. Ins. Co. v.
Kelley, 284 S.W.3d 805, 808 (Tex. 2009)).
      As the Court itself explains, we have emphatically and repeatedly
held that a release is only effective as to releasees it identifies with
“descriptive particularity”—so clearly that “a stranger could readily
identify the released party” and its identity and connection to the

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released claims “is not in doubt.” Ante at ____ (quoting Duncan v. Cessna
Aircraft Co., 665 S.W.2d 414, 419 (Tex. 1984)); see Dresser Indus., Inc. v.
Page Petroleum, Inc., 853 S.W.2d 505, 508 (Tex. 1993). In the absence of
such descriptive particularity—that is, when such doubt is present—the
release is simply not effective as to that party. Here, the ambiguity
creates such doubt. Did Headington release all claims against Petro
Canyon’s predecessors in interest or only against its corporate
predecessors? We can’t know for sure because both constructions are
reasonable. The release is thus ambiguous as to that point. And because
the ambiguity places Finley’s identity as a released party in doubt, the
release is simply ineffective as to Finley.
      For these reasons only, I concur in the Court’s judgment affirming
the court of appeals’ judgment and remanding the case to the trial court
for further proceedings.

                                         Jeffrey S. Boyd
                                         Justice

OPINION FILED: May 12, 2023

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