David Sanchez, Independent Executor of the Estate of Maria Alicia Tijerina Sanchez, Deceased v. Duke Energy Field Services, Inc. now known as Duke Energy Field Services, L.P.--Appeal from 79th Judicial District Court of Jim Wells County

MEMORANDUM OPINION

No. 04-05-00926-CV

David SANCHEZ, Independent Executor

of the Estate of Maria Alicia Tijerina Sanchez, Deceased ,

Appellant

v.

DUKE ENERGY FIELD SERVICES, INC.,

Appellee

From the 79th Judicial District Court, Jim Wells County, Texas

Trial Court No. 02-09-40691-CV

Honorable Richard C. Terrell , Judge Presiding

Opinion by: Alma L. L pez, Chief Justice

Sitting: Alma L. L pez, Chief Justice

Catherine Stone , Justice

Sarah B. Duncan , Justice

Delivered and Filed: September 6, 2006

AFFIRMED

David Sanchez, Independent Executor of the Estate of Maria Alicia Tijerina Sanchez, appeals a summary judgment granted in favor of Duke Energy Field Services, Inc. in a declaratory judgment action seeking to construe two pipeline easements. Sanchez asserts eight separate issues that generally challenge: (1) the trial court's construction of the easements as requiring only one annual payment based on the lineal feet of pipeline owned by Duke Energy under Sanchez's land; (2) the trial court's construction of a general conveyance as not conveying certain pipeline to Duke Energy; and (3) the trial court's denial of Sanchez's objections to Duke Energy's summary judgment evidence and its consideration of such evidence to vary the terms of the documents. Because the issues in this appeal involve the application of well-settled principles of law, we affirm the trial court's judgment in this memorandum opinion.

Background

On September 27, 1998, Sanchez and Duke Energy entered into two pipeline easements in relation to two separate, existing pipelines in place under Sanchez's property. One pipeline was a 4-1/2 inch line, and the other was a 12-3/4 inch line. Under the terms of the pipeline easements, Duke Energy agreed to release all existing easements it held on Sanchez's land, with the exception of a specifically described gas pipeline easement, and to remove all pipelines associated with the released easements. In addition, each of the pipeline easements contained the following language:

ADDITIONAL CONSIDERATION:

As additional consideration for this grant, Grantee shall pay upon execution hereof, and thereafter on or before the anniversary date of each following year during the term of this Agreement the sum of twenty-five cents (25 ) for each lineal foot of Grantee's pipelines on Grantor's premises.

After the pipeline easements were executed, Duke Energy immediately paid Sanchez an amount equal to 25 times the total length of the lineal feet of the following pipelines under Sanchez's property: (1) the 4-1/2 inch pipeline; (2) the 12-3/4 inch pipeline; and (3) the gas pipeline that was specifically excluded from the general release in the pipeline easements. Sanchez accepted that payment and a similar payment on the first anniversary of the pipeline easements in 1999. Although Duke Energy submitted the same annual payment from 2000 forward, Sanchez did not cash the checks; however, she did not explain her reason for failing to cash the checks.

In September of 2002, Sanchez sued Duke Energy seeking a declaratory judgment that:(1) Duke Energy owned additional pipelines under Sanchez's land based on a general conveyance pursuant to which Duke Energy purchased the Seeligson Gas Processing Plant from various Mobil entities; and (2) because the "additional consideration" language was contained in both pipeline easements, Duke Energy owed Sanchez two annual payments of the same amount - one payment in satisfaction of the additional consideration clause in the 4-1/2 inch pipeline easement, and the other payment in satisfaction of the additional consideration clause in the 12-3/4 inch pipeline easement. Both parties moved for summary judgment. The trial court overruled Sanchez's objections to Duke Energy's summary judgment evidence and granted summary judgment in favor of Duke Energy.

Discussion

The party moving for summary judgment carries the burden of establishing that no material fact issue exists and that it is entitled to judgment as a matter of law. Rhone-Poulenc, Inc. v. Steel, 997 S.W.2d 217, 223 (Tex. 1999). When competing motions for summary judgment are filed, and one is granted and the other denied, the reviewing court must review the summary judgment evidence presented by both sides and determine all questions presented. Commissioners Court of Titus County v. Agan, 940 S.W.2d 77, 81 (Tex. 1997).

The rules of contract construction govern the interpretation of easements. See DeWitt County Elec. Coop., Inc. v. Parks, 1 S.W.3d 96, 100 (Tex. 1999). When interpreting a contract, the intent of the parties is to be determined from the express language found within the four corners of the document. Luckel v. White, 819 S.W.2d 459, 461-63 (Tex. 1991); Walker v. Foss, 930 S.W.2d 701, 704 (Tex. App.--San Antonio 1996, no writ). Construction of an unambiguous contract is a question of law to be resolved by the court. Luckel, 819 S.W.2d at 461; Walker, 930 S.W.2d at 704. Agreements executed at the same time, with the same purpose, and as part of the same transaction, are construed together. In re Prudential Ins. Co. of America, 148 S.W.3d 124, 135 (Tex. 2004). Evidence of surrounding circumstances may be consulted. Sun Oil Co. (Delaware) v. Madeley, 626 S.W.2d 726, 731 (Tex. 1981); Creel v. Houston Industries, Inc., 124 S.W.3d 742, 750 n.8 (Tex. App.--Houston [1st Dist.] 2003, no pet.). Consideration of the facts and circumstances surrounding the execution of a contract, however, is simply an aid in construction of the contract's language. Madeley, 626 S.W.2d at 731; Creel, 124 S.W.3d at 750. "Such circumstances help to illuminate the contractual language chosen by the parties and enable evaluation of the objects and purposes intended to be accomplished by them in entering into the contract." Medical Towers, Ltd. v. St. Luke's Episcopal Hosp., 750 S.W.2d 820, 823 (Tex. App.--Houston [14th Dist.] 1988 writ denied).

1. Ambiguity

Whether a contract is ambiguous is a question of law that must be decided by examining the contract as a whole in light of the circumstances present when the contract was entered. Columbia Gas Transmission Corp. v. New Ulm Gas, Ltd., 940 S.W.2d 587, 589 (Tex. 1996). A contract is ambiguous only if it is subject to two or more reasonable interpretations after applying the pertinent rules of construction. Id. Ambiguity does not exist merely because the parties assert forceful and diametrically opposing interpretations. Id. As further explained below, after applying the pertinent rules of construction, we conclude that the pipeline easements and the general conveyance are not subject to two or more reasonable interpretations. Accordingly, the contracts are not ambiguous as a matter of law.

2. Additional Pipelines

The basis for Sanchez's complaints relating to Duke Energy's summary judgment evidence stem from Sanchez's belief that the language of the general conveyance relating to the conveyance of the Seeligson plant must be considered in isolation. However, as previously noted, we are permitted to consider both the circumstances surrounding the general conveyance and any agreements executed as part of the same transaction. Id.; Sun Oil Co. (Delaware), 626 S.W.2d at 731. The affidavit of David F. Garrett, a vice-president of Duke Energy and a former employee of its predecessor, explains that the conveyance of the Seeligson plant was part of a larger transaction involving the conveyance of numerous other plants. In connection with this transaction, the parties executed three documents which reveal their intent to exclude from the conveyance the additional pipelines Sanchez contends that Duke Energy owns as a result of the Seeligson conveyance. These documents include: (1) the general conveyance relating to the conveyance of the La Gloria plant, which specifically lists the additional pipelines as an excluded asset in relation to the Seeligson conveyance; (2) the ballot sent to the Seeligson Plant Owners requesting permission to separate the plant facility from the additional pipelines in connection with the Seeligson conveyance; (1) and (3) a letter agreement evidencing the right of a third party (Triad) to continue operations of those pipelines on behalf of the Unit owners of those pipelines. Accordingly, construing the Seeligson general conveyance in connection with the surrounding circumstances and the documents executed as a part of the same transaction, the documents establish as a matter of law that Duke Energy is not the owner of the additional pipelines Sanchez claimed Duke Energy owned as a result of the Seeligson conveyance.

3, Additional Consideration

With regard to the additional consideration, we must construe the two pipeline easements, which were executed at the same time and as part of the same transaction, together. In re Prudential Ins. Co. of America, 148 S.W.3d at 135. Although an identical provision for additional consideration appears in both easements, the payment is unambiguously intended to be an annual payment based on the amount of lineal feet of pipeline Duke Energy owned on Sanchez's land. Accordingly, as a matter of law, the existence of the clause in each of the pipeline easements did not obligate Duke Energy to make two identical payments to Sanchez.

Conclusion

The trial court's judgment is affirmed.

Alma L. L pez, Chief Justice

1. Garrett explained in his affidavit that the ballot was necessary because prior documents required unified ownership of the plant facility and the "Unit" which owned the additional pipelines in question.