Ranchero Esperanza, Ltd. v. Marathon Oil Co.

• Decision Date: 24 July 2015
• Docket Number: No. 08–14–00152–CV,08–14–00152–CV
• Citation: 488 S.W.3d 354
• Parties: Ranchero Esperanza, Ltd., Appellant/Cross–Appellee, v. Marathon Oil Company, Appellee/Cross–Appellant.
• Court: Texas Court of Appeals

488 S.W.3d 354

Ranchero Esperanza, Ltd., Appellant/Cross–Appellee,

v.Marathon Oil Company, Appellee/Cross–Appellant.

No. 08–14–00152–CV

Court of Appeals of Texas, El Paso.

July 24, 2015

Thomas A. Zabel, Zabel Freeman, Houston, TX, attorney for appellee.

D. Douglas Brothers, Austin, TX, attorney for appellant.

Before McClure, C.J., Rodriguez, and Hughes, JJ.

OPINION

STEVEN L. HUGHES, Justice

This case involves the well-established rule in Texas that a cause of action for injury to land is a personal right belonging to the person who owns the property at the time of injury, and that a mere subsequent purchaser does not have standing to recover for injuries committed before his purchase. Here, Marathon Oil Company plugged and abandoned Well 812 in 1989 and ceased all activity as an operator on the property in 1999. Ranchero Esperanza, Ltd. purchased the property in 2004. In July 2008, Well 812 began leaking salt water onto the surface of the land, apparently due to injection activity being conducted nearby. Ranchero Esperanza alleges that Marathon's negligence in plugging Well 812 in 1989 allowed the salt water to reach the surface and was a proximate cause of the surface damages around the well.

On traditional summary judgment, the trial court determined that Ranchero Esperanza as a subsequent purchaser of the property did not have standing to assert its claims for negligence, trespass, and nuisance. We conclude the trial court erred, because the surface damage from Well 812 was an injury that occurred in July 2008 when Ranchero Esperanza was the owner of the property. We also conclude, however, that the trial court erred in denying Marathon's alternative ground for summary judgment based on statute of limitations. Accordingly, we reverse the trial court's judgment dismissing Ranchero Esperanza's claims for lack of standing and render judgment that Ranchero Esperanza take nothing because its claims are barred by the statute of limitations.

BACKGROUND

In December 2004, Ranchero Esperanza bought a ranch in Crockett County, Texas, consisting of approximately thirty-two sections of land. In addition to the surface estate, Ranchero Esperanza owned an undivided one-half interest in the Trinity Aquifer under the property.¹ Well 812, the well at issue in this appeal, is located on one of the two most westerly sections of the ranch, both of which are included in the Olson Unit.

The Olson Unit was formed by Marathon Oil in 1965 to implement secondary recovery of hydrocarbons through water injection. Most of the wells within the Olson Unit were drilled in the 1940s and 1950s by Plymouth Oil or Midland Oil Company. Well 812 was drilled by Midland Oil Company in 1957. In 1989, Marathon Oil plugged and abandoned Well 812, utilizing a contractor for the plugging operations who had been approved by the Texas Railroad Commission (RRC) and who performed the plugging operations in accordance with procedures approved in advance by the RRC.

Marathon Oil sold and quit operating the Olson Unit in 1999. The Olson Unit was subsequently acquired and operated by Aspen Operating Company, LLC in 2004.

On July 20, 2008, Aspen noticed a large amount of salt water flowing from Well 812. Aspen worked to stop the flow of brine, and cleaned and remediated the area surrounding Well 812. Ranchero Esperanza alleged that it did not discover the leak until eight days later, on July 28, 2008, when its foreman, Ken Hartman, saw men and equipment in the area of Well 812 and went over to investigate. Mr. Hartman testified that his attention was elsewhere at the time, but had he driven over to the Well 812 area a week earlier, he might have discovered the leak.

Aspen later determined that one of its nearby producing wells, Well 711, had a subsurface leak in its downhole tubing and casing, causing large volumes of salt water to leak out of its wellbore and traverse through a subsurface salt formation to Well 812. After Aspen had begun injecting salt water under pressure into the producing reservoir in the Olson Unit, salt water had exited Well 711 and apparently traversed underground from Well 711 and entered Well 812 well bore, traversed up the well bore, and exited holes in the surface casing above a subsurface depth of 50 feet, then traversed to the ground surface.

When Aspen re-entered Well 812 in 2008, it did not find a plug at the surface casing shoe in the well, although a plug had previously been spotted and tagged there in 1989 when the well was plugged. Aspen also discovered that the salt water leaking from Well 711 towards Well 812 had over time washed out a large cavern just below the surface casing shoe. In its efforts to re-plug Well 812, Aspen spotted in the well more than fifty-nine truckloads of gravel and three thousand sacks of cement in the cavern, but was unable to fill the cavern and establish circulation in the well. Ranchero Esperanza filed suit on July 27, 2010, against Marathon Oil, Aspen, and others. In its Third Amended Petition, which was the live pleading at the time of summary judgment, Ranchero Esperanza asserted claims against Marathon Oil and Aspen for negligence, trespass, and nuisance. Ranchero Esperanza sued for both surface damages and damages to the aquifer “resulting from Aspen's and Marathon's failure to properly manage and operate the wells on Ranchero Esperanza property.” Among other allegations, Ranchero Esperanza alleged that “brine from Well 812 polluted the surface of the ranch, killing vegetation over several acres.” Ranchero Esperanza raised the discovery rule in response to Marathon Oil's assertion of limitations, and claimed the “problem with the Olson Unit wells on Ranchero Esperanza did not become apparent until the Ranchero Esperanza foreman, Ken Hartman, saw an uncontained flow of brine from the Olson Unit Well 812 on July 28, 2008.”

Ranchero Esperanza also claimed additional problems with several other wells, including Well 907. Ranchero Esperanza alleged that its discovery of casing leaks in other wells demonstrated “that the problem that became apparent at Wells 812 and 907 is a field-wide phenomenon[.]”² As damages, Ranchero Esperanza sought $1.5 million “for remediation of brine contamination below Wells 812 and 907, $1.6 million for monitoring all the Olson Unit wells on the property for ten years, $3.7 million for diminution in the value of the property due to environmental stigma, and unspecified damages for reduction in the value of the aquifer due to contamination.

Marathon Oil filed a hybrid motion for summary judgment arguing in part that it was entitled to traditional summary judgment because: (i) Ranchero Esperanza lacked standing to assert claims against Marathon Oil; (ii) Ranchero Esperanza's claims were barred by the statute of limitations; and (iii) Marathon Oil had plugged Well 812 in accordance with applicable RRC rules and regulations, and thus, had no liability for damages arising from any alleged improper plugging.³ The trial court granted Marathon's motion on the ground Ranchero Esperanza “lacks standing to assert claims against Marathon,” and denied the motion in all other respects. The trial court dismissed all of Ranchero Esperanza's claims against Marathon due to Ranchero Esperanza's “lack of standing to assert such claims[.]”⁴ Marathon filed a conditional cross-appeal preserving its right to appeal the trial court's denial of its alternative grounds for summary judgment.

DISCUSSION

On appeal, Ranchero Esperanza contests the dismissal of its claims. Ranchero Esperanza contends the trial court erred when it concluded that Ranchero Esperanza did not have standing to sue Marathon for improperly plugging Well 812. In particular, Ranchero Esperanza contends that it had standing to sue for the surface damages arising from Well 812 because that injury did not occur until July 2008, after it had already acquired the property. We agree.

Standard of Review

We review the trial court's grant of summary judgment de novo. Shell Oil Co. v. Writt, 464 S.W.3d 650, 654 (Tex.2015) ; Merriman v. XTO Energy, Inc., 407 S.W.3d 244, 248 (Tex.2013). The evidence is viewed in the light most favorable to the nonmovant. Shell Oil Co., 464 S.W.3d at 654 ; City of Keller v. Wilson, 168 S.W.3d 802, 824 (Tex.2005). In reviewing the record, we indulge every reasonable inference in favor of the nonmovant, and resolve any doubts in favor of the nonmovant. Shell Oil Co., 464 S.W.3d at 654 ; Buck v. Palmer, 381 S.W.3d 525, 527 (Tex.2012).

Standing

Standing is a component of subject-matter jurisdiction. DaimlerChrysler Corp. v. Inman, 252 S.W.3d 299, 304 (Tex.2008) (“A court has no jurisdiction over a claim made by a plaintiff without standing to assert it.”). As a prerequisite to subject-matter jurisdiction, a lack of standing may be raised in a motion for summary judgment. Bland Indep. Sch. Dist. v. Blue, 34 S.W.3d 547, 553–54 (Tex.2000). The movant for summary judgment bears the burden to establish the absence of standing. Roskey v. Texas Health Facilities Comm'n, 639 S.W.2d 302, 303 (Tex.1982) (per curiam); La Tierra de Simmons Familia, Ltd. v. Main Event Entm't, LP, No. 03–10–00503–CV, 2012 WL 753184, at *4 (Tex.App.–Austin Mar. 9, 2012, pet. denied).⁵ We therefore must determine if Marathon established that Ranchero Esperanza lacked standing as a matter of law. See STICO Mut. Ins. Co., RRG v. Advanced Polymer Coatings, Inc., 412 S.W.3d 56, 58 n. 1 (Tex.App.–El Paso 2013, no pet.) (“When a defendant moves for summary judgment based on a lack of standing, it must conclusively establish the defense as a matter of law.”); La Tierra de Simmons Familia, 2012 WL 753184, at *4.

“It is well established that a cause of action for injury to land is a personal right belonging to the person owning the property at the time of injury, and a mere subsequent purchaser cannot recover for an injury committed before his or her purchase.” La Tierra de Simmons Familia, 2012 WL 753184, at *5. “For more than 100 years, this Court has recognized...