MJR Oil & Gas 2001 LLC v. Ariesone, LP

558 S.W.3d 692
CourtCourt of Appeals of Texas
DecidedJuly 25, 2018
DocketNo. 06-17-00116-CV
StatusPublished
Cited by4 cases

This text of 558 S.W.3d 692 (MJR Oil & Gas 2001 LLC v. Ariesone, LP) 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
MJR Oil & Gas 2001 LLC v. Ariesone, LP, 558 S.W.3d 692 (Tex. Ct. App. 2018).

Opinion

Opinion by Justice Moseley

This dispute is about a right of first refusal (ROFR) in certain oil and gas leases on various properties located in Gregg and Rusk Counties. It is undisputed that a ROFR in favor of MJR Oil & Gas 2001 LLC (MJR) is contained in a May 2002, unrecorded Settlement and Release Agreement (the Settlement Agreement) between two groups of owners of an oil company, including MJR and Energy 2000, Inc. (Energy). At issue in this case is whether MJR's ROFR is a covenant running with the land, and therefore enforceable against the assignees and successors in interest to Energy: AriesOne, LP (AriesOne), GFP Texas, Inc. (GFP), Miken Oil, Inc. (Miken), and SND Energy Company, Inc. (SND) (collectively, Appellees). The trial court held that it was not a covenant running with the land and entered summary judgments in favor Appellees on that basis.1 The trial court also denied MJR's motion for partial summary judgment against AriesOne, which asked for summary judgment against AriesOne on liability and contended that the ROFR was a covenant running with the land. After the parties agreed to non-suit all other claims and counterclaims, the trial court entered a final judgment in favor of Appellees.

On appeal, MJR contends that the trial court erred in holding that the ROFR was not a covenant running with the land and asks us to reverse the trial court's rulings. We agree that the trial court erred in granting the motion for summary judgment in favor of Appellees.

I. Standard of Review

"We review the trial court's summary judgment de novo." Provident Life & Accident Ins. Co. v. Knott , 128 S.W.3d 211, 215 (Tex. 2003) (citing FM Props. Operating Co. v. City of Austin , 22 S.W.3d 868, 872 (Tex. 2000) ). In our review, all evidence favorable to the non-movant is deemed true, and every reasonable inference and any doubts are resolved in the *697non-movant's favor. Valence Operating Co. v. Dorsett , 164 S.W.3d 656, 661 (Tex. 2005). To be entitled to traditional summary judgment, a movant must establish that there is no genuine issue of material fact so that the movant is entitled to judgment as a matter of law. TEX. R. CIV. P. 166a(c) ; Mann Frankfort Stein & Lipp Advisors, Inc. v. Fielding , 289 S.W.3d 844, 848 (Tex. 2009). Once the movant produces evidence entitling it to summary judgment, the burden shifts to the non-movant to present evidence raising a genuine issue of material fact. Walker v. Harris , 924 S.W.2d 375, 377 (Tex. 1996). A defendant is entitled to summary judgment on a claim only when it conclusively negates a single essential element of a cause of action or conclusively establishes an affirmative defense. Frost Nat'l Bank v. Fernandez , 315 S.W.3d 494, 508-09 (Tex. 2010).

When, as in the case of AriesOne, both sides file motions for summary judgment and the trial court grants one motion and denies the other, we consider both sides' summary judgment evidence and determine all questions presented, and if the trial court erred, we render the judgment the trial court should have rendered. Mann Frankfort , 289 S.W.3d at 848 (citing Comm'rs Court of Titus Cty. v. Agan , 940 S.W.2d 77, 81 (Tex. 1997) ).

II. The Summary Judgment Evidence

MJR's ROFR appears in the Settlement Agreement, which was executed May 5, 2002. The Settlement Agreement arose out of a lawsuit filed in the County Court at Law No. 3 of Dallas County between MJR and others (referred to collectively in the Settlement Agreement as the Ryan Parties), Energy and others (referred to collectively in the Settlement Agreement as the Dickerson Parties), and Ascend Oil & Gas, L.L.C. (Ascend), over the ownership and operation of Ascend and certain oil and gas properties. Under the Settlement Agreement, the various parties agreed to convey all of their interest in the oil and gas properties to Energy, and Energy agreed to convey varying overriding royalty interests (ORRI) in certain oil and gas properties to MJR. The Settlement Agreement also contained a section that set forth the continuing obligations of Energy to MJR.2 These obligations included the actions Energy would take to insure the proper and prompt payment of the overriding royalties for any production from the oil and gas properties to MJR, and also included a ROFR that provided:

[Energy] shall advise MJR within ten business (10) days of any assignment, farmout, sale or transfer of any property, lease, or well in which MJR has any interest and shall give MJR a [ROFR] to purchase such interest upon the same terms as offered to [Energy] by a bona fide third party. If MJR does not agree to purchase such interest within ten (10) days, [Energy] shall advise the new operator and/or transferee of MJR's overriding royalty interest. As a condition precedent to the transfer, any transferee shall be required to agree to be bound by the obligations to MJR contained in this agreement as it pertains to any interest transferred and give MJR evidence of same.

The Settlement Agreement also provided, "This Agreement shall be binding upon and inure to the benefit of the parties, and all of their respective assigns, successors, agents, servants, employees, insurers, and legal representatives."

*698On the same day, Energy executed an Assignment of Overriding Royalty Interest, effective as of May 1, 2002 (the ORRI Assignment) to MJR that conveyed varying ORRI in certain oil and gas properties, including some, but not all,3 of the oil and gas leases in dispute in this case.4 After setting forth the varying ORRI and their definition, the ORRI Assignment stated:

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Bluebook (online)
558 S.W.3d 692, Counsel Stack Legal Research, https://law.counselstack.com/opinion/mjr-oil-gas-2001-llc-v-ariesone-lp-texapp-2018.