ConocoPhillips Co. v. Koopmann

Summary

The Texas Supreme Court considered whether the common-law rule against perpetuities invalidated a future interest in a reserved nonparticipating royalty interest. The Court held that the rule did not invalidate the interest on the circumstances presented, but concluded that the reservation's savings clause was ambiguous and remanded for interpretation. The Court also held that Texas Natural Resources Code section 91.402 does not bar a lessor's common-law breach-of-contract claim and addressed attorney's fees under Texas Rule of Civil Procedure 91a.

Holdings

1. In the oil-and-gas context, the rule against perpetuities does not invalidate a future interest created by reservation when the holder is ascertainable and the preceding defeasible term estate is certain to terminate.
2. The savings clause is ambiguous as a matter of law because the phrase "other similar payments" is reasonably susceptible to more than one interpretation; the issue of the parties' intent must therefore be resolved by the factfinder.
3. Section 91.402 does not preclude a lessor's common-law breach-of-contract claim based on a controlling lease absent clear legislative intent to abrogate that claim.
4. A party that loses its Rule 91a motion to dismiss is not transformed into the prevailing party on that motion merely because it later prevails on summary judgment asserting similar arguments.

Questions Presented

1. Whether the rule against perpetuities invalidated the Koopmanns' future interest in Strieber's reserved nonparticipating royalty interest.
2. Whether the savings clause in Strieber's reservation was ambiguous and whether the evidence established that the clause preserved Strieber's or Burlington's interest after the initial fifteen-year term.
3. Whether Texas Natural Resources Code section 91.402 barred the Koopmanns' common-law breach-of-contract claim based on withheld royalty payments.
4. Whether Burlington was entitled to attorney's fees under Texas Rule of Civil Procedure 91a as the prevailing party on its motion to dismiss after later prevailing on summary judgment.

Disposition

affirmed