Ratification Issue Did Not Provide Path to Attorneys’ Fees

Originally published by Ryan Lammert.

M & M Res., Inc. v. DSTJ, LLP, 2018 Tex. App. LEXIS 9331 (Tex.Civ.App.—Beaumont 2018, no pet.)

Plaintiffs in title disputes sometimes will allege a claim under the Declaratory Judgment Act in order to seek attorneys’ fees. In this case, the court held that the claim could only be asserted as a trespass to try title claim, where attorneys’ fees are not recoverable.

Here, an oil and gas company hired landmen to acquire oil and gas leases in Jefferson County. Landmen acquired 22 leases and assigned them to the oil and gas company using a form that included an overriding royalty reservation and a provision indicating the assignment would terminate upon any late royalty payments. The landmen allegedly recorded the assignment without giving the oil and company an opportunity to review or approve the form. Years later, the landmen claimed royalty payments were untimely and sought termination of the assignment. The landmen claimed that, even though the oil and gas company had not reviewed or accepted the assignment, it ratified the assignment by its conduct.

 

At the trial court, the oil and gas company complained that the landmen’s complaint was really a trespass to try title claim (attorneys fees are generally not recoverable) and that the landmen were improperly attempting to couch their lawsuit as a claim for declaratory relief in order to seek attorneys’ fees. The court stated that “if a disputed involves a claim of superior title and the determination of possessory interests in property, it must be brought as a trespass-to-try-title action….a party may not proceed alternatively under the Declaratory Judgments Act to recover their attorneys’ fees.” While ratification was also an issue in the suit, which may also involve separate fact questions, the Court held that “it is an issue within the context of a trespass to try title case, adjudicating which party holds superior title to the mineral estates.”

As a result, the court held that the ratification issue did not negate the requirement the case be pleaded and litigated as a trespass to try title action.

Author information

Ryan Lammert

Oil and Gas Attorney at McGinnis Lochridge (click for profile)

Ryan represents oil and gas exploration and production companies, saltwater disposal operators, landowners, and electric cooperatives before multiple state agencies, including the Railroad Commission of Texas, the Public Utility Commission of Texas, and the State Office of Administrative Hearings. Ryan also assists clients with a wide range of oil and gas transactional matters, including lease negotiation, joint operating agreements, production sharing agreements, and farmout agreements. By understanding the interplay between administrative regulations and oil and gas law, he is able to provide sound, efficient, and effective legal advice.

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