Jarvis v. Rocanville Corp., 05-07-00091-CV.

Citation298 S.W.3d 305
Decision Date24 August 2009
Docket NumberNo. 05-07-00091-CV.,05-07-00091-CV.
PartiesBen E. JARVIS, Bruce Wilder, Jarvis Oil Company, and Wildco Resources, Inc., Appellants, v. ROCANVILLE CORPORATION and Dalvant Corporation, Appellees.
CourtCourt of Appeals of Texas

M. Keith Dollahite, M. Keith Dollahite, P.C., Tyler, TX, for appellants.

Daylen K. Gallman, Blake L. Beckham, The Beckham Group, Susan Hays, Law Office of Susan Hays, PC, Dallas, TX, for appellees.

Before Justices BRIDGES, RICHTER, and LANG-MIERS.

OPINION

Opinion By Justice LANG-MIERS.

Appellants Ben E. Jarvis and Bruce Wilder, and their respective operating companies, appellants Jarvis Oil Company and Wildco Resources, Inc., were plaintiffs and counter-defendants below (collectively, Plaintiffs). They appeal from a partial summary judgment and a final judgment issued after a nonjury trial in favor of appellees Rocanville Corporation and Dalvant Corporation, defendants and counter-plaintiffs below (collectively, Defendants). We overrule Plaintiffs' issues on appeal and affirm the trial court's partial summary judgment and final judgment.

FACTUAL AND PROCEDURAL BACKGROUND

The underlying dispute in this case concerns (1) the operating expenses for an oil well in Kaufman County known as the Melton Well, and (2) the land and auxiliary equipment across a county road from the Melton Well.

The Parties

Defendants are the majority interest owners in, and operators of, the Melton Well and its auxiliary equipment. Plaintiffs are or were minority interest owners in the Melton Well. The parties have had interests in the Melton Well for more than 30 years and have had ongoing disputes arising from their interests over the last several years.

The Melton Well, the Auxiliary Equipment, and the Property at Issue

The Melton Well produces a mixture of crude oil, saltwater, natural gas, and hydrogen sulfide gas (also known as sour gas). The auxiliary equipment used in connection with the Melton Well's operation is located directly across a county road from the well on three acres of land formerly leased by Dalvant and currently leased by Rocanville (the Rocanville Land). The auxiliary equipment includes (1) a gas plant used to process and store the usable natural gas produced from the Melton Well, (2) a flare stack used to burn off the sour gas from the Melton Well, and (3) a saltwater disposal well known as the Musgraves Saltwater Disposal Well. The Rocanville Land is bordered on one side by the county road and is surrounded on the other three sides by land owned by Jarvis and Wilder (the Jarvis/Wilder Land).1

Two underground pipes, a water pipe and a gas pipe, run from the Melton Well, underneath the county road, to the auxiliary equipment on the Rocanville Land. It is undisputed that after they cross under the road, and before they get to the Rocanville Land, those two pipes run underneath a corner of the Jarvis/Wilder Land for a short distance. It is also undisputed that one of the three wires (known as "guy wires" or "guy lines") used to hold up the flare stack is tethered to the ground on the Jarvis/Wilder Land. Plaintiffs also claim that the well bore for the Musgraves Saltwater Disposal Well encroaches, in part, on the Jarvis/Wilder Land.

The First Lawsuit

The parties have made claims against each other in at least two other lawsuits.2 The first lawsuit ended with, in pertinent part, an agreed final judgment dated September 18, 20003 against Jarvis Oil and Wildco, for $150,000 and $100,000, respectively, on Rocanville's counterclaim for shared expenses relating to the operation of the Melton Well, known as "joint-interest billings." In what Plaintiffs describe as the "[p]artial [s]ettlement" of that lawsuit, instead of executing on the judgment, Rocanville essentially agreed to collect the amounts due under that judgment from Jarvis Oil and Wildco's share of future revenues from the Melton Well's production. Apparently, Rocanville has not yet recovered from Jarvis Oil and Wildco's royalties all of the amounts due under that judgment because Plaintiffs state that Jarvis Oil and Wildco "have not received any revenue attributable to their working interests in the Melton Well" since the time of the partial settlement.

The Second Lawsuit

In the second lawsuit, "Plaintiffs sued Defendants in trespass to require Defendants to remove all pipelines, guy wires, guy wire anchors, and other tangible items that emanated from or went to the Gas Plant and which touched, crossed, or were above, below, or through the Jarvis/Wilder [Land]." In response, Defendants asserted affirmative defenses to the trespass claim and counterclaimed for the amount they claimed was overdue for additional joint-interest billings. The parties settled the second lawsuit and agreed to dismiss all claims with prejudice. The parties' settlement agreements, dated December 1, 2004, expressly permitted the equipment "encroachments" on the Jarvis/Wilder Land and required Rocanville to "rework" a non-operating oil well on the Jarvis/Wilder Land, known as the Musgraves Oil Well, by March 2005.

This Lawsuit

Plaintiffs filed this lawsuit against Defendants in April 2005. In their second amended petition,4 Plaintiffs allege that Rocanville breached the settlement agreements from the second lawsuit by failing to rework the Musgraves Well, and argued that Rocanville's breach "automatically terminated" those settlement agreements. Plaintiffs asked the trial court to "declare that Defendant Rocanville's breach and default terminated the [settlement agreements]." They also asked the court to declare that, without the rights that existed only under the settlement agreements, the equipment "encroachments" "constitute a trespass on the Jarvis/Wilder [Land]." Plaintiffs sought a mandatory injunction "ordering Defendants, at their sole cost and expense, to remove the Encroachments from the Jarvis/Wilder [Land]," and a permanent injunction "enjoin[ing] Defendants from placing any other encroachments upon or otherwise trespassing upon the Jarvis/Wilder [Land]." Jarvis and Wilder also sought a declaratory judgment relating to the operation of the gas plant.5 In response, Defendants filed a general denial and also asserted multiple affirmative defenses including res judicata, quasi estoppel, and adverse possession. Rocanville also asserted a "breach-of-contract/sworn-account" counterclaim against Jarvis and Wilder for additional overdue joint-interest billings for the Melton Well that accrued after the agreed final judgment was rendered in the first lawsuit. Defendants also asserted a claim for attorneys' fees under civil practice and remedies code sections 37.009 and 38.001.

Plaintiffs filed motions for summary judgment on their claims and Defendants' counterclaims and affirmative defenses, and the trial court denied those motions. Defendants filed motions for summary judgment on multiple claims, including plaintiffs' request for declarations that Rocanville breached the settlement agreements and that the "encroachments" constituted a trespass. The trial court granted summary judgment in favor of Defendants on Plaintiffs' claim for declaratory relief regarding the alleged encroachments and denied summary judgment on other claims. After a six-day nonjury trial the trial court issued a final judgment on the remaining claims. Pertinent to this appeal, the trial court denied Jarvis and Wilder's request for declaratory judgment relating to the operation of the gas plant, denied Plaintiffs' request for declaratory relief or injunction, granted Rocanville's breach-of-contract/sworn-account counterclaim against Jarvis and Wilder, and granted Defendants' claim for attorneys' fees against Plaintiffs. Plaintiffs timely requested, and the trial court timely filed, findings of fact and conclusions of law. Plaintiffs also filed a motion for new trial, which was apparently overruled by operation of law.

ISSUES ON APPEAL

In a combined appellants' brief, Plaintiffs identify the issues on appeal as follows:

1. Did the trial court err in denying Jarvis and Wilder's request for a declaratory judgment that—

• under the principle of res judicata, the dismissal with prejudice of the second lawsuit negated all of Rocanville's6 possible claims existing before December 1, 2004, for having the encroachments on Jarvis and Wilder's land;

• as a result, after December 1, 2004, the settlement agreements provided the sole legal basis for Rocanville to have the encroachments on Jarvis and Wilder's land;

• Rocanville's failure to rework the Musgraves Well on or before March 1, 2005 terminated the sole legal basis for Rocanville to have the encroachments on Jarvis and Wilder's land;

• as a result, Rocanville should be ordered to remove the encroachments from Jarvis and Wilder's land and enjoined from trespassing on their land?

2. Did the trial court err in denying Jarvis and Wilder's motion for summary judgment for this declaratory judgment?

3. Did the trial court err in partially granting Rocanville's motion for summary judgment?

4. Did the trial court err in ordering [Jarvis Oil] to pay $93,302.97 and Wildco to pay $80,053.47 to Rocanville for operating expenses for the Melton Well?

5. Did the trial court err in ordering Jarvis, Wilder, [Jarvis Oil] and Wildco, "jointly and severally," to pay $75,000 in attorney's fees to Rocanville?7

Plaintiffs' Third Issue

We address Plaintiffs' third issue first because our resolution of that issue is also dispositive of other issues on appeal. In their third issue, Plaintiffs challenge the trial court's order partially granting Defendants' motion for summary judgment.

Relevant Facts

In their motion for summary judgment, Defendants argued that they were entitled to judgment in their favor as a matter of law on Plaintiffs' trespass claim on several separate grounds. First, they argued that Plaintiffs could not establish a trespass claim because "when read together, the 1973...

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