Justia Contracts Opinion Summaries

The Supreme Court reversed the trial court's denial of Defendant's motion to compel arbitration, holding that remand was required for reconsideration in light of this Court's holdings in TotalEnergies E&P USA, Inc. v. MP Gulf of Mexico, LLC, 667 S.W.3d 694 (Tex. 2023).Lone Star Cleburne Autoplex filed this suit asserting that Alliance Auto Auctions of Dallas conspired with two of Lone Star's employees in order to embezzle money from Lone Star. Alliance moved to compel arbitration based on arbitration clauses contained in authorization agreements between Lone Star and a company Alliance used to verify and authorize car dealerships to buy and sell in the company's auctions. In opposing the motion Lone Star asserted that its claims fell outside the scope of the arbitration agreement. The trial court denied Alliance's motion to compel. The court of appeals affirmed. The Supreme Court reversed, holding that because the court of appeals decided this case without addressing arguments rejected in TotalEnergies, remand was required. View "Alliance Auto Auction of Dallas, Inc. v. Lone Star Cleburne Autoplex, Inc." on Justia Law

The Supreme Court vacated the judgment of the court of appeals in this case involving the question of deed construction within the oil and gas context as to whether a royalty interest was fixed or floating, holding that further proceedings were required to evaluate this case in light of the framework articulated in Van Dyke v. Navigator Group, 668 S.W.3d 353 (Tex. 2023).The 1956 deed at issue expressly reserved an undivided 3/32's interest "(same being three-fourths (3/4's) of the usual one-eighth (1/8th) royalty)" in the oil, gas, and other minerals. The question before the Supreme Court was whether the reservation was a floating 3/4 interest of the royalty rather than a fixed 3/32 interest. The court of appeals concluded that the reservation was a floating 3/4 interest. Because the court of appeals' decision preceded Van Dyke, the Court's most recent double-fraction case, the Supreme Court granting the petition for review and vacated the lower court's decision, holding that this case must be remanded this case for further proceedings in light of Van Dyke. View "Thomson v. Hoffman" on Justia Law

The Supreme Court reversed the judgment of the court of appeals in this case concerning whether Apache Corporation breached its purchase-and-sale agreements (PSAs) with Sellers, holding the court of appeals erred by failing to apply the default common-law rule of contractual construction to the parties' dispute and incorrectly construed other contractual provisions at issue.In the PSAs at issue, Sellers sold seventy-five percent of their working interests in 109 oil-and-gas leases to Apache. The trial court rendered final judgment for Apache on the grounds that Sellers had no evidence of damages and could not prevail on their claims. The court of appeals reversed in part. At issue was whether the default rule for treating contracts that use the words "from" or "after" a specified date to measure a length of time should be applied in this case. The Supreme Court reversed the judgment of the court of appeals as to the issues that the parties presented for review, holding that the parties' agreement in this case implicated the default rule without displacing it. View "Apache Corp. v. Apollo Exploration, LLC" on Justia Law

In these two consolidated cases involving claims brought against the Electric Reliability Council of Texas, Inc. (ERCOT) the Supreme Court answered, among other questions, that ERCOT is a governmental unit as defined in the Texas Tort Claims Act and is thereby entitled to pursue an interlocutory appeal from the denial of a plea to the jurisdiction.CPS Energy sued ERCOT and several of its officers for, inter alia, breach of contract. The trial court denied ERCOT'S plea to the jurisdiction. Ultimately, the court of appeals held that ERCOT was a governmental unit entitled to take an interlocutory appeal. In the second case, Panda sued ERCOT for, inter alia, fraud. The trial court denied ERCOT's pleas to the jurisdiction. The court of appeals ultimately held that ERCOT was not entitled to sovereign immunity. The Supreme Court affirmed in the first case and reversed in the other, holding (1) ERCOT was entitled to pursue an interlocutory appeal from the denial of a plea to the jurisdiction; (2) the Public Utility Commission of Texas has exclusive jurisdiction over the parties' claims against ERCOT; and (3) ERCOT was entitled to sovereign immunity. View "CPS Energy v. Electric Reliability Council of Texas" on Justia Law

In this case alleging defective design and development of a commercial property the Supreme Court reversed the judgment of the court of appeals concluding that the running of limitations was equitably tolled while the suit was on appeal, holding that there was no tolling.The suit in this breach of contract and negligence action was eventually dismissed for failure to file a certificate of merit. Plaintiff nonsuited its claims and refiled. The court of appeals held that the certificate of merit was deficient as to the breach of contract claim but complied with the statute with respect to the negligence claim. The Supreme Court reversed in part, holding that the certificate of merit failed to satisfy Tex. Civ. Prac. & Rem. Code 150.002 as to Plaintiff's negligence claim. The Supreme Court remanded the case for a determination of whether the dismissal should be with or without prejudice. Thereafter, Plaintiff filed a new suit against Defendant that included a new certificate of merit. The trial court granted summary judgment for Defendant on the grounds that Plaintiff's claims were time-barred. The court of appeals reversed, concluding that Plaintiff was entitled to equitable tolling. The Supreme Court reversed, holding that there was no tolling during the appeal of the earlier-filed lawsuit. View "Levinson Alcoser Associates, LP v. El Pistolon II, Ltd." on Justia Law

The Supreme Court affirmed the judgment of the court of appeals reversing the orders of the trial court granting TotalEnergies E&P USA, Inc.'s motion to stay arbitration before the American Arbitration Association (AAA) and denying MP Gulf of Mexico, LLC's motion to compel that arbitration, holding that the parties' contracts required them to resolve their controversies through arbitration.In the underlying dispute involving oil and gas leases Total E&P filed this suit seeking a declaratory construing the parties' cost sharing agreement. Thereafter, MP Gulf initiated an arbitration proceeding asserting that Total E&P breached the agreement. At issue was whether the parties clearly and unmistakably delegated arbitrability issues to the arbitrator by agreeing to arbitrate their controversies in accordance with the AAA Commercial Rules. The trial court granted Total E&P's motion to stay the AAA arbitration and denied MP Gulf's motion to compel that arbitration. The court of appeals reversed and compelled AAA arbitration. The Supreme Court reversed, holding that the parties clearly and unmistakably delegated to the AAA arbitrator the decision of whether the parties' controversy must be resolved by arbitration. View "TotalEnergies E&P USA, Inc. v. MP Gulf of Mexico, LLC" on Justia Law

The Supreme Court affirmed the judgment of the court of appeals concluding that governmental immunity does not protect a city against a breach of contract claim because the city was acting in its proprietary capacity when it entered into the contract, holding that the court of appeals did not err.In this dispute involving an "Economic Development Incentives Grant Agreement" under Tex. Loc. Gov't Code 373.002(b) Plaintiff alleged that the City of League City breached its agreement to reimburse Plaintiff for certain fees and costs in connection with Plaintiff's construction of a restaurant facility in the City. The City filed a plea to the jurisdiction arguing that governmental immunity barred the claim. The trial court denied the plea. The court of appeals affirmed, concluding that governmental immunity did not apply to the claim. The Supreme Court affirmed, holding that the court of appeals correctly determined that the City engaged in a proprietary function when it entered into the agreement with Plaintiff. View "City of League City v. Jimmy Changas, Inc." on Justia Law

The Supreme Court reversed the judgment of the court of appeals in this employment discrimination suit ruling that an arbitration agreement was unconscionable and affirming the order of the trial court denying the employer's motion to compel arbitration, holding that the court of appeals erred in ruling that the evidence supported the trial court's finding that the arbitration agreement was unconscionable.After Petitioner terminated Respondent's employment Respondent sued for race discrimination and retaliation under federal and state law. Petitioner moved to compel arbitration based on the arbitration agreement signed by Respondent when he was hired. Respondent opposed the motion, arguing that the agreement was unconscionable. The trial court denied the motion to compel, and the court of appeals affirmed. The Supreme Court reversed, holding that there was insufficient evidence to prove that the agreement was unconscionable. View "Houston AN USA, LLC v. Shattenkirk" on Justia Law

The Supreme Court reversed the opinion of the court of appeals reversing the trial court's holding that, as a matter of law, a statutory "safe-harbor" provision applied and relieved an operator of oil-and-gas wells from any obligation to pay interest in the amounts withheld, holding that the safe-harbor provision applied as a matter of law.At issue was the "safe harbor" provision that permits operators to withhold payments without interest under certain circumstances. In reliance with the safe harbor provision the operator in this case withheld production payments it was contractually obligated to make to one of the wells' owners. The owner brought suit seeking to recover the payments with interest. The operator made the payments but without interest. The trial court concluded that the safe-harbor provision allowed the operator to withhold the funds. The court of appeals reversed. The Supreme Court reversed, holding that the operator established as a matter of law that it was entitled to withhold distribution of production payments without interest under the statutory safe-harbor provision of Tex. Nat. Res. Code 91.402(b)(1)(A) and (b)(1)(B)(ii). View "Freeport McMoRan Oil & Gas LLC v. 1776 Energy Partners, LLC" on Justia Law

In this interlocutory appeal involving the application of a statutory immunity waiver in a lawsuit alleging breach of a contract to construct university housing the Supreme Court reversed the decision of the court of appeals reversing the trial court's ruling that the university was not immune from suit, holding that the court of appeals erred.In 2014, Texas Southern University (TSU) executed a contract with Pepper Lawson Horizon International Group, LLC (PLH) to work as the contractor on a project to construct student housing. PLH later sued TSU for breach of contract. TSU asserted sovereign immunity to suit as a defense despite PLH's pleadings expressly invoking the immunity waiver in Tex. Civ. Prac. & Rem. Code 114.003, arguing that section 114.003 was inapplicable because PLH failed to plead a claim covered by the waiver provision. The trial court denied TSU's plea to the jurisdiction, but the court of appeals reversed. The Supreme Court reversed, holding that the court of appeals erred in concluding that PLH failed to plea a cognizable Chapter 114 claim. View "Pepper Lawson Horizon Int'l Group, LLC v. Tex. Southern University" on Justia Law