Santa Fe Petroleum, L.L.C. v. Star Canyon Corp.

156 S.W.3d 630, 167 Oil & Gas Rep. 486, 2004 Tex. App. LEXIS 11854, 2004 WL 3021269
CourtCourt of Appeals of Texas
DecidedDecember 30, 2004
Docket12-03-00403-CV
StatusPublished
Cited by63 cases

This text of 156 S.W.3d 630 (Santa Fe Petroleum, L.L.C. v. Star Canyon Corp.) 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
Santa Fe Petroleum, L.L.C. v. Star Canyon Corp., 156 S.W.3d 630, 167 Oil & Gas Rep. 486, 2004 Tex. App. LEXIS 11854, 2004 WL 3021269 (Tex. Ct. App. 2004).

Opinion

OPINION

JAMES T. WORTHEN, Chief Justice.

Appellants Santa Fe Petroleum, L.L.C., TexTron Southwest, L.L.C., and Southwest Land and Pipeline Company, L.L.C. (collectively “Santa Fe”) appeal the trial court’s judgment, which awarded a one percent overriding royalty interest in various Shelby County mineral leases to Star Canyon Corporation, as well as money damages and attorney’s fees. Santa Fe raises six issues on appeal. We affirm.

Background

Santa Fe hired Sam Embras to organize a mineral development program for it in the James Lime Horizontal Gas Project in Shelby County (the “James Lime”). While seeking individuals to assist with the land purchase, Embras contacted Kent Lam-beth, who was the president of Star Canyon. Embras, as agent of Santa Fe, agreed to pay Lambeth a five dollar bonus per acre purchased, as well as a one percent overriding royalty for any large blocks of acreage that Santa Fe could purchase.

Based upon the agreement, Star Canyon procured over eight thousand acres of mineral interests on behalf of Santa Fe in the James Lime. These mineral interests were transferred to Santa Fe by virtue of three closings in March, April, and October 1999.

At the March closing, Lambeth was told by the attorney for Santa Fe that he should get his overriding royalty interest in writing. On April 19, 1999, four days prior to the April closing, Lambeth received, by facsimile, the following signed agreement from Tom Griffin, the president of Santa Fe:

April 19,1999
Agreement
This agreement between Star Canyon Corporation, hereinafter referred to as “SCC” and Sante Fe Petroleum, L.L.C. hereinafter referred to as “SFP” and TexTron Southwest, L.L.C. hereinafter referred to as “TS” or any of their assigns or affiliates covering Federal Lease No. TXNM-89845 consisting of approximately 772 net acres and the HBP leasehold covered by Lease numbers 25666, 17850, 17842, and fee leases consisting of approximately 4,556.70 net acres and NON-HBP Leasehold covered by Lease numbers 71595 and 71596 consisting of approximately 3,621.29 net acres hereby agree to the following:
1. SFP, by signing this agreement, acknowledges that SCC has received a commission of Five Dollars ($5.00) per acre for the transaction covering lease number TXNM-89845 to close on or before April 23, 1999 and on the transaction covering the above referenced HBP and NON-HBP acreage that was closed on March 19,1999.
2. It is understood that SCC shall be given an assignment of a one percent (1%) ORRI on any of the above referenced acreage to be delivered at the time a unit is formed containing any of the referenced acreage and said assignment shall be effective as of the date said unit was formed.
3. If the unit formed is not comprised one-hundred percent (100%) from the above referenced leases, the ORRI will be proportionately reduced.
*636 If this letter agreement accurately sets forth your understanding of our previous verbal agreement to the subject matter hereof, please sign two copies of the letter in the space provided below and return one of the same to the undersigned.
Sincerely,
/s/ Kent Lambeth
Star Canyon Corporation
/s/ Kent Lambeth
Kent Lambeth, President
Santa Fe Petroleum, L.L.C.
/s/ Tom Griffin
Mr. Tom Griffin, President

On April 23, 1999, Lambeth' and Griffin met at Santa Fe’s Dallas office for the second closing. There, Lambeth presented two' originals and a copy of the aforementioned letter agreement'to Griffin for his signature. Griffin handed the originals of the agreement to Embras and instructed him to destroy them. Embras did as Griffin asked and placed the shredded documents in the trash. The parties then proceeded with the second closing, which resulted in the transfer of the seven hundred seventy-two net acres referenced in the agreement.

On May 11,1999, Lambeth sent Griffin a letter requesting that he honor the agreement to transfer the one percent overriding royalty interest to Star Canyon. In May 2000, Star Canyon filed a declaratory judgment action against Santa Fe for breach' of the April 19, 1999 letter agreement. See Tex. Crv. Prac. & Rem.Code Ann. § 37.001-37.011 (Vernon 1997 & Supp. 2004). After a bench trial, the one percent overriding royalty interest in the acreage described in the letter agreement was awarded to Star Canyon along with $174,235.19 in money damages and $12,000.00 in attorney’s fees. Santa Fe timely filed this appeal.

Standard of Review

Our standard of review is limited in the instant case. When findings of fact are neither filed nor requested following a bench trial, it is implied that the trial court made all findings necessary to support its judgment, provided that (1) the necessary findings are raised by the pleadings and supported by the evidence and (2) the decision can be sustained by any reasonable theory consistent with the evidence and applicable law. See Roberson v. Robinson, 768 S.W.2d 280, 281 (Tex.1989); Fair Deal Auto Sales v. Brantley, 24 S.W.3d 543, 546 (Tex.App.-Houston [1st Dist.] 2000, no pet.). The appellant’s burden on appeal is to show that the judgment of the court below cannot be sustained by any theory raised by the evidence. See Brantley, 24 S.W.3d at 546.

■ The trial court’s findings of fact, express or implied, after a bench trial are reviewable for legal and factual sufficiency by the same standards applied in reviewing the evidence supporting a jury’s answer. See Hitzelberger v. Samedan Oil Corp., 948 S.W.2d 497, 503 (Tex.App.-Waco 1997, writ denied). We review de novo a trial court’s conclusions of law, whether express or implied. See Benedictine Sisters of the Good Shepherd v. Ellison, 956 S.W.2d 629, 631 (Tex.App.-San Antonio 1997, pet. denied). A conclusion of law will be set aside if it is erroneous as a matter of law. Id.

Complaint by party not having burden of proof

When the complaining party raises a “no-evidence” or “legally insufficient evidence” issue challenging the legal sufficiency of the evidence to support a finding that favors the party who had the burden of proof on that finding, we must overrule the challenge if, considering only the evidence and inferences that support *637

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Bluebook (online)
156 S.W.3d 630, 167 Oil & Gas Rep. 486, 2004 Tex. App. LEXIS 11854, 2004 WL 3021269, Counsel Stack Legal Research, https://law.counselstack.com/opinion/santa-fe-petroleum-llc-v-star-canyon-corp-texapp-2004.