Justia Contracts Opinion Summaries

The Supreme Court reversed the judgment of the court of appeals in this contract dispute, holding that the court of appeals erred by failing to apply a common-law default rule to the parties' dispute involving the sale of working interests in 109 oil-and-gas leases.According to the Court, Texas cases have long followed a default common-law rule in the circumstances that the words "from" or "after" a specific date to measure a length of time. Under the rule, courts must treat the time period as excluding the specified date (measuring date), and therefore, a period measured in years "from" or "after" a measuring date ends on the anniversary of the measuring date, not the day before. In the instant case, the parties asked the Supreme Court to resolve key issues of contract construction. Noting that the parties could have easily departed from the default rule by indicating as much within the four corners of the relevant lease, the Supreme Court held that because the parties' agreement implicated the default rule without displacing it, the default rule must be applied to the dispute. View "Apache Corp. Apollo Exploration, LLC" on Justia Law

In this mineral lease dispute, the Supreme Court reversed the judgment of the court of appeals concluding that a lease deadline and untimely scheduled drilling date were irrelevant for invoking a force majeure clause and thus reversing the trial court's judgment and remanding the case, holding that the court of appeals erred.In reversing the trial court's judgment, the court of appeals determined that fact issues existed both as to whether the force majeure clause applied and as to each element of the lessee's tortious-interference claims. The Supreme Court reversed and remanded the case, holding (1) construed in context, the phrase "Lessee's operations are delayed by an event of force majeure" does not refer to the delay of a necessary drilling operation already scheduled to occur after the deadline for perpetuating the lease; (2) the force majeure clause in this case did not save the lease; and (3) to the extent the lessee's tortious-interference claims were predicated on the force majeure clause's saving the lease, a take-nothing judgment is rendered in part. View "Point Energy Partners Permian, LLC v. MRC Permian Co." on Justia Law

The Supreme Court reversed the judgment of the court of appeals in this insurance dispute, holding that an insurance policy does not incorporate by reference the payout limits in an underlying service agreement.Two employees that were severely burned in a workplace accident at an ExxonMobil Corporation refinery sought compensation for their injuries and settled for a collective amount over $24 million. When two of Exxon's insurers, National Union Fire Insurance Company and Starr Indemnity & Liability Insurance Company, denied Exxon coverage under their umbrella policies Exxon sued both insurers for breach of contract. The trial court sided with Exxon, ruling that National Union was obligated to reimburse Exxon. The court of appeals reversed, concluding that Exxon was not insured under National Union's umbrella policy. The Supreme Court reversed, holding (1) Exxon was an insured under National Union's umbrella policy, and the court of appeals erred in ruling otherwise; and (2) because the court of appeals' holding with respect to Starr's policy was predicated on a similar error, judgment in favor of Starr must also be reversed. View "ExxonMobil Corp. v. Nat'l Union Fire Ins. Co. of Pittsburgh, PA" 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 an American Arbitration Association (AAA) arbitration and denying MP Gulf of Mexico, LLC's motion to compel that arbitration, holding that the parties clearly and unmistakably delegated to the AAA arbitrator the decision of whether the parties' controversy must be resolved by arbitration.In this dispute arising over interests in a group of oil-and-gas leases Total E&P sought a declaration construing the parties' "Cost Sharing Agreement." On the same day, Total E&P initiated an arbitration proceeding asking the International Institute to determine the parties' rights under their "Chinook Operating Agreement." MP Gulf subsequently initiated the AAA arbitration proceeding. Total E&P filed a motion to stay the arbitration, which the trial court granted. The court of appeals reversed and compelled AAA arbitration. The Supreme Court affirmed, holding that the parties agreed to delegate the arbitrability issue to the arbitrator. View "TotalEnergies E&P USA, Inc. v. MP Gulf of Mexico, LLC" on Justia Law

The Supreme Court remanded this case stemming from a labor dispute between a union and city, holding that remand was required to establish whether the city complied with Local Government Code Chapter 174's compensation standards.When the City of Houston and the Houston Professional Fire Fighters' Association, Local 341 could not agree to an employment contract the Fire Fighters sued the City for compensation under the Fire and Police Employee Relations Act, codified in Chapter 174, claiming that the City failed to meet Chapter 174's compensation standards. Thereafter, the City's voters approved the "pay-parity amendment" amending the City's charter. The Houston Police Officers' Union sued the Fire Fighters seeking a declaration that Chapter 174 preempted the pay-parity amendment, rendering it unenforceable. In the first action, the trial court rejected the constitutional and immunity challenges brought by the City, and the court of appeals affirmed. In the second action, the court of appeals reversed, concluding that state law did not preempt the amendment. The Supreme Court affirmed as to the initial suit and reversed as to the second suit, holding (1) Chapter 174 does not violate constitutional separation of powers principles; (2) the Fire Fighters met the prerequisites for seeking Chapter 174 enforcement; and (3) Chapter 174 preempts the pay-parity amendment. View "City of Houston v. Houston Professional Fire Fighters' Ass'n, Local 341" on Justia Law

In this tort and breach-of-contract lawsuit, the Supreme Court affirmed in part and reversed in part the trial court's take-nothing summary judgment entered on the claim brought by several affiliated retailers (the Retailers), holding that the trial court erred in part.The Retailers in this case sought to recoup millions of dollars in disallowed reimbursements for purchases their customers made under the federally-funded Supplemental Nutrition Assistance Program (SNAP) after a lengthy outage in a third-party contractor's Electronic Benefit Transfer (EBT) system. The Retailers had permitted their SNAP customers to make purchases during the system outage, as authorized by a federal regulation, but held the EBT transactions in abeyance until they could be submitted and the Retailers reimbursed. The EBT contractor, however, later declined reimbursement for nearly 90,000 transactions. The trial court rendered a final take-nothing judgment against the Retailers, and the court of appeals affirmed. The Supreme Court affirmed the judgment on the Retailers' breach of contract claim but reversed the judgment as to losses from certain transactions and the Retailers' tort claims, holding that the court relied on an erroneous construction of 7 C.F.R. 274.8(e)(1). View "Wal-Mart Stores, Inc. v. Xerox State & Local Solutions, Inc." on Justia Law

The Supreme Court affirmed the summary judgment in favor of Landowners in this oil-and-gas dispute over how to calculate Landowners' royalty under the terms of a mineral lease with Producers, holding that there was no error in the proceedings below.At issue in a declaratory judgment action was whether, based on language in the subject leases, Landowners' royalty was payable not only on gross proceeds but also on an unaffiliated buyer's post-sale postproduction costs if the producers' sales contracts stated that the sales price had been derived by deducting such costs from published index prices downstream from the point of sale. The trial court granted summary judgment for Landowners as to these types of marketing arrangements. The Supreme Court affirmed, holding that the broad language of the lease unambiguously contemplated such a royalty base. View "Devon Energy Production Co., L.P. v. Sheppard" on Justia Law

The Supreme Court reversed the judgment of the court of appeals affirming the judgment of the district court denying Borrower's motion for a new trial in this appeal arising from a suit on a note and guaranty after Borrower allegedly defaulted on a loan, holding that Borrower was entitled to a new trial.After Lender moved for summary judgment and set the motion for an oral hearing the COVID-19 pandemic resulted in the hearing the hearing being canceled. The trial court unilaterally moved the hearing to its submission docket and, without further notice, went forward on the date of the originally scheduled oral hearing. The trial court granted summary judgment to Lender. Borrower moved for a new trial on the grounds that he had not received an amended notice of the hearing date after the original hearing was canceled. The trial court denied the motion, and the court of appeals affirmed. The Supreme Court reversed, holding that because Borrower did not receive the adequate notice as required the trial court erred in granting summary judgment and in refusing to grant a new trial upon Borrower's request. View "Price v. Series 1 - Virage Master LP" on Justia Law

In this dispute over an arbitration clause within a contract, the Supreme Court held that the minor children who joined Plaintiffs, their parents, in bringing this action seeking damages for construction defects in their home may be compelled to arbitrate along with their parents on the basis of direct-benefits estoppel.Plaintiffs, Tony and Michelle Ha, signed a purchase agreement with Taylor Woodrow Communities-League City, Ltd. to build a home in Texas. The agreement included an arbitration provision. The Has sued both Taylor Woodrow Communities-League City, Ltd. and Taylor Morrison of Texas, Inc., for negligent construction and other claims, alleging the home developed significant mold problems due to construction defects. Plaintiffs' second amended petition named both Tony and Michelle and their three children. Taylor Morrison moved to compel arbitration, but the trial court denied the motion as it pertained to Michelle and the children. The court of appeals affirmed. The Supreme Court reversed, holding that when a family unit resides in a home and files suit for factually intertwined construction-defect claims concerning the home, a nonsignatory spouse and minor children have accepted direct benefits under the signatory spouse’s purchase agreement such that they may be compelled to arbitrate through direct-benefits estoppel. View "Taylor Morrison of Texas, Inc. v. Ha" on Justia Law

In this dispute over an arbitration clause within a contract, the Supreme Court held that the minor children who joined Plaintiffs, their parents, in bringing this action seeking damages for construction defects in their home may be compelled to arbitrate along with their parents on the basis of direct-benefits estoppel.Plaintiffs, Jack and Erin Skufca, signed a purchase agreement with Taylor Woodrow Communities-League City, Ltd. to build a home in Texas. The agreement included an arbitration provision. Plaintiffs sued both Taylor Woodrow Communities-League City, Ltd. and Taylor Morrison of Texas, Inc., for construction defects and fraud, alleging that less than a year after they moved in, the home developed mold issues that caused their minor children to be ill. The petition listed Jack and Erin as plaintiffs individually, as well as Erin as next friend of the couple's children. Taylor Morrison moved to compel arbitration, but the trial court denied the motion as it pertained to the children. The court of appeals affirmed. The Supreme Court reversed, holding that the minor children sued based on the contract and were subject to its terms, including the arbitration clause. View "Taylor Morrison of Texas, Inc. v. Skufca" on Justia Law