March 11, 2013
Smyser Kaplan & Veselka, L.L.P.
is pleased to announce that it has won for three energy industry clients a reversal of a 2011 state court judgment in an oil and gas lease dispute.
The Court of Appeals for the First District of
judgment entered by the 405th District Court of
Galveston County, Texas
, Plantation Petroleum Corporation, and Stroud Production LLC.
The litigation arose out of the termination of two oil and gas leases in
in 2004. The plaintiffs owned overriding royalty interests in the leases and argued that they were injured when the leases terminated, extinguishing their royalty interests.
The Court of Appeals held that there was no evidence to support plaintiffs' claim that the only producing well was sabotaged and rejected the plaintiffs' theory that the Stroud entities owed the plaintiffs special or fiduciary duties arising out of the assignment of overriding royalty interests.
Larry R. Veselka
tried the case and briefed and argued the appeal.
Mr. Veselka said, "We were gratified by the Court's judgment that the plaintiffs take nothing from their claims against Mr. Stroud and his companies based on any claim that the plaintiffs' overriding royalty interests somehow survived the expiration of the underlying leases. Plaintiffs were asserting claims unrecognized in
and which would disrupt well-established concepts of
oil and gas law. The Court of Appeals' rejection of those claims prevents that potential disruption."
The only part of the judgment reversed but remanded for new trial was the issue of the appropriate amount of interest and attorney fees due on
in royalties—less than one-tenth of one percent of the damages sought—owed for production in the last month before production ceased. Those royalties, which had not been paid in 2004 due to an oversight, were paid several months before trial of the case."
The case is "Stroud Production, L.L.C., et al. v.
Patrick E. Hosford
, et al," No. 01-11-00593-CV in the Court of Appeals, First District of
, Smyser Kaplan & Veselka, L.L.P., Bank of America Center, 700 Louisiana, Suite 2300,
SOURCE Smyser Kaplan & Veselka, L.L.P.