Court Opinion

ID: 9515848
Source: CourtListenerOpinion
Date Created: 2023-08-06 23:06:24.786765+00
Date Added: 2024-06-11T09:09:01.230534
License: Public Domain

HIGGINSON, Circuit Judge,
concurring:
I agree with Judge Dennis’ reasoning and outcome, but write to explain in further detail why I believe the contracts’ language is ambiguous.
The overriding royalty interest (“ORRI”) assignment contracts contain “calculate and pay” clauses stating: “The overriding royalty interest assigned herein shall be calculated and paid in the same manner and subject to the same terms and conditions as the landowner’s royalty under the Lease.” Like many complex sentences, ambiguity exists in this one’s structure. ORRI is the subject, and one predicate is the “calculate[ ] and pay” verb phrase.
Appellants imply that the prepositional phrase and subordinate clause that follow — i.e., “in the same manner and subject to the same terms and conditions” — modify that verb phrase, cf. Int’l Primate Prot. League v. Adm’rs of Tulane Educ. Fund, 500 U.S. 72, 79-80, 111 S.Ct. 1700, 114 L.Ed.2d 134 (1991), and because the verb phrase “calculate[ ] and pay” is affirmative, it logically does not imply its opposite, nonpayment or suspension. Manners and terms and conditions all contemplate payment in the first pláce. In simpler terms, this reading would be less ambiguous if written as follows: “The ORRI shall be calculated and paid in the same manner as the landowner’s royalty under the Lease,” persuasively, therefore, not contemplating suspension altogether, but just regulating payment.
Contrastingly, Appellees’ argument points to meaning from a different grammatical arrangement, where ORRI itself is modified by the final clause “subject to the same terms and conditions as the landowner’s royalty,” hence, plausibly, subject even to nonpayment or suspension altogether. In simpler, less ambiguous terms: “The *442ORRI shall be subject to the same terms and conditions as the landowner’s royalty under the Lease,” even if that condition is suspension altogether. Indeed, had the sentence separated that dependent clause by commas — thus: “, and subject to the same terms and conditions,” — Appellees would have a stronger argument as to clarity of meaning.
Given the language of the contracts, however, I cannot say that, for the reasons above, the sentence is free of ambiguity.