Rogers v. Ricane Enterprises, Inc.

• Decision Date: 24 July 1996
• Docket Number: No. 07-91-0058-CV,07-91-0058-CV
• Citation: Rogers v. Ricane Enterprises, Inc., 930 S.W.2d 157 (Tex. App. 1996)
• Parties: Lavina ROGERS, et al., Appellants, v. RICANE ENTERPRISES, INC., et al., Appellees.
• Court: Texas Court of Appeals

Page 157

930 S.W.2d 157

Lavina ROGERS, et al., Appellants, v.RICANE ENTERPRISES, INC., et al., Appellees.

No. 07-91-0058-CV.

Court of Appeals of Texas Amarillo.

July 24, 1996.

Opinion Granting Appellees' Motion

forRehearing and Overruling Other

Motions forRehearing Sept. 18, 1996.

Rehearing Overruled Oct. 8, 1996.

Law Offices of Robert P. Baxter, Jr., Robert P. Baxter, Jr., Dallas, Hook and Husen, Dan Hook and Richard Husen, Levelland, for appellant.

McCleskey, Harriger, Brazill and Graf, Dennis R. Burrows, Lubbock, Bullock, Scott, Neisig and Owens, Tom Scott, C. Medferd Owen, Jr., Midland, Tabor and Tabor, Warren G. Tabor, Jr., Levelland, Brockett and Lindemood, C.H. Hal Brockett, Jr., Midland, Amoco Production Co., A. Andrew Gallo, Carolyn J. McKinney, Houston, Patton, Boggs and Blow, Pat Long, Dallas, Shafer, Davis, Ashley, O'Leary and Stoker, Robert E. Motsenbocker, Odessa, Underwood, Wilson, Berry, Stein and Johnson, Edward H. Hill, Amarillo, Whitten and Young, Charles

C. Self, III, Abilene, Hughes and Luce, Walter G. Pettey, III, Stephen G. Gleboff, Dallas, Carr, Fouts, Hunt and Wolfe, Donald M. Hunt, Lubbock, for appellees.

Before BOYD and QUINN, JJ. and REYNOLDS, Senior Justice.^*

ON REMAND FROM THE SUPREME COURT

BOYD, Justice.

The controversy giving rise to this appeal has been the subject of four previously reported opinions, two by this court and two by our supreme court.¹Even so, a brief resume of the rather tortuous and convoluted history of the case is necessary for an intelligent discussion of the matters now before us.This matter originated as an action in trespass to try title and for conversion.It was filed on April 2, 1984, by appellants²(the Rogers Group), claiming as shareholders of defunct Western Drilling Company(Western), and through various amended petitions included as defendants: Richard Scurlock(Scurlock), individually, and Ricane Enterprises, Inc.(Ricane); Brock Resources, Inc.(formerly Argonaut Energy Corporation)(Brock); Willbros Energy Services Company(formerly Cordova Resources, Inc.)(Willbros); Amoco Production Company(Amoco); Pride Pipeline Company(Pride); Mobil Oil Company(Mobil); Lea Refining Company(formerly Southern Union Refining Company)(Lea); Southern Union Company(Southern Union); Meyer, Moritz & Company, Inc.(Meyer-Moritz); Jerry Moritz(Moritz), individually; Torreyana Oil Corporation(Torreyana); Opeco Energy, Inc.(Opeco); Tom Meredith(Meredith); J.C. Craft (Craft); Calvin J. Ortego(doing business as Tego)(Ortego); Patrick L. Helton(Helton); and Allen Harrison(Harrison).

In their action, the Rogers Group sued appellees to recover possession of a working mineral interest under an assignment of an oil and gas leasehold estate, insofar as it covers a 329.3 acre tract out of approximately 7,893 acres in the base lease.The Rogers Group also claimed entitlement to all rights formerly held by Western under a conveyance of mineral interest and further claimed that appellees, under a claim of title adverse to them, had converted production from the 329.3 acre tract of land.

On May 31, 1937, Carrie Slaughter Dean, as lessor, entered into an oil and gas lease with lessee P.N. Wiggins covering approximately 7,893 acres.The lease contained a habendum clause providing that Wiggins was "TO HAVE AND TO HOLD [the 7,893 acres] ... for a term of ten (10) years from [May 31, 1937] ... the primary term, and as long as oil and gas ... is produced...."The lease also provided that if the leased premises "shall hereafter be owned in the severalty or in separate tracts, the premises, nevertheless shall be developed ... as one lease...."The lessee achieved production within the primary term, which production apparently continues to this time, and subsequently assigned the base lease to Superior Oil Company(Superior).

Subsequently, on June 1, 1949, Superior assigned the lease above a depth of 5200 feet on 329.3 acres of the larger tract, on which there was no production, to Western.In the assignment, it was provided the conveyance would terminate and the property revert to Superior unless Western commenced drilling within thirty days.Western also agreed to assume all express and implied base obligations.Western immediately drilled and completed one well.The well was marginally productive and ceased production in July 1961.Western and its shareholders did nothing on the tract from 1961 until the present time.

In August 1960, before the marginal well ceased production, Western's president, E.P. Campbell, signing in his individual capacity, conveyed all his "right, title, and interest" to the 329.3 acre tract to the Dakota Company, Inc.(Dakota).In return, Dakota gave Campbell a promissory note and deed of trust which Campbell transferred to Union Bancredit Corporation.Union Bancredit purported to foreclose on the 329.3 acres when Dakota defaulted on the note.Union Bancredit subsequently assigned the 329.3 acres to Harry Allred, a majority shareholder of the Torreyana Oil Corporation.Torreyana, a part of the Ricane Group, successfully drilled four new wells on the premises in 1979.³

Campbell died in 1961, and in 1965 the State of Texas forfeited Western's corporate charter due to nonpayment of franchise taxes.In 1984, as we have noted, the Rogers Group brought this action in trespass to try title against appellees, seeking to quiet their title to the working interest under the partial assignment of the base lease.They alleged that the drilling of the well by Western within the required time fulfilled Western's obligation under the assignment, the assignment continued in force and, as the successors in interest to, or the beneficial owners of the claims, assets and properties of Western, they were entitled to the recovery sought.

The Rogers Group also alleged that between 1979 and 1983, Harry Allred, "sole owner" of Torreyana, executed assignments to "Scurlock and/or Ricane, Opeco and/or Meredith, Torreyana, Ortego and Craft."They also alleged that on or about March 6, 1983, Torreyana purported to transfer "an interest" in the premises to Meyer-Moritz and that Meyer-Moritz later conveyed interests to Argonaut and Cordova.They additionally alleged that Ricane and/or Scurlock claimed an overriding royalty interest, that Mobil purchased oil and assorted hydrocarbons from the property "on or about October of 1979, through and including approximately all of 1980," that Southern Union purchased such production "for approximately the years 1981, 1982, and through February or March of 1983," that Pride purchased such production from "approximately February or March of 1983, to and through the filing of this lawsuit until appointment of the receiver," and that Amoco purchased "all gas, casinghead gas and associated hydrocarbons from the Leased property from approximately October of 1979 to the current time."The Rogers Group sought recovery of damages for conversion of oil and casinghead gas, for bad faith trespass, and for punitive damages.

In delivering the case to the jury, the trial judge submitted eighteen questions.In response to the questions, the jury: 1) & 2) found Western Drilling at all relevant times owned a 1/3 working interest in the property; 3) found Ortego, Craft, Ricane, and Cordova/Willbros at various times owned interests in the subject property; 4) failed to find that Cordova/Willbros trespassed upon the property in bad faith; 5) failed to find Amoco, Southern Union, Pride, Mobil, Ricane, or Cordova/Willbros converted oil and gas produced from the subject property; 6) refused to assess exemplary damages against Mobil, Southern Union, Pride, Meyer-Moritz, and Allen Harrison, but did assess such damages in the amount of $30,000 against Pat Helton, and amounts of $125,000 each against defendants Torreyana, Opeco/Meredith, and Cordova/Willbros; 7) found the Rogers Group discovered or should have discovered the operations being conducted by the defendants by January 1, 1980; 8) refused to award the Rogers Group attorney fees against Meyer-Moritz, Pat Helton, Allen Harrison, Torreyana, Opeco/Meredith or Cordova/Willbros; 9) found Western abandoned or ceased operating the leased premises; 10) found Superior elected to require Western to reassign to it Western's interest in the 1949 assignment from Superior; 11) found Western abandoned the purposes for which the 1969 assignment from Superior was made; 12) refused to find it was more reasonable than not that there was a lost deed from Western to E.P. Campbell; 13) refused to find that Cordova/Willbros incurred reasonable or necessary expenses for improving or operating the subject property; 14) found that Western, either by passive acquiescence or affirmative action ratified the E.P. Campbell assignment to the Dakota Company; 15) found the heirs of E.P. Campbell are estopped to claim title to the land E.P. Campbell purported to assign to the Dakota Company; 16) found that Western was the alter ego of E.P. Campbell; 17) found that Southern Union, Mobil, Amoco, and Pride were good faith purchasers of the "production in question"; and 18) found the Rogers Group was not precluded by laches from asserting title to the Dean lease.

In Rogers v. Ricane Enterprises, Inc., 884 S.W.2d 763(Tex.1994)(Ricane II), a divided court reversed this court's affirmance of the trial court's take-nothing judgment on the Rogers Group's action in Rogers v. Ricane Enterprises, Inc., 852 S.W.2d 751(Tex.App.--Amarillo1993, writ granted), specifically concluding "we ... render judgment quieting title in Rogers" and remanded the cause to us"for consideration of the points it (the Court of Appeals) did not reach, including the conversion issues."Ricane II, 884 S.W.2d at 770.

In performing our review function, we note the Rogers Group correctly postulates that by its decision, a five justice majority of the supreme court has determined that the Rogers Group had title during the times relevant to...