Contract Interpretation—The SCOTX Report

23-0384·Petition For Review

Courts may not blue-pencil words into a contract: the trial court erred by adding "scheduled" and "physical" to Section 9.1 of a firm gas-balancing agreement, whose plain language excused the pipeline from providing balancing services whenever the upstream pipeline required the pipeline or the shipper to limit imbalances attributable to the shipper.
The Court rendered judgment for the pipeline on the shipper's repudiation and fraud, fraudulent-inducement and negligent-misrepresentation claims, remanded the breach-of-contract claims for a new trial, and cautioned that lost profits from an untested forward-sales strategy dependent on volatile gas prices are speculative.

23-0676·Other

A deed or lease using typical language to convey oil-and-gas rights, though silent on produced water, conveys the hydrocarbon lessee the right to possession, custody, control, and disposition of the constituent water in the liquid waste that is inevitably produced with the hydrocarbons; a surface owner who wants to keep it must reserve it expressly.
The Court rejected the surface owner's lessee's argument that produced water is groundwater belonging to the surface estate and that the lessee's rights are merely usufructuary, distinguishing Robinson v. Robbins Petroleum and the groundwater cases as addressing water, not oil-and-gas waste.

23-0927·Petition For Review

A passive-voice habendum clause continuing an oil-and-gas lease "as long thereafter as" minerals are produced from the land does not require the lessee to personally cause production, so a non-operating co-tenant's leases did not terminate where the operating co-tenant continuously produced in commercial paying quantities.
The Court disapproved Mattison v. Trotti (5th Cir.), Hughes v. Cantwell and Cimarex Energy v. Anadarko to the extent they hold otherwise, construed an ambiguous paragraph in one lease against automatic termination under the rule disfavoring forfeiture, and noted the producing co-tenant's remedy is an accounting.

24-0024·Mandamus

Individual shareholders of a Maryland real estate investment trust may not sue the trust's advisors directly on an advisory agreement that says the advisor is in a fiduciary relationship "to the Trust and its Shareholders," because the phrase refers to the shareholders collectively and creates no duty to individual shareholders distinct from the duty to the entity.
The shareholders therefore lack capacity to bring claims the trust owns and must pursue them derivatively under the trust documents' exclusive Maryland forum, so the trial court erred in denying the advisors' plea in abatement and the Court conditionally granted mandamus directing dismissal with prejudice.

24-0425·Petition For Review

A fracking company did not breach its water-supply contract by buying water from other suppliers, because its oil wells sit outside the scope of the contract's exclusivity clause making Lindale the exclusive water provider and pumper "on the Pipeline."
The Court reversed the court of appeals and rendered judgment for Equinor.

24-0794·Petition For Review

The parties' 1984 pole-attachment agreement's "all laws" clause incorporates later-enacted statutes affecting either side's rights or obligations⁠—including PURA's rate-discrimination and rate-ceiling provisions⁠—regardless of whether the agreement itself technically "renews" each year.
The Public Utility Regulatory Act applies to this agreement, and CPS Energy's practice of invoicing Spectrum and AT&T at the same rate while collecting only from Spectrum violates the statute's ban on discriminatory pole-attachment pricing.

25-0274·Petition For Review

Does an LLC's buy-sell provision let a member condition a buyout offer on return of the other member's unreturned capital contribution, or does Section 12.2 allow only the purchase and sale of "Membership Interest"?
Can a party recover Chapter 38 attorney's fees when the only relief obtained on a breach-of-contract claim is a specific-performance injunction rather than damages?

25-0637·Petition For Review

Whether a shipper that prepaid $32.7 million for firm pipeline transportation and terminal loading under related "ship-or-pay" agreements can recover its prepayment when the carrier never provided a terminal capable of loading a million-barrel vessel or transported one of the contract grades of crude, or whether the agreements' vessel limits and nomination requirements defeat the claim.
Whether related contracts must be construed together and in harmony, so that an exhibit's loading specifications cannot negate the terminal-service obligations in the Terminal Agreement, and whether the futility doctrine excuses the shipper from nominating a vessel or grade the carrier had not made available.

26-0118·Petition For Review

Without argument, the Court vacated a judgment holding a refinery's "except to the extent" indemnity clause unenforceable under the express negligence rule, and remanded for the court of appeals to apply the Court's later decision in S&B Engineers v. Scallon Controls.
The Court expressed no view on whether the clause satisfies the express negligence rule or on the other indemnity questions the parties raised.