Exxon Corporation and Exxon Texas, Inc., Petitioners v. Emerald Oil & Gas Company, L.c. and Laurie T. Miesch, Et…

Summary

The Texas Supreme Court held that the royalty owners' statutory and common-law waste claims and Emerald's negligent-misrepresentation and tortious-interference claims were barred by the two-year statute of limitations because both parties had actual knowledge of Exxon's injury-causing conduct—evidenced by the 1990-1991 plugging letters and Emerald's June 1994 report of cut casing and junk—more than two years before suing in 1996. The Court also held that the lease's Article 3(a) defined Exxon's development duty as drilling and completing at least one well per zone per specified acreage capable of producing in paying quantities, that Article 4's aspirational 'full value' language did not enlarge that duty, and that no evidence supported the jury's breach-of-lease finding, rendering judgment for Exxon. However, the Court affirmed the court of appeals' reversal of the directed verdict on Emerald's fraud claim for different reasons, finding some evidence that Exxon knew of an especial likelihood that Emerald specifically would rely on allegedly false Railroad Commission plugging reports in a then-contemplated transaction. The Court remanded to the court of appeals to address the royalty owners' unbriefed conditional claims and to send Emerald's fraud claim back to the trial court.