Bluestone v. Randle – Another Case to Watch – Post-Production Costs

Bluestone v. Randle – Another Case to Watch – Post-Production Costs

Originally published by John McFarland.

Last April the Fort Worth Court of Appeals issued its opinion in Bluestone Natural Resources II, LLC v. Randle, No. 02-18-00271-CV, 2019 WL 1716415. The Court decided that, under Randle’s lease, Bluestone could not deduct post-production costs and owed royalty on plant fuel and compressor fuel. Bluestone has petitioned the Supreme Court for review and the Court has asked for briefs on the merits.

Randle’s lease was a printed form with an exhibit. The printed form provided that royalties on gas would be “the market value at the well of one-eighth of the gas so sold or used …” Exhibit A provided that “the language on this Exhibit A supersedes any provisions to the contrary in the printed lease hereof.” One provision in Exhibit A dealt with post-production costs:

Lessee agrees that all royalties accruing under this Lease (including those paid in kind) shall be without deduction, directly or indirectly, for the cost of producing, gathering, storing, separating, treating, dehydrating, compressing, processing, transporting, and otherwise making the oil, gas and other products hereunder ready for sale or use. Lessee agrees to compute and pay royalties on the gross value received, including any reimbursements for severance taxes and production related costs.

The trial court held that Bluestone could not deduct post-production costs, and the Fort Worth Court of Appeals agreed. The Court distinguished Heritage Resources v. NationsBank, 929 S.W.2d 118 (Tex. 1996) and held that the no-deduction clause in the lease’s exhibit modified the royalty clause – in particular, the second sentence of that clause. The second sentence, not present in Heritage, provided an alternate measure of value for royalties – “gross value received” rather than “market value at the well” – and “gross value received” means proceeds prior to deduction of post-production costs. This part of Exhibit A conflicts with the printed royalty clause and so must supersede that clause.

Bluestone argued that the second sentence in the Exhibit A provision did not establish an alternate “valuation point” for the royalty, so the valuation point must still be “at the well” as provided in the printed form. The Court disagreed:

[Bluestone] argues that once an “at the well” measure is baked into the royalty provision, it requires super clarity in any provision that attempts to alter its effect. We construe this argument to mean that once a royalty provides an “at the well” point of valuation, a lease can alter that scheme of valuation only by clearly altering its terms to provide a different point of valuation, such as by striking the words “at the well” when they appear in a lease. …

We do not see how we would be giving Exhibit A its controlling role if we were to cut and past the words “at the well” from Paragraph 3 of the Printed Lease into Paragraph 26 of Exhibit A. In fact, that approach would seem to take exactly the opposite approach mandated by the superseding provision in Exhibit A; we would be resolving the conflict by giving superseding effect to the terms of the Printed Lease. …

In essence, Appellant’s position boils down to the argument that once it appears, the “at the well” measure is so “baked into” the royalty calculation that it has to be physically removed by going to the length of actually striking those words wherever they appear.

The Court noted that the Supreme Court has recognized that  “a proceeds measure–not tied to particular point of sale–creates a measure that does not allow the lessor to net-back its post-production costs,” citing Judice v. Mewbourne Oil Co., 929 S.W.2d 133, 136 (Tex. 1996): Burlington Res. Oil & Gas Co. LP v. Texas Crude Energy, LLC, 2019 WL 983789 at 5; Chesapeake Expl. LLC v. Hyder, 483 S.W.3d 70, 873 (Tex. 2016); and Heritage Res., 939 S.W.2d at 130.

The Court noted that its conclusion may be contrary to that of the El Paso Court of Appeals in Commissioner v. SandRidge, 454 S.W.3d 603 (Ct.App.-El Paso 2014, no pet.), which construed very similar language to allow deduction of post-production costs.

The Court also held that Bluestone had to pay royalty on plant fuel and compressor fuel. Plant fuel was gas produced from the leased premises and burned in the gas plant that processed the lessee’s gas. The compressor fuel was a commingled gas stream that included gas produced from the lease and other leases and was sent to compressors on Plaintiff’s lease and other leases to compress gas produced from the leases. The lease provides that “Lessee shall have free from royalty or other payment the use of … gas … produced from said land in all operations which Lessee may conduct hereunder .. and the royalty … shall be computed after any so used.” The Court held that this provision applied only on gas used on the leased premises. “Hereunder means “under or in accordance with this writing or document.” Plant fuel was not used to operate the lease or produce oil or gas from the lease, but to process gas in the third-party gas plant.

The Court also reasoned that the lease required payment of royalty on “gross value received” from the production; that the lessee received value from the processo in exchange for free use of the gas as fuel; and that Bluestone owed royalties on that value.1

The Court recognized that some of the gas produced from Plaintiff’s lease was used in compressors on the lease and therefor would be covered by the “free from royalty” clause. But the Court held that, because the lessee commingled gas from the lease with other gas, it had a duty to account for the aliquot share of the gas that is burned in compressors on the lease, citing Humble v. West, 508 S.W.2d 812 (Tex. 1974), and had failed to do so, and so was obligated to pay royalty on all production from the lease used as compressor fuel.

Curated by Texas Bar Today. Follow us on Twitter @texasbartoday.



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ADA Title III Litigation: A 2019 Review and Hot Trends for 2020

ADA Title III Litigation: A 2019 Review and Hot Trends for 2020

Originally published by Seyfarth Shaw LLP.

By Minh N. Vu

Seyfarth Synopsis:  ADA Title III lawsuits flooded federal courts in 2019 and will likely continue to do so in 2020 with new theories for the courts to consider. 

We are still tallying up the end-of-year numbers, but the number of ADA Title III lawsuits filed in federal courts by the end of November 2019 (10,206) exceeded the number of such lawsuits filed in all of 2018 (10,163).  California courts continue to be the busiest with roughly 43% of the lawsuits, with New York and Florida courts taking second and third place with  24% and 18% of the market share, respectively.  With plaintiffs and their lawyers constantly conjuring up new claims, businesses are not likely to see any relief from these types of suits in 2020.

What types of lawsuits are trending now?

Braille Gift Card Lawsuits.  Starting in October of 2019, more than a dozen blind plaintiffs represented by five attorneys have filed at least 243 lawsuits in the Southern and Eastern Districts of New York alleging that retailers and other businesses have violated the ADA and New York state and city laws by failing to offer for sale gift cards that have all the information printed on the cards shown in Braille. These cases are assigned to at least twenty-nine different judges. A firm in southern California has also jumped on the bandwagon, filing Braille gift card lawsuits in California state court and sending out a number of pre-suit demand letters. Most defendants are digging in for a fight so we expect to see many motions to dismiss filed in the first quarter of 2020.

Website and Mobile App Accessibility Lawsuits.  Although we are still tallying the numbers, lawsuits alleging inaccessible websites and mobile apps accounted for at least a fifth of the total number of ADA Title III lawsuits filed in federal courts in 2019. Most plaintiffs in these cases are blind and claim that the websites in question do not work with their screen reader software which reads website content aloud. A much smaller number of plaintiffs are deaf and are suing about the lack of closed captioning for online videos.

Plaintiffs continue to file these website and mobile app accessibility lawsuits, though the rate at which they were being filed seemed to slow down in the fourth quarter of 2020. The change may be attributable to the fact that some of the lawyers who were filing many of these website accessibility suits in New York have turned their attention to Braille gift card lawsuits.

The big news from 2019 on the website accessibility front was the U.S. Supreme Court’s refusal to hear Domino’s appeal from a Ninth Circuit Court of Appeals decision allowing a blind plaintiff to pursue his lawsuit against the pizza chain for having an allegedly inaccessible website and mobile app. Businesses had hoped that the Supreme Court would hear the case and perhaps take some action to curtail the tsunami of website and mobile app lawsuits.

In 2019, Plaintiffs also made significant headway in persuading California state courts that inaccessible websites violate the state’s non-discrimination statute, including one appellate affirmation of a judgment in favor of blind plaintiff. In fact, one California Superior Court judge decided that the ADA applies to websites of businesses with no physical location where customers go. In reaching this conclusion, this California judge rejected federal Ninth Circuit precedent that the ADA only applies to websites of public accommodations with a nexus to a physical location.

Hotel Accessibility Information on Reservations Websites.  A number of plaintiffs filed lawsuits against hotels for allegedly failing to provide sufficient information about the accessibility of their accessible guest rooms and common areas on their websites, as required by the ADA Title III regulations, to allow travelers with disabilities to make informed decisions about whether a hotel meets their needs. In response to this flurry of lawsuits, many hotels have updated their websites to provide the required information. Now some plaintiffs are filing lawsuits alleging that hotels are not making accessible rooms available for sale on websites operated by third party online travel agencies.

Accessible Hotel Room Dispersion.  Title III of the ADA requires hotels to provide accessible rooms in a range of different room types (e.g. rooms with two beds, premium views, suites) so that people with disabilities have room choices that are comparable to those offered to people without disabilities. One plaintiff in particular has filed more than a hundred lawsuits under this theory, and we have no reason to think she will stop in 2020.

Inaccessible Facilities.  Historically the most prolific category for accessibility lawsuits, we have continued to see in the lawsuit filing numbers and in our practice many lawsuits about allegedly inaccessible physical public accommodations facilities such as hotels, retail stores, restaurants, and shopping centers in 2019. We do not expect this to change in 2020.

***

Be sure to subscribe to our ADA blog to receive notices of developments throughout the year!

Edited by Kristina Launey

Curated by Texas Bar Today. Follow us on Twitter @texasbartoday.



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Will Dispute Arises Over Definition of “Personal Effects”

Will Dispute Arises Over Definition of “Personal Effects”

Originally published by Tiffany Dowell.

 

A recent case involving a will devising “personal effects” to a family member is a good reminder of the need to be detailed and complete when drafting a will, and the importance of residuary clauses.

Photo by sydney Rae on Unsplash

Background

In 1990, Mildred Ethridge drafted a will that included the following provisions:

I, MILDRED L. ETHRIDGE, (femme sole) of Midland County, Texas, for the purpose of the distribution of my entire estate, real, personal and mixed, which I wish to have take effect at my death, do make, publish and declare this to be my Last Will and Testament, and I do hereby revoke all former wills and testamentaries heretofore made by me at any time.

I hereby appoint and name Fred D. Davis, Jr. as Independent Executor and trustee of my estate, to serve without bond.  I give Fred D. Davis, Jr. all my personal effects to clear my estate after my death.

I give and bequeath my 1/2 ownership in my residence and homestead…to Patricia Petosky. 

Mildred passed away in 1994.  Prior to her death, she gifted her 1/2 ownership interest in the homestead to someone else, leaving Davis as the only named party under the will. Davis was named executor of her estate. 

At her death, Mildred had money in checking accounts and miscellaneous property including furniture and a television. She also had mineral interests that were not specifically devised in her will or included in the inventory submitted to probate.  The mineral lessee began paying royalties to Mildred’s estate and Davis opened a checking account to receive these royalties.  Believing he was entitled to her entire estate, he transferred the royalty payments from the estate’s checking account into his personal account.

Lawsuit

In 2010, Mildred’s heirs discovered they may have been entitled to royalties under her estate. They argued that the mineral interests did not pass under her will. At trial, the court had to construe the meaning of the term “personal effects.”  The court held that this term as more limited than “personal property” and rule that it included only the furniture and television owned by Mildred, but did not include her bank accounts, receivables, and interest in oil, gas, other minerals, royalties, real property, or other personal property.  As to these assets, the court held she died intestate and the intestate succession laws should govern distribution.

Davis appealed the court’s decision regarding the definition of “personal effects.”  The Eastland Court of Appeals affirmed the trial court’s ruling. [Read full opinion here.]

The court noted that, when interpreting a will, a court seeks to ascertain the intent of the testator based on the language included in the will itself.  Terms used in a will are to be given their “plain, ordinary, and generally accepted meaning” unless the will shows they were used in a technical or different sense.

First, Davis argued that the initial clause in her will stated that her intent was to dispose of her entire estate, real, personal, and mixed.  It was her intent, Davis argued, to divide her property into two categories–the 1/2 interest in the Oxford House, and then everything else, which she referred to as “personal effects.”  Davis argues the court should broadly interpret the phrase “personal effects” because Mildred was not an attorney and her will was not drafted by an attorney.

The court rejected this argument. Under the law, the term “personal effects” generally refers “to articles bearing intimate relation or association to the person of the testator” such as clothing, jewelry, toiletries, glasses, dentures, and luggage. Mineral interests do not fall within the scope of “personal effects.”  Further, Mildred indicated she intended to dispose of her entire estate, real, personal and mixed.  By stating she left only her “personal effects” to Davis, it appears she did not intend for that to include her real property as well.

In light of this, Mildred’s will did not dispose of her entire estate.  When a person drafts a will, there is a presumption that he or she intends to dispose of the entire estate.  That presumption is strong, noted the court, but can be overcome in situations where the testator fails to provide for complete distribution of property.  In that situation, the testator is found to have died intestate as to the property not included in the will.  In this scenario, the court upheld the finding that Mildred died intestate as to her mineral and royalty interests and her bank accounts.

Thus, the court affirmed.  Davis was entitled only to the furniture and television, while the bank accounts, mineral interest, and royalty interests passed through intestacy.

Key Takeaways

First, I think the most important reminder from this case is the need for including a residuary clause in a will. Even the most carefully drafted will may omit certain assets.  Whether that be something the testator simply forgot, something purchased after a will was drafted, or something that the testator thought was covered by the will that simply was not, this can certainly happen.  One way to avoid the issue here, where a portion of the estate passed outside the will via intestate succession, is to ensure that a will has a residuary clause.  This clause simply disposes of any estate assets that remain after all of the other devises in the will have been made. In this case, for example, had there been a residuary clause, the bank accounts, mineral rights, and royalty rights would have passed to the person named in the residuary clause.  A sample residuary clause could be: “I give the rest, residue, and remainder of my estate to my husband.”

Second, when writing a will, it is important for the testator to do his or her best to think of all assets owned.  I always recommend that before delving into will drafting or other estate planning, parties gather information on their assets, agricultural business, farm and ranch.  This includes an inventory list that identifies all major assets including real property, vehicles, equipment, mineral rights, royalty interests, bank accounts, retirement savings, investment portfolios, and personal property of significant value such as jewelry, artwork, and firearms. Having a complete inventory list can help to ensure one’s will does bequeath all of one’s assets.

Third, it is important to continue to update a will after it is drafted.  This is particularly important if major life changes occur such as births, deaths, divorces, or the sale or purchase of assets.  It is good practice to do a quick review of one’s will each year to ensure that changes do not need to be made.

Fourth, I always recommend that people at least consider using an attorney to draft a will.  There are certainly documents that I think people can adequately draft themselves without too much worry.  Wills, however, are so important and their interpretation is so critical that using an attorney to ensure that the testator’s wishes are carried out is generally well worth the cost.  Additionally, while there is an up-front cost to have a will drafted by an attorney, it will almost always be less than the cost of litigating a will dispute down the road.

Finally, for anyone serving as an executor of an estate, it is really important to ensure that the executor understands what assets exist and how they are to pass under the will.  Here, it was the executor’s belief that mineral and royalty rights were included in the term “personal effects” that caused the issue leading to litigation. Executors should be extremely careful and prudent before deeding over any assets from an estate.

 

 

 

 

The post Will Dispute Arises Over Definition of “Personal Effects” appeared first on Texas Agriculture Law.

Curated by Texas Bar Today. Follow us on Twitter @texasbartoday.

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Pay Equity Litigation Update: The Second Circuit Clarifies A Key Difference Between Title VII And Equal Pay Act Wage Discrimination Claims

Pay Equity Litigation Update: The Second Circuit Clarifies A Key Difference Between Title VII And Equal Pay Act Wage Discrimination Claims

Originally published by Seyfarth Shaw LLP.

By Matthew Gagnon

Seyfarth Synopsis: In an unusual opinion considering an issue raised by the plaintiff for the first time on appeal, the Second Circuit clarifies that unlike under the Equal Pay Act, Title VII plaintiffs need not show “equal work for unequal pay” to succeed on a pay discrimination claim. This case demonstrates that plaintiffs have options when bringing such claims and underscores the different challenges employers face under the different statutory schemes.

On December 6, 2019, the Second Circuit Court of Appeals vacated in part a summary judgment ruling that had dismissed a plaintiff’s pay equity claims against her former employer. The plaintiff had alleged, in relevant part, violations of the Equal Pay Act (“EPA”) and Title VII related to the setting of her compensation. The District Court for the Eastern District of New York dismissed her claims because she had failed to prove she performed equal work for unequal pay, as she was the only employee in her position at the company. After consideration, the Second Circuit vacated the District Court’s order related to the Title VII claim, clarified the standard for Title VII discriminatory compensation claims, and remanded the case back to the District Court for further proceedings.

Case Background

Plaintiff filed her lawsuit in 2014 alleging violations of the EPA, Title VII, the Pregnancy Discrimination Act, the whistleblower protections of the Consumer Product Safety Improvement Act, and related provisions of New York state law. In sum, Plaintiff’s complaint claimed that Defendant had paid her less because of her gender, retaliated against her when she brought forward concerns about her disparate pay and potential Consumer Product Safety Act violations, and terminated her because she was pregnant. Defendant filed a motion for summary judgment on Plaintiff’s claims in March 2017.

In March 2018, the District Court granted the motion for summary judgment. After analyzing Plaintiff’s pay discrimination allegations, the District Court held that Plaintiff’s Title VII claims, like claims brought under the EPA, required her to show “positions held by her purported male comparators [were] substantially equal to her position.” Lenzi v. Systemax, Inc., No. 18-979, 2019 WL 6646630, at *6 (2d Cir. Dec. 6, 2019) (internal citations omitted). Plaintiff could not make this showing because she was the only employee who held her job title and duties, so her Title VII claims were dismissed. The District Court further noted that Plaintiff had not presented evidence of discriminatory intent in the determination of her pay, as is also required for Title VII wage disparity claims.

Plaintiff subsequently appealed the District Court’s order to the Second Circuit. Notably, in the briefing of the summary judgment motion to the District Court, both Plaintiff and Defendant had agreed that Title VII disparate pay claims shared the same standard as EPA claims but required an additional showing of discriminatory animus; however, on appeal, Plaintiff challenged the District Court’s holding that Title VII discriminatory compensation claims, like EPA claims, required a showing of equal work for unequal pay.

The Court’s Decision

In evaluating the dismissal of Plaintiff’s Title VII claims, the Second Circuit first addressed Plaintiff’s failure to challenge Defendant’s argument at the summary judgment stage that a pay discrimination claim under Title VII required a showing that the Plaintiff’s position was substantially equal to the positions held by her purported comparators (in fact, the Plaintiff adopted this standard in her own briefing on the issue). While the Second Circuit recognized that “[s]uch a concession ordinarily precludes a party from advancing a different argument on appeal,” it ultimately decided that it would exercise its discretion to consider the Plaintiff’s later argument that such standard was not appropriate. Id.

The Second Circuit then acknowledged that one of its opinions from 1995, which held that“[a] claim of unequal pay for equal work under Title VII . . . is generally analyzed under the same standards used in an EPA claim,” is commonly used by district courts in their analyses of Title VII pay discrimination claims. Id. (quoting Tomka v. Seiler Corp., 66 F.3d 1295, 1312 (2d Cir. 1995)). The Court expressed a desire to “take this opportunity to clarify that a Title VII plaintiff alleging a discriminatory compensation practice need not establish that she performed equal work for unequal pay,” as is required by the EPA. Id. at *7 (emphasis added). While affirming that a plaintiff could bring a claim for equal work for unequal pay under Title VII if they could show a discriminatory animus behind the pay determination, the Court emphasized that such a claim was not the only kind of Title VII claim available related to pay.

The Second Circuit gave examples of several variants of disparate pay claims that could be alleged under Title VII that would not require an equal work for unequal pay showing: “[f]or example, an employer might hire a woman for a unique position in the company, but then pay her less than it would had she been male . . . [s]imilarly, if an employer used a transparently sex-biased system for wage determination, women holding jobs not equal to those held by men would be denied the right to prove that the system is a pretext for discrimination [if required to make such a showing].” Id. Ultimately, the Second Circuit rejected the notion that plaintiffs can only succeed on discriminatory pay claims under Title VII if there is an employee of the opposite sex in an equal position earning a higher rate of pay.

The Court concluded its holding by reiterating that “all Title VII requires a plaintiff to prove is that her employer ‘discriminate[d] against [her] with respect to [her] compensation . . . because of [her] . . . sex.” Id. (quoting 42 U.S.C. § 2000e-2(a)(1)). Discriminatory pay claims can be brought successfully under Title VII even if the plaintiff cannot show a purported comparator of the opposite sex earning a higher wage (provided that the challenged pay rate is not based on seniority, merit, quantity or quality of production, or any other factor besides sex). The Second Circuit then found that the Plaintiff had sufficiently shown discriminatory intent with respect to her pay and vacated the District Court’s order granting summary judgment on her Title VII claim.

Implications For Employers

The Second Circuit’s opinion is, in effect, a reaffirmation of the U.S. Supreme Court’s 1981 holding in Washington County v. Gunther. 452 U.S. 161 (1981) (“[C]laims for sex-based wage discrimination can also be brought under Title VII even though no member of the opposite sex holds an equal but higher paying job.”). However, this case serves as a good reminder that employers should not expect to rely exclusively on the fact that there is no comparator in an equal position as a defense to a pay discrimination claim. Plaintiffs in such positions have options as to how to structure their theory of the case. And the oft-repeated mantra that Title VII is to be interpreted in line with the EPA clouds important, substantive differences between those two statutory schemes. When performing pay equity audits or setting employee compensation, employers should be mindful of those differences, particularly employers with more specialized positions or smaller operations that may have only one or two employees in senior leadership roles or performing the same kind of work. Such employers may also want to check market analyses and reporting when setting compensation. This case shows how pay equity claims can be brought even where there are no purported comparators, perhaps especially when it comes to high-level or specialized positions that are unique within a company.

Please feel free to reach out with any questions to the author, your Seyfarth attorney, members of Seyfarth’s Pay Equity Group, or the Group’s co-chairs Christine Hendrickson and Annette Tyman.

Curated by Texas Bar Today. Follow us on Twitter @texasbartoday.

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Court Holds That Will Contestant Was Not Estopped From Challenging The Will Due To Accepting Assets

Originally published by David Fowler Johnson.

In In the Estate of Johnson, a decedent’s daughter filed a will contest after accepting over $146,000 from the estate. No. 05-18-01193-CV, 2019 Tex. App. LEXIS 9646 (Tex. App.—Dallas November 4, 2019, no pet.). The executrix filed a motion in limine challenging the daughter’s standing and asked the trial court to dismiss the will contest, which the trial court did. The daughter appealed.

The court of appeals first addressed whether the daughter had standing to file a will contest. The court held that “[d]evisees and heirs-at-law are interested persons.” Id. (citing Tex. Est. Code § 20.018). The court concluded:

Though Lisa Jo claims that Tia did not meet this burden because she failed to introduce the Will into evidence with her petition, we assume the trial court took judicial notice of the Will and its contents, as well as the inventory, which was in the trial court’s files. Because the face of the Will established Tia’s standing as a devisee and an heir-at-law, Tia satisfied her threshold burden.

Id. The court then reviewed the estoppel defense arising from the daughter’s acceptance of estate assets. The court reviewed the law and its own precedent on estoppel in this context:

Estoppel by acceptance of benefits provides a will proponent one mechanism for challenging a will contestant’s standing. The rule of estoppel by acceptance in will contests is designed to estop a will contest by a person who previously accepted a benefit devised under the will. If the proponent seeks to challenge the contestant’s standing by way of estoppel by acceptance, he or she must assert it as an affirmative defense. Accordingly, the will proponent bears the burden of proving the affirmative defense by demonstrating that the challenge is inconsistent with the accepted benefit. To do so, this Court has held that the proponent must demonstrate that the contestant “received benefits to which she would not be entitled under [any] will, or even under the laws of intestacy.” In Holcomb, this Court held the proponent had not met this burden because he “failed to establish as a matter of law that [the contestant] accepted benefits under the probated will over those which she would have otherwise been entitled to.” Therefore, the contestant was not estopped from filing a contest because she had not received more benefits than she was entitled to under the will or intestacy.

Id. The court concluded that the executrix failed to meet her burden to establish estoppel:

Though Tia accepted the bequest, the Will and inventory also demonstrated that she was entitled to half of a bank account and additional residual gifts devised by the Will, a fact conceded by Lisa Jo. Additionally, Tia’s acceptance was also consistent with the laws of intestacy because, as an heir, she would have been entitled to a one-third share of the $1,427,209 estate. Rather than satisfy her burden, Lisa Jo relied on a case that disagreed with our holding in Holcomb, and argued Tia was burdened with disproving estoppel. Declining an unacceptable invitation for one panel of this court to disregard the holding of another panel, we hold Lisa Jo failed to satisfy her burden, as the Will’s proponent, by failing to demonstrate that Tia accepted greater benefits than those to which she was entitled under the Will or intestacy laws.

Id.

Interesting Note: The court of appeals refused to review the propriety of its previous opinion in Holcomb v. Holcomb, 803 S.W.2d 411, 414 (Tex. App.—Dallas 1991, writ denied). Another court has criticized Holcomb as contrary to binding Texas Supreme Court authority. See In re Estate of McDaniel, 935 S.W.2d 827, 829 (Tex. App.—Texarkana 1996, writ denied). The court in Estate of McDaniel stated:

McDaniel argues that estoppel by acceptance of benefits should not apply in this case because the property he received under the 1994 will is but a small part of what he allegedly would have received under the 1989 will he wishes to have probated. McDaniel relies almost exclusively on Holcomb v. Holcomb [citation omitted]. Holcomb holds that a person who has received benefits under a will is not estopped to contest that will if the person would have received the same or a greater amount of benefit under another will of the testator or under the law of intestacy. [Citation omitted.] This holding is an inaccurate statement of Texas Supreme Court precedent on this issue. The proper test for determining whether a beneficiary under a will has received benefits which estop him from contesting that will is whether the benefits granted him by the will are or are not something of which he could legally be deprived without his consent. [Citation omitted.]

935 S.W.2d at 829. Therefore, there is some controversy regarding the merits of the Holcomb court’s opinion and holding on estoppel.

The court in In the Estate of Johnson refused to reevaluate its twenty-eight year old precedent. Rather, the court held that one panel of the court should not disregard the holding of another panel. This is an important use of stare decisis. As courts have held: “Absent (1) a decision from a higher court or this court sitting en banc that is on point and contrary to the prior panel decision or (2) an intervening and material change in the statutory law, this court is bound by the prior holding of another panel of this court.” Clear Lake City Water Auth. v. Friendswood Dev. Co., No. 14-07-00404-CV, 2008 Tex. App. LEXIS 9127, 2008 WL 5131932, at *1 (Tex. App.—Houston [14th Dist.] 2008, pet. denied); D’Arcy v. Mead, No. 14-04-01220-CV, 2006 Tex. App. LEXIS 6850, 2006 WL 2165733, at *3 (Tex. App.—Houston [14th Dist.] Aug. 1, 2006, pet. denied); City of Webster v. City of Houston, No. 14-04-00353-CV, 2005 Tex. App. LEXIS 3048, 2005 WL 913813, at *1 (Tex. App.—Houston [14th Dist.] Apr. 19, 2005, no pet.); United States v. Treft, 447 F.3d 421, 425 (5th Cir. 2006). Moreover, if, in its holding, the prior panel applied or distinguished the higher-court or en banc precedent, then subsequent panels are still bound by the first panel decision, even if they think that the first panel misapplied and contradicted the superior precedent. County of Monroe, Florida v. U.S. Dep’t of Labor, 690 F.2d 1359, 1363 (11th Cir. 1982); Wilson v. Taylor, 658 F.2d 1021, 1034-35 (5th Cir. 1981).

So, the panel of the court of appeals in In the Estate of Johnson correctly refused to revisit another panel’s decision absent a decision from a higher court or an en banc court or some other intervening and material change in the law. This is a very important concept in Texas at this time. This past election cycle, many of the courts of appeals in Texas went from republican majorities to democratic majorities. No matter the political affiliation, courts of appeals should follow stare decisis and follow the court’s earlier precedent even if the current justices do not agree with that precedent. This is an important aspect of the rule of law.

Curated by Texas Bar Today. Follow us on Twitter @texasbartoday.



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Oil Field Services Gets Lump of Coal From Santa

Oil Field Services Gets Lump of Coal From Santa

Originally published by Charles Sartain.

Co-author Ethan Wood

Merry Christmas and Happy Holidays from all of us at Gray Reed! Assuming that most of you have been good this year (stay tuned for 2019’s Bad Guys in Energy to see who hasn’t), we hope Santa brought you everything on your Amazon Wish List. Our sympathies go out to those in the oilfield services industry in Texas—it looks like you got a lump of coal. In Mesa Southern CWS Acquisition v. Deep Energy Exploration Partners the Houston Court of Appeals upended the long-held view that mineral lien waivers violate public policy. Bah Humbug!

Mesa performed work on three wells for operator Deep Operating pursuant to a Master Service Agreement. Mesa was not fully paid, so it filed three mineral liens in Milam County encumbering Deep Operating’s property under Chapter 56 of the Property Code. After Deep Operating filed for bankruptcy, Mesa sued Deep Operating’s parent, Deep Energy. Deep Energy argued that Mesa contractually waived its right to assert liens against Deep Operating’s wells and waived its right to seek payment on the contract from any entity other than Deep Operating per the language of the MSA requiring that Mesa “look solely and exclusively to Deep Operating For Payment.”

The trial court dismissed Mesa’s claims. The court of appeal elected to avoid the issue of whether mineral lien waivers are against public policy, and instead focused on the “Payment of Claims” provision in the MSA.

The court’s conclusion

When a party to a contract agrees to seek payment or damages only from one source to the exclusion of all others, that party has effectively waived its rights to such payment or damages from other parties. Regardless of the label, the Payment of Claims provision effectively waived Mesa’s liens. Thus, this contract provision appears to have functioned as a de facto lien waiver.

This case (or one like it) seems destined for the Texas Supreme Court. In the meantime, oilfield service providers should not assume that advance contractual waivers of mineral liens are void as a matter of public policy and should watch out for sneaky “Payment of Claims” provisions.

To learn more about the events leading to this decision and the various statutory references and legal arguments of the parties, check out this Gray Reed Legal Alert.

Musical interlude

It’s not too late to annoy your relatives over the age of 40 with this version of God Rest Ye Merry Gentlemen.

 

Curated by Texas Bar Today. Follow us on Twitter @texasbartoday.

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Texas Supreme Court on arbitrability of class claims

Originally published by Christopher McKinney.

November 22, 2019 – Texas Supreme Court issued an opinion affirming the decision of the court of appeals affirming the judgment of the trial court declining to compel arbitration of class claims under the parties’ arbitration agreement. This dispute was not an employment case but the same reasoning should apply to attempts by employers to force employment-related class claims into arbitration. Supreme Court held:

The question of whether the parties agreed to class arbitration was a question of arbitrability for the court to make and that the warranty agreement did not permit class arbitration. The court of appeals affirmed. The Supreme Court affirmed, holding (1) arbitratibility of class claims is a gateway issue for the court unless the arbitration agreement clearly and unmistakably expresses a contrary intent; (2) an agreement to arbitrate class claims cannot be inferred from silence or ambiguity, but rather, an express contractual basis is required; and (3) the lower courts correctly determined that Defendant was not bound to arbitrate Plaintiffs’ putative class claims.

Opinion: Robinson v. Home Owners Management Enterprises, Inc.

Curated by Texas Bar Today. Follow us on Twitter @texasbartoday.



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2019 Year in Review – Texas

2019 Year in Review – Texas

Originally published by Tiffany Dowell.


Once again, it’s been a busy year for agricultural law in Texas. There were a number of potential cases that I could have included on this list, but I’ve decided to focus on three key agricultural law cases for which the Texas Supreme Court granted petitions for review in 2019.

Garcia v. Pruski (Fence Law)

In this important fence law case out of Wilson County, the San Antonio Court of Appeals addressed legal issues related to a bull getting hit on the highway.

Curated by Texas Bar Today. Follow us on Twitter @texasbartoday.

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Texas Court Grants Grandparents Visitation and Access to Grandchildren

Texas Court Grants Grandparents Visitation and Access to Grandchildren

Originally published by Francesca Blackard.

By

Under Texas family law, a court may grant grandparents reasonable possession and access to a grandchild if three conditions are met.  First, at least one of the child’s parents, whether adoptive or biological, must have parental rights to the child.  Second, the grandparent must overcome the presumption the child’s parent is acting in the child’s best interest by showing that denying the grandparent possession or access would result in significant impairment to the child’s health or well-being.  Finally, the grandparent must be the parent of the child’s parent, and that parent must have been incarcerated during the past three months, have been found incompetent, be deceased, or not have possession or access to the child.  TEX. FAM. CODE ANN. § 153.433.

In a recent case, a father challenged an order allowing the maternal grandparents possession and access to his children.  The parents and children stayed with the grandparents while they looked for a house when they moved to Texas from California.  The grandparents supported the family so the parents could save up to buy the home.  After the parents bought a home nearby, the children regularly visited their grandparents, sometimes overnight.  The grandparents would take the children to school and attend school functions.  The grandmother testified she felt she had assumed the role of parent.

The grandmother testified both parents were alcoholics.  The mother’s friend testified the parents had a tense and unhealthy relationship.  There was testimony that the mother sent the children to stay with the grandparents when the situation at home grew tense.  The father’s friend testified the father left the children with the grandparents when he went to bars and nudist colonies.  He also testified the father told him he often argued with the mother, but did not state the arguments ever turned physical.

 

The mother sadly died in 2018.  The children stayed with their grandmother for several days and the oldest child told the grandmother they were going to live with their other grandparents in California.

The grandparents promptly filed suit seeking sole managing conservatorship.  Although they obtained a temporary restraining order to keep the father from moving the children from the county/ the children went to live with their paternal grandparents in California when it expired.

The grandparents amended their petition to seek possession and access to the children under the grandparent access statute.  Following a trial, the court found the grandparents had proved by a preponderance of the evidence that denying them possession or access would significantly impair the health or well-being of the children.  The court granted the grandparents possession for one weekend during the fall and spring semester and seven days during the summer.  The grandparents were also allowed phone, Skype, or FaceTime access.  They were also allowed to send cards, letters, and gifts.

The father appealed.  In this case, the only element at issue was whether the grandparents had overcome the presumption the father was acting in the children’s best interest.  The father argued the grandparents had not submitted evidence of any impairment to the children from denial of access.  He testified the children were doing very well and had not shown any need for psychological treatment or counseling.  They lived with his parents, where the oldest had her own room and the boys shared a room.  They were physically safe and doing well psychologically.

The grandparents argued the father had not provided counseling for the children and planned to deny all access to the grandparents.  The appeals court noted that the leading cases overturning orders granting grandparent access involved evidence that the parent would not deny the grandparent all access to the child.  The father testified he would not allow any access or possession of the children unless ordered to do so by the court.

The appeals court found no evidence denying the grandparents access would significantly impair the physical health of the children, but there was sufficient evidence it would significantly impair their emotional well-being.  The grandmother testified denying them access would not be in the children’s best interest.  The mother’s friend and the father’s friend each testified they did not think the father was acting in the children’s best interest.  The grandmother testified the children had lost their mother, grandmother, and home, and had moved to live with grandparents they had rarely seen.  There was evidence regarding the father’s heavy drinking and potential alcoholism.

The father testified that the children did not exhibit any emotional turmoil.  He said they did not ask about their grandparents.  He testified they were healthy and doing well.

The appeals court found the trial court could have reasonably disbelieved the father’s evidence and found the grandparents overcame the parental presumption by a preponderance of the evidence.  The appeals court affirmed the order.

Although it can be difficult for grandparents to get access and possession of their grandchildren, it is possible under certain circumstances.  This case may have turned on the father’s intent to deny all access to the grandparents.  If you are seeking or fighting grandparents’ rights, a knowledgeable Texas custody attorney can advise you and fight for your rights.  Call McClure Law Group at 214.692.8200 to set up a meeting to talk about your case.

Curated by Texas Bar Today. Follow us on Twitter @texasbartoday.



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Texas Court Orders Child’s Name Change to Include His Father’s Surname

Texas Court Orders Child’s Name Change to Include His Father’s Surname

Originally published by Robert Epstein.

By

Under Texas family law, a court may order a child’s name be changed if doing so is in the child’s best interest.  Neither parent is specifically granted the right to name the child under Texas law, but generally a child’s name will not be changed unless the party seeking the change shows a good reason for it.  In a recent case, a mother challenged a court’s order to change the child’s name to include the father’s last name.

The parties appeared to have a good co-parenting relationship.  According to the appeals court’s opinion, the child lived with the mother, but the father had always been a part of his life and assisted financially with his living expenses.  The father’s family was also significantly involved in the child’s life, helping the mother financially and with child care.

The mother had been adopted as a young child.  She grew up in Virginia and moved to Texas when she was 18.  She did not have any family other than her son in Texas.  Due to the distance, the child did not have the same amount of interaction with his mother’s family that he had with his father’s family.

 

The mother testified her surname was her adoptive family’s name.  She also testified it was important for her son to have her surname because he was the only biological relative she knew.  She also said it could help him be connected to “different pieces of himself and his history.” She did not believe having her surname instead of his father’s would have a negative effect on the child.

The father testified he thought a name change would help avoid confusion at places like doctor’s offices.  He also hoped the child would play sports and wanted the child to use the father’s name.

Both parents agreed the child was too young to know his name.  Each also said they would not change their surnames.

The father testified the mother did not give him a choice regarding the child’s name.  He also indicated he believed he did not have a choice with regard to signing the acknowledgement of paternity.  He testified he thought the child would have trouble when he got older if he did not have his father’s last name.  He said he did not know any children who did not use their father’s last name, though the children he knew had parents who were married to each other.

The father’s father testified to what he and his wife had done for the child and his mother.  He also testified that he was very close to the child.  He testified that they did things for the child and his mother because they loved them both.

The trial court found it was in the child’s best interest to change his name to include his father’s last name.  The mother appealed, arguing the evidence was legally and factually insufficient to support the finding.

In considering whether a name change would be in a child’s best interest, the court considers various nonexclusive factors, including whether it would avoid embarrassment, inconvenience, or confusion for the custodial parent or child, whether the present or potential changed name would be more convenient, how long the current name has been used, how the change affects the child’s bond with the parent or other family members, and whether the parent is trying to alienate the other parent by seeking the change.  Courts do not have to weight each factor equally.

The appeals court found there was little or no evidence that changing the child’s name would have a negative effect on the mother or child.  The appeals court found there was legally and factually sufficient evidence to support a finding the change would be in the child’s best interest.  The child was only 14 months old and therefore did not have meaningful attachment to his mother’s name.  He had not started school or been involved in extracurricular activities under his mother’s name.  The child was on the father’s health insurance, so the court found it could be beneficial for medical appointments and billing for the child to have his father’s name.

The appeals court acknowledged the mother was the primary caretaker, but also noted the father and his family were an important part of the child’s life.  The mother’s family was less involved in the child’s daily life due to distance. The appeals court found the father’s last name would better help identify the child with a family unit.  The mother and her family were not from the area and did not have the type of ties to the local community that the father’s family had.  The appeals court found having the father’s name would strengthen the child’s relationship with the community.

Finally, the appeals court found the father was not seeking the change to alienate the mother from the child. There was evidence that the father and his family cared for the mother and expected to continue doing so.

The appeals court found no abuse of discretion in the trial court’s finding that changing the child’s name to include his father’s surname was in the child’s best interest.  The appeals court affirmed the trial court’s judgment.

Sometimes unusual disputes arise in matters relating to children, even if both parents care for each other and want to work together.  If you are facing a dispute involving child custody or other matters relating to your children, an experienced Texas family law attorney can help.  Call McClure Law Group at 214.692.8200.

Curated by Texas Bar Today. Follow us on Twitter @texasbartoday.



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