Copano Energy, LLC v. Stanley D. Bujnoch, Life Estate

Texas Supreme Court·Decided January 31, 2020·No. 18-0044·Published

Opinion

IN THE SUPREME COURT OF TEXAS ══════════

No. 18-0044

══════════

COPANO ENERGY, LLC, ET AL., PETITIONERS, v.

STANLEY D. BUJNOCH, LIFE ESTATE, ET AL., RESPONDENTS ══════════════════════════════════════════ ON PETITION FOR REVIEW FROM THE COURT OF APPEALS FOR THE THIRTEENTH DISTRICT OF TEXAS ══════════════════════════════════════════

Argued October 8, 2019

JUSTICE BLACKLOCK delivered the opinion of the Court.

As happens all the time in modern business, the parties to this contract dispute sent each other many e-mails prior to the anticipated signing of a formal written agreement. Though no formal written agreement was ever executed, the plaintiffs claimed the various e-mails, taken together, amount to an enforceable written contract satisfying the statute of frauds. See TEX. BUS. & COM. CODE §§ 26.01–.02 (Texas’s primary statute of frauds). They sued for breach of that alleged contract and for tortious interference with it. The defendants argued the statute of frauds bars the claims, and the trial court granted summary judgment for the defendants on all claims. The court of appeals affirmed summary judgment on the tortious interference claim but reversed as to the breach of contract claim. The court of appeals concluded that the e-mails, taken together, satisfy the statute of frauds and amount to a contract enforceable against the defendants.

We disagree. The e-mails containing many of the alleged deal’s principal terms are part of a forward-looking request to negotiate a contract. Neither those e-mails nor any other writing evidences the defendant’s agreement to the particular terms stated in the e-mails. As a result, there is no “written memorandum which is complete within itself in every material detail,” as required by the statute of frauds. Cohen v. McCutchin, 565 S.W.2d 230, 232 (Tex. 1978). The court of appeals’ judgment on the contract claim is reversed, and judgment is rendered that the plaintiffs take nothing on all their claims.

I. Background

The plaintiffs 1 (Landowners) individually or collectively own land in Lavaca and Dewitt Counties. In 2011, the Landowners granted easements to Copano, 2 for the construction, operation, and maintenance of a 24-inch pipeline on their properties. The original easement was 30 feet wide, and the pipeline was completed as agreed.

In December 2012, Copano approached the Landowners about obtaining a second easement to construct another 24-inch pipeline on their properties. James Sanford, a landman with Copano, contacted Marcus Schwartz, an attorney representing the Landowners, to discuss the proposed second easement. The record includes a series of e-mails about the proposed easement. The focus of the parties’ dispute is whether those e-mails amount to a contract to purchase the proposed easement satisfying the statute of frauds.

1 The Landowners consist of Stanley D. Bujnoch, Life Estate, Betty A. Bujnoch, Life Estate, James J.

Bujnoch, Sally Ann Bujnoch, K & HR Properties, L.P., Susan K. McDowell, Allan Grahmann, Shelly E. Summers, Cauley–Barker, Ltd., Jo Ann Schindler, Independent Executrix of the Estate of Annie Mae Technik, Deceased and Trustee of the Annie Mae Technik Family Trust, Sandra Kay Coe, Stanley D. Bujnoch Jr., Transportation Equipment, Inc., Harvey Renger Jr., Trustee of the Harvey Renger Jr. Trust, and Alice Friedrich.

2 For convenience and consistent with the parties’ nomenclature, “Copano” refers to Copano Energy, LLC, Copano Pipelines/South Texas LLC, Copano Pipelines, GP, LLC, Copano Energy Services GP, LLC, CPNO Services, LLC, and Kinder Morgan Energy Partners, L.P.

On December 6, Debbie Bujnoch, 3 who was Schwartz’s secretary, e-mailed Sanford and informed him that Schwartz was available for a meeting on December 11 or 13. Sanford responded to Bujnoch by e-mail, suggesting December 11 for the meeting. On December 7, Bujnoch and Sanford exchanged several more e-mails. Bujnoch e-mailed Sanford: “In preparation for the meeting on the 11th, Mr. Schwartz needs to know the size of the NGL line Copano is proposing to put in. He needs [it] for valuation and discussion with our clients.” Sanford responded:

It will be a 24 inch gas line. We will preserve the 2nd line right we purchased for condensate. I will be asking for an additional 20 feet of new right of way. We will be laying the line generally on the North side of the existing 24 inch line (temporary workspace side). I will be asking for an additional 20 feet of temporary workspace.

James

Bujnoch responded: “dry gas or liquid?” Sanford responded: “Rich gas.” Bujnoch responded: “By that do you mean NGL?” Sanford finally responded:

When we purchased the original easement for the 24 inch line we purchased the rights for a second 12 inch liquid line. We will be buying an additional 20 foot easement contiguous to the first easement for a 2nd 24 inch gas line. The rights to lay the 12 inch liquid line will be unchanged. James

All of Sanford’s e-mails on December 7 use the subject line “Meeting with Schwartz.” None of the December 6 and 7 e-mails from Sanford to Bujnoch copied Schwartz. No writing indicates whether the anticipated December 11 meeting took place or, if it did, what Sanford and Schwartz discussed or agreed at the meeting.

On January 30, 2013, Sanford and Schwartz exchanged e-mails for the first time. Sanford wrote to Schwartz and Bill Caraway, another attorney for the Landowners, stating:

Mark/Bill,

3 While Debbie Bujnoch shares the same surname with some of the Landowners, she was not herself a Landowner.

Pursuant to our conversation earlier, Copano agrees to pay your clients $70.00 per foot for the second 24 inch line it proposes to build. In addition to this amount Copano agrees to address and correct the damages to your client’s property caused due to the construction of the first 24 inch line.

Please confirm that Copano has access to your client’s property for survey and environmental.

Thanks, James

James Sanford, Director, Right-of-Way Services Copano Energy

Schwartz responded to Sanford: “James: In reliance on this representation we accept your offer and will tell our client you are authorized to proceed with the survey on their property. We would appreciate you letting them know a reasonable time before going on their property. mfs/bbc.”

On February 1, 5, 6, 11, and 22, six letters were sent to the Landowners, including two letters sent on February 6. The letters were sent by landman Thomas Goolsby, employed by Percheron Field Services and acting on behalf of Copano. Each letter states that Copano is offering to amend the original pipeline easement per an attached amendment and amended plat. The amendments are not included in the record, but an amended “bubble plat” is attached, consisting of a survey of the existing easement and circular images of small sections of the proposed new easement, providing a magnified view of the existing pipeline and the proposed expansion of the existing easement from 30 to 50 feet. 4 The “bubbles” show that the new easement would in some

4 The court of appeals opinion includes an image of a bubble plat. 581 S.W.3d 262, 267 (Tex. App.–Corpus Christi 2017, pet. granted).

locations fall north of the existing easement and in some locations south of the old easement. The surveys state, “PRELIMINARY (NOT FOR RECORDING)” (emphasis in original). In contrast to the above-described January 30 e-mail from Sanford, which offered the Landowners $70 per foot for the easement, the February letters offer $15 or $25 per foot. None of these offers for the reduced amounts was accepted.

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Copano Energy, LLC v. Stanley D. Bujnoch, Life Estate, (Tex. 2020).

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