STATUTORY ATTORNEY'S FEES UNDER THE TTLA
SOURCE: Chieftain Exploration Co., Inc v. Gastar Exploration Inc., No. 10-15-00037-CV (Tex.App.- Waco, Aug. 30, 2017, pet. filed and docketed under Tex. No.17-1040, case abated 11/9/2018 based on bankruptcy filing) (summary judgment reversed in part and remanded for award of attorney's fees under the TTLA to the prevailing defendant).
Chieftain contends Gastar was not a prevailing party because Gastar did not prove it did not commit theft of the royalties. We have already held that because Chieftain was not entitled to royalties, Gastar was not liable to Chieftain for theft. Summary judgment was granted in favor of Gastar and all of Chieftain's claims, including its claim under the TTLA, were dismissed with prejudice. Therefore, Gastar was entitled to attorney's fees, and the trial court erred in denying Gastar's request for attorney's fees.
Gastar's second issue is sustained. Because of our disposition of Gastar's second issue, we need not discuss Gastar's first issue.
CONCLUSION
Having overruled Chieftain's issues necessary to the appeal but having granted one of Gastar's issue necessary to the appeal, we reverse the trial court's Final Summary Judgment, only to the extent that it does not award attorney's fees to Gastar, and remand this appeal to the trial court for a determination of reasonable and necessary attorney's fees for Gastar's defense of Chieftain's TTLA claim. The trial court's Final Summary Judgment is affirmed in all other respects.
COURT OF
APPEALS
TENTH DISTRICT OF TEXAS
August 30, 2017
No. 10-15-00037-CV
CHIEFTAIN EXPLORATION COMPANY, INC.
v.
GASTAR EXPLORATION INC. AND CUBIC ASSETS, LLC
From the 369th District Court
Leon County, Texas
Trial Court No. NOT-13-126
JUDGMENT
This Court has
reviewed the briefs of the parties and the record in this proceeding as
relevant to the issues raised. Because
it is the opinion of this Court that there was error, in part, in the Final
Summary Judgment of the trial court; it is the judgment of this Court that the
Final Summary Judgment signed by the trial court on July 31, 2014, is reversed
but only to the extent that attorney’s fees were not awarded to Gastar
Exploration Company, Inc., and this appeal is remanded to the trial court for further
proceedings only on the issue of attorney’s fees due to Gastar Exploration
Company, Inc. for Gastar Exploration Company, Inc.’s defense of the Texas Theft
Liability Act claim made by Chieftain Exploration Company, Inc. To the extent not expressly reversed and
remanded, the trial court’s Final Summary Judgment is affirmed.
It
is further ordered that Gastar Exploration Company, Inc. and Cubic Assets,
LLC., is awarded judgment against Chieftain Exploration Company, Inc. for
Gastar Exploration Company, Inc.’s and Cubic Assets, LLC.’s appellate court costs
that were paid, if any, by Gastar Exploration Company, Inc. and Cubic Assets,
LLC.; and all unpaid appellate court costs, if any, are taxed against Chieftain
Exploration Company, Inc.
A
copy of this judgment will be certified by the Clerk of this Court and
delivered to the trial court clerk for enforcement.
PER CURIAM
SHARRI
ROESSLER, CLERK
By:
___________________________
Nita
Whitener, Deputy Clerk
CHIEFTAIN EXPLORATION COMPANY, INC., Appellant,
v.
GASTAR EXPLORATION INC. AND CUBIC ASSETS, LLC. Appellee.
Court of Appeals of Texas, Tenth District, Waco.
Jess W. Mason, Christopher Grimm, Robert D. O'Conor, for Chieftain Exploration Company, Inc., Appellant.
Matthew Jensen, Barry F. Cannaday, for Cubic Assets, LLC, Appellee.
Katherine A. Willyard, Cassandra M. McGarvey, Michael C. Sanders, for Gastar Exploration Ltd., Appellee.
Katherine A. Willyard, Cassandra M. McGarvey, Michael C. Sanders, for Gastar Exploration Texas, LP, Appellee.
Appeal from the 369th District Court, Leon County, Texas, Trial Court No. NOT-13-126.
Affirmed in part; Reversed and remanded in part.
Before Chief Justice Gray, Justice Davis, and Justice Scoggins.
MEMORANDUM OPINION
TOM GRAY, Chief Justice.
Chieftain Exploration Company, Inc. appeals the trial court's summary judgment in favor of Gastar Exploration, Ltd. and Gastar Exploration Texas, L.P. (now Gastar Exploration Inc.) and Cubic Assets, LLC. Gastar also appeals the denial of its request for attorney's fees. Because the trial court did not err in granting Gastar's and Cubic's motions for summary judgment but did err in denying Gastar's request for attorney's fees, the trial court's Final Summary Judgment is reversed and remanded in part and, to the extent not expressly reversed and remanded, is affirmed.
BACKGROUND
The Streater Gas Unit, a pooled unit, was formed in 2010 by Gastar and two other entities (Presco, Inc. and Navasota Resources, Ltd., LLP) which had executed various oil and gas leases included in the Unit. The Unit was comprised of 56 leases, covering 702.3 acres of land. These leases are listed in the Unit Designation. Tract 17, which was comprised of 56 surface acres, was included in the Unit. The Streater Well was drilled on the Unit but not on Tract 17.
Title to the minerals in Tract 17, the 56 acre tract, is divided, with two parties each owning an undivided one-half of the minerals: the McBeth Family Limited Partnership and Lone Oak.[1] An undivided ¼ nonparticipating royalty interest, now owed by Chieftain, was carved out of Lone Oak's mineral estate.
Before Chieftain acquired its NPRI, two oil and gas leases were executed, each covering the lessor's one-half of the mineral estate in the 56 acre tract: the McBeth Lease, executed by the McBeth Family Limited Partnership, and the Lone Oak Lease, executed by Lone Oak. The Lone Oak Lease covered 3,466 acres, including the 56 acre tract. The McBeth Lease covered 591.3 acres, which also included the 56 acre tract.
CHIEFTAIN'S APPEAL
Chieftain sued Gastar asserting violations of the Natural Resources Code, breach of contract, and violations of the Texas Theft Liability Act and claiming it was owed oil and gas royalties from a well drilled in a pooled unit. As a successor in interest to Gastar's rights in the Streater Unit, Cubic intervened in the suit. Each party filed competing motions for summary judgment. Gastar filed a traditional motion for partial summary judgment asserting Chieftain's claims fail as a matter of law because Chieftain is not owed any royalties. Cubic filed a traditional motion for summary judgment asserting that the terms of a Ratification and the Lone Oak Lease defeat Chieftain's claims as a matter of law. Chieftain also filed a traditional motion for partial summary judgment on its claims. The trial court granted Gastar's and Cubic's motions and denied Chieftain's motion.
Summary Judgment Review
[omitted]
Issues
Asserted by various issues, Chieftain's appeal centers on its desire to be paid what it alleges to be its share of royalties from the Streater Well located in the Streater Unit. We first discuss whether the Lone Oak Lease was pooled in the Streater Unit, which would entitle Chieftain to payment. If the Lease was not pooled, we then will address other reasons for payment asserted by Chieftain
Pooling of the Lease/Land
Oil and gas leases in general, and pooling clauses in particular, are a matter of contract. Samson Expl., LLC v. T.S. Reed Props., Inc., No. 15-0886, 60 Tex. Sup. Ct. J. 1413, 2017 Tex. LEXIS 599, at *13 (June 23, 2017); Wagner & Brown, Ltd. v. Sheppard, 282 S.W.3d 419, 424 (Tex. 2008). A lessee's authority to pool requires the lessor's consent, which is typically furnished through a pooling provision in the mineral lease. Samson, at *13; Se. Pipe Line Co. v. Tichacek, 997 S.W.2d 166, 170 (Tex. 1999). Pooling is valid only if done "in accordance with the method and purposes specified in the lease." Id. A pooling agreement that does not comply with the terms of the lease is invalid and unenforceable absent the lessor's ratification. See Samson, at *14.
