EnerQuest Oil & Gas, LLC v. Plains Exploration & Production Co., No. SA-12-CV-542-DAE, slip op. (W.D. Tex. Nov. 7, 2013)(Ezra, M.J.)

A month after hearing oral argument on four cross-motions for partial summary judgment, Judge Ezra issued a 94-page opinion that narrowed the claims to be tried in this oil and gas lease dispute. 

The primary issue was whether the leases had terminated or remained extant by operation of their shut-in royalty clauses.  The pertinent clause in each lease provided that wells “capable of producing oil and gas . . . in paying quantities” were shut-in the lessee could maintain the lease by paying a shut-in royalty of a dollar an acre within 90 days of being shut-in.  Slip op. at 13-14.  The District Court determined that there were genuine issues of material fact regarding the “Well’s capability of production in paying quantities.”  Id. at 40.   But the District Court concluded that (a) no shut-in royalties were paid during the primary term of the leases, (b) the only well was shut-in on June 2, 2010, making the shut-in royalties due on August 31, 2010, and (c) EnerQuest failed to tender payment beforehand, meaning the leases terminated according to their terms.  Id. at 72. 

In an amended complaint, EnerQuest claimed trespass and other causes of action related to EOG Resources’ unauthorized three-dimensional seismic program on a portion of the leased property.  Slip op. at 73-74.  EOG Resources moved for summary judgment on the grounds that they claim was barred by the two-year statute of limitations for trespass to real property.  Id. at 74.   The District Court rejected EnerQuest’s argument that these claims relate back to the filing of its original complaint, as well as its efforts to invoke tolling doctrines to the claim. Id. at 75-92.  The District Court therefore dismissed these claims.  Id. at 92-94.

Zurich American Ins. Co. v. Tejas Concrete & Materials, Inc., No. SA-13-CV-310-DAE, slip op. (W.D. Tex. Nov. 6, 2013)(Ezra, J.)

The plaintiff insurance companies issued performance and payment bonds naming Ballenger Construction Company as principal on nine Texas construction projects, three of which were located in the Western District of Texas.  Slip op. at 3 and 13.  In connection with the bonds, the defendants signed an Agreement of Indemnity, promising to “exonerate and indemnify” the insurance companies for losses on the projects.  Id.  After Ballenger Construction Company filed for bankruptcy and unpaid subcontractors and suppliers made claims on the bonds, the insurance companies filed this suit.  Id. at 3.

The District Court denied the defendants’ Rule 12(b)(3) motion and motion to transfer venue, rejecting the suggestion that the Southern District was the proper venue because most of the defendants resided there.  Venue was proper under 28 U.S.C. § 1391(b)(2) because the location of three construction projects in the District meant that “a substantial part of the events or omissions giving rise to the claim” occurred in the District.  Slip. at 12-16.  For the same reason, much of the evidence and many of the witnesses were located in the Western District and the Southern District was not “clearly a more convenient” venue.  Slip op. at 21-30. 

The defendants argued that the insurance companies’ claim under Chapter 162 of the Texas Property Code should be dismissed under Rule 12(b)(6) because the statute did not create a private cause of action.  Slip op. at 16.  The District Court, however, pointed out that the Texas Supreme Court recognized such a cause of action in Dealers Electrical Supply Co. v. Scoggins Construction Co., 292 S.W.3d 650, 657 (Tex. 2009) and denied the motion.  Slip op. at 16-21.

Tipps v. McGraw, No. SA-12-CV-761-DAE, slip op. (W.D. Tex. Nov. 1, 2013)(Ezra, J.)

The District Court dismissed supervisory liability claims under Rule 12(b)(6) in this civil rights case stemming from an Austin woman’s arrest on subsequently dismissed charges.  The Fifth Circuit requires specific instances of a subordinate’s civil rights violations to plead a viable claim for section 1983 supervisory liability under section 1983.  Slip op. at 12.  Because the allegations against the DPS troopers lacked these specifics, the District Court dismissed the section 1983 claims against them, but afforded the plaintiff an opportunity to join the troopers later if developments in discovery warranted.  Id.  The District Court also dismissed the Austin plaintiff’s common law claims, concluding they were barred by the statutory protection for government employees acting within the scope of their employment. Id. at 12-13 (applying Tex. Civ. Prac. & Rem. Code § 101.106(f)).