Hayes v. E.T.S. Enterprises, Inc.

809 S.W.2d 652, 1991 WL 75375
CourtCourt of Appeals of Texas
DecidedJune 5, 1991
Docket07-90-0073-CV
StatusPublished
Cited by21 cases

This text of 809 S.W.2d 652 (Hayes v. E.T.S. Enterprises, Inc.) 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
Hayes v. E.T.S. Enterprises, Inc., 809 S.W.2d 652, 1991 WL 75375 (Tex. Ct. App. 1991).

Opinions

BOYD, Justice.

In one point, appellants Joe W. Hayes, Ty M. Sparks, Cecil Meadows and Susan Krehbiel say the trial court erred in granting a summary judgment in favor of appel-lee E.T.S. Enterprises, Inc. We disagree and affirm the judgment of the trial court.

Appellants own an undivided mineral interest in the west one-half (W/2) of Section 4, Block Z-l, ACH & B Survey in Hemphill County, Texas (the Property). On April 2, 1982, Cecil Meadows and wife Emma Jean Meadows, executed an oil and gas lease to Tom L. Scott, Inc., covering the Property. On May 14, 1982, this lease was conveyed to the Pogo Producing Company (Pogo).

On November 30, 1983, the Meadows conveyed a 1.5/320 mineral interest to appellant Joe W. Hayes, and a like interest to appellant Ty M. Sparks. On September 11, 1986, Hayes conveyed a .75/320 mineral interest to appellant Susan Krehbiel (nee Martha Susan Hayes).

On February 20, 1985, Pogo executed a “farm out” agreement to appellee by the terms of which appellee was obligated to drill a test well upon a pooled unit which included all of Section 4. Appellee commenced drilling operations upon the tract on or about April 5, 1985, and completed a producing well on December 27, 1985.

On May 14, 1985, during the course of appellee’s drilling operations, Pogo executed a release of the oil and gas lease. Subsequently, on June 24, 1985, by an instrument denominated as a “Revocation and Rescission of Release of Oil and Gas Leases,” which recited it had not been its intent to release its oil and gas lease, Pogo sought to revoke and rescind the release. By an instrument dated March 19, 1986, but which recited its effective date as of October 2, 1985, and which recited it was made without express or implied warranty of title, Pogo assigned the lease to appel-lee. In the transfer, Pogo retained an overriding royalty interest equal to the difference between all existing leasehold burdens of record and 25% of 8/8 production.

In the action giving rise to this appeal, appellee sought a declaratory judgment that Pogo’s release was ineffective because it was the result of a mistake. They further alleged even if Pogo’s release was effective, appellee had obtained a limitation title to an oil and gas leasehold estate pursuant to Texas Civil Practice & Remedies Code Annotated § 16.024 (Vernon 1986) (three year statute). Appellee’s successful motion for summary judgment was also based upon these grounds.

Appellants contend the summary judgment should not have been granted on either ground. Initially, they contend that any mistake in the execution of the release was a unilateral one on Pogo’s part and cannot support either cancellation or rescission. Alternatively, they say, if such a unilateral mistake is to be the basis of the relief sought, it must meet the requirements of a “remedial mistake.” Those requirements do not exist, they continue, because (a) there exists a genuine issue of material fact whether the execution and filing of the release was in fact a mistake, (b) appellee offered no summary judgment proof that to enforce the release would be unconscionable, and (c) there exists a genuine issue of material fact whether Pogo exercised ordinary care in the execution and filing of the release.

With regard to the limitation contention, appellants contend that appellee did not prove the unbroken chain of title from the sovereign to appellee which is a requisite of the three year limitation statute. They also contend that the effect of the release was to make appellee and appellants co-tenants, and a fact question exists as to whether appellee repudiated appellants’ title.

The rules governing the decision of appeals from summary judgments are well established. Under Rule 166a of the Texas Rules of Civil Procedure,1 the summary [655]*655judgment movant must establish there is no genuine issue of fact and the movant is entitled to judgment as a matter of law. MMP, Ltd. v. Jones, 710 S.W.2d 59, 60 (Tex.1986); City of Houston v. Clear Creek Basin Authority, 589 S.W.2d 671, 678 (Tex.1979). We are required to view summary judgment evidence in the light most favorable to the non-movant and resolve any doubt of the existence of a genuine issue of material fact against the movant. Nixon v. Mr. Property Management, 690 S.W.2d 546, 548-49 (Tex.1985); Montgomery v. Kennedy, 669 S.W.2d 309, 311 (Tex.1984). Since the trial court did not specify which of appellee’s theories was relied upon for summary judgment, it will be affirmed on appeal if any of the theories advanced are meritorious. Rogers v. Ricane Enterprises, Inc., 772 S.W.2d 76, 79 (Tex.1989); Carr v. Brasher, 776 S.W.2d 567, 569 (Tex.1989).

Another case styled Pogo Producing Company v. Cecil Meadows et al., No. 32,319-A in the 47th District Court of Randall County, involved the same facts and legal issues in controversy in this case. Although appellee was not a party to that suit, the trial court allowed depositions taken in that case to be used in this one.

As summary judgment evidence and pertinent to its mistake ground, appellee attached excerpts from the deposition of Kenneth Good, an employee of Pogo, taken in the instant case. In that deposition, Good testified that, although he intended to sign the release at the time he did so, he would not have signed it had he known of the farm-out agreement to appellee and that well drilling operations were proceeding upon the tract in question. He recited the preliminary procedures that were standard in his company and said that, by the time a release was submitted to him, his signature was a mere formality as the release had been cleared by those below him responsible for its accuracy.

He also stated this was the only time such a mistake had been made by Pogo in the twelve years of his employment, and it was made because the information about the farm-out and the well drilling was not included. Had he known about this missing information, he would not have signed and “would also determine how the error occurred and have the situation corrected.” He averred that there was absolutely nothing to be gained by Pogo by executing the release where a farm-out existed and drilling had commenced. He characterized the signing of the release as a “mistake. A clerical error. A fluke.”

The summary judgment motion was also supported by the affidavit of John W. Chisholm, appellee’s senior vice president in charge of administration of oil and gas leases, production, marketing and well operations. He averred that the well on the premises was spudded on April 5, 1985, and was completed on December 27, 1985, with an absolute open flow potential of 17,500,-000 cubic feet of gas per day.

In opposition to appellee’s motion, and relevant to the mistake contention, appellants advanced deposition testimony of Gina Gresham taken in the Randall County case. Ms. Gresham was also an employee of Pogo. In that testimony, she recounted in some detail the procedures followed by Pogo in the preparation of releases of oil and gas leases and the company’s endeavors to ensure their accuracy.

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Hayes v. E.T.S. Enterprises, Inc.
809 S.W.2d 652 (Court of Appeals of Texas, 1991)

Cite This Page — Counsel Stack

Bluebook (online)
809 S.W.2d 652, 1991 WL 75375, Counsel Stack Legal Research, https://law.counselstack.com/opinion/hayes-v-ets-enterprises-inc-texapp-1991.