United States District Court, S.D. Texas, Corpus Christi Division
ORDER ON KOERNER DEFENDANTS' MOTION FOR SUMMARY
GONZALES RAMOS UNITED STATES DISTRICT JUDGE.
the Court is a motion for summary judgment on Plaintiffs'
third amended class action complaint filed by Defendants
Diane Duncan Koerner, Kimberly K. Sheridan, Stacey E.
Koerner, and Charles D. Duncan (collectively, the Koerner
Defendants). D.E. 108. Defendants primarily challenge
Plaintiffs' breach of covenant claim because Burlington
Resources Oil & Gas Company LP (Burlington), a nonparty
to this action and the operator-lessee of the oil and gas
interests at issue, assumed any obligation to pay royalties.
The remaining defendants, Jo Ann Crawford Floyd, Barbara
Braun Wolin, as Trustee of the Robyn Louis Wolin Trust,
Virginia Kathleen Pittman Rothermel, Charles T. Rothermel
III, Elizabeth Pittman Clark, and Ansel P. Clark
(collectively, the Crawford Defendants) joined and adopted
this argument. D.E. 112. Plaintiffs responded (D.E. 113)
and the Koerner Defendants replied (D.E. 116). For the
following reasons, the Koerner Defendants' motion for
summary judgment is DENIED.
judgment is proper if there is no genuine dispute as to any
material fact and the moving party is entitled to judgment as
a matter of law. Fed.R.Civ.P. 56(a). “A genuine dispute
of material fact means that evidence is such that a
reasonable jury could return a verdict for the nonmoving
party.” Royal v. CCC & R Tres Arboles,
L.L.C., 736 F.3d 396, 400 (5th Cir. 2013) (quoting
Anderson v. Liberty Lobby, Inc., 477 U.S. 242, 248
(1986) (internal quotation marks omitted)). A party may also
move for summary judgment when the dispute is purely over
issues of law. Neff v. Am. Dairy Queen Corp., 58
F.3d 1063, 1065 (5th Cir. 1995). “[E]ven if the issue
of law is complex or requires difficult questions of
interpretation, summary judgment is still appropriate if
there is no triable issue of fact.” Trade-Winds
Envtl. Restoration, Inc. v. Stewart, No. CIV. A.
06-3299, 2008 WL 236891, at *4 (E.D. La. Jan. 28, 2008).
Court previously described the facts of this case in the
order denying the Crawford Defendants' motion for summary
judgment (D.E. 123), which the Court hereby incorporates by
reference. For purposes of this motion, the Court sets out
the procedural history.
originally sued Defendants for breach of covenant, breach of
fiduciary duties, and conversion, and sought a declaratory
judgment and injunctive relief. In their second amended
complaint, Plaintiffs brought claims against Burlington and
later dismissed Burlington without prejudice. Subsequently,
Defendants filed a 12(b)(6) partial motion to dismiss. D.E.
55. The Court dismissed the claims for conversion, injunctive
relief, and punitive damages for failure to state a claim and
dismissed the request for declaratory relief as duplicative
of the breach of covenant claim. D.E. 68.
third amended complaint, Plaintiffs dropped the claim for
breach of fiduciary duties, restated a claim for declaratory
judgment, and added Burlington to the lawsuit for violation
of the Texas Natural Resources Code (TNRC). Soon after,
Burlington filed a motion to dismiss. D.E. 81. Because
Plaintiffs failed to show that Burlington was liable under
the TNRC, the Court granted the motion to dismiss. D.E. 96.
Thus, Burlington is no longer a party to this action.
remaining claims are for declaratory judgment and breach of
covenant. Plaintiffs allege that Defendants are bound by the
covenants contained in the Hawley Deeds (Deeds) to deliver
and pay to Plaintiffs a portion of the proceeds for oil and
gas found and sold from the Hawley-Ayers Survey (the
Property). The Court held that the Deeds conveyed a floating
royalty interest. D.E. 123.
Defendants move for summary judgment, arguing that they
cannot be liable for a breach of covenant claim as the
lessors of the Property. Defendants' argument is solely
an issue of law. Defendants also argue that the Deeds
conveyed a personal payment covenant that does not run with
the land and the Deeds are invalid under the statute of
frauds-arguments previously rejected by the Court. D.E. 123.
The Court declines to revisit these arguments and addresses
only the breach of covenant claim.
argue that in a typical oil and gas dispute, the plaintiff
alleging failure to pay royalties sues the operator-lessee,
not the lessor, for breach of contract or violations of the
TNRC. Thus, Plaintiffs are asserting the breach of covenant
claim against the wrong party because it is Burlington who is
liable for any royalties owed under the terms of
Burlington's lease with Defendant Diane Crawford (the
Lease). Defendants' argument fails for the following
The Deeds created an obligation to pay and deliver
argue that the Hawley Deeds define Defendants'
obligations, which is the basis of the breach of covenant