156 Alliance Partners, Ltd. v. Republic Energy, Inc.

• Court: Court of Appeals of Texas
• Decided: November 22, 2006
• Docket: 10-05-00175-CV
• Status: Published

Opinion

IN THE

TENTH COURT OF APPEALS

 

No. 10-05-00175-CV

156 Alliance Partners, Ltd.,

                                                                      Appellant

 v.

Republic Energy, Inc.,

                                                                      Appellee

From the 16th District Court

Denton County, Texas

Trial Court No. 2003-10039-16

MEMORANDUM  Opinion

          Alliance sued Republic for tortious interference with an existing contract.  Republic, in addition to its other defenses, asserted the affirmative defense of limitations.  Republic moved for and was granted summary judgment.  There is no dispute that the alleged interference occurred more than two but less than four years before suit was filed.  Alliance can only prevail if the four year limitations period applies, or if the discovery rule applies.  Because the Supreme Court of Texas has determined the two year limitations period is applicable to a claim for tortious interference, and because under the relevant Supreme Court authority the allegedly tortious events were not inherently undiscoverable, we affirm the trial court’s judgment that Alliance take nothing from Republic.

Background Facts

          The underlying case is a dispute over mineral interest.  Alliance had a contract under which a third party was to offer to lease Alliance mineral interest before it was leased to someone else.  This contract was recorded in the deed records.  The third party allegedly leased to Republic without first offering the lease to Alliance.  Alliance ultimately sued Republic, roughly three years after Republic obtained the leases.

Four Year or Two Year Limitations

Alliance asserts that the four year residual limitations period should apply to claims for tortious interference.  See Tex. Civ. Prac. Rem. Code Ann. § 16.051 (Vernon 1997).  This issue has been determined against Alliance by the Texas Supreme  Court.  First Nat. Bank of Eagle Pass v. Levine, 721 S.W.2d 287, 288-89 (Tex. 1986).

Alliance argues that we should reexamine Levine in light of the Supreme Court’s more recent holding in Williams v. Kahlof and the Texarkana court’s inability to square the rationale in Williams with Levine.  See Williams v. Kahlof, 802 S.W.2d 651, 657-58 (Tex. 1990); Burke v. Union Pac. Res. Co., 138 S.W.3d 46, 72 (Tex. App.—Texarkana 2004, pet. denied); Dickson Constr. v. Fidelity & Deposit Co., 960 S.W.2d 845, 849 (Tex. App.—Texarkana 1997, no writ).

We are bound to follow the precedent of the Texas Supreme Court.  Even if we were to join Texarkana in this argument, we are not free to disregard the Supreme Court’s pronouncement in Levine.  Indeed, Levine was expressly discussed and confirmed in Williams.  Williams, 802 S.W.2d at 654.

But until the Texas Supreme Court or the Legislature says otherwise, the limitations period for a claim of tortious interference with contract is two years.  First Nat. Bank of Eagle Pass v. Levine, 721 S.W.2d 287, 288-89 (Tex. 1986).  Alliance’s issue is overruled.

Discovery Rule

          To avoid the bar of the two year limitations period, Alliance asserts that the period of limitations on their claim is extended by application of the discovery rule.  The discovery rule applies only when the type of injury alleged is inherently undiscoverable.  Computer Assocs. Int'l v. Altai, Inc., 918 S.W.2d 453, 456 (Tex. 1996).  “An injury is inherently undiscoverable if it is by nature unlikely to be discovered within the prescribed limitations period despite due diligence.”  S.V. v. R.V., 933 S.W.2d 1, 7 (Tex. 1996).

          The conveyance of the mineral interest to Republic in alleged violation of Alliance’s agreement was a matter of public record.  Alliance alleges that Republic knew, or should have known, of Alliance’s contractual rights because Alliance’s contract was recorded.  For the same reason, Alliance knew, or should have known, of the taking of the leases by Republic in violation of the agreement because they were recorded.

          But the more practical reason that Alliance’s claim is not subject to the discovery rule is that drilling activity in the general area was evident to the public.  Further, anyone exercising due diligence would have easily seen the drilling activity and production activity.  A simple drive-by would have put a reasonable person on notice of facts that further inquiry was warranted and a reasonable inquiry would have revealed the alleged interference by Republic of Alliance’s agreement with the third party.

          We hold the discovery rule is not available to Alliance to extend the limitations period and overrule Alliance’s issue.

Conclusion

          Having overruled all of Alliance’s issues, we affirm the trial court’s judgment that Alliance take nothing from Republic.

                                                          TOM GRAY

                                                          Chief Justice

Before Chief Justice Gray,

          Justice Vance, and

          Justice Reyna

Affirmed

Opinion delivered and filed November 22, 2006

[CV06]