Devon Energy Production Company, L.P. v. KCS Resources, LLC

450 S.W.3d 203, 2014 Tex. App. LEXIS 11960, 2014 WL 5490402
CourtCourt of Appeals of Texas
DecidedOctober 30, 2014
Docket14-13-00348-CV
StatusPublished
Cited by39 cases

This text of 450 S.W.3d 203 (Devon Energy Production Company, L.P. v. KCS Resources, LLC) is published on Counsel Stack Legal Research, covering Court of Appeals of Texas primary law. Counsel Stack provides free access to over 12 million legal documents including statutes, case law, regulations, and constitutions.

Bluebook
Devon Energy Production Company, L.P. v. KCS Resources, LLC, 450 S.W.3d 203, 2014 Tex. App. LEXIS 11960, 2014 WL 5490402 (Tex. Ct. App. 2014).

Opinions

OPINION

KEN WISE, Justice.

In this dispute over ownership of property in Louisiana, appellant Devon Energy Production Company, L.P., contends that the trial court erred in granting summary judgment in favor of appellee KCS Resources, LLC, on the ground that the trial court lacked subject matter jurisdiction over Devon’s action for relief under the Uniform Declaratory Judgments Act. In a cross-issue, KCS contends the trial court erred in concluding that it also lacked jurisdiction to decide KCS’s counterclaim for [207]*207attorney’s fees under the Act. We affirm in part and reverse and remand in part.

Background

Devon and KCS are parties to a Purchase and Sale Agreement, effective February 22, 2005, in which Devon agreed to sell to KCS certain oil and gas assets in Texas, Louisiana, and Mississippi (the PSA). The assets to be sold were listed in Exhibit A to the PSA, which was further divided into three sub-parts. Exhibit A-3 of the PSA identified “Leases and Lands” to be conveyed, including oil and gas leases, wells, mineral interests, and associated assets located in DeSoto Parish, Louisiana. Under the PSA, the assets included all of Devon’s right, title, and interest in and to the oil and gas leases, lands, and wells described in Exhibit A as follows:

2.1 Purchase and Sale. Subject to the terms and conditions of this Agreement, [Devon] agrees to sell, and [KCS] agrees to purchase and pay for, all of [Devon]’s right, title and interest in and to the following (less and except for the Excluded Assets, collectively, the “Assets ”):
(a) the oil and gas leases more particularly described in Exhibit A, subject to any depth restrictions described in Exhibit A (collectively, the “Leases”), together with any and all other rights, titles, and interests of [Devon] in and to (i) the leasehold estates created thereby,, subject to any depth restrictions described in Exhibit A and to the terms, conditions, covenants, and obligations set forth in the Leases and/or Exhibit A and (ii) the lands covered by the Leases or included in Units with which the Leases may have been pooled or unitized, subject to any depth restrictions described in Exhibit A (the “Lands ”), including in each case, without limitation, fee interests, royalty interests, overriding royalty interests, production payments, net profits interests, carried interests, reversionary interests, and all other interests of any kind or character;
(b) all oil and gas wells located on the Leases and the Lands or on other leases or lands with which the Leases and/or the Lands may have been pooled or unitized (collectively and including the wells set forth on Exhibit A, the “Wells”), and all Hydrocarbons produced therefrom or allocated thereto.

(Emphasis added). The PSA also included a forum selection clause specifying that Texas law applied and that all actions arising out of or related to the PSA would be exclusively litigated in Harris County.

After about six weeks of due diligence, the parties closed the deal on April 13, 2005. At the closing, Devon executed various deeds conveying the assets to KCS, including a “Deed, Assignment and Bill of Sale” conveying the DeSoto Parish properties (the DeSoto Deed). Although the parties had negotiated revisions to some of the deeds during the due diligence period, Exhibit A to the DeSoto Deed contained the same properties that were previously listed on Exhibit A-8 of the PSA, with no revisions other than the addition of recording information. On April 18, 2005, the DeSoto Deed was recorded in the public records of DeSoto Parish.

About five years later, a dispute arose between KCS and Devon concerning the scope of the mineral interests Devon conveyed to KCS in DeSoto Parish. That dispute is the subject of this lawsuit. KCS contends that Devon intended to convey all of its right, title, and interest in two mineral servitudes1 known as the “Olin Mathie-[208]*208son Servitude” and the “Riverwood Servitude” burdening ten sections of land. Conversely, Devon maintains that its conveyance was restricted to specific wells or wellbores located within the two mineral servitudes. For convenience, we will refer to the properties at issue as the “Disputed Properties.”

In 2010, after Devon learned that KCS had mortgaged some of the Disputed Properties, Devon filed a “Petition to Quiet Disturbance” in Louisiana seeking to cancel KCS’s mortgage on those mineral interests. Devon contends that, after it filed that petition, EXCO Resources, Inc., another oil and gas company, informed Devon that KCS was claiming an interest in wells in which Devon had retained an interest under the PSA. Recognizing that Devon and KCS “had different views regarding what interests were intended to be conveyed by the PSA,” Devon argues that it filed this declaratory action in Texas in accordance with the PSA’s forum-selection clause.

KCS disputes Devon’s account. According to KCS, EXCO contacted both Devon and KCS in the fall of 2009 to confirm who owned the Disputed Properties in connection with EXCO’s plans to drill new wells in the area and, rather than acknowledge KCS’s ownership, Devon seized an opportunity “to re-gain the now highly valuable” mineral interests. According to KCS, Devon sought to maintain its suit in both Louisiana and Texas by challenging the conveyance of different sections of the Disputed Properties in each action. KCS also argues that Devon’s original pleadings in the Texas action sought a declaration as to the parties’ rights under the DeSoto Deed and an adjudication of title to Louisiana real property, not declaratory relief under the PSA.

Litigation over the Disputed Properties proceeded in both Texas and Louisiana. In response to Devon’s Louisiana petition, KCS answered and filed a counterclaim to have its rights under both the PSA and the DeSoto Deed declared in its favor, as well as alternative claims for fraud, misrepresentation, and violations of Louisiana law. KCS later amended its request for declaratory relief to seek a declaration as to the DeSoto Deed only. The Louisiana case has since been stayed pending the completion of the present case.

In the Texas action, KCS filed a motion to dismiss Devon’s request for declaratory relief. Because Devon originally sought a declaration as to the parties’ rights under the PSA and the DeSoto Deed in the Texas action, KCS argued that the Texas court lacked subject matter jurisdiction to interpret the DeSoto Deed and declare title to the Disputed Properties in Louisiana. The trial court treated KCS’s motion as a plea to the jurisdiction and conditionally granted it, but allowed Devon the opportunity to amend its original petition.

Devon then amended its pleading to seek a declaration of the parties’ intent regarding the conveyance of the Disputed Properties under the PSA alone. In response, KCS again challenged the court’s jurisdiction over Devon’s amended claims, arguing that the court must look first to the DeSoto Deed, not the PSA, because the conveyance provisions of the PSA had been merged into and were superseded by the conveyance provisions of the later-executed DeSoto Deed. The trial court denied KCS’s motion, but stated that it would be willing to revisit the issue of subject matter jurisdiction later in the proceedings.

[209]

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Cite This Page — Counsel Stack

Bluebook (online)
450 S.W.3d 203, 2014 Tex. App. LEXIS 11960, 2014 WL 5490402, Counsel Stack Legal Research, https://law.counselstack.com/opinion/devon-energy-production-company-lp-v-kcs-resources-llc-texapp-2014.