Court Opinion

ID: 4323049
Source: CourtListenerOpinion
Date Created: 2018-10-20 07:44:20.020015+00
Date Added: 2024-06-11T14:19:40.169355
License: Public Domain

In the
                     Court of Appeals
             Second Appellate District of Texas
                      at Fort Worth
                   --------------------------------------------
                           No. 02-17-00387-CV
                   --------------------------------------------
LOUIS DORFMAN; K I HOLDINGS, LTD.; SAM MYERS; J.M.D. RESOURCES,
   INC.; BILLY COGDELL BOWDEN; BARBARA STANDFIELD; STACEY
DORFMAN-KIVOWITZ; JULIA DORFMAN; MARK DORFMAN; DAVID PHILIP
 COOK; CHERYL KING COOK; SAM Y. DORFMAN JR.; FRANK MORAVITS,
INDIVIDUALLY AND AS TRUSTEE OF THE MORAVITS CHILDREN TRUSTS
   NOS. 1 AND 2; SHELBY MORAVITS; AND JERRY KORTZ, Appellants

                                       V.

  JPMORGAN CHASE BANK, N.A., IN ITS INDIVIDUAL CAPACITY AND AS
 TRUSTEE OF THE RED CREST TRUST; ORCA/ICI DEVELOPMENT; ORCA
     PETROLEUM, LTD.; AND ORCA ASSETS, G.P., L.L.C., Appellees

                On Appeal from the 342nd District Court
                        Tarrant County, Texas
                    Trial Court No. 342-259139-12

              Before Sudderth, C.J.; Gabriel and Pittman, JJ.
                Memorandum Opinion by Justice Gabriel
                           MEMORANDUM OPINION

      Once again, we are asked to determine the effects of mineral leases on a 200.1-

acre tract in Karnes County (the tract). Previously, we agreed with the trial court’s

interlocutory determination that Appellants held ownership and development rights

to the tract under a 1944 judgment, which rendered a prior 1929 deed void ab initio.

Orca Assets, G.P. v. Dorfman, 470 S.W.3d 153, 164, 167 (Tex. App.—Fort Worth 2015,

pets. denied) (permissive appeal). We now must determine whether the trial court

erred by granting Appellees judgment as a matter of law on Appellants’ tort claims,

which were based on Appellees’ actions in entering into the disputed mineral-rights

transactions on the tract. We conclude that Appellees were entitled to judgment as a

matter of law on Appellants’ tort claims primarily because Appellees had a reasonable,

good-faith basis on which to assert title.

                                 I. BACKGROUND

           A. TRACING OWNERSHIP OF THE TRACT’S MINERAL RIGHTS

      To place the current issues in context, we find it necessary to replow some of

the same factual ground as before. In 1901, William Mayfield conveyed the tract to

Mary Moravits. In 1929, Mary and her husband J.W. Moravits conveyed an undivided

15/16 interest in all minerals to H.J. McMullen, retaining a 1/16 royalty interest.

McMullen then conveyed the executive right and the right to execute mineral leases to

his oil and gas company, McMullen Oil & Royalty Co. But McMullen retained the

right to receive royalty payments. When McMullen died in 1934, his interest in the
                                             2
tract passed to his wife Susie McMullen, who remarried and became Susie Langille.

Upon her death in 1938, her interest in the tract was placed in a trust—the Langille

Trust—that she had created for the benefit of her surviving children. The trustee of

the Langille Trust eventually became appellee JPMorgan Chase Bank, N.A.

        In 1943, Mary Moravits and her sons filed suit to cancel the 1929 deed to H.J.

McMullen. During the litigation, McMulllen Oil disclaimed any interest in the tract.

In 1944, the trial court signed a judgment that “cancelled and held for naught” the

1929 deed and declared that title to the minerals belonged to Mary Moravits and her

sons.

        In 1961, JPMorgan’s predecessor as trustee of the Langille Trust conveyed any

mineral interests remaining in the Langille Trust to McMullen Oil but reserved a

royalty. In 1966, McMullen Oil dissolved and conveyed to the Langille Trust any

mineral interest that it owned.

        The Langille Trust terminated in 1984, and the res was distributed to Susie

Langille’s grandchildren. The grandchildren created the Red Crest Trust to hold their

inherited mineral interests. As with the Langille Trust, JPMorgan eventually became

the trustee of the Red Crest Trust through several bank mergers. The 1944 judgment,

voiding the 1929 deed and declaring Mary Moravits and her sons to be the owners of

the tract’s mineral interests, was recorded in Karnes County in 1991.

                                           3
           B. THE DISPUTED TRANSACTIONS INVOLVING THE TRACT

      On April 6, 2009, the Moravitses1 leased the mineral rights on thirty-three acres

of the tract to Moffit & Associates, Inc. The lease was recorded in Karnes County on

June 10, 2009. On July 28, 2010, Moffit assigned its lease interest to Petro-Hunt,

LLC. Moffitt recorded the assignment in Karnes County on September 20, 2010.

      During the summer of 2010, JPMorgan as trustee of the Red Crest Trust began

receiving inquiries from oil-company landmen about possible leases for the mineral

rights on at least a portion of the tract. One of those inquiries came from Joan

Stewart, a landman for appellee Orca Assets G.P., L.L.C. (Orca Assets).            On

September 8, Stewart emailed Philip Mettham, a JPMorgan employee who was

primarily responsible for the oil and gas interests contained in the Red Crest Trust,

and stated that Orca Assets wanted to lease “the 458.1 acres in Karnes,” which

included the tract, for $3,500 per acre. Stewart also stated that “there seems to be a

problem with the title” but that Orca Assets was “prepared to defend” the title on

behalf of the Red Crest Trust because she believed the problem could “be cured

in . . . favor [of the Red Crest Trust].” She gave no information regarding the nature

of the title “problem,” and Mettham did not inquire further. Mettham stated that at

the time the lease with Orca Assets was signed, “nothing in [JPMorgan’s] records

      1
       We use “the Moravitses” to refer collectively to appellants Frank Moravits,
individually and as trustee of the Moravits Children Trusts Nos. 1 and 2; Shelby
Moravits; and Jerry Kortz.

                                          4
[showed] that the Red Crest Trust did not own that acreage.” He further explained

that Orca Assets was aware the lease would be granted “without warranties.”

      On October 5, JPMorgan as the trustee of the Red Crest Trust leased the

tract’s minerals to Orca Assets for a three-year primary term.2 The lease provided that

it was “made without warranties of any kind, either express or implied.” The lease

contract required Orca Assets to record a “Memorandum of Oil and Gas Lease” in

Karnes County, which occurred on October 18. As relevant to this appeal, the

recorded memorandum described the leased premises: “200.1 acres, more or less,

being all of the land described in Deed from William I. Mayfield to J. W. Moravit[s],

dated March 16, 1901 and recorded in Volume Y, Page 621 of the Deed Records of

Karnes County, Texas.”

      On November 3 after the lease between JPMorgan and Orca Assets was signed

and recorded, two employees of appellee Orca Petroleum, Ltd.—land administrator

Tiffanie Cozean and land manager Ellis McConn—exchanged the “runsheets” for the

tract by email with no comment.3 The runsheets showed the Moravitses’ 2009 leases

      2
       The lease also included 258 adjacent acres that are not at issue in this appeal.
      3
         A runsheet is generally prepared by a landman in anticipation of a more formal
title examination:

      A landman, usually hired by the client, identifies from the county
      indexes, whether they are maintained by a[] private online provider, or
      are computerized indexes maintained by the county, or from the hard-
      copy indexes in the county, all the recorded instruments affecting the
      tract of land under examination. The landman prepares an index or
                                         5
to Moffitt for thirty-three acres of the tract but not the 1944 judgment. The record

does not clearly indicate who prepared the runsheets for Orca Assets or when they

were prepared. Before signing the lease with Orca Assets, Mettham had not reviewed

any runsheets.

      On November 15, Dorfman Production Company entered into an agreement

to buy 50% of the mineral interests to two 33.62-acre parcels contained in the tract

from Frank Moravits, individually and as the trustee for two Moravits trusts (Frank).

Frank represented that he “own[ed] marketable title to the Conveyed Mineral

Interest” and that “to the best of [his] knowledge, there is an existing, written,

recorded, oil, gas, and mineral lease covering all or a portion of the Lands.” But the

agreement specified that if Dorfman Production discovered a title defect that Frank

was unable to cure, Dorfman Production “in its sole discretion” could terminate the

agreement. On the same day as the agreement, the chairman of Dorfman Production,

      runsheet listing all those instruments and then obtains copies of all the
      instruments listed.

             ....

            While defined as “a list of all instruments to be examined in
      preparation of a title opinion,” the term has no real definition in fact. . . .
      Usually a runsheet is prepared for purposes of conducting a [separate]
      “standup title” examination [in the county clerk’s office].

Allen D. Cummings, Basis of Opinions, Types of Opinions, and Layout of Opinions, in Rocky
Mountain Mineral Law Found., Nuts and Bolts of Mineral Title Examination, Paper
No. 3, at *3-5–3-6 (Feb. 9, 2012).

                                            6
appellant Louis Dorfman, forwarded the agreement to a landman, Roger A. Soape, to

run a title search of the two parcels.

       On November 30, Soape informed Louis that Frank “owns full mineral interest

in” the two parcels and that there were “no outstanding royalty interest[s] of record.”

The attached documentation showed the 1944 judgment, rendering the 1929 deed

“NULL,” but did not reflect JPMorgan’s lease to Orca Assets, presumably because

Soape was tasked with researching title and not any leasehold status. On December 1,

Frank signed deeds conveying 50% of the mineral interests of the two parcels in favor

of Dorfman Production.        On December 30, Dorfman Production conveyed its

mineral interest in the two parcels to the Dorfmans.4 Orca Assets states that this

conveyance was recorded in Karnes County on January 3, 2011, but there seems to be

no summary-judgment evidence supporting this assertion.5

       On December 10, 2010, close in time to Frank’s conveyance to Dorfman

Production, Petro-Hunt conveyed and assigned its interest in the Moravitses’ 2009

lease to Petrohawk Properties, LP.

       We use “the Dorfmans” to refer collectively to Louis and to appellants K.I.
       4

Holdings, Ltd.; Sam Myers; J.M.D. Resources, Inc.; Billy Cogdell Bowden; Barbara
Standfield; Stacey Dorfman-Kivowitz; Julia Dorfman; Mark Dorfman; David Philip
Cook; Cheryl King Cook; and Sam Y. Dorfman Jr.
       5
        Although Dorfman Production had the unilateral right to terminate the
conveyance from Frank in the face of any unresolvable title issue, there is no
indication that Dorfman Production or its assignees, the Dorfmans, availed
themselves of this contractual right.

                                          7
      To sum up, Petrohawk’s and the Dorfmans’ interest in the tract flowed from

the 1901 deed from William Mayfield to Mary Moravits. JPMorgan’s and Orca

Assets’ interest in the tract flowed from the 1929 deed from Mary and J.W. Moravits

to H.J. McMullen.

                                 C. LITIGATION

      On March 31, 2011, McConn contacted an Orca Assets landman, Tony

Villalon, and enclosed a copy of the 1944 judgment, which McConn had received

from Petrohawk—the ultimate assignee of Moffit’s interest in its 2009 lease from the

Moravitses. McConn stated that Orca Assets was getting a “title opinion” on the

issue but noted that Orca Assets’ runsheets had not shown the judgment, which he

recognized “basically states that the Mineral Deed from J.W. Moravits to H.J.

McMullen is null and does not convey the minerals.” Villalon responded that in his

view, Orca Assets’ lease on the tract was “valid” and “good,” but he asked Cozean to

get the “entire file” from Karnes County.     Villalon informed McConn that the

requested title opinion might not be useful depending on what documents the author

relied on, but he averred that the opinion could be disregarded or amended based on

any missing documentation.6

      Contrary to the Moravitses and the Dorfmans’ assertion in their brief, the
      6

summary-judgment evidence does not reflect that Villalon “aborted” the title opinion
“because it would have concluded that the Orca Lease was invalid.”

                                         8
      On May 23, Orca Assets sent a memo to Petrohawk, explaining that Orca

Assets believed its interest in the tract was superior to Petrohawk’s because the Red

Crest Trust—Orca Assets’ lessor—had been a bona fide purchaser, notwithstanding

the 1944 judgment.

      On June 3, 2011, an attorney representing at least some of the Dorfmans

emailed Mettham about the Dorfmans’ competing-title claim and attached the 1929

deed, McMullen Oil’s disclaimer of interest filed in Mary Moravits’s 1943 suit, and the

1944 judgment. The attorney asked JPMorgan to sign a quitclaim of its interest in the

tract to benefit the Dorfmans “as well as others who have relied on the disclaimer and

judgment” and posited that JPMorgan followed its policies in signing the lease to

Orca Assets:

      Mr. Dorfman believes that this may be the situation:

      • That the [Red Crest] [T]rust owns a great deal of minerals and leases
      them on a regular basis.

      • That it is not the policy of [JPMorgan], when approached for a lease,
      to defer leasing until it has obtained a title opinion affirming the quality
      of title in the trust. Rather, [JPMorgan] follows the conventional
      approach of fiduciaries—grant a lease when requested but with no
      warranty of title.

      • That this situation is unusual—if not unique. [JPMorgan] was
      unaware of [McMullen Oil’s] disclaimer of interest. Had it known of the
      disclaimer, it would have wished [to] honor the judgment and action of
      McMullen and not given a lease over the Moravit[s] acreage [i.e., the
      tract].

                                           9
                             1. Claims and Counterclaims

        Petrohawk filed suit against Orca Assets and JPMorgan on June 22, 2011,

seeking to resolve the title question by bringing claims for trespass to try title, to quiet

title, and for a declaratory judgment. On May 3, 2012, the Dorfmans filed suit against

JPMorgan, the Orca Entities,7 and other defendants not parties to this appeal, raising

the same title claims as Petrohawk but also alleging several tort claims: slander of title;

tortious interference with existing and prospective contractual relationships; tortious

interference with property rights; negligence; gross negligence; and negligent hiring,

retention, or supervision (negligent employment).8 Orca Assets filed a third-party

petition in the Dorfmans’ suit naming the Moravitses as third-party defendants and

alleging title claims. The trial court consolidated Petrohawk’s suit and the Dorfmans’

suit.       The Moravitses then filed counterclaims against the Orca Entities and

JPMorgan, raising the same title and tort claims alleged by the Dorfmans.

        Our use of “the Orca Entities” includes Orca Assets; appellee Orca/ICI
        7

Development; and appellee Orca Petroleum, Ltd. In the trial court and in this court,
the parties do not attempt to clearly delineate which of the Orca entities engaged in
what tortious action. The parties merely alleged “Orca” in their trial-court pleadings
and continue that practice here. To the extent possible in our factual recitation, we
stated with particularity which Orca entity did what. But because the Dorfmans and,
later, the Moravitses generally alleged their claims against “Orca” and because the
Orca Entities did not point out the discrepancy in the trial court, we will follow suit
and assume all claims were alleged against each of the Orca Entities.

        The negligent-employment claim was raised only against JPMorgan regarding
        8

its employment of Mettham. The Dorfmans and, later, the Moravitses also raised
claims for conspiracy against JPMorgan and the Orca Entities but nonsuited them.

                                            10
                        2. Summary Judgment: Title Claims

      As would be expected, the predicate issue for the trial court was who held

superior title to the tract, which turned on the validity of the 1929 deed in light of the

1944 judgment, which “cancelled” the 1929 deed and conferred title on the

Moravitses. All parties moved for summary judgment on the issue of title, and the

trial court concluded that the 1929 deed was void ab initio based on the 1944 judgment

and that JPMorgan and the Orca Entities could not rely on the 1929 deed to establish

superior title. Orca Assets, 470 S.W.3d at 157–58. In a subsequent permissive appeal

from the interlocutory order, we agreed with the trial court and affirmed its order. Id.

at 167.

                        3. Summary Judgment: Tort Claims

      JPMorgan then moved for a traditional and no-evidence summary judgment on

the Dorfmans’ and the Moravitses’ tort claims and moved for a traditional summary

judgment on its affirmative defense of limitations.         To defeat the tort claims,

JPMorgan averred that the Dorfmans and the Moravitses failed to raise a genuine

issue of material fact on or produced no evidence of each element of their tort claims

and that their lost-profits evidence was speculative and lacked reasonable certainty.

The Orca Entities also moved for judgment as a matter of law under either the

traditional or no-evidence standard, essentially raising the same arguments asserted by

JPMorgan to defeat the tort claims, and moved for a traditional summary judgment

on their affirmative defense of limitations. The Dorfmans and Moravitses similarly
                                           11
sought summary judgment on their claims for slander of title against JPMorgan and

the Orca Entities and for negligent employment against JPMorgan. They also sought

judgment as a matter of law on JPMorgan’s and the Orca Entities’ affirmative defense

of limitations. The trial court noted that this flurry of summary-judgment motions

presented a subsidiary, yet dispositive, question regarding the tort claims: Given that

the Red Crest Trust did not have an interest in the tract based on the 1944 judgment,

did JPMorgan as the trustee for the Red Crest Trust have a good-faith or reasonable

belief that it did?

       After a nonevidentiary hearing, the trial court orally granted JPMorgan’s and

the Orca Entities’ summary-judgment motions without specifying the grounds. In the

subsequent order, which included finality language, the trial court granted JPMorgan’s

and the Orca Entities’ summary-judgment motions and rendered judgment in their

favor on the Dorfmans’ and the Moravitses’ tort claims.

     II. PROPRIETY OF SUMMARY JUDGMENT ON TORT CLAIMS

       In their first issue, the Dorfmans and the Moravitses (collectively, the Owners)

assert that the trial court erred by granting summary judgment on their tort claims in

favor of JPMorgan and the Orca Entities. Because JPMorgan and the Orca Entities

moved for summary judgment on both no-evidence and traditional grounds, we

                                          12
address their no-evidence motions first.9 See Ford Motor Co. v. Ridgway, 135 S.W.3d
598, 600 (Tex. 2004).

                              A. STANDARD OF REVIEW

      Once JPMorgan and the Orca Entities specifically asserted that there was no

evidence of one or more essential elements applicable to each of the Owners’ claims,

the burden of proof shifted to the Owners to produce more than a scintilla of

summary-judgment evidence—more than a mere surmise or suspicion of a fact—

creating a genuine issue of material fact as to the existence of the challenged element.

See Tex. R. Civ. P. 166a(i); Mack Trucks, Inc. v. Tamez, 206 S.W.3d 572, 582 (Tex. 2006);

Ford Motor, 135 S.W.3d at 600–01; Morgan v. Anthony, 27 S.W.3d 928, 929 (Tex. 2000);

Kindred v. Con/Chem, Inc., 650 S.W.2d 61, 63 (Tex. 1983). The trial court must grant

the no-evidence motions if the Owners failed to do so. See Tex. R. Civ. P. 166a(i) &

cmt. But if the Owners brought forward more than a scintilla of probative evidence

that raised a genuine issue of material fact on the challenged elements, then a no-

evidence summary judgment was not proper. See Smith v. O’Donnell, 288 S.W.3d 417,

424 (Tex. 2009).

      In certain instances, we may address a traditional motion first or may address
      9

the motions in tandem. See, e.g., Mann Frankfort Stein & Lipp Advisors, Inc. v. Fielding,
289 S.W.3d 844, 848 (Tex. 2009); Poag v. Flories, 317 S.W.3d 820, 825 (Tex. App.—
Fort Worth 2010, pet. denied). But in this case, we need not address the traditional
motions based on our analysis of the no-evidence motions.

                                           13
      In reviewing the trial court’s ruling, we look at the entire record in the light

most favorable to the plaintiff, indulging every reasonable inference and resolving any

doubts against the motion. See Sudan v. Sudan, 199 S.W.3d 291, 292 (Tex. 2006). And

we, as was the trial court, are confined in our review to those grounds specifically

raised by JPMorgan and the Orca Entities in their motions. See McConnell v. Southside

ISD, 858 S.W.2d 337, 341 (Tex. 1993).

                               B. SLANDER OF TITLE

      Slander of title, as relevant here, requires evidence that (1) the Owners

possessed an interest in the property slandered, (2) JPMorgan and the Orca Entities

published a false statement about the title to the property, (3) the statement was

published with legal malice, and (4) the publication caused the loss of a specific sale—

special damages. See Duncan Land & Expl., Inc. v. Littlepage, 984 S.W.2d 318, 332 (Tex.

App.—Fort Worth 1998, pet. denied) (citing Williams v. Jennings, 755 S.W.2d 874, 879

(Tex. App.—Houston [14th Dist.] 1988, writ denied)); see also Marrs & Smith P’ship v.

D.K. Boyd Oil & Gas Co., 223 S.W.3d 1, 20 (Tex. App.—El Paso 2005, pet. denied).

Both JPMorgan and the Orca Entities asserted in the trial court that the Owners had

produced no evidence of or failed to raise a genuine fact issue regarding legal malice

or the loss of a specific sale.10 Because we conclude that the summary-judgment

evidence on these two elements of slander of title constituted less than a scintilla, the

      10
        JPMorgan and the Orca Entities attacked other elements of the Owners’
slander claim, but we begin, and ultimately end, with these two.

                                           14
trial court did not err by granting JPMorgan’s and the Orca Entities’ no-evidence

motions directed to this claim.

                                       1. Malice

       In a claim for slander of title, legal malice means making a false statement

without reasonable cause regarding title either in the absence of color of title or under

a reasonable belief that the speaker had title. See Duncan Land, 984 S.W.2d at 332;

Santa Fe Energy Operating Partners, L.P. v. Carrillo, 948 S.W.2d 780, 785 (Tex. App.—San

Antonio 1997, writ denied). In other words, malice is not present if a claim “is made

under color of title upon the advice of attorneys, or upon reasonable belief that a

party has title to the property acquired.”      Humble Oil & Refining Co. v. Luckel,

171 S.W.2d 902, 906 (Tex. Civ. App.—Galveston 1943, writ ref’d w.o.m.). The

Owners argued that JPMorgan and the Orca Entities published the lease

memorandum with malice because JPMorgan did not have colorable title by which to

lease the tract’s minerals. Their argument essentially boils down to an assertion that

because the trial court and this court ultimately determined that the 1901 deed and the

1944 judgment were the operative documents for title purposes, there were no

circumstances under which JPMorgan could have reasonably believed it had title to

the mineral interests for the tract.

       The summary-judgment evidence, even viewed in favor of the Owners, that

indicated JPMorgan and the Orca Entities had an unreasonable—not good-faith—

belief that JPMorgan held title to the tract’s mineral interests when it entered into the
                                           15
lease with Orca Assets was less than a scintilla and created at best a mere surmise or

suspicion of this element. Cf. Misco Leasing, Inc. v. Keller, 490 F.2d 545, 548 (10th Cir.

1974) (recognizing malice in slander-of-title claim is “the principal element . . . and the

one most difficult to prove”). After the lease was recorded, ownership of the tract

was hotly disputed with all involved parties staking some claim based on competing

title evidence. Orca Assets, 470 S.W.3d at 157–58. JPMorgan relied on the 1929 deed

to trace its ownership to the tract’s minerals and raised several legal arguments

supporting its position that it held title, several of which accounted for the possibility

that the 1944 judgment validly “cancelled” the 1929 deed. Id. at 157. Although these

arguments were unavailing at the end of the day, they evinced the reasonableness of

JPMorgan and Orca Assets’ belief under the applicable law that JPMorgan held title to

the tract. See id. at 158–67. The Dorfmans’ counsel recognized that JPMorgan

followed the “conventional approach of fiduciaries” by granting Orca Assets a lease

with no warranty of title and did so with no prior knowledge of the 1944 disclaimer

and judgment. Although JPMorgan and Orca Assets had some indication that there

was a “problem” with the title before the lease was signed, at no point did the

summary-judgment evidence reveal that they deliberately acted in contravention of the

1944 judgment under no reasonable claim to title. See generally Williams, 755 S.W.2d at

882 (defining malice in context of slander-of-title claim as “deliberate conduct without

reasonable cause”).

                                            16
      We conclude that the Owners produced no more than a scintilla of evidence

that JPMorgan or Orca Assets acted with the requisite legal malice in entering into

and recording the lease; therefore, JPMorgan and the Orca Entities were entitled to

judgment as a matter of law. See Preston Gate, LP v. Bukaty, 248 S.W.3d 892, 896 (Tex.

App.—Dallas 2008, no pet.); Jones v. Rabson & Broocks, L.L.C., No. 01-01-01210-CV,

2003 WL 302439, at *5 (Tex. App.—Houston [1st Dist.] Feb. 13, 2003, no pet.)

(mem. op.); Storm Assocs., Inc. v. Texaco, Inc., 645 S.W.2d 579, 580–82, 588–89 (Tex.

App.—San Antonio 1982), aff’d on other grounds sub nom. Friedman v. Texaco, Inc.,

691 S.W.2d 586 (1985); cf. Williams, 755 S.W.2d at 882–83 (holding because appellants

had constructive notice that deed passed no title, it was unreasonable for appellants to

not check title, supporting slander-of-title verdict); Walker v. Ruggles, 540 S.W.2d 470,

473–74 (Tex. Civ. App.—Houston [14th Dist.] 1976, no writ) (finding sufficient

evidence of malice to support slander of title where real-estate agents recorded

unexecuted earnest-money contract and circulated false letter to title companies

stating they had judgment against homeowners), overruled on other grounds by A. H. Belo

Corp. v. Sanders, 632 S.W.2d 145, 146 (Tex. 1982).           See generally Duncan Land,
984 S.W.2d at 332 (quoting Williams and defining malice to require deliberate conduct

with no reasonable cause).

                                 2. Special Damages

      Both JPMorgan and the Orca Entities argued to the trial court and continue to

assert on appeal that the Owners produced no evidence of or raised no fact issue
                                           17
regarding special damages—the loss of a specific, pending sale—which is an essential

element of slander of title. See Ellis v. Waldrop, 656 S.W.2d 902, 904–05 (Tex. 1983);

Shell Oil Co. v. Howth, 159 S.W.2d 483, 490 (Tex. 1942). The Owners assert that

because of the lease between JPMorgan and Orca Assets, Petrohawk was not able to

“develop” the tract after Murphy Oil “walked away” from “a prospective business

relationship.” The Owners proffered the deposition testimony of Ronald Berry, a

former Petrohawk employee, who stated that Petrohawk and Murphy Oil had a prior

relationship and had intended to “trade” acreage in Karnes County to “help

[Petrohawk] get a hundred percent well and give [Murphy] what [Petrohawk] thought

to be a hundred percent well on using [the tract].” Berry averred that Murphy Oil lost

interest in trading for the tract in May 2011 after Orca Assets asserted its leasehold

interest, which caused the Owners to “miss[] the production window . . . when the

average price per barrel was consistently $100–110.” He stated that Murphy Oil

stopped negotiating with Petrohawk not only because Petrohawk “couldn’t guarantee

[Murphy Oil] clear title” but also because Frank had conveyed part of his interest to

another “portion of the family,” which Berry described as “kind of a mess.”

      This prospective deal between Murphy Oil and Petrohawk is no evidence of

the Owners’ loss of a specific and pending sale, which is required in a slander-of-title

claim. See A. H. Belo, 632 S.W.2d at 145–46 (noting slander of title cannot be

supported by evidence of impairment of vendibility). The Owners were not involved

in the talks between Murphy Oil and Petrohawk about a land swap to develop the two
                                          18
companies’ mineral interests in Karnes County.             Kane Heinen, the Murphy Oil

employee who discussed the potential swap with Berry, stated that Murphy Oil had

discovered the proposed swap with Petrohawk was unnecessary because Murphy Oil

could fully develop its Karnes County acreage without Petrohawk’s interest.

        The Owners assert that Heinen’s testimony does not defeat their proof on this

slander-of-title element because they did not allege that Murphy Oil needed the tract

to develop its own acreage but instead alleged “that, but-for the Orca Lease, Murphy

[Oil] would have included the [tract] in its development.” Heinen’s testimony shows

that the proposed swap deal was not pending such that the proposed swap equated to

more than a scintilla of evidence regarding the Owners’ loss of a specific, pending

sale.    Further, Heinen’s testimony negates any causation arising from the

recordation—even in the absence of the recorded lease between JPMorgan and Orca

Assets, Murphy Oil ultimately would not have entered into the swap because it did

not need the tract to develop its acreage. See generally Restatement (Second) of Torts

§ 633 cmt. c (Am. Law Inst. 1977) (“The disparaging matter may prevent a sale by

causing an intending purchaser to withdraw an offer already made or otherwise to

terminate negotiations that were reasonably certain to result in a sale.” (emphasis added)).

        The discussions between Petrohawk and Murphy Oil never progressed from

the preliminary stage. Indeed, there is no evidence of the particular terms of the

swap. See Ellis, 656 S.W.2d at 906 (Spears, J., concurring) (recognizing damages in

slander-of-title claim “must be proven with sufficient certainty and particularity to
                                              19
avoid the need for speculation or conjecture by the fact finder”). The proposed swap

between Petrohawk and Murphy Oil was not a pending sale that was “frustrated” by

the recordation of the memorandum of lease between JPMorgan and Orca Assets.

Allen-Pieroni v. Pieroni, 535 S.W.3d 887, 889 (Tex. 2017).     Because there was no

evidence of a specific, pending sale lost by the Owners, their slander-of-title claim

could not stand as a matter of law. See U.S. Enercorp, Ltd. v. SDC Mont. Bakken Expl.,

LLC, 966 F. Supp. 2d 690, 699–702 (W.D. Tex. 2013); Marrs & Smith P’ship,
223 S.W.3d at 20–21; Halliburton Co. v. Can-Tex Energy Corp., No. 05-00-00309-CV,

2001 WL 737542, at *3 (Tex. App.—Dallas July 2, 2001, pet. denied) (not designated

for publication); Tex. Am. Corp. v. Woodbridge Jt. Venture, 809 S.W.2d 299, 304 (Tex.

App.—Fort Worth 1991, writ denied).

                                  C. NEGLIGENCE

      The Owners raised negligence and gross-negligence claims against JPMorgan

and the Orca Entities, alleging that JPMorgan and the Orca Entities owed them a duty

to avoid placing a cloud on their interests in the tract; that they knew of the Owners’

competing claim but refused to sign a quitclaim; and that it was foreseeable that their

wrongful claim to the tract “would prevent oil companies from drilling, producing

and selling the minerals.” The Owners also raised a negligent-employment claim

against JPMorgan, alleging that it owed them a duty to use ordinary care in hiring,

training, and supervising Mettham and had breached that duty as shown by Mettham’s

signing the lease with Orca Assets. JPMorgan and Orca Assets argued in the trial
                                          20
court that the Owners failed to carry their summary-judgment burden to proffer

evidence either that they owed the Owners a legal duty based on their good-faith

claim to a mineral interest or that there was a breach of a duty proximately causing the

Owners injury.

      JPMorgan and the Orca Entities are correct that the existence of a defendant’s

legal duty to a plaintiff is an essential element of any claim grounded in negligence.

See, e.g., Greater Hous. Transp. Co. v. Phillips, 801 S.W.2d 523, 525 (Tex. 1990); Ins.

Network of Tex. v. Kloesel, 266 S.W.3d 456, 467 (Tex. App.—Corpus Christi 2008, pet.

denied). The Owners’ negligence-based claims arose from Mettham’s and JPMorgan’s

leasing the minerals to the tract to Orca Assets and thereafter JPMorgan’s failure to

quitclaim its interest at the Dorfmans’ attorney’s request. As we explained regarding

slander of title, JPMorgan and Orca Assets had a reasonable basis upon which to

assert a competing title claim. It follows that because JPMorgan and Orca Assets had

a reasonable basis to assert title in the face of the Owners’ competing title claims, they

owed no legal duty to the Owners to not pursue that colorable claim. See Howell v.

Aspect Res., LLC, No. 09-10-00349-CV, 2011 WL 4389560, at *5–6 (Tex. App.—

Beaumont Sept. 22, 2011, pet. denied) (mem. op. on reh’g); cf. Sw. Guar. Tr. Co. v.

Hardy Rd. 13.4 Jt. Venture, 981 S.W.2d 951, 954 (Tex. App.—Houston [1st Dist.] 1998,

pet. denied) (recognizing claim for failure to release purported property interest is one

for slander of title, not negligence). And because the Owners’ slander-of-title claim

failed as a matter of law based on JPMorgan’s and the Orca Entities’ reasonable basis
                                           21
to assert title, the Owners’ negligence-based claims must fail as well.         See Ellis,
656 S.W.2d at 905 (explaining cause of action for failure to release purported property

interest is a claim for slander of title); Howell, 2011 WL 4389560, at *5 (“[B]reach of

this common law duty [to release an expired lease even though the terms of the lease

do not require release] gives rise to a cause of action for slander of title.”); Sw. Guar.

Tr., 981 S.W.2d at 954 (recognizing failure to release property interest does not give

rise to negligence claim).

       The Owners contend that JPMorgan did not argue on summary judgment that

the Owners’ negligence-based claims are simply a slander-of-title horse of a different

color; therefore, this ground cannot support the trial court’s summary judgment.

However, JPMorgan argued that Texas law did not support the Owners’ position

“that parties with good faith claims to a mineral interest owe any legal duties to one

another” and that it owed no legal duty to the Owners based on that good-faith belief.

And in their response to JPMorgan’s summary-judgment motion, the Owners

recognized JPMorgan’s position to be that a good-faith title dispute could not give

rise to tort liability. We conclude that JPMorgan gave fair notice in its summary-

judgment motion of this legal theory, and the trial court could have relied on it in

granting a no-evidence summary judgment in JPMorgan’s favor. See Timpte Indus., Inc.

v. Gish, 286 S.W.3d 306, 310–11 (Tex. 2009) (imposing “fair notice” standard to

review of substance of summary-judgment grounds).

                                           22
      In summary, there was no evidence that JPMorgan or the Orca Entities owed a

duty to the Owners because, as a matter of law, they had a good faith belief that

JPMorgan held title to the tract. Accordingly, the trial court did not err by granting

JPMorgan and the Orca Entities a no-evidence summary judgment on the Owners’

negligence-based claims.

                           D. TORTIOUS INTERFERENCE

                             1. With Property Rights

      The Owners alleged that JPMorgan’s and the Orca Entities’ intentional actions

in leasing the tract interfered with the Owners’ right to the use and enjoyment of the

tract and were done without just cause.11 A claim of tortious interference with

property rights requires proof that (1) there was an interference with one’s property

rights, (2) the interference was intentional and caused damages, and (3) the

interference was conducted without just cause or legal excuse. See Robles v. Mann,

No. 13-14-00211-CV, 2016 WL 1613316, at *7 (Tex. App.—Corpus Christi Apr. 21,

2016, no pet.) (mem. op.). JPMorgan and the Orca Entities argued in the trial court

that the Owners produced no evidence or failed to raise a genuine and material fact

issue that JPMorgan and the Orca Entities willfully intended to interfere with the

Owners’ property rights. As we discussed regarding the Owners’ slander-of-title

      11
        This type of interference-with-property claim is, “in essence, a claim for
intentional invasion of, or interference with, property rights.” Surprise v. DeKock,
84 S.W.3d 378, 382 (Tex. App.—Corpus Christi 2002, no pet.).

                                         23
claim, the Owners, as a matter of law, proffered no more than a scintilla of summary-

judgment evidence that JPMorgan and Orca Assets acted without just cause or legal

excuse by entering into the lease—the third element of the Owners’ claim for

interference with their property rights. Therefore, JPMorgan and the Orca Entities

were entitled to a no-evidence summary judgment on this claim. See In re ACM-Tex.,

Inc., 430 B.R. 371, 417 (Bankr. W.D. Tex. 2010); Edberg v. Laurel Canyon Ranch

Architectural Review Comm., No. 04-10-00395CV, 2011 WL 541134, at *5–6 (Tex.

App.—San Antonio Feb. 16, 2011, pet. denied) (mem. op.); cf. Marrs & Smith P’ship,
223 S.W.3d at 21 (holding that legally sufficient evidence of slander of title similarly

supported claim for intentional interference with property rights).

                    2. With Existing Contractual Relationships

      The Owners alleged that JPMorgan’s and the Orca Entities’ actions in entering

into the 2010 lease tortiously interfered with “the Petrohawk Leases,” an existing

contractual relationship. The elements of this claim required the Owners to show

(1) the existence of a contract subject to interference, (2) a willful and intentional act

of interference, (3) a proximate cause of the Owners’ damages was the interfering act,

and (4) actual damage or loss. See Tex. Beef Cattle Co. v. Green, 921 S.W.2d 203, 210

(Tex. 1996) (op. on reh’g). JPMorgan and the Orca Entities asserted that they were

entitled to judgment as a matter of law, under either rule 166a(b)–(c) or rule 166a(i),

because the Owners failed to meet their summary-judgment burden as to any of these

elements. Indeed, to establish a willful and intentional act of interference, there must
                                           24
be evidence that the defendant was more than a willing participant—the defendant

knowingly induced one of the contracting parties to breach its obligations under the

contract or knowingly made performance more burdensome or difficult. Greenville

Automatic Gas Co. v. Automatic Propane Gas & Supply, LLC, 465 S.W.3d 778, 786–87

(Tex. App.—Dallas 2015, no pet.); AKB Hendrick, LP v. Musgrave Enters., Inc.,

380 S.W.3d 221, 236 (Tex. App.—Dallas 2012, no pet.); Funes v. Villatoro, 352 S.W.3d
200, 213 (Tex. App.—Houston [14th Dist.] 2011, pet. denied). “Ordinarily, merely

inducing a contract obligor to do what it has a right to do is not actionable

interference.” ACS Inv’rs, Inc. v. McLaughlin, 943 S.W.2d 426, 430 (Tex. 1997).

      Again, our holding regarding the Owners’ slander-of-title claim portends our

holding for this claim. We held as a matter of law that the Owners failed to proffer

more than a scintilla of evidence that JPMorgan and the Orca Entities acted with

malice by entering into the lease, thwarting their slander-of-title claim. And we have

concluded that there is no summary-judgment evidence that JPMorgan and the Orca

Entities acted without just cause or legal excuse regarding the Owners’ claim for

tortious interference with their property rights.    Similarly, there is no summary-

judgment evidence that JPMorgan and the Orca Entities acted willfully or

intentionally in light of JPMorgan’s reasonable claim to title and JPMorgan’s and the

Orca Entities’ actions taken with just cause or legal excuse. See Mark III Sys., Inc. v.

Sysco Corp., No. 01-05-00488-CV, 2007 WL 529960, at *5–6 (Tex. App.—Houston

[1st Dist.] Feb. 22, 2007, no pet.) (mem. op.); N.Y. Life Ins. Co. v. Miller, 114 S.W.3d
25
114, 125 (Tex. App.—Austin 2003, no pet.); Software Sys., Inc. v. Res. Support Assocs.,

Inc., No. 05-01-00864-CV, 2002 WL 1788007, at *2–3 (Tex. App.—Dallas Aug. 5,

2002, no pet.) (not designated for publication). Accordingly, the Owners produced

no or less than a scintilla of evidence on an essential element of their claim for

tortious interference with existing contractual relationships. JPMorgan and the Orca

Entities were, therefore, entitled to judgment as a matter of law under rule 166a(i).

                  3. With Prospective Contractual Relationships

      Similarly, JPMorgan and the Orca Entities showed themselves entitled to

judgment as a matter of law on the Owners’ claim for tortious interference with

prospective contractual relationships—probable “contracts with Petrohawk and/or

purchasers of minerals produced” from the unleased portion of the tract. To avoid

summary judgment on this claim, the Owners were required to produce more than a

scintilla of evidence that (1) there was a reasonable probability that the Owners would

have entered into a contractual relationship with a third party, (2) there was an

intentional and independently tortious act by JPMorgan and the Orca Entities to

prevent the relationship, (3) JPMorgan and the Orca Entities had a conscious desire to

prevent the relationship from occurring or knew that interference was substantially

certain to occur as a result of their actions, and (4) the Owners suffered actual harm

or damage as a result of the interference. See Coinmach Corp. v. Aspenwood Apt. Corp.,

417 S.W.3d 909, 923 (Tex. 2013).

                                           26
         As argued by JPMorgan and the Orca Entities in their summary-judgment

motions, the Owners have no evidence that any act by JPMorgan or the Orca Entities

was independently tortious. Conduct is considered independently tortious if it would

be actionable under a recognized tort. See Wal-Mart Stores, Inc. v. Sturges, 52 S.W.3d
711, 726 (Tex. 2001). As we have discussed, the Owners failed to produce the

required quantum of evidence on any of their other tort claims; thus, there is no

evidence that JPMorgan’s and Orca Assets’ actions, alleged to have interfered with the

Owners’ prospective contractual relationships, were independently tortious. See AMX

Corp. v. Pilote Films, No. 3:04-CV-2035-D, 2007 WL 1695120, at *20–21 (N.D. Tex.

June 5, 2007); McConnell v. Coventry Health Care Nat’l Network, No. 05-13-01365-CV,

2015 WL 4572431, at *6–7 (Tex. App.—Dallas July 30, 2015, pet. denied) (mem. op.);

cf. AmeriPath, Inc. v. Hebert, 447 S.W.3d 319, 342 (Tex. App.—Dallas 2014, pet. denied)

(“Because we have already concluded Hebert’s conduct raised a material fact issue on

the issue of breach of fiduciary duty, appellants have similarly raised a fact issue as to

Hebert’s conduct being independently tortious.”). The trial court did not err by

granting JPMorgan’s and the Orca Entities’ no-evidence motions directed to this

claim.

                                 III. CONCLUSION

         JPMorgan, the Orca Entities, and the Owners each had a good-faith basis to

assert title to the tract. Indeed, this court grappled with tracing the fractured title

interests, the effect of the 1944 judgment on the 1929 deed, and JPMorgan’s reasons
                                           27
to assert title. See Orca Assets, 470 S.W.3d 158–67. Although this court ultimately

concluded that the Owners’ title was superior, JPMorgan’s lease to Orca Assets during

a time that it held a colorable legal claim to title is not rendered tortious based on

hindsight. We conclude that the Owners proffered no, or less than a scintilla of,

summary-judgment evidence regarding essential elements of each of their tort claims

directed to JPMorgan’s or the Orca Entities’ actions regarding the tract.         We

accordingly overrule the Owners’ first issue. We need not address the Owners’

second and third issues because they assert the summary judgment was in error to the

extent it was based on JPMorgan’s and the Orca Entities’ affirmative defenses or on

their summary-judgment arguments attacking the Owners’ lost-profits evidence. See

Tex. R. App. P. 47.1. We affirm the trial court’s summary-judgment order. See Tex. R

App. P. 43.2(a).

                                                    /s/ Lee Gabriel

                                                    LEE GABRIEL
                                                    JUSTICE

DELIVERED: October 18, 2018

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