pjc-oil-and-gas-2022-lib

PJC 312.19

D EFENSES

PJC 312.19 Question and Instruction on Repudiation of Title If you answered “Yes” to Question ______ [ applicable liability question ], then answer the following question. Otherwise, do not answer the following question. QUESTION ______ Was Larry Lessee ’s failure to comply with the oil and gas lease excused? A lessee’s failure to comply with the terms of an oil and gas lease is excused by the lessor’s repudiation of the lease. A lessor repudiates an oil and gas lease when a lessor gives the lessee unqualified notice asserting the lessee’s interest has terminated or been forfeited. Answer “Yes” or “No.” Answer: _______________ COMMENT When to use. PJC 312.19 is appropriate to use when repudiation is asserted as a defense to either breach of lease or a lease termination claim and should be predicated on an appropriate finding in such a case. Source of question and instruction. PJC 312.19 is derived from Coastal Oil & Gas Corp. v. Garza Energy Trust , 268 S.W.3d 1, 20 (Tex. 2008); Ridge Oil Co. v. Guinn Investments, Inc. , 148 S.W.3d 143, 157 (Tex. 2004); Kothmann v. Boley , 308 S.W.2d 1, 4 (Tex. 1958); and Cheyenne Resources, Inc. v. Criswell , 714 S.W.2d 103, 105 (Tex. App.—Eastland 1986, no writ). Reliance. Some Texas appellate courts have recognized that a lessee’s suspension of operations in reliance on, or as a result of, the lessor’s alleged repudiation, while seemingly implicit in the doctrine of repudiation of a lease, has also been stated to be part of the showing that the lessee must make to establish the lessor’s repudiation. Rippy Interests, LLC v. Nash , 475 S.W.3d 353, 363 (Tex. App.—Waco 2014, pet. denied) (reversing lessor’s no-reliance summary judgment on lessee’s repudiation claims because lessee had raised a fact issue on reliance); Atlantic Richfield Co. v. Hil ton , 437 S.W.2d 347, 355 (Tex. App.—Tyler 1969, writ ref’d n.r.e.) (holding that to establish “repudiation” creating an estoppel, lessee had the affirmative burden of establishing that it had actual notice of the repudiation and that, in reliance thereon, operations were suspended). In instances in which reliance is in dispute, the above question may be modified accordingly.

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