Swift Energy Operating, LLC v. Regency Field Servs. LLC
| Decision Date | 29 May 2019 |
| Docket Number | No. 04-17-00638-CV,04-17-00638-CV |
| Citation | 608 S.W.3d 214 |
| Parties | SWIFT ENERGY OPERATING, LLC, Appellant v. REGENCY FIELD SERVICES LLC; Regency Energy Partners LP; Regency GP LP ; Regency GP LLC ; abd La Grange Acquisition, L.P. d/b/a Energy Transfer Company, Appellees |
| Court | Texas Court of Appeals |
Karen A. Conticello, Holman Fenwick & Willan USA LLP, 5151 San Felipe, Suite 400, Houston, TX 77056, Anjali Gillette, Holman Fenwick & Willan USA LLP, 5151 San Felipe, Suite 400, Houston, TX 77056, Jeanie Goodwin, Holman Fenwick & Willan USA LLP, 5151 San Felipe, Suite 400, Houston, TX 77056, Glenn R. Legge, Holman Fenwick & Willan USA LLP, 5151 San Felipe, Suite 400, Houston, TX 77056, Charles Flores, Beck Redden LLP, 1221 McKinney St. Ste. 4500, Houston, TX 77010-2029, B.D. Daniel, Beck Redden LLP, 1221 McKinney St., Ste. 4500, Houston, TX 77010-2029, David M. Gunn, Beck Redden LLP, 1221 McKinney, Suite 4500, Houston, TX 77010-2029, for Appellant
Bryce Callahan, Yetter Coleman LLP, 811 Main, Suite 4100, Houston, TX 77002, Robert Woods, Yetter Coleman LLP, 811 Main St., Suite 4100, Houston, TX 77010, R. Paul Yetter, Yetter Coleman LLP, 811 Main Street, suite 4100, Houston, TX 77002, Reagan Wm. Simpson, Yetter Coleman LLP, 811 Main St., Suite 4100, Houston, TX 77002, April Lynn Farris, Yetter Coleman, LLP, 811 Main, Suite 4100, Houston, TX 77002, Geraldine Young, Norton Rose Fulbright US LLP, 1301 McKinney Street, Suite 5100, Houston, TX 77010-3095, M. Joy Soloway, Norton Rose Fulbright US LLP, 1301 McKinney Street, Suite 5100, Houston, TX 77010-3095, Darryl Wade Anderson, Norton Rose Fulbright US, LLP, 1301 McKinney Street, Suite 5100, Houston, TX 77010-3095, Kent Krabill, Lynn PinkerCox & Hurst, LLP, 2100 Ross Ave., Ste. 2700, Dallas, TX 75201-7919, Alan Dabdoub, Lynn Pinker Cox & Hurst, LLP, 2100 Ross Ave., Ste. 2700, Dallas, TX 75201-7919, Roger Dale Bellows, Bellows Law Firm, PLLC, 501-C N. Harborth Avenue P.O. Box 1047, Three Rivers, TX 78071-1047, for Appellees
Sitting: Rebeca C. Martinez, Justice, Patricia O. Alvarez, Justice, Luz Elena D. Chapa, Justice
OPINION ON MOTION FOR REHEARING
Opinion by: Patricia O. Alvarez, Justice
On April 10, 2019, this court issued an opinion and judgment in this appeal. Appellant timely filed a motion for rehearing. We deny Appellant's motion for rehearing, but acting sua sponte to clarify the applicable facts and analysis, we withdraw our April 10, 2019 opinion and judgment and substitute this opinion and judgment in their stead.
Appellant Swift Energy Operating, LLC sued Appellees for damage to its leased minerals allegedly caused by H2 S/CO2 injectate spreading from Appellees' nearby injection well. Appellees asserted a statute of limitations affirmative defense, and both sides moved for summary judgment. Because Appellees conclusively established their affirmative defense only to Swift's PCQ lease claims, we affirm the trial court's order in part, reverse it in part, and remand this cause.
BACKGROUND
This case concerns damage caused by the underground spread of H2 S/CO2 gas from an injection well. The damages Swift seeks pertain to its leases near Appellees' injection well in McMullen County.
In 2009, Swift and Leo O. Quintanilla entered into a lease (the PCQ lease) for minerals underlying much of Quintanilla's ranch. The PCQ lease covers most depths below 2,000 feet for over 4,200 acres of the approximately 4,271-acre Quintanilla ranch. Swift's leased depths include some depths in the Olmos and Eagle Ford formations.
Swift has other leases in the area, some contiguous, some not, to the PCQ lease.1 Swift's PCQ lease and its eight other (non-PCQ) leases are all near Appellees' injection well.
Appellees are Regency Field Services LLC; Regency Energy Partners LP; Regency GP LP; Regency GP LLC; and La Grange Acquisition, L.P. d/b/a/ Energy Transfer Company (collectively Regency). In 2006, Regency sought permission from the Texas Railroad Commission (RRC) to allow Regency to operate an injection well (the Tilden Injection Well) in McMullen County to dispose of a gaseous mixture of concentrated hydrogen sulfide (H2 S) and carbon dioxide (CO2
).2 Regency sought to pump the H2 S/CO2 mixture, the injectate, into the Wilcox formation.
In its permit application, Regency submitted a plume model that predicted the injectate would spread horizontally by about 2,200 feet after forty years of injection.
The RRC Examiner's Report, issued in response to Regency's permit application, states there is The RRC approved Regency's plan to use H2 S resistant materials, such as stainless steel, for the injection well and the RRC issued the permit for the Tilden Injection Well. In February 2012, the RRC approved an increased disposal rate. Regency's revised model predicted a horizontal spread of 2,900 feet after thirty years of injection.
In August 2012, Layline Petroleum was operating the JCB Horton #1 well. The JCB Horton #1 well is located on the Quintanilla ranch, and is about 3,300 feet northeast of the Tilden Injection Well. That August, Layline detected H2 S in the JCB Horton #1 well; the H2 S was tested and determined to have originated from Regency's Tilden Injection Well.
Although the plume was not predicted to spread to the JCB Horton #1 well even after thirty years of injection, in 2012, Layline had to plug and cap its JCB Horton #1 well because of the H2 S contamination from Regency's injectate.
On October 23, 2012, Layline's Aaron Brougher e-mailed Swift's Richard Kimberlin with this message:
Later the same day, Swift's Bob Redweik responded to Layline's Aaron Brougher with this request:
That evening, Layline's Aaron Brougher responded to Swift's Bob Redweik's request and identified the permitted wells that could be affected.
The permitted wells are:
PC-Q EF #5H, #8H and #10H
On October 29, 2012, Layline's Aaron Brougher asked Swift's Bob Redweik if Swift would like to participate in the upcoming RRC hearing with Layline. Swift's Bob Redweik responded with
In July 2014, Quintanilla and others sued Regency for trespass, negligence, and other causes. Swift intervened on September 24, 2015. Swift sued Regency for trespass, negligence, gross negligence, and nuisance for present and future damage to seventy-four existing or planned wells. Some of the wells are on the PCQ lease; others are on the non-PCQ leases.
Citing the two-year statute of limitations for injuries to real property, see TEX. CIV. PRAC. & REM. CODE ANN. § 16.003, Regency moved for summary judgment against all of Swift's claims.
The trial court granted summary judgment for Regency against Swift's PCQ lease and non-PCQ leases claims based on Regency's affirmative defense of limitations.
Swift appeals.
LIMITATIONS PERIOD TO BRING SUIT
The limitations period for a trespass claim is two years. TEX. CIV. PRAC. & REM. CODE ANN. § 16.003(a) (); accord Taub v. Hous. Pipeline Co. , 75 S.W.3d 606, 620 (Tex. App.—Texarkana 2002, pet. denied) (citing First Nat'l Bank of Eagle Pass v. Levine , 721 S.W.2d 287, 289 (Tex. 1986) ).
The limitations period for negligence, gross negligence, and nuisance claims is also two years. Hunt Oil Co. v. Live Oak Energy, Inc. , 313 S.W.3d 384, 387 (Tex. App.—Dallas 2009, pet. denied) (negligence); Hall v. Stephenson , 919 S.W.2d 454, 467 (Tex. App.—Fort Worth 1996, writ denied) (gross negligence); Nat. Gas Pipeline Co. of Am. v. Justiss , 397 S.W.3d 150, 153 (Tex. 2012) (nuisance).
"A defendant moving for summary judgment on the affirmative defense of limitations has the burden to conclusively establish that defense." Town of Dish v. Atmos Energy Corp. , 519 S.W.3d 605, 608 (Tex. 2017) (quoting KPMG Peat Marwick v. Harrison Cty. Housing Fin. Corp. , 988 S.W.2d 746, 748 (Tex. 1999) ). To establish that defense, if the discovery rule has not been pled or raised, "the defendant must ... conclusively prove when the cause of action accrued." KPMG , 988 S.W.2d at 748.
"Causes of action accrue and statutes of limitations begin to run when facts come into existence that authorize a claimant to seek a judicial remedy." Exxon Corp. v. Emerald Oil & Gas Co., L.C. , 348 S.W.3d 194, 202 (Tex. 2011) (op. on reh'g) (citing Provident Life & Acc. Ins. Co. v. Knott , 128 S.W.3d 211, 221 (Tex. 2003) ); accord Town of Dish , 519 S.W.3d at 609 (). "Generally, when a cause of action accrues is a question of law." Knott , 128 S.W.3d at 221 ; accord Emerald Oil , 348 S.W.3d at 202.
"[T]he commencement of [a] limitations period may be determined as a matter of law if reasonable minds could not differ about the conclusion to be drawn from the facts in the record."...
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Regency Field Servs., LLC v. Swift Energy Operating, LLC
...claims. Swift appealed, and the court of appeals affirmed in part and reversed in part. Swift Energy Operating, LLC v. Regency Field Servs., LLC , 608 S.W.3d 214 (Tex. App.—San Antonio 2019).The court of appeals held that Regency was entitled to summary judgment to the extent Swift's claims......