Texas Outfitters v. Nicholson, 04-16-00392-CV (4th COA. 05/17/2017)
Appellees, owners of a 50% mineral interests on a 1,082-acre track, sought concurrence with appellant to lease the parties' interests following appellant's purchase of the surface rights. Two separate offers for the lease were remitted and several meetings between the parties ensued. After the parties were unable to reach a settlement agreement on the lease, appellees filed the underlying action alleging appellant breached its duty of utmost good faith and fair dealing by refusing lease. Following a bench trial, the trial court awarded appellee damages and made findings of fact and conclusions of law finding appellant breached it duty by refusing to lease their mineral interest. In addition, the trial court made several specific fact-findings regarding the factual background of the case. On appeal, the court affirmed concluding the trial court, as the factfinder, made reasonable credibility determinations based on conflicting evidence and did not err in awarding damages to appellees based on its findings. The court noted the trial court correctly stated that a party's refusal to lease may not motivated by self-interest or arbitrary. Here, the trial court appeared to have focused on appellant's breach evidenced by the fact that appellee's interest in the mineral estate was greater than that held by appellant, the mineral co-tenants had already entered the lease, and appellant eventually sold the property. Taken together, the court found the trial court's findings supported an award for damages for breach of the executive duty for refusing to permit any mineral lease. As appellant's refusal to lease was arbitrary or motivated by self-interest, the court affirmed the damages award determined by the trial court.
Texas Outfitters Ltd., LLC v. Nicholson, San Antonio Court of Appeals, Case No.: 04-16-00392-CV, 05/17/2017
|June 01, 2017
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