Texas Appeals Court Affirms Dismissal of Oil and Gas Royalty Suit Over Failure to Add Neighboring Landowners
Austin, TX (Law Firm Newswire) March 23, 2015 – A Texas appeals court has ruled on an oil and gas royalty lawsuit, stating that the trial court did not abuse its discretion by dismissing a landowner’s lawsuit against a subsidiary of ExxonMobil Corp.
The Seventh Court of Appeals held that the lawsuit against XTO Energy Inc. was properly dismissed because plaintiff Richard Crawford, a landowner in the Barnett Shale, did not add 44 adjacent landowners to the suit.
“The interests of adjacent landowners may come into play in litigation related to oil and gas royalties,” said Gregory D. Jordan, an Austin, Texas oil and gas attorney with the Law Offices of Gregory D. Jordan. “It can be a touchy situation. You want to include all appropriate parties, but you don’t want to unnecessarily complicate the litigation. Here, the court agreed that the plaintiff needed to bring in other parties.”
Crawford filed the lawsuit against XTO for royalties on a thin strip of land that remained after Crawford’s mother deeded property to the north and south to other owners. XTO said that adjacent property owners were entitled to the royalties under the “strip and gore” doctrine, which provides that a grantor is presumed not to have intended to reserve a narrow strip adjacent to a conveyed parcel, unless he or she makes such a reservation explicitly.
In a split decision from the appeals court, the majority held that the trial court could rightly dismiss Crawford’s action without prejudice, because he failed to join the adjacent landowners after the trial court’s order to compel joinder. The appeals court said that because XTO is currently paying royalties to the neighboring landowners, their interests are at stake. In a dissent, Justice Patrick A. Pirtle said that XTO had not proven that the adjacent property owners were indispensable to the lawsuit.