Purvis Oil Corp. v. Hillin

890 S.W.2d 931, 1994 Tex. App. LEXIS 3167, 1994 WL 711590
CourtCourt of Appeals of Texas
DecidedDecember 23, 1994
Docket08-93-00445-CV
StatusPublished
Cited by54 cases

This text of 890 S.W.2d 931 (Purvis Oil Corp. v. Hillin) 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
Purvis Oil Corp. v. Hillin, 890 S.W.2d 931, 1994 Tex. App. LEXIS 3167, 1994 WL 711590 (Tex. Ct. App. 1994).

Opinion

OPINION

KOEHLER, Justice.

This is an appeal from a final summary judgment in a suit for declaratory judgment seeking interpretation of unambiguous oil and gas well joint operating agreements. In this suit initially brought by Appellant, both parties moved for summary judgment. The trial court granted Appellee’s motion, determining that Appellee was the lawfully installed current operator of the wells in question and that a successor operator could be elected only if the current operator resigned or was removed in accordance with provisions of the agreement. The trial court also awarded Appellee its attorney’s fees in the amount of $26,425. We affirm.

RELEVANT FACTS

Tiburón Petroleum Corporation (Tiburón) was operator of certain oil and gas wells, located in Reagan, Sterling, and Dawson Counties in Texas, under joint operating agreements (JOAs), which governed the operations of such wells and which had been entered into and were binding on all parties owning interests in the wells. Tiburón filed a petition under Chapter 11 of the Bankruptcy Act in 1986. Claydesta National Bank (CDNB) bought Tiburon’s interest in the wells on July 1, 1986. On August 1, 1986, Tiburón entered into a suboperating agreement with Hillin-Simon Oil Company 1 (Hil-lin), Appellees herein, which among other things anticipated that Hillin would be elected operator in the near future, at which time the suboperating agreement would terminate. The JOAs under which Tiburón was operating requires that any successor operator must be selected from among the parties to the agreement owning oil and gas interests in the area covered by such agreements. It was contemplated that Hillin would acquire Tiburon’s interest in the wells. In that connection, Tiburón, CDNB, and Hillin on August 1,1986 entered into an agreement by the terms of which Hillin was to purchase Tiburon’s and CDNB’s interests in certain properties included in the JOAs. On October 27, 1986 and on February 25, 1987, the non-operators ratified the suboperating agreement and elected Hillin as operator.

In the meantime, Tiburón petitioned the bankruptcy court for approval to resign as operator, to which that court agreed on February 15, 1987, additionally approving and authorizing the assignment by Tiburón to Hillin of its rights to receive and disburse proceeds from oil and gas sales. A subsequent motion by CDNB to set aside the bankruptcy court’s order approving Tibu-ron’s resignation and substitution of Hillin resulted in another order, dated June 9,1992, approving, ratifying, and reaffirming Tibu-ron’s resignation as operator and the assignment of its rights to Hillin. After Hillin had been serving as operator for approximately one year, CDNB repudiated and withdrew its offer to sell to Hillin those interests it owned or had acquired from Tiburón.

However, effective August 1, 1987, Hillin acquired the interests of Everett Beckett in the wells. On December 1, 1988, Hillin acquired the interests of E. Ray Lewis in the wells. After Hillin had been serving as operator of the wells for approximately five years, Purvis in June 1991 purchased Tiburon’s interests held by CDNB. Within a couple months after acquiring those interests in the wells, Purvis (proceeding on the premise that Hillin was not properly elected as operator because at the time it was so elected it did not own an interest in the areas covered by the agreements) polled the non-operating owners and was by a majority of them select *935 ed operator. Purvis then attempted to assume operation of the wells, but Hillin refused to resign as operator or to relinquish its operation of the wells. Purvis then brought this action for declaratory judgment, injunctive relief, and interference with business relations. 2

Purvis’ Points of Error Nos. One and Two concern the trial court’s interpretation of the JOAs. Specifically, Purvis challenges Hillin’s status as operator which that court upheld by its grant of Hillin’s motion for summary judgment based upon its interpretation of the provision relating to the selection of an operator to succeed an operator which has resigned or been removed. Purvis bases its challenge of Hillin’s status as Operator on paragraph B(2) asserting that because Hillin did not “own an interest in the Contract Area” at the time it was selected as operator that it was never lawfully selected as the successor operator.

When the interpretation of a contract is in issue, the court must first determine whether or not the provisions in question are ambiguous. Coker v. Coker, 650 S.W.2d 391, 394 (Tex.1983); Cap Rock Elec. Coop., Inc. v. Texas Util. Elec. Co., 874 S.W.2d 92, 99 (Tex.App. — El Paso 1994, no writ). A contract is ambiguous if, after examining the contract as a whole in light of the circumstances existing at the time the contract was signed and after applying the rules of construction, its meaning is uncertain and doubtful or it is reasonably susceptible to more than one meaning. Coker, 650 S.W.2d at 393; Cap Rock, 874 S.W.2d at 99. Neither of the parties argue that the terms of these agreements are ambiguous; they simply disagree over their construction and interpretation. We agree that the provision in question is not ambiguous. A disagreement over the meaning of a contract provision does not render the provision ambiguous. First City Nat’l Bank of Midland v. Concord Oil Co., 808 S.W.2d 133, 136 (Tex.App. — El Paso, 1991, no writ). When the parties disagree over the meaning of an unambiguous contract, the court must determine the parties’ intent by examining and considering the entire writing in an effort to give effect to and harmonize all provisions so that none will be rendered meaningless. Coker, 650 S.W.2d at 393; First City Nat’l. Bank, 808 S.W.2d at 136; KMI Continental Offshore Production Co. v. ACF Petroleum Co., 746 S.W.2d 238, 241 (Tex.App. — Houston [1st Dist.] 1987, writ denied). The intent of the parties must be taken from the agreement itself, not from the parties’ present interpretation, and the agreement must be enforced as it is written. Sun Oil Company (Delaware) v. Madeley, 626 S.W.2d 726, 731-32 (Tex.1981).

Legal conclusions of a trial court are always reviewable on appeal. Cap Rock, 874 S.W.2d at 99. Legal conclusions of a trial court are given no particular deference at the appellate level. Rather, as the final arbiter of the law, the appellate court has the power and the duty to evaluate independently the legal determinations of the trial court. Cap Rock, 874 S.W.2d at 99; Sears, Roebuck and Co. v. Nichols, 819 S.W.2d 900, 903 (Tex.App. — Houston [14th Dist.] 1991, writ denied); MJR Corp. v. B & B Vending Co., 760 S.W.2d 4, 10 (Tex.App. — Dallas 1988, writ denied).

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Bluebook (online)
890 S.W.2d 931, 1994 Tex. App. LEXIS 3167, 1994 WL 711590, Counsel Stack Legal Research, https://law.counselstack.com/opinion/purvis-oil-corp-v-hillin-texapp-1994.