Smyser Kaplan & Veselka, L.L.P.: Texas Supreme Court Victory in Oil and Gas Dispute

Apr 25, 2014, 17:35 ET from Smyser Kaplan & Veselka, L.L.P.

HOUSTON, April 25, 2014 /PRNewswire/ -- The Texas Supreme Court kept in place a closely watched First Court of Appeals reversal of a 2011 state court judgment in an oil and gas dispute, Smyser Kaplan & Veselka, L.L.P. announced today.

The litigation arose out of an oil and gas lease termination in High Island Field in Galveston County in 2004. The plaintiffs owned overriding royalty interests in the lease and argued that they were injured when the lease terminated, extinguishing their overriding royalty interests.

The Supreme Court's denial of the plaintiffs' petition for review followed the First Court's decision in March 2013 that found that SKV's clients owed no duty to the overriding royalty interest owner plaintiffs and reversed a $929,903 judgment entered by the 405th District Court of Galveston County, Texas, against Robert Stroud, Plantation Petroleum Corporation, and Stroud Production LLC.

The Court of Appeals held that there was no evidence to support plaintiffs' claim that the only producing well was sabotaged and rejected the plaintiffs' theory that the Stroud entities owed the plaintiffs special or fiduciary duties arising out of the assignment of overriding royalty interests.

SKV partners Larry R. Veselka and Land Murphy tried the case and briefed and argued the appeal.

Mr. Veselka said, "We remain gratified by the appellate court's judgment that the plaintiffs take nothing from their central claims against Mr. Stroud and his companies in this important case. Plaintiffs were asserting claims unrecognized in Texas and which would disrupt well-established concepts of Texas oil and gas law. The Court of Appeals' rejection of those claims – and now the Supreme Court's denial of the plaintiffs' petition for review – prevent that potential disruption."

The only part of the judgment reversed but remanded for new trial was the issue of the appropriate amount of interest and attorney fees due on $375 in royalties — less than one-tenth of one percent of the damages sought — owed for production in the last month before production ceased. Those royalties, which had not been paid in 2004 due to an oversight, were paid several months before trial of the case."

The case is Stroud Production, L.L.C., et al. v. Patrick E. Hosford, et al, No. 01-11-00593-CV in the Court of Appeals, First District of Texas.

Contact: Larry R. Veselka or Land Murphy, Smyser Kaplan & Veselka, L.L.P., Bank of America Center, 700 Louisiana, Suite 2300, Houston, Texas 77002; 713.221.2300;

SOURCE Smyser Kaplan & Veselka, L.L.P.