Vial v. Gas Solutions Ltd.

The fact that property has since been adversely possessed has no relevance to whether the appellants may assert a cause of action for fraud in connection with the 1931 well-spacing agreement. Fraud, the cause of action at issue, survives the death of the injured party under the common law. Thus, under the facts of this case, the heirs have standing to bring suit.

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Click here for the full text of this decision FACTS:R. Crist Vial, Angela Glover, Betty Hoffman and Carman Tucker appeal the trial court’s granting of the summary judgment motions and pleas to the jurisdiction of Gas Solutions Ltd., Mission Resources Corp., d/b/a Bellweather Exploration Co. and Texaco Exploration and Production Inc. The appellants claim their predecessor in interest was fraudulently induced to execute an agreement concerning a six-acre tract of land, referred to as the Campbell tract. The entire tract lies beneath an easement acquired in 1872 by the Texas & Pacific Railway Co. In 1887, T. M. Campbell purchased the land in and around the easement. The appellants claim ownership in the right-of-way through the conveyance of the Nettleton tract. T. M. Campbell conveyed the right-of-way under the strips and gores doctrine to the appellants’ predecessor in interest. Since 1931, Gregg Oil and its successors have been extracting oil from the Campbell tract. They have been operating under a lease granted in 1931 by Fannie Campbell. The appellants argue that Fannie Campbell did not own the Campbell tract in 1931, and that Campbell’s lease to Gregg Oil did not validly convey a mineral lease. The appellants argue their predecessors actually owned the Campbell tract and were fraudulently induced by Tidal Oil (Edna Nettleton executed an oil, gas and mineral lease for the Nettleton tract to J. C. O’Brien. Tidal Oil was a successor in interest to J. C. O’Brien. Texaco, Mission Resources, and Gas Solutions are successors in interest to Tidal Oil) to execute a 1931 agreement, which designated that Gregg Oil had an oil and gas lease on the Campbell tract. The 1931 agreement was in essence a well-spacing agreement in which Tidal Oil, the appellants and the owners of the mineral estates of the neighboring tracts agreed not to drill any additional wells. The agreement contained the following recital which forms the basis of this suit: “WHEREAS, the above tract of land adjoins on the south the right of way of the Texas & Pacific Railroad which right of way is under lease for oil and gas purposes to Gregg Oil Company.” The appellants allege that this recital misled their predecessors to believe that the lease to Gregg Oil was valid. According to the appellants, the recital was fraudulently induced and they relied on the recital to their detriment. The appellants further allege that Texaco, Mission Resources, Gas Solutions and their predecessors fraudulently concealed the fraudulent inducement. HOLDING:Affirmed in part; reversed and remanded in part. The trial court erred in finding that the appellants lacked standing. Even assuming Tidal Oil committed fraudulent inducement or fraudulent nondisclosure, there is no evidence of fraudulent concealment tolling the statute of limitations, the court decides. Thus, the statute of limitations bars suit. The true line of demarcation at common law separating those causes of action which survive, from those which do not, is that in the first the wrong complained of affects primarily and principally property and property rights, and the injuries to the person are merely incidental, while in the latter, the injury complained of is to the person, and the property and rights of property affected are merely incidental. In the former case the cause of action survives, while in the latter it abates. Dowlin v. Boyd, 291 S.W. 1095 (Tex. Comm’n App. 1927, judgm’t adopted). Mission Resources and Texaco argue that the appellants’ claims are barred because the property has since been adversely possessed. Unlike the companion case, the fact that property has since been adversely possessed has no relevance to whether the appellants may assert a cause of action for fraud in connection with the 1931 agreement. Fraud, the cause of action at issue, survives the death of the injured party under the common law. Thus, under the facts of this case, the heirs have standing to bring suit. The trial court erred in granting the pleas to the jurisdiction. Texaco and Mission Resources argue that the appellants’ claims are barred by the statute of limitations. The appellants respond that any statute of limitations was tolled by Texaco’s and Mission Resources’ alleged fraudulent concealment of the fraudulent inducement. The appellants argue that Texaco, Mission Resources and their predecessors filed fraudulent well-spacing exceptions, fraudulently concealed their duty to disclose and failed to correct an error in a letter from Tidal Oil to Gregg Oil. This letter and the well-spacing exceptions amount to no evidence of deception or an intent to conceal the allegedly misleading nature of the recital in the 1931 document. The appellants argue that Union Pacific, (Anadarko and their predecessors fraudulently concealed the alleged tort when they had a duty to disclose it. The appellants’ evidence that Texaco, Mission Resources, and their predecessors fraudulently concealed the underlying tort amounts to nothing more than mere suspicion. While Texaco, Mission Resources or their predecessors never informed the appellants that they actually owned the Campbell tract, a record titleholder’s ignorance of what he or she owns does not affect the running of limitations. Natural Gas Pipeline Co. v. Pool, 124 S.W.3d 188 (Tex. 2003). “[S]ome suspicion linked to other suspicion produces only more suspicion, which is not the same as some evidence.” Browning-Ferris Inc. v. Reyna, 865 S.W.2d 925 (Tex. 1993). The appellants’ claims amount to little more than suspicion based on the unavailability of complete records more than 70 years later and the unavailability of witnesses, the court states. In this case, the court observes, more than 70 years have elapsed since the complained-of acts, many of the corporations involved are no longer in existence and most of the witnesses are no longer available. None of these allegations create a fact issue concerning whether the defendants used deception to conceal their actions, the court decides. The appellants failed to present more than a scintilla of evidence of fraudulent concealment. Therefore, the statute of limitations was not tolled. OPINION:Carter, J.; Morriss, CJ, Ross and Carter, JJ.

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