# Culberson Midstream Equity, LLC v. Energy Transfer LP

Supreme Court of Texas, No. 24-0625

**Culberson Midstream Equity, LLC v. Energy Transfer LP, No. 24-0625, is before the Supreme Court of Texas. Key issue: The Court granted the petition, vacated the court of appeals' judgment and remanded to the trial court under the parties' settlement in a dispute over whether contract disclaimers and warnings barred a fraud claim arising from an option to buy a gas-gathering company.**

Practice areas: fraud

## Key issues

- The Court granted the petition, vacated the court of appeals' judgment and remanded to the trial court under the parties' settlement in a dispute over whether contract disclaimers and warnings barred a fraud claim arising from an option to buy a gas-gathering company.

## Factual History
Culberson Midstream was a West Texas gas gathering company whose value depended on oil and gas production from more than 43,000 Culberson County acres operated by its customer, Charger Shale Oil. Energy Transfer signed an Option Agreement to buy Culberson at floor and ceiling prices, with a put price of about $93 million that the sellers could trigger. In March 2022, six days after the sellers triggered Energy Transfer's obligation to buy, Energy Transfer and a subsidiary claimed Culberson breached, and the sellers sued (Petition for Review, PDF pp. 10-12).

## Procedural History
The trial court denied the sellers' motion for summary judgment on Energy Transfer's fraud claim and identified controlling questions of law for permissive appeal; the Dallas Court of Appeals denied the petition for permissive appeal. The sellers petitioned this Court August 5, 2024. On February 14, 2025, on a joint motion, the Court granted the petition under Rule of Appellate Procedure 56.3 and, without considering the merits, vacated the court of appeals' judgment and remanded to the trial court under the settlement agreement.

## Issues Presented
The petition asked whether a disclaimer of reliance in a letter of intent is effective against pre-contractual representations or was superseded by a merger clause in a separate contract, and whether pre-contractual warnings from the buyer's head geologist and its choice of a contract without a minimum drilling commitment are "red flags" that negate justifiable reliance as a matter of law (Petition for Review, PDF p. 7). The Court did not reach them.

## Legal Arguments
**Culberson Midstream and the sellers (Petitioners):** the questions are controlling questions of law, and answering them in their favor would end the litigation (Petition for Review, PDF p. 10). Energy Transfer contended the disclaimer was superseded by a merger clause (Petition for Review, PDF p. 7).

## Stated Reasons the Court Should Take the Case
The order rests on the parties' settlement; the Court did not consider the petition's reasons for review (February 14, 2025 orders).

## Practice Area Tags
fraud

## Procedural Posture/Vehicle
Petition for review of a court of appeals' order denying a petition for permissive appeal, under Civil Practice and Remedies Code § 51.014(h); granted and judgment vacated and remanded on a joint motion under settlement, Rule of Appellate Procedure 56.3 (Petition for Review, PDF p. 7; February 14, 2025 orders).

## Amicus Involvement
None noted

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Source: The SCOTX Report, https://scotxreport.com/cases/24-0625. AI-generated summary of the Court's opinion, orders and the parties' briefs, with pin cites to the page of each document; verify against the Court's own documents at search.txcourts.gov.