Court Opinion

ID: 4055342
Source: CourtListenerOpinion
Date Created: 2016-09-29 06:58:47.585192+00
Date Added: 2024-06-11T13:55:56.795562
License: Public Domain

ACCEPTED
                                                                             04-14-00807-CV
                                                                 FOURTH COURT OF APPEALS
                                                                      SAN ANTONIO, TEXAS
                                                                        5/20/2015 4:00:54 PM
                                                                              KEITH HOTTLE
                                                                                      CLERK

                        No. 04-14-00807-CV
__________________________________________________________________
                                                         FILED IN
                                                  4th COURT OF APPEALS
                   IN THE COURT OF APPEALS         SAN ANTONIO, TEXAS
        FOURTH COURT OF APPEALS DISTRICT OF05/20/2015
                                                   TEXAS 4:00:54 PM
                      SAN ANTONIO, TEXAS              KEITH E. HOTTLE
                                                           Clerk
__________________________________________________________________

                        BRAD AERY, ET AL.,
                                        Appellants          FILED IN
                                                     4th COURT OF APPEALS
                                 v.                   SAN ANTONIO, TEXAS
                                                     05/20/2015 4:00:54 PM
                      HOSKINS, INC., ET AL.,             KEITH E. HOTTLE
                                                              Clerk
                                       Appellees.
__________________________________________________________________

     On Appeal from 36th District Court of McMullen County, Texas
                Trial Court Cause No. M-12-0045-CV-A
               Honorable Starr Boldrick Bauer, Presiding
__________________________________________________________________

    BRIEF OF APPELLEE AURORA RESOURCES CORPORATION
__________________________________________________________________

                                  Roberta S. Dohse
                                  State Bar No. 05955400
                                  rdohse@hfdlaw.com
                                  Conner R. Jackson
                                  State Bar No. 24087786
                                  cjackson@hfdlaw.com
                                  HOBLIT DARLING RALLS HERNANDEZ
                                    & HUDLOW, LLP
                                  2000 Frost Bank Plaza
                                  802 N. Carancahua
                                  Corpus Christi, TX 78401
                                  (361) 888-9392
                                  (361) 888-9187 (facsimile)
                                  Counsel for Appellee
                                  Aurora Resources Corporation
                          Identities of Parties and Counsel

      Pursuant to TEX. R. APP. P. 38.1(a), Appellee Aurora Resources Corporation

submits the following list of the names and last known addresses of all parties and

their counsel at trial and on appeal:

Appellants/Plaintiffs                   Brad Aery
                                        Randi Aery

Counsel for the
Aery Appellants                         Dan Pozza
                                        State Bar No. 16224800
                                        Dan.pozza@yahoo.com
                                        Law Offices of Dan Pozza
                                        239 E. Commerce Street
                                        San Antonio, TX 78205-2923
                                        (210) 226-8888
                                        (210) 224-6373 (facsimile)

Trial Counsel for the
Aery Appellants                         Marc K. Whyte
                                        State Bar No. 24056526
                                        whytemarc@gmail.com
                                        Whyte, PLLC
                                        209 Tuttle
                                        San Antonio, TX 78209
                                        (210) 340-9877
                                        (210) 344-9899 (facsimile)

                                        Melanie Hessler Phipps
                                        State Bar No. 24032416
                                        mphipps@kplegal.com
                                        Kustoff & Phipps, LLP
                                        4103 Parkdale Street
                                        San Antonio, TX 78229-2520
                                        (210) 614-9444
                                        (210) 614-9464 (facsimile)

                                          ii
                          John George, Jr.
                          State Bar No. 24051944
                          jgeorgejr@bmpllp.com
                          Matthew F. Wymer
                          State Bar No. 24005234
                          mwymer@bmpllp.com
                          Bierne Maynard & Parson, LLP
                          112 East Pecan Street, Suite 2750
                          San Antonio, TX 78205
                          (210) 582-0220
                          (210) 582-0231 (facsimile)

Appellants/Intervenors:   The J.L. House Trust
                          Lloyd House
                          Robert Eugene House
                          Magdalen House
                          Judith Ann House
                          Wayne House
                          Jimmy R. House
                          Edna Pawelek Ulbrich
                          Peter James Pawelek
                          Jesse Pawelek
                          Ruby Pawelek Schumacher
                          Elizabeth Pawelek Reich
                          Roy Mitchell Pawelek
                          Darlene Robinson Williams
                          Diane Fischer Casey
                          Mary Kay Fischer Adams
                          Arley House

Counsel for
the House Appellants:     Rosemarie Kanusky
                          State Bar No. 00790999
                          Rosemary.kanusky@nortonrosefulgright.com
                          John W. Weber, Jr.
                          State Bar No. 21046500
                          John.weber@nortonrosefulbright.com
                          Jeffrey A. Webb
                          State Bar No. 24053544
                          Jeff.webb@nortonrosefulbright.com
                            iii
                           300 Convent, Suite 2100
                           San Antonio, TX 78205
                           (210) 224-5575
                           (210) 270-7205 (facsimile)

Trial Counsel for
the House Appellants:      John W. Weber, Jr.
                           State Bar No. 21046500
                           John.weber@nortonrosefulbright.com
                           Jeffrey A. Webb
                           State Bar No. 24053544
                           Jeff.webb@nortonrosefulbright.com
                           300 Convent, Suite 2100
                           San Antonio, TX 78205
                           (210) 224-5575
                           (210) 270-7205 (facsimile)

Appellees/Defendants:      C. Clifton Hoskins
                           Hoskins, Inc.
                           Trudy Day

Counsel for
these Hoskins Appellees:   C. David Kinder
                           State Bar No. 11432550
                           dkinder@dykema.com
                           Corey F. Wehmeyer
                           State Bar No. 24051903
                           cwehmeyer@dykema.com
                           Amy Davis
                           State Bar No. 24074114
                           adavis@dykema.com
                           Benjamin Robertson
                           State Bar No. 24083748
                           brobertson@dykema.com
                           Lindsay Scaief Riley
                           State Bar No. 24083799
                           lriley@dykema.com
                           Ellen B. Mitchell
                           State Bar No. 14208875
                           emitchell@dykema.com
                             iv
                              Dykema Cox Smith
                              112 East Pecan, Suite 1800
                              San Antonio, TX 78205
                              (210) 554-5500
                              (210) 226-8395 (facsimile)

                        and   Michael C. Sartori
                              State Bar No. 17655500
                              michael@msartori.com
                              Law Office of Michael C. Sartori
                              P.O. Box 1222
                              502A Houston Street
                              George West, TX 78022
                              (361) 449-2691
                              (361) 449-2380 (facsimile)

Appellees/Defendants:         Leonard Hoskins

Counsel for
Leonard Hoskins               David L. Ylitalo
                              State Bar No. 22155500
                              dylitalo@coatsrose.com
                              Coats Rose PC
                              1020 Northeast Loop 410, Suite 800
                              San Antonio, TX 78209
                              (210) 224-7098
                              (210) 212-5698 (facsimile)

Appellees/Defendants:         Lee Ann Kulka
                              Lee Roy Hoskins, III
                              Andrea Jurica

Counsel for
Kulka, Hoskins and Jurica
Appellees:                    Peter E. Hosey
                              State Bar No. 10027500
                              phosey@jw.com
                              Julia W. Mann
                              State Bar No. 00791171
                                v
                                jmann@jw.com
                                Jackson Walker, L.L.P.
                                112 E. Pecan Street, Suite 2400
                                San Antonio, TX 78205
                                (210) 978-7700
                                (210) 978-7790 (facsimile)

Appellee/Defendant:             Blake C. Hoskins

Counsel for Blake C. Hoskins:   Ezra A. Johnson
                                State Bar No. 24065499
                                ejohnson@ufjblaw.com
                                Joseph B.C. Fitzsimons
                                State Bar No. 07099100
                                jfitzsimons@ufjblaw.com
                                J. Byron “Trace” Burton, III
                                State Bar No. 24031776
                                tburton@ufjblaw.com
                                Uhl, Fitzsimons, Jewett & Burton, PLLC
                                4040 Broadway, Suite 430
                                San Antonio, TX 78209
                                (210) 829-1660
                                (210) 829-1641 (facsimile)

Appellee/Defendant:             Brent C. Hoskins

Counsel for Brent C. Hoskins:   David W. Navarro
                                State Bar No. 24027683
                                dnavarro@hsfblaw.com
                                Brendon C. Holm
                                State Bar No. 24087737
                                bholm@hsfblaw.com
                                Hornberger Sheehan Fuller Bieter
                                Wittenberg & Garza Incorporated
                                The Quarry Heights Building
                                7373 Broadway, Suite 300
                                San Antonio, TX 78209
                                (210) 271-1700
                                (210) 271-1740 (facsimile)

                                  vi
Appellee/Defendant:               Hazel Q. Hoskins
                                  (in her individual and representative
                                  capacities)
Counsel for Hazel Q. Hoskins:     Michael C. Sartori
                                  State Bar No. 17655500
                                  michael@msartori.com
                                  Law Office of Michael C. Sartori
                                  P.O. Box 1222
                                  502A Houston Street
                                  George West, TX 78022
                                  (361) 449-2691
                                  (361) 449-2380 (facsimile)

Appellee/Defendant:               Jane Hoskins

Counsel for Jane W. Hoskins:      Benjamin F. Youngblood, III
                                  State Bar No. 22213700
                                  bfy@prodigy.net
                                  Benjamin F. Youngblood III, P.L.L.C.
                                  8207 Callaghan Road, Suite 100
                                  San Antonio, TX 78230
                                  (210) 308-9829
                                  (210) 308-9854 (facsimile)

Appellee/Third Party Defendant:   Aurora Resources Corporation

Counsel for Aurora
Resources Corporation:            Roberta S. Dohse
                                  State Bar No. 05955400
                                  rdohse@hfdlaw.com
                                  Conner R. Jackson
                                  State Bar No. 24087786
                                  cjackson@hfdlaw.com
                                  HOBLIT DARLING RALLS HERNANDEZ
                                    & HUDLOW, LLP
                                  2000 Frost Bank Plaza
                                  802 N. Carancahua
                                  Corpus Christi, TX 78401
                                  (361) 888-9392
                                  (361) 888-9187 (facsimile)
                                    vii
Appellees/Third Party
Defendants:                        Armadillo E&P,Inc.
                                   (f/k/a Texoz E&P II, Inc.)
                                   Sea Eagle Ford, LLC
                                   Sundance Energy, Inc.

Counsel for Armadillo E&P, Inc.,
Sea Eagle Ford & LLC
Sundance Energy, Inc.:             Bruce D. Oakley
                                   State Bar No. 15156900
                                   Bruce.oakley@hoganlovells.com
                                   Robert L. Pillow
                                   State Bar N. 24080315
                                   Robert.pillow@hoganlovells.com
                                   Hogan Lovells US LLP
                                   700 Louisiana Street, Suite 4300
                                   Houston, TX 77002
                                   (713) 632-1420
                                   (713) 632-1401 (facsimile)

Appellee/Third Party Defendant:    Texoz E&P I, Inc.

Counsel for Texoz E&P I, Inc.:     Jason A. Newman
                                   State Bar No. 24048689
                                   Jason.newman@bakerbotts.com
                                   Baker Botts L.L.P.
                                   One Shell Plaza
                                   910 Louisiana Street
                                   Houston, TX 77002-4995
                                   (713) 229-1720
                                   (713) 229-2720 (facsimile)

                                    viii
                                                Table of Contents

Identities of Parties & Counsel ...................................................................... ii

Table of Contents .......................................................................................... ix

Index of Authorities ...................................................................................... xi
      Cases .............................................................................................. xi, xii
      Statutes ................................................................................................ xii
      Rules ................................................................................................... xii

Statement of the Case .................................................................................. xiii

Statement Regarding Oral Argument .......................................................... xv

Issues Presented ........................................................................................... xv

Adoption and Incorporation of Brief of Appellees C. Clifton Hoskins
and Hoskins, Inc. ............................................................................................. 1

Statement of Facts .......................................................................................... 2
      A.    Aurora Serves as Operator for Wells Located on the
            Hoskins and Ray Tracts.............................................................. 2
      B.    Appellants Sued Aurora for, among other things, the
            Nonpayment of Royalties ........................................................... 3
      C.    As Noted in the Hoskins Appellees’ Statement of Facts,
            the Trial Court Granted Summary Judgment in Favor of
            Hoskins, and Declared Appellants Did Not Have the
            NPIRs in Production from the Hoskins and Ray Tracts ............ 4
      D.    Aurora’s Traditional Motion for Partial Summary
            Judgment was Granted on a Derivative Basis ............................ 5

Summary of the Argument ............................................................................. 5

Argument and Authorities............................................................................... 6
     A.    The Trial Court Properly Granted Derivative Summary
           Judgment in Favor of Aurora, as the Granting of
           Summary Judgment in Favor of the Hoskins Appellees
           Disposed of any Basis for Recovery Against Aurora ................ 7

                                                             ix
                   1. Appellants are Not “Payees” as Defined in the Statute
                      Authorizing Non-Payment of Oil and Gas Royalties
                      as a Cause of Action .............................................................. 7
                   2. Any Benefit or Money Retained by Aurora Would
                      Not Belong to Appellants ...................................................... 8
                   3. Any Alleged Tortious Interference Could Not Have
                      Damaged Appellants ........................................................... 10
                   4. Appellants Had No Possession of or Interest in the
                      Property Claimed to Have Been Converted ........................ 12
Conclusion ................................................................................................... 13

Prayer ........................................................................................................... 14

Certificate of Compliance ............................................................................ 15

Certificate of Service .............................................................................. 15-16

Appendix ....................................................................................................... 17

                                                              x
                                         Index of Authorities

Cases

Baty v. Protech Ins. Agency,
63 S.W.3d 841 (Tex. App.—Houston [14th Dist.] 2001, pet. denied) ......... 11

Best Buy v. Barrera,
248 S.W.3d 160 (Tex. 2007) (per curiam) ...................................................... 9

Cristobal v. Allen,
2010 Tex. App. LEXIS 5829 (Tex. App.—Houston [1st Dist.] 2010) ........ 10

Delz v. Winfrey,
16 S.W. 111 (Tex. 1891) ......................................................................... 11, 13

Heldenfels Bros., Inc. v. City of Corpus Christi,
832 S.W.2d 39 (Tex. 1992) ....................................................................... 9, 10

J.P. Morgan Chase Bank, N.A. v. Texas Contract Carpet, Inc.,
302 S.W.3d 515 (Tex. App.—Austin 2009, no pet.) .................................. 12

Long Island Owner’s Ass’n, Inc. v. Davidson,
965 S.W.2d 674, 684 (Tex. App.—Corpus Christi 1998, pet. denied) .......... 6

Massey v. Armco Steel Co.,
652 S.W.2d 932 (Tex. 1983)......................................................................... 11

MGA Ins. Co. v. Charles R. Chesnutt, P.C.,
358 S.W.3d 808, (Tex. App.—Dallas 2012, no pet.) ..................................... 9

Staats v. Miller,
240 S.W.2d 342 (Tex. Civ. App.—Amarillo 1951), rev’d on other
grounds, 150 Tex. 581, 243 S.W.2d 686 (Tex. 1951) .................................. 12

Staats v. Miller,
243 S.W.2d 686 (Tex. 1951)..................................................................... 9, 10

Stonebridge Life Ins. Co. v. Pitts,
236 S.W.3d 201 (Tex. 2007) (per curiam) ...................................................... 9
                                                       xi
Tri-State Chems., Inc. v. Western Organics, Inc.,
83 S.W.3d 189 (Tex. App.—Amarillo 2002, pet. denied)........................ 9, 10

Victoria Bank & Trust Co. v. Brady,
811 S.W.2d 931 (Tex. 1991)......................................................................... 10

Wal-Mart Stores, Inc. v. Sturges,
52 S.W.3d 711 (Tex. 2001) ........................................................................... 11

Statutes

TEX. NAT. RES CODE ANN. §91.401 (West 2005) ........................................... 8

TEX. NAT. RES CODE ANN. §91.401(1) (West 2005) ...................................... 8

TEX. NAT. RES CODE ANN. §91.402 (West 2005) ........................................... 8

TEX. NAT. RES CODE ANN. §91.403 (West 2005) ........................................... 8

TEX. NAT. RES CODE ANN. §91.404 (West 2005) ........................................... 8

TEX. NAT. RES CODE ANN. §91.404(c) (West 2005) ...................................... 8

Rules

TEX. R. APP. P. 9.4 ........................................................................................ 15

TEX. R. APP. P. 9.4(i) .................................................................................... 15

TEX. R. APP. P. 38.1(a) ........................................................................................ ii

TEX. R. APP. P. 38.2 ............................................................................................ 1

                                                            xii
                         STATEMENT OF THE CASE
      Appellee Aurora Resources Corporation (“Aurora”) (Third Party Defendant

below) adopts by reference and incorporates as though fully set forth herein the

Statement of the Case provided in the Brief of Appellees C. Clifton Hoskins and

Hoskins, Inc.

      The position of Aurora in this appeal is directly dependent upon this Court’s

decision as to the merits of the Motion for Summary Judgment (CR 1 at 11-64) by

C. Clifton Hoskins and Hoskins, Inc. (“Hoskins”) and the subsequent amended

motion (CR 1 at 194-381). The trial court entered an Order granting Hoskins’

Amended Motion for Summary Judgment on August 4, 2014. CR 4 at 1077-81;

Appendix at A.

      Aurora filed its Motion for Summary Judgment on August 25, 2014,

following the trial court’s Order on Hoskins’ Motion for Summary Judgment. CR

4 at 1155-1256.

      On September 18, 2014, the trial court entered a series of orders, effectively

resolving nearly all outstanding issues and facilitating Final Judgment in the case.

The rulings included an Order denying the Joint Motion for Summary Judgment

filed by Aery and House (CR 5 at 1656), an Order denying Aery’s and House’s

Joint No Evidence Motion for Summary Judgment as to C. Clifton Hoskins’ and

Blake Hoskins’ Counterclaims (CR 5 at 1654), an Order sustaining objections to

                                        xiii
certain of Hoskins’ summary judgment evidence (CR 5 at 1658), and an Order

granting Hoskins’s Objection and Motion to Strike certain of Aery and House’s

summary judgment evidence (CR 5 at 1651-52).

      Also among the numerous Orders entered on September 18, 2014, was the

trial court’s Order on Derivative Summary Judgment Motions Based on the August

4, 2014 Order. CR 5 at 1631-33; Appendix at B. This Order granted summary

judgment in favor of numerous parties, including Aurora. Id.

      The parties subsequently dismissed cross-claims. See, e.g., Texoz E&P I,

Inc. and Aurora’s Joint Motion for Entry of Proposed Order Dismissing

Crossclaims dated September 24, 2014 (CR 5 at 1669-72). An Order dismissing

those cross-claims was entered October 21, 2014. CR 5 at 1685-86; Appendix at

C. Aurora also nonsuited its counterclaim for declaratory relief on September 26,

2014. SR at 4-7. The trial court granted this request for nonsuit in the Final

Judgment entered on October 21, 2014. CR 5 at 1707; Appendix at D.

      Ultimately, all pending cross-claims and counterclaims were dismissed,

nonsuited or otherwise resolved, enabling the Court to enter a Final Judgment as to

all claims on October 21, 2014. CR 5 at 1705-1716; Appendix at D. That Final

Judgment sets out in detail the rationale for its finality, and resolves any remaining

issues associated with any summary judgment filed by Hoskins. CR 5 at 1705-07;

Appendix at D.      That Final Judgment also clarifies that the Order granting

                                         xiv
summary judgment in favor of Aurora, and others, is derivative of the ruling in

favor of Hoskins. CR 5 at 1706; Appendix at D. Appellants’ Notice of Appeal

was timely filed. CR 5 at 1718-22.

      In accord with the foregoing, Aurora is aligned with the position of Hoskins

in this appeal.

                  STATEMENT REGARDING ORAL ARGUMENT

      Appellee Aurora Resources Corporation does not believe that oral argument

would be of assistance to the Court, as the facts are undisputed and the issues

presented are wholly a matter of construction of deeds and conveyances.

However, in the event that the Court elects to grant Appellants’ request for oral

argument, Appellee Aurora Resources Corporation requests the opportunity to

participate therein and present argument as well.

                              ISSUES PRESENTED

      Appellants identify two issues on appeal. Aurora adopts the position of

Hoskins, that there is really only one issue to be resolved:

      The ultimate issue presented is whether the 1966 deed from Sam

      Quinn to James House, which described only the 623.93-acre Quinn

      Tract, also conveyed Quinn’s one-quarter (1/4) non-participating

      interests in royalties (“NPIRs”) in the separate Ray Tract and Hoskins

      Tract.

                                          xv
                        No. 04-14-00807-CV
__________________________________________________________________

                   IN THE COURT OF APPEALS
        FOURTH COURT OF APPEALS DISTRICT OF TEXAS
                      SAN ANTONIO, TEXAS
__________________________________________________________________

                            BRAD AERY, ET AL.,
                                                Appellants
                                        v.
                           HOSKINS, INC., ET AL.,
                                       Appellees.
__________________________________________________________________

     On Appeal from 36th District Court of McMullen County, Texas
                Trial Court Cause No. M-12-0045-CV-A
               Honorable Starr Boldrick Bauer, Presiding
__________________________________________________________________

    BRIEF OF APPELLEE AURORA RESOURCES CORPORATION
__________________________________________________________________

TO THE HONORABLE COURT OF APPEALS:

      COMES NOW Appellee, Aurora Resources Corporation (“Aurora”), and

respectfully submits this its Brief of Appellee pursuant to Rule 38.2 of the Texas

Rules of Appellate Procedure, and would respectfully show the Court as follows:

            I. ADOPTION AND INCORPORATION OF
  BRIEF OF APPELLEES C. CLIFTON HOSKINS AND HOSKINS, INC.

      Because Aurora’s position in the underlying litigation and in this appeal is

clearly derivative of the position of Hoskins, Appellee Aurora hereby adopts and
incorporates by reference the Brief of Appellees C. Clifton Hoskins and Hoskins,

Inc., including the Statement of Facts, Standard of Review, Argument and

Authorities. To the extent additional specific reference is required as to Aurora,

that is included below, as an addition to the facts and argument set forth by

Hoskins.

                         II. STATEMENT OF FACTS

      Appellee has adopted and incorporated by reference the undisputed facts

contained in the Brief of Appellees C. Clifton Hoskins and Hoskins, Inc. This

includes those facts pertaining to the conveyance of the various deeds and

instruments relating to ownership of and royalty interests in the estates of the

various tracts comprising 2.471.8-acre ranch ( “The Ranch”), as well as any others

set out in Hoskins’ Statement of Facts. Aurora would add the following facts

which are specific to Aurora.

      A.    Aurora Serves as Operator for Wells Located on the Hoskins and
            Ray Tracts.

      Aurora became involved in this case as result of serving as operator for

various producing wells on the Hoskins and Ray Tracts. CR 1 at 77-78. Part of

Aurora’s obligations as operator include the proper and timely payment of royalties

on the production from these wells.

                                        2
          B.    Appellants Sued Aurora for, among other things, the Nonpayment
                of Royalties.

          On January 10, 2014, The James House Family filed its Original Petition in

Intervention, Third-Party Petition, and Application for Injunctive Relief, naming

Aurora and others as Third-Party Defendants. CR 1 at 66. The James House

Family identifies causes of action for trespass to try title to the mineral estate,

conversion, declaratory relief, a request for injunctive relief, and a claim for the

nonpayment of oil and gas proceeds or interest. All causes of action allege the

same fundamental complaint: non-payment of oil and gas royalties. CR 1 at 78-83

et seq.

          Shortly thereafter, the Aery Appellants amended their Petition to add several

Defendants, including Aurora. Aery similarly raised claims for conversion and

accounting, unjust enrichment and money had and received, and violation of

Chapter 91 of the Texas Natural Resources Code. CR 1 at 155-166. The Aery

Appellants also requested declaratory judgment, claiming they were entitled to

royalties related to oil and gas production from the Hoskins and Ray Tracts in the

past, present, and future, and that the NPIR was a valid and existing contractual

right, passed to the Aery Appellants upon their purchase of the Quinn Tract. CR 1

at 161, et seq.

          Appellants’ live pleadings, which mirror one another, allege the following

causes of action against Aurora: conversion and conspiracy to commit the same;
                                            3
unjust enrichment and money had & received; tortious interference with existing

and prospective contracts, and conspiracy to commit the same; and, pursuant to

Chapter 91 of the Texas Natural Resources Code, non-payment of oil and gas

proceeds. CR 3 at 1016-1031 et seq. (Aery live Petition); CR 3 at 1033-1059 et

seq. (House live Plea in Intervention and Third Party Petition). Appellants’ live

pleadings also seek declaratory and injunctive relief. CR 3 at 1022, 1024-25; CR 3

at 1047-48, 1052-54.

      C.    As Noted in the Hoskins Appellees’ Statement of Fact, the Trial
            Court Granted Summary Judgment in Favor of Hoskins, and
            Declared Appellants Did Not Have the NPIRs in Production from
            the Hoskins and Ray Tracts.

      On August 4, 2014, Judge Starr Boldrick Bauer signed and entered an order

granting the declaratory relief sought in Defendant C. Clifton Hoskins’s First

Amended Motion for Partial Summary Judgment. CR 4 at 1077-1078; Appendix at

A. The Court ordered and declared that:

      The February 9, 1966 Deed from Sam E. Quinn to James L. House
      conveying the lands of the 623.93-acre Quinn Tract (Vol. 95, pg. 451)
      did not convey Sam E. Quinn’s non-participating royalty interests in
      the Ray Tract and Hoskins Tract, originally established and described
      in that certain November 7, 1963 Partition and Royalty Deed (Vol. 95,
      pg. 357) and subsequently conveyed to Hazel Hoskins and L.R.
      Hoskins by that certain February 11, 1966 Deed from Sam E. Quinn
      to L. R. Hoskins and Hazel Hoskins conveying his non-participating
      royalty interests in Ray Tract and Hoskins Tract.

Id.

                                          4
      In conjunction with this declaration, the Court further ordered that the House

and Aery Appellants take nothing on their declaratory judgment claims. CR 4 at

1078; Appendix at A.

      D.     Aurora’s Traditional Motion for Partial Summary Judgment was
             Granted on a Derivative Basis.

      As further noted above, based upon the trial court’s ruling as to Hoskins,

Aurora moved for summary judgment, arguing that claims raised against Aurora

all derived from the claims against Hoskins and therefore held no merit. CR 4 at

1155-1255 et seq. The trial court granted Aurora’s Traditional Motion for Partial

Summary Judgment and several other summary judgment motions on this same

derivative basis. CR 5 at 1631-33; Appendix at B.

                       III. SUMMARY OF ARGUMENT

      Aurora has adopted in its entirety the argument and authorities set forth by

the Hoskins Appellees in their Brief. The trial court did not err when it granted

summary judgment and derivative summary judgment in favor of Appellees,

including Aurora.

      The trial court correctly determined that the Aery and House Appellants did

not acquire non-participating interests in royalties (“NPIRs”) in the Hoskins and

Ray tracts. The agreement upon which Appellants base their claim is contractual

in nature.   Texas recognizes that cross-conveyances of royalty interests in a

pooling situation can be valid, but they do not create appurtenant interests in land
                                         5
not directly owned. Instead, they create a pooled royalty interest in gross.1 Under

the circumstances of this case, three individual tracts continued to exist, not just

one.

       Therefore, the Aery and House Appellants are not entitled to royalty on

production from the Hoskins and Ray Tracts.                All claims against Aurora are

without merit, as the trial court properly found. As a matter of law, derivative

summary judgment was properly granted in favor of Aurora. The trial court’s

judgment should in all things be affirmed.

                       IV. ARGUMENT AND AUTHORITIES

       Aurora Resources Corporation herein incorporates by reference the

“Argument and Authorities” contained in Appellee C. Clifton Hoskins’ Brief. For

the reasons set forth therein, the transfer of property to Appellants through the

Quinn Deed did not expressly convey Quinn’s NPIRs in the Ray Tract or the

Hoskins Tract. Further, it did not impliedly convey Quinn’s NPIRs in the Ray

Tract or the Hoskins Tract as appurtenances.

       Appellee Aurora Resources also adds the following argument appropriate to

the derivative claims asserted by Appellants against Aurora.

1An appurtenant interest attaches to the land; an interest in gross is personal and does not pass
with the land. See Long Island Owner’s Ass’n, Inc. v. Davidson, 965 S.W.2d 674, 684 (Tex.
App.—Corpus Christi 1998, pet. denied).
                                               6
       A.    The Trial Court Properly Granted Derivative Summary
             Judgment in Favor of Aurora, as the Granting of Summary
             Judgment in Favor of the Hoskins Appellees Disposed of any
             Basis for Recovery Against Aurora.

       In their Opening Brief, Appellants do not address the appropriateness of the

derivative summary judgment granted by the trial court in favor of Aurora.

Nevertheless, in the event that Appellants challenge this grant of summary

judgment in favor of Aurora or any other Appellee, Appellee Aurora would refer

this Court to its underlying Motion for Partial Traditional Summary Judgment (CR

4 at 1155-1255), which sets out in detail the basis on which the trial court could

properly rule that all causes of action and relief sought from Aurora are premised

upon Appellants’ entitlement to royalties.       The trial court properly declared

Appellants had no interest in the Hoskins or Ray Tracts. Appellants therefore have

no basis for claiming that they have not properly been paid for royalty interests

they do not possess.

             1. Appellants are Not “Payees” as Defined in the Statute
                Authorizing Non-Payment of Oil and Gas Royalties as a Cause
                of Action.
       Aurora was properly granted summary judgment regarding Appellants’

claims of non-payment of oil and gas royalties on the basis that Appellants are not

entitled to payments of oil and gas royalties in dispute, and thus are not “payees” as

defined by the statute establishing a cause of action for non-payment of oil and gas

royalties.

                                          7
       Nonpayment of oil and gas proceeds or interest is a statutory cause of action

provided in Section 91.404 of the Texas Natural Resources Code whereby a

statutorily-defined “payee” “has a cause of action for nonpayment of oil or gas

proceeds or interest on those proceeds as required Section 91.402 or 91.403 of [the

Texas Natural Resource Code]….” TEX. NAT. RES. CODE ANN. §91.404(c) (West

2005). The trial court correctly determined that Appellants are not “payees.”

       Texas Natural Resources Code Chapter 91, Subchapter J, Payment For

Proceeds Of Sale, defines “payee” as “any person or persons legally entitled to

payment from the proceeds derived from the sale of oil or gas from an oil or gas

well located in this state.” TEX. NAT. RES CODE ANN. §91.401(1) (West 2005).

Appellants are not legally entitled to payment of proceeds derived from the sale of

oil or gas from wells located on either the Ray or Hoskins Tracts of the Ranch, as

they have no NPIRs or other royalty interests therein. CR 4 at 1077-78; Appendix

at A. Appellants are therefore not “payees” as defined by §91.401, and summary

judgment in favor of Aurora was properly granted as to Appellants’ claims for non-

payment of oil and gas royalties. TEX. NAT. RES CODE ANN. §91.401(1) (West

2005).

             2. Any Benefit or Money Retained by Aurora Would Not Belong
                to Appellants.

       Appellants further asserted a claim against Aurora for unjust enrichment and

money had and received. CR 3 at 1023; CR 3 at 1049. Even if Aurora has
                                          8
retained any benefit from this dispute, which it denies, it would not be to the

detriment of Appellants, who have no interest in the disputed royalties.

      Unjust enrichment is a theory of recovery that applies when a defendant has

obtained a benefit from the plaintiff by fraud, duress, or the taking of an undue

advantage. See Heldenfels Bros., Inc. v. City of Corpus Christi, 832 S.W.2d 39, 41

(Tex. 1992). Unjust enrichment may take the form of the unjust retention of a

benefit to the detriment of another person or the unlawful retention of money or of

other personal property belonging to another person. Tri-State Chems., Inc. v.

Western Organics, Inc., 83 S.W.3d 189, 199 (Tex. App.—Amarillo 2002, pet.

denied).

      Similarly, a claim for money had and received requires proof that a

defendant holds money which belongs to the plaintiff in equity and good

conscience. MGA Ins. Co. v. Charles R. Chesnutt, P.C., 358 S.W.3d 808, 813

(Tex. App.—Dallas 2012, no pet.). It is an equitable doctrine applied to prevent

unjust enrichment. Id.; see Stonebridge Life Ins. Co. v. Pitts, 236 S.W.3d 201, 203

at n.1 (Tex. 2007) (per curiam). A plaintiff must show that the defendant holds

money or its equivalent that in equity and good conscience belongs to the

plaintiff.   Best Buy v. Barrera, 248 S.W.3d 160, 162–163 (Tex. 2007) (per

curiam); Staats v. Miller, 243 S.W.2d 686, 687 (Tex. 1951); see Tri-State Chems.,
83 S.W.3d at 194-95 (equivalent of money may be recovered).

                                         9
      Appellants have no royalty interest in production from the Hoskins or Ray

Tracts. As such, any money or other benefit Aurora may hold from production of

oil and gas on the Ray Tract or the Hoskins Tract, which Aurora denies, does not

belong to Appellants either legally or in equity. See Staats, 243 S.W.2d at 687;

Tri-State Chems., 83 S.W.3d at 199.          As the oil and gas, or any monetary

equivalent such as royalties, do not belong to Appellants, any withholding or

benefit received by Aurora has not been obtained from Appellants. See Cristobal

v. Allen, 2010 Tex. App. LEXIS 5829, *16-17 (Tex. App.—Houston [1st Dist.]

2010) (citing Heldenfels Bros., Inc., 832 S.W.2d at 41). As Appellants are not an

aggrieved party, summary judgment was properly granted in favor of Aurora with

respect to Appellants’ causes of action of unjust enrichment and money had and

received.

             3. Any Alleged Tortious Interference Could Not Have Damaged
                Appellants.
      The elements of a cause of action for tortious interference with an existing

contract are: (1) the existence of a contract subject to interference; (2) a willful and

intentional act of interference; (3) such act was a proximate cause of damage; and

(4) actual damage or loss occurred. Victoria Bank & Trust Co. v. Brady, 811
S.W.2d 931, 939 (Tex. 1991).

      The elements of a cause of action for tortious interference with a prospective

contract are: (1) a reasonable probability that the parties would have entered into a

                                          10
contractual relationship; (2) an “independently tortious or unlawful” act by the

defendant that prevented the relationship from occurring; (3) the defendant did

such act with a conscious desire to prevent the relationship from occurring or knew

that the interference was certain, or substantially certain, to occur as a result of his

conduct; and (4) the plaintiff suffered actual harm or damage as a result of the

defendant's interference. Wal-Mart Stores, Inc. v. Sturges, 52 S.W.3d 711, 726

(Tex. 2001); Baty v. Protech Ins. Agency, 63 S.W.3d 841, 860 (Tex. App.—

Houston [14th Dist.] 2001, pet. denied).

      Finally, a conspiracy is a combination by two or more persons to accomplish

an unlawful purpose or to accomplish a lawful purpose by unlawful means.

Massey v. Armco Steel Co., 652 S.W.2d 932, 934 (Tex. 1983). The essential

elements of a conspiracy include one or more unlawful, overt act and damages as

the proximate result. Id. If a plaintiff is incapable of sustaining a separate action

against a defendant on account of the matter complained of, then a charge of

conspiracy will not sustain it alone. Delz v. Winfrey, 16 S.W. 111, 112 (Tex.

1891). In other words, the act complained of as accomplished or attempted to be

accomplished through the conspiracy must be actionable itself. Id.

      Aurora has done no tortious act, much less an intentional act of interference,

and has not caused damages to Appellants. Appellants have no royalty interests in

production from the Hoskins or Ray Tracts. CR 4 at 1077-78; Appendix at A.

                                           11
Because Appellants had no such interests, they cannot as a matter of law have

suffered any damages from the nonpayment of monies to which they are not

entitled.

       Because an element of Appellants’ tortious interference claim fails as a

matter of law, and the alleged tortious conduct underlying Appellants’ claim for

conspiracy is not actionable, summary judgment in favor of Aurora disposing of

Appellants’ claims of tortious interference and conspiracy to commit the same was

properly granted.

             4. Appellants Had No Possession of or Interest in the Property
                Claimed to Have Been Converted.

       Conversion is an offense against the possession of property. Staats v. Miller,

240 S.W.2d 342, 345 (Tex. Civ. App.—Amarillo 1951), rev’d on other grounds,

150 Tex. 581, 243 S.W.2d 686 (Tex. 1951). If the plaintiff did not or does not

own, possess, or have the right to possession of property, the plaintiff has no

property interest and cannot sue for conversion. J.P. Morgan Chase Bank, N.A. v.

Texas Contract Carpet, Inc., 302 S.W.3d 515, 536-39 (Tex. App.—Austin 2009,

no pet.). This is self-evident. Here, the property in question, oil and gas produced

from the Ray and Hoskins Tracts, is not the property of Appellants. CR 4 at 1077-

78; Appendix at A. As such, a claim that Aurora converted property in which

Appellants have no possessory rights or entitlement of any other nature necessarily

                                         12
fails. Moreover, as Appellants’ conversion claims cannot be sustained, neither can

Appellants’ claims of conspiracy to commit conversion. See Delz, 16 S.W. at 112.

      Based on the foregoing, summary judgment was properly entered in favor of

Aurora and against Appellants’ claims for conversion and conspiracy to commit

conversion.

                                V. CONCLUSION

      The trial court’s Order granting summary judgment in favor of C. Clifton

Hoskins and Hoskins, Inc. reflects the proper construction and interpretation of the

relevant deeds and conveyances as it relates to the royalty interests at issue.

Because the issue centers on the interpretation and construction of written deed and

agreements, the question presented is inherently one of law, and the trial court was

within its rights and discretion to make such a ruling.

      Appellants raise no argument in their Opening Brief regarding the fitness of

the trial court in granting derivative summary judgment.         Appellants’ claims,

including those against Aurora, are entirely conditioned upon ownership of

relevant royalty interests. The trial court determined those interests do not belong

to Appellants. The trial court further acted properly, and in accordance with

controlling legal principles, by granting derivative summary judgment in favor of

Aurora and all other appellees. Accordingly, as to Aurora and all other appellees,

the Final Judgment entered by the trial court should be upheld in all respects.

                                          13
                                    VI. PRAYER

      WHEREFORE, Appellee Aurora Resources Corporation respectfully

requests that the trial court’s judgment in all things be affirmed, including the

granting of summary judgment in favor of Appellee Aurora. Appellee further

prays for such other and further relief to which it may be justly entitled.

                                           Respectfully submitted,

                                           HOBLIT DARLING RALLS HERNANDEZ
                                            & HUDLOW, LLP
                                           2000 Frost Bank Plaza
                                           802 N. Carancahua
                                           Corpus Christi, TX 78401
                                           (361) 888-9392
                                           (361) 888-9187 (facsimile)

                                           /s/ Roberta S. Dohse
                                           Roberta S. Dohse
                                           State Bar No. 05955400
                                           rdohse@hfdlaw.com
                                           Conner R. Jackson
                                           State Bar No. 24087786
                                           cjackson@hfdlaw.com

                                           Counsel for Appellee
                                           Aurora Resources Corporation

                                          14
                         CERTIFICATE OF COMPLIANCE

      I hereby certify that this Appellees’ Brief has been computer-generated,
using Word by Microsoft, in 14-point font, Times New Roman, in accord with
TEX. R. APP. P. 9.4, and that the number of words in this document totals
approximately 2,920, excluding the caption, identity of parties and counsel,
statement regarding oral argument, table of contents, index of authorities,
statement of the case, statement of issues presented, statement of jurisdiction,
statement of procedural history, signatures, proof of service, this certificate of
compliance, and any appendix (as is permitted by and in compliance with Tex. R.
App. P. 9.4(i)).

                                      /s/ Roberta S. Dohse
                                      Roberta S. Dohse
                                      Counsel for Appellees

                            CERTIFICATE OF SERVICE
      I hereby certify that a true and correct copy of Appellees’ Brief has been
forwarded to all counsel of record, via U.S. Postal Services, Certified Mail, return
receipt requested, and/or via electronic filing, on this the 20th day of May, 2015.
Dan Pozza                                    John George, Jr.
Law Offices of Dan Pozza                     Matthew F. Wymer
239 E. Commerce Street                       Bierne Maynard & Parson, LLP
San Antonio, TX 78205-2923                   112 East Pecan Street, Suite 2750
                                             San Antonio, TX 78205
Marc K. Whyte
Whyte, PLLC                                  Rosemarie Kanusky
209 Tuttle                                   John W. Weber, Jr.
San Antonio, TX 78209                        Jeffrey A. Webb
                                             Norton Rose Fulbright
Melanie Hessler Phipps                       300 Convent St., Suite 2100
Kustoff & Phipps, LLP                        San Antonio, TX 78205
4103 Parkdale Street
San Antonio, TX 78229-2520

                                        15
C. David Kinder                             Peter E. Hosey
Corey F. Wehmeyer                           Julia W. Mann
Amy Davis                                   Jackson Walker, L.L.P.
Benjamin Robertson                          112 E. Pecan Street, Suite 2400
Lindsay Scaief Riley                        San Antonio, TX 78205
Ellen B. Mitchell
Dykema Cox Smith                            Ezra A. Johnson
112 East Pecan, Suite 1800                  Joseph B.C. Fitzsimons
San Antonio, TX 78205                       J. Byron “Trace” Burton, III
                                            Uhl, Fitzsimons, Jewett
Michael C. Sartori                           & Burton, PLLC
Law Office of Michael C. Sartori            4040 Broadway, Suite 430
P.O. Box 1222                               San Antonio, TX 78209
502A Houston Street
George West, TX 78022

David L. Ylitalo
Coats Rose PC
1020 Northeast Loop 410, Suite 800
San Antonio, TX 78209

                                     /s/ Roberta S. Dohse
                                     Roberta S. Dohse

                                       16
                                APPENDIX

Exhibit A   Order Granting Defendant C. Clifton Hoskin’s First Amended Motion
            for Partial Summary Judgment (August 4, 2014) (CR 4 at 1077-81)

Exhibit B   Order on Derivative Summary Judgment Motions Based on August 4,
            2014 Order (September 18, 2014) (CR 5 at 1631-33)

Exhibit C   Agreed Order Dismissing Texoz E&P I, Inc.’s and Aurora Resources
            Corporation’s Cross-Claims for Contribution Without Prejudice
            (October 21, 2014) (CR 5 at 1685-86)

Exhibit D   Final Judgment (entered October 21, 2014) (CR 5 at 1705-1716)

                                      17