JPMorgan Chase Bank, N.A. v. Orca Assets G.P., LLC (Opinion)
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The lessee of certain mineral interests could not justifiably rely on extra-contractual representations by the lessor’s agent despite “red flags” and a negation-of-warranty clause in the sales documents explicitly placing the risk of title failure on the lessee.
In its complaint, the lessee alleged breach of contract, fraud, and negligent misrepresentation. Following a pre-trial conference, the trial court issued an order under Tex. R. Civ. P. 166(g) disposing of all of the lessee’s claims, concluding (1) the unambiguous terms of the letter of intent and leases precluded the lessee’s contract claim; and (2) as a matter of law, the lessee could not establish the justifiable-reliance element of its fraud and negligent-misrepresentation claims. The court of appeals affirmed the trial court's ruling regarding the contract claim but reversed on fraud and negligent misrepresentation. The Supreme Court reversed the court of appeals and reinstated the trial court’s judgment, holding (1) justifiable reliance was an essential element of the lessee’s remaining causes of action; and (2) as a matter of law, the lessee could not show justifiable reliance.
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