Haley v. Gpm Gas Corp.

• Decision Date: 29 May 2002
• Docket Number: No. 07-01-0281-CV.,07-01-0281-CV.
• Parties: J. Evetts HALEY, Jr., as Trustee of the Nita Stewart Haley Trust, and as Independent Executor of the Estate of J. Evetts Haley, Appellant, v. GPM GAS CORPORATION, Appellee.
• Court: Texas Court of Appeals

80 S.W.3d 114

J. Evetts HALEY, Jr., as Trustee of the Nita Stewart Haley Trust, and as Independent Executor of the Estate of J. Evetts Haley, Appellant, v. GPM GAS CORPORATION, Appellee.

No. 07-01-0281-CV.

Court of Appeals of Texas, Amarillo.

May 29, 2002.

Hazen & Terrill P.C., Paul M. Terrill, Austin, for appellant.

Gibson Ochsner & Adkins, Michael G. Smith, John T. Huffaker, David L. LeBas, Amarillo, for appellee.

Before BOYD, C.J., and REAVIS and JOHNSON, JJ.

DON H. REAVIS, Justice.

By this appeal following a jury trial, appellant J. Evetts Haley, Jr., as Trustee of the Nita Stewart Haley Trust, and as Independent Executor of the Estate of J. Evetts Haley, deceased (Haley) presents five issues (restated in our analysis) complaining of the judgment rendered that he take nothing on his action against GPM Gas Corporation and granting relief in favor of GPM concerning a five-acre surface lease.¹ Based on the rationale expressed herein, we affirm.

On July 11, 1956, Vera Dial Dickey, as lessor, executed a six page written lease covering the surface of a five acre tract out of Section 50, Block 25, H & GNRR Co. Survey, Gray County, Texas to Phillips Petroleum Company, as lessee.² As material here, paragraph 1 of the lease provides

Lessor does hereby lease and let to Lessee, to use for any lawful purposes in connection with the erection, maintenance, operation and repair of a gas booster station and other appurtenances and facilities useful or proper in connection with gas pipe lines (but the uses to be made by lessee shall not include the erection or use of any dwellings)....

(Emphasis added).

Paragraph 2 of the lease provides:

This lease shall be for a period of one (1) year from this date, herein called "primary term"; provided, however, that Lessee, its successors and assigns, at their option, may extend and continue this lease in effect for successive periods of one (1) year each thereafter indefinitely and perpetually by payment of annual rentals as hereinafter provided. In order to continue this lease in force after the expiration of the primary term, Lessee shall pay or tender to the Lessor on or before one year after this date the sum of Two Hundred Fifty Dollars ($250.00) as advance annual rental, and Lessee shall continue to pay said sum of Two Hundred Fifty Dollars ($250.00) as advance annual rental on or prior to the anniversary date of this lease for each and any year so long as Lessee desires to continue this lease in force.

(Emphasis added). The lease was recorded in the Gray County records and when Haley purchased the land in 1986, GPM was operating a gas booster station and other appurtenances on the leased premises.³

After Haley learned that GPM planned to construct a radio repeater tower on the leased premises, he wrote GPM on April 2, 1996, and inquired about its plans. By subsequent letters, Haley expressed his position that the lease did not authorize the construction of the tower. When efforts to arrive at a consensus failed, GPM proceeded with the construction of a radio repeater tower in 1996 on the leased premises for the sole purpose of receiving and relaying to GPM's office radio signals transmitting gas measurement information from electronic flow measurement meters installed at various well heads and central points of delivery of gas in the area to enhance the operation of its gas gathering system and pipe lines in the area. Contending that construction of the radio tower was not authorized by the lease and the use and maintenance of the tower constituted a trespass, Haley filed his original petition in September 1997, contending that because the lease was a "tenancy at will" he had terminated the lease and by which he sought damages for trespass, breach of contract, and other relief. By its answer, among other things, GPM contended that the lease was not a "tenancy at will," and sought a declaratory judgment that the lease remained in force and effect, free from interference by Haley.

After considering GPM's motion for summary judgment on May 11, 1998, the trial court signed its order on July 21, 1998, finding, among other things:

The lease unambiguously granted GPM an annual option to renew the Lease indefinitely and in perpetuity;

Haley's attempts to terminate the lease on the basis that it creates a tenancy at will are invalid, and do not result in termination of the lease; and

A material fact issue existed as to whether GPM's construction of a radio repeater tower on the leased property is within the scope of the lease.

The order concluded:

IT IS, THEREFORE, ORDERED that partial summary judgment is hereby entered in favor of GPM in that the Lease unambiguously grants GPM an annual option to renew the Lease indefinitely and in perpetuity.

IT IS FURTHER ORDERED that Plaintiff's Motion for Partial Summary Judgment is denied in its entirety. Plaintiff's attempts to terminate the Lease on the basis that it creates a tenancy at will are invalid and did not terminate the Lease.

IT IS FURTHER ORDERED that a genuine issue of material fact exists as to whether GPM's construction of a radio repeater tower on the Lease property is within the scope of the Lease and is authorized under the Lease.

Then, upon jury trial, based upon the jury's finding that GPM did not fail to comply with the lease agreement by constructing the radio repeater tower, the trial court signed judgment that Haley take nothing by the suit and declared that (1) the lease is valid and remains in full force and effect, (2) GPM has the right to continue to maintain and operate its Lee Tex Booster, the Tower, and the radio shack located on the lease, and (3) GPM had the right to continue to use the leased premises for any lawful purpose in connection with the erection, maintenance, operation, and repair of a gas booster station and other appurtenances and facilities useful and proper in connection with gas pipelines, provided however, that it continues to elect to pay the successive one-year annual renewal options in accordance with the lease.

Considering appellant's issues in a logical rather than sequential order, we commence our analysis by considering Haley's third issue by which he contends that the booster station lease established a tenancy at will terminable by either party. We disagree. Haley did not allege any fraud, accident, or mistake or contend that the July 11, 1956 agreement did not constitute the entire agreement of the parties. We commence our analysis by reviewing paragraph two of the lease. According to the plain language, the lease was for a fixed term of one year, commencing July 11, 1956. In addition, the agreement granted lessee the option to extend the lease for "successive periods of one (1) year each," so that if lessee timely exercised the option, the lease continued in effect for a subsequent one year term. In Willis v. Thomas, 9 S.W.2d 423, 424 (Tex. Civ.App.-San Antonio 1928, writ dism'd w.o.j.), the court held:

To create an estate for years, or for any definite term, the lease must be certain, or capable of being made certain, as to the beginning, duration, and termination of the term.

According to the July 11, 1956 agreement, the initial "term"⁴ of the lease was July 11, 1956 to July 10, 1957; and upon the exercise of the option by lessee, additional leases with one year "terms" followed. Because each one year term has its beginning and termination date, the July 11, 1956 agreement complies with the rule in Willis.

The option allowing lessee to continue the lease in the July 11, 1956 agreement is similar to the provision of the lease considered in Hull v. Quanah Pipeline Corp., 574 S.W.2d 610, 611 (Tex.Civ.App.-San Antonio 1978, writ ref'd n.r.e). In rejecting arguments similar to the contentions of Haley, the court, in part, concluded:

The lease involved here clearly and specifically shows that it was the intention of both the lessor and the lessee that the lessee should have a right of perpetual renewal .... The provisions of the lease are plain and unambiguous and they clearly evidence an intent and purpose to create a right of perpetual renewal. The lease is valid and enforceable and the trial court's holdings and findings are correct.

Then, in Philpot v. Fields, 633 S.W.2d 546, 548 (Tex.App.-Texarkana 1982, no writ), after noting that no legitimate reason exists to prevent parties from freely and intelligently contracting for the terms of a lease, the court held that a lease for a term of 20 years and so long thereafter as the lessee, his heirs, successors or assigns, may use the premises for the purpose of maintaining and operating a LTX separator, tank and other machinery ...

upon payment of an annual rental of $75.00 was enforceable and did not create a tenancy at will terminable at the will of either party.

Norman, et al. v. Morehouse, et al., 243 S.W. 1104 (Tex.Civ.App.-Amarillo 1922, writ dism'd w.o.j.), cited by Haley, is not controlling because the lease was partially oral and the lessee contended that the lease ran "so long as either of the defendants engaged in the business of making and repairing harnesses, shoes, etc." Here, however, the expiration date of each year lease was specific. Further, we have not overlooked Haley's reference to Holcombe v. Lorino, 124 Tex. 446, 79 S.W.2d 307 (1935). However, the former Holcombe opinions, see 76 S.W.2d 509 (Tex.Com. App.1934) and 71 S.W.2d 402 (Tex.Civ. App.-Galveston 1934), taken together also demonstrate that Holcombe is not controlling here. Initially, Haley acknowledges that the rental agreement in Holcombe was oral, whereas the July 11, 1956 lease was written and recorded. Next, according to the opinion of the Texas Commission of Appeals, 76 S.W.2d at 510, section 922 of the Revised Code of Ordinances for the City of Houston, provided in part, "jaill leases or rental contracts shall run from month to month revokable at the pleasure of the mayor or city council," and in October 1933, the...