Roddy Harrison v. Rosetta Resources Operating
I honestly cannot imagine whether being a Texas Appellate Judge would be really fun and interesting or would drive a person insane. And when I read the unusual (read: crazy) theories of the Petitioner in the recent opinion of the Court of Appeals on the Eighth District of Texas, El Paso, titled Roddy Harrison v. Rosetta Resources Operating, I laughed until I thought about the poor Justices who had to take them seriously.
Harrison, Trustee of the Harrison Trust, executed an Oil and Gas Lease as Agent for the State of Texas, with Rosetta’s successor interest as the Lessee. Harrison and others sued Rosetta’s successor, Comstock Oil & Gas, for negligence in destroying an irrigation ditch and other damages to the surface. The lawsuit was settled quickly. As part of the settlement agreement, Comstock repaired a water well on Harrison’s land and agreed to purchase 120,000 barrels of water for fifty cents a barrel.
Comstock repaired the well, built a plastic lined frac pit on the land, and purchased the agreed upon amount of water. After drilling and completing two wells, Comstock assigned the lease to Rosetta. Rosetta began operations for a third well but decided to pump in water from Harrison’s neighbor. Rosetta used temporary lines for 3 to 6 days to fill their storage tanks. When Harrison realized this, he sued Rosetta for breach of contract. Harrison claimed that a Rosetta employee orally agreed to continue buying water from him. He also claimed that Rosetta should be liable (somehow) for violating what he called the “West Texas Rule”.
This is my favorite: the “West Texas Rule.” To clarify, Harrison insisted that “it was customary that an oil and gas lessee would only purchase water from the surface owner of the tract it was operating and not pump in neighboring water unless necessary.” Harrison also claimed negligence and trespass because the temporary hoses and other equipment were brought onto his land, and they wouldn’t have been necessary if Rosetta had just bought his water. Later Harrison claimed a violation of the “accommodation doctrine” because the water well that Comstock repaired and the frac pit that Comstock built could not be used if Rosetta would not purchase his water, thus (I guess?) making them worthless and thwarting their existing use. Damages for violations of the accommodation doctrine require proof that: “(1) the lessee’s use of the surface completely precludes or substantially impairs the existing use; and (2) the surface owner has no reasonable alternative method available to continue his existing use of the surface.” citing Coyote Lake Ranch, LLC v. City of Lubbock, 498 S.W.3d 53, 64.
Here, the Court recognized that Harrison’s complaints could simply not be considered violations of the accommodation doctrine by Rosetta because “the substantial interference complained of is that the frac pit is no longer profitable because Rosetta is not using it to supply water for its operations.” The Court went on to say (after acknowledging the creativity of the argument) that “categorizing a refusal to buy goods produced from the land as ‘interference’ with the land for purposes of the accommodation doctrine would stretch the doctrine beyond recognition. […] Rosetta’s use does not impair the trust’s existing surface use in any way, except in the sense that not buying the water has precluded the trust from realizing potential revenue from selling Rosetta its water.”
I have no personal end remarks or analysis on this opinion, other than to say “Way to go, Judges!” Instead, I will end this article on another of the Courts observations and remarks, and rest happily knowing that the accommodation doctrine has not been expanded, warped or distorted for one more day.
“Indeed, were we to hold for Harrison on these facts we would, in effect, be holding that all mineral lessees must use and purchase water from the surface owner under the accommodation doctrine if his water is available for use. The accommodation doctrine does not require such a holding, and we decline Harrison’s invitation to stretch it to do so.”