Reeder v. Wood County Energy, LLC

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Justia Opinion Summary

This case involved the duties and standard of care of an oil and gas operator under an exculpatory clause in a joint operating agreement (JOA). Based on language in the exculpatory clause in the JOA, the trial court instructed the jury to find that to find a breach of the JOA the operator's conduct must have risen to the level of gross negligence or willful misconduct. The jury found the operator, Petitioner, breached his duties under the JOA to the working interest owners. The court of appeals affirmed, holding (1) the gross negligence and willful misconduct instruction should not have been included in the charge because the case centered around a breach of contract; but (2) there was legally sufficient evidence to support the jury's findings that Petitioner breached his duty as operator when measured against the elements of breach of contract. The Supreme Court reversed, holding (1) the exculpatory clause in the JOA established the standard for the claims against Petitioner; and (2) there was legally insufficient evidence that Petitioner was grossly negligent or acted with willful misconduct.

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IN THE SUPREME COURT OF TEXAS 444444444444 NO . 10-0887 444444444444 WENDELL REEDER, PETITIONER, v. WOOD COUNTY ENERGY, LLC, WOOD COUNTY OIL & GAS, LTD., NELSON OPERATING, INC., DEKRFOUR, INC., BOBBY NOBLE, EXZENA OIL CORPORATION, DAVID FRY, AND PATRICIA FRY, RESPONDENTS 4444444444444444444444444444444444444444444444444444 ON PETITION FOR REVIEW FROM THE COURT OF APPEALS FOR THE TWELFTH DISTRICT OF TEXAS 4444444444444444444444444444444444444444444444444444 SUPPLEMENTAL PER CURIAM ON MOTION FOR REHEARING OF CAUSE In their motion for rehearing, respondents contend that this Court s judgment improperly reversed portions of the trial court s judgment that petitioner did not challenge and we did not address. We agree. For the reasons explained in our opinion issued August 31, 2012, the trial court erred in entering judgment for respondents on their claims governed by the joint operating agreement. But petitioner did not challenge the portion of the judgment awarding $7,500 plus $7,500 in associated attorney s fees to Patricia Fry or the portion granting declaratory relief and awarding $55,000 in associated attorney s fees to respondents. We therefore grant the motion for rehearing, withdraw our judgment dated August 31, 2012, and issue a new judgment that affirms those portions of the trial court s judgment and reverses and renders a take-nothing judgment on the remaining claims. OPINION DELIVERED: March 29, 2013 2