Approach Resources I, L.P. v. Cheryl Elizabeth Clayton

Procedural entryThis page is a short order in Approach Resources I, L.P. v. Cheryl Elizabeth Clayton. Read the opinion of the Court — 2012 Tex. App. LEXIS 203
Court of Appeals of Texas·Decided January 11, 2012·No. 08-10-00247-CV·Published

Opinion

COURT OF APPEALS

EIGHTH DISTRICT OF TEXAS

EL PASO, TEXAS

APPROACH RESOURCES I, L.P., § No. 08-10-00247-CV

Appellant, §

Appeal from the

v. § 112th Judicial District Court §

CHERYL ELIZABETH CLAYTON, of Crockett County, Texas §

Appellee. (TC# 05-09-06794)

§

OPINION

Approach Resources I, L.P. (“Approach”) appeals the trial court’s judgment denying its request for attorney’s fees under the Texas Uniform Declaratory Judgment Act. Approach raises six issues for this Court’s review. Issues One through Five contain Approach’s analysis of the trial court’s failure to award its requests for attorney’s fees, which the entity characterizes as an abuse of discretion. In Issue Six, Approach requests that this Court exercise its authority to reform the underlying judgment to correct a clerical error. Affirmed as reformed.

BACKGROUND

This case is before the Court for a second time, following remand for reconsideration of attorney’s fees in light of our opinion in Thompson v. Clayton, 346 S.W.3d 650, 657 (Tex.App.-- El Paso 2009, no pet.). In the first appeal (“Clayton I”), we were asked, in part, to review the trial court’s summary judgment in favor of property owner Ms. Elizabeth Clayton regarding the viability of a letter agreement entered into by Ms. Clayton’s father in 1975.1 See Clayton, 346

1 For a full recitation of the facts, arguments, and analysis related to the summary judgment, see Clayton, 346 S.W.3d at 653-54.

S.W.3d at 654. In Clayton I, the trial court determined as a matter of law that the 1975 letter agreement terminated upon the death of Ms. Clayton’s father, and rendered a declaratory judgment to that effect. See id. at 653. The trial court also awarded Ms. Clayton, “reasonable and necessary attorney’s fees” in excess of $136,000 for proceedings in the trial court, and contingent awards for appeal to this Court, and the Texas Supreme Court.

On appeal, this Court concluded that the 1975 letter agreement remained in effect, and provided Mr. J. Cleo Thompson, James Cleo Thompson, Jr., L.P., Wes-Tex Drilling Company, and Approach (collectively, “the declaratory judgment defendants”), a valid easement on Ms. Clayton’s property. See id. at 656-57. The easement permitted the declaratory judgment defendants to build and maintain a road across Ms. Clayton’s ranch so that they could access oil drilling equipment on neighboring property. See id. As a result, the summary judgment was reversed and the case was remanded, “to the trial court for reconsideration of attorney’s fees.” See id. at 657.

On remand the trial court conducted an additional hearing, and requested additional evidence and argument from the parties regarding attorney’s fees. During the hearing, the trial court expressed its concern that any fees awarded should relate only to the litigation surrounding the validity of the 1975 letter agreement, and should not include fees related to any other causes of action pending in the case. To assist the court in understanding the posture of the case prior to the first appeal, Ms. Clayton called two witnesses: herself and Attorney Paul Millican, who had represented Ms. Clayton throughout the litigation.

According to Mr. Millican, in addition to the work related to the validity of the 1975 letter agreement, he also represented Ms. Clayton relative to her claims for damages to the surface of her property caused by the defendant’s activities, as well as during negotiations for a

separate agreement governing the defendants’ use of the road on her property. Mr. Millican testified that independent of the easement validity dispute, the parties mediated a settlement for Ms. Clayton’s claim for surface damages related to what he characterized as breaches of the 1975 agreement. He explained further:

After the mediation and actually after the trial itself, an issue arose because of a global release that was sent by the defendants to Ms. Clayton asking her to release all claims. Then the issue arose, well, if the defendants want a release from all claims, then we have these other surface damage issues that are totally unrelated to the road, but we will simply resolve those issues, too, if that’s what the parties want to do.

So, there was quit [sic] a bit of correspondence and phone calls between [counsel for Approach] and myself concerning those -- a little over $56,000 of surface damages that were unrelated to the road, and so that were not settled, however.

Ms. Clayton testified, without objection, that her father entered into the 1975 letter agreement to permit the owners of an adjacent ranch, to cross the Clayton property to pursue development of minerals. Ms. Clayton’s father passed away in 2003. By that time, Approach was producing minerals from both the adjacent property, and the Clayton Ranch directly. While the continued effectiveness of the 1975 letter agreement was still in dispute, Ms. Clayton and some of the declaratory judgment defendants attempted to negotiate a new agreement to govern the use of the road. While the new agreement was never fully executed, the new negotiations led Ms. Clayton to believe that the 1975 agreement was no longer enforceable. Ms. Clayton explained that just prior to the time Mr. Thompson contacted her to begin negotiating a new road agreement, Approach began drilling a new mineral well on the neighboring property. Mr. Thompson also approached Ms. Clayton for permission to allow a geological team to cross the property, via the road, to conduct a seismic study on the adjacent ranch. To Ms. Clayton’s knowledge, the geological team was forced to use an alternative route to access the adjacent property when the parties failed to finalize the new road agreement.

Approach continued to use the road to access its wells on the adjacent property, as well as to conduct drilling operations on the Clayton Ranch. During this time, Ms. Clayton testified, Approach caused damage to her property by failing to drain their collection pits properly, leaving pools of oil on the property. These damages led to a separate dispute with Approach over the company’s alleged misuse of the surface in its development of the minerals. In the summer of 2005, Approach offered to compensate Ms. Clayton for the surface damages in exchange for her permission to continue to use the road for access to its wells on the adjacent ranch. According to her testimony, Ms. Clayton refused to accept Approach’s payment because she believed Approach was not complying with the terms of 1975 agreement. According to Ms. Clayton, Approach violated the terms of her father’s agreement in three major instances: (1) Approach drilled a well on the adjacent property during hunting season; (2) Approach destroyed part of the property fence and access gate; and (3) Approach constructed an un-authorized water pipeline along the road.

Ms. Clayton filed the underlying lawsuit in September 2005.2 In November 2006, approximately two weeks before trial, the parties attempted to mediate the entire case, including Ms. Clayton’s claims related to surface damages, as well as her claims regarding the validity of the 1975 agreement. According to Ms. Clayton, during mediation, Approach agreed to settle the surface damages claim related to its drilling on the Clayton ranch for $10,000, despite the continuing litigation on the status of the 1975 letter agreement. Approach did not pay the settlement amount, however, until ten months later, just prior to the supersedeas hearing

2 Ms. Clayton’s second amended petition was the live pleading at the time the trial court entered judgment in Clayton I. In addition to her request for declaratory judgment, Ms. Clayton asserted claims for: trespass, negligence, breach of contract, and requested that the defendants be enjoined from using the road in order to protect her property from additional damage.

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