Energy Transfer Fuel, L.P., a Texas Limited Partnership v. 660 North Freeway, LLC, a Texas Limited Liability Company, and Tindall Properties, LTD., a Texas Limited Partnership

Court of Appeals of Texas·Decided April 22, 2021·No. 02-20-00170-CV·Published

Opinion

In the

Court of Appeals

Second Appellate District of Texas at Fort Worth

No. 02-20-00170-CV

ENERGY TRANSFER FUEL, L.P., A TEXAS LIMITED PARTNERSHIP, Appellant

V.

660 NORTH FREEWAY, LLC, A TEXAS LIMITED LIABILITY COMPANY; AND TINDALL PROPERTIES, LTD., A TEXAS LIMITED PARTNERSHIP, Appellees

On Appeal from the 17th District Court Tarrant County, Texas

Trial Court No. 017-311391-19

Before Sudderth, C.J.; Wallach and Walker, JJ.

Memorandum Opinion by Justice Walker

MEMORANDUM OPINION

In this appeal, we are asked to decide whether an oil-and-gas easement agreement allowed the surface owner’s lessee to pour concrete paving over the easement. We conclude that the easement agreement’s plain terms allowed the paving and that the Health and Safety Code’s provisions do not apply to otherwise prohibit it. Accordingly, we affirm the trial court’s summary judgment so declaring.

I. BACKGROUND

The operative facts are largely undisputed. We recount them to give context and support for our substantive discussion.

A. FACTUAL BACKGROUND

In 1988, Chevron Pipe Line Company obtained a right-of-way, twenty-foot-

wide easement (the easement strip) for the construction and maintenance of an oil- and-gas pipeline “within and across” an approximately 14-acre tract of land in Fort Worth; at the time, California–Texas Properties, Inc. owned the land. The easement agreement specified the parties’ rights and obligations as relevant to the instant dispute:

• Term 3 provided that the easement holder “shall, as practicable, restore land, vegetation and improvements which may be removed, altered or damaged by the exercise of the rights herein granted, however, where complete restoration cannot be made any actual losses incurred are settled with the valuable consideration for the easement.”

• Term 4 stated that the easement holder “shall pay the then OWNER of the land and/or tenant or lessee thereof, as their respective interests may appear, for any future actual losses, where complete restoration cannot be made to

fences, improvements, growing crops and timber which may be caused by the exercise of the rights, privileges and easements herein granted.”

• Term 6 dictated that the owner “hereby reserves the right to use the land in any manner that will not prevent or interfere with the exercise by [the easement holder] of its rights, privileges and easements hereunder, provided, however, that OWNER shall not construct or permit to be constructed any house, building or structure of any kind whatsoever on the easement.”

At some point, appellee 660 North Freeway, LLC became the owner of five acres of the tract (the 660 lot) and, in 2017, granted a ground lease to appellee Tindall Properties, Ltd. 660 North Freeway and Tindall Properties have the same president—J. Scott Tindall. The eastern edge of the 660 lot is encumbered with part of the easement strip. In 2004, appellant Energy Transfer Fuel, L.P. (ETF) acquired Chevron’s easement by assignment and began operating and maintaining a high- pressure, natural-gas pipeline under the easement strip.

In mid-2019, Tindall Properties prepared to build a “multi[-]level self[-]storage complex” on the 660 lot, and the project’s plans included pouring a six-inch concrete slab on the easement strip.1 Tindall Properties’ contractor notified ETF of the planned construction. ETF, believing that the easement agreement did not allow the paving, sent Scott Tindall a cease-and-desist letter, asserting that the proposed paving created a “potentially dangerous or unsafe condition” and requesting that the slab be redesigned. ETF later asked him to sign an “encroachment agreement,” which would

1 Tindall Properties also notified ETF that it would “cross” the easement with a storm-water storage culvert. The parties’ dispute does not involve the proposed culvert.

require Tindall Properties to add “bollards to protect the pipeline” before pouring the slab.

B. PROCEDURAL BACKGROUND

Believing that the easement agreement allowed the paving over a portion of the easement strip, Tindall Properties and 660 North Freeway (collectively and singularly, Tindall) sued ETF under the Uniform Declaratory Judgments Act (the UDJA) for declarations of the parties’ rights under the easement agreement and of the inapplicability of the hazardous-conditions provisions in the Health and Safety Code (HSC) to its planned paving on the 660 lot. Tindall filed a traditional motion for partial summary judgment,2 arguing that the unambiguous easement agreement allowed improvements on the easement strip, the planned paving would not be a prohibited structure, the paving would not interfere with ETF’s rights, and the HSC did not apply to the dispute.3 The HSC’s hazardous-conditions provisions are found in Chapter 756.

Specifically, Subchapter H governs construction affecting oil-and-gas pipeline easements and rights-of-way. Tex. Health & Safety Code Ann. §§ 756.121–.126. Tindall relied on Section 756.122(a), which dictates that Subchapter H applies “to a

Presumably, the motion sought only a partial summary judgment because 2

Tindall did not address its UDJA attorney’s fees and costs in its motion.

Tindall raised the HSC because ETF had raised the issue in discovery. In 3

response, Tindall had amended its petition to request declarations regarding the applicability of the HSC.

construction or the repair, replacement, or maintenance of a construction unless there is a written agreement . . . to the contrary between the owner or operator of the affected pipeline facility and the person that . . . causes a construction to be placed on the easement or right-of-way of a pipeline facility.” Id. § 756.122(a). Tindall asserted that the easement agreement was a written agreement to the contrary, taking its construction outside the purview of Subchapter H as a matter of law. Similarly, Tindall referred to Section 756.123, which prohibits construction “on, across, over, or under the easement or right-of-way” unless the operator of the pipeline facility is given notice of the construction and “the building, repair, replacement, or maintenance is conducted under an existing written agreement.” Id. § 756.123(3). Tindall argued that the easement agreement was an existing written agreement that placed the proposed construction outside Section 756.123’s construction prohibition.

ETF sought a partial, traditional summary judgment,4 essentially contending the opposite of Tindall—the easement agreement prohibits structures, which would include the proposed paving; the paving would violate the HSC; and the paving would interfere with ETF’s ability to operate and maintain its pipeline. ETF attached two affidavits to its motion. The first affidavit was by Celeste Waterwall, ETF’s “Encroachment Supervisor and Project Manager,” who averred that the proposed paving would violate Section 756.123 and would interfere with ETF’s rights under the

4 ETF sought a partial summary judgment based on its unaddressed claim for reasonable and necessary attorney’s fees and costs under the UDJA.

easement agreement. The second affidavit was by Nicholas Gordon, ETF’s “Project Manager,” who stated that ETF could not maintain its pipeline unless protective bollards or “green spaces” were added to the proposed construction. In response to ETF’s motion, Tindall objected to Waterwall’s and Gordon’s affidavits because they constituted improper parol evidence of an unambiguous contract, were conclusory, did not establish personal knowledge, and were incompetent expert opinions.

The parties stipulated that once the summary-judgment motions were determined, the only remaining issue would be the reasonable and necessary attorney’s fees and costs under the UDJA. They further stipulated to the amount of such fees and costs for either party.

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Energy Transfer Fuel, L.P., a Texas Limited Partnership v. 660 North Freeway, LLC, a Texas Limited Liability Company, and Tindall Properties, LTD., a Texas Limited Partnership, (Tex. Ct. App. 2021).

Energy Transfer Fuel, L.P., a Texas Limited Partnership v. 660 North Freeway, LLC, a Texas Limited Liability Company, and Tindall Properties, LTD., a Texas Limited Partnership (Energy Transfer Fuel, L.P., a Texas Limited Partnership v. 660 North Freeway, LLC, a Texas Limited Liability Company, and Tindall Properties, LTD., a Texas Limited Partnership) — published by Counsel Stack Legal Research, free access to 12M+ legal documents.

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