Rosetta Resources Operating, LP v. Martin (Opinion)
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In this oil and gas case, the Supreme Court reversed the judgment of the court of appeals reversing the trial court's summary judgment, holding that a fact issue remained on Plaintiffs' claim for breach of the lease and that Plaintiffs' argument was not barred by res judicata but that the court of appeals erred by reversing a take-nothing summary judgment as to Plaintiffs' tort and statutory claims.
At issue was the meaning and application of an express covenant to protect against drainage that appeared in a lease addendum that expressly limited the location of wells that may trigger Defendant-Lessee's obligation to protect against drainage but did not directly address the location of wells that may cause drainage. Plaintiffs-Lessors argued that the covenant allowed for separate triggering and draining wells and that Defendant breached the covenant by failing to protect against drainage from a non-triggering well. In response, Defendant argued that it had a duty to protect only against drainage from the limited class of triggering wells. The Supreme Court held (1) the addendum was ambiguous because both interpretations of the covenant were reasonable; (2) the court of appeals improperly reversed the trial court's take-nothing summary judgment on Plaintiffs' tort and statutory claims; and (3) remand was required for further proceedings on Plaintiffs' claim for breach of the lease.
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