pjc-oil-and-gas-2022-lib

D AMAGES

PJC 313.13

PJC 313.13 Question and Instruction on Damages for Breach of Express Royalty Provision [Insert predicate, PJC 313.1.] QUESTION ______ What sum of money, if any, if paid now in cash, would fairly and reasonably compensate Paul Payne for his damages, if any, that resulted from Larry Les see ’s failure to pay royalties according to the lease? Consider only the difference, if any, between the royalty Paul Payne would have received if Larry Lessee had paid royalties according to the lease, and the royalty Paul Payne actually received. Do not add any amount for interest on damages, if any. Answer in dollars and cents for damages, if any. Answer: _______________ COMMENT When to use. PJC 313.13 should be used to determine damages for breach of the express royalty provision and should be predicated on a “Yes” answer to PJC 303.4. Causation. To recover damages for breach of contract, a plaintiff must establish damages sustained as a result of the breach. Southern Electrical Services, Inc. v. City of Houston , 355 S.W.3d 319, 324 (Tex. App.—Houston [1st Dist.] 2011, pet. denied). Damages for failure to pay proceeds under Texas Natural Resources Code. A “payee” can recover damages for nonpayment of oil or gas proceeds or interest on those proceeds as required by Texas Natural Resources Code sections 91.402 and 91.403. Tex. Nat. Res. Code § 91.404(b). A successful action thereunder shall further entitle the plaintiff to attorney’s fees. Tex. Nat. Res. Code § 91.406. For a question on untimely payment of proceeds of production under Tex. Nat. Res. Code §§91.401– .408, see PJC 303.5. Submission of separate answers. If there are multiple plaintiffs or lessees, it will normally be necessary to require an answer for each. It may also be necessary to require an answer for each well and each month in issue in the royalty dispute if the plaintiff is seeking to recover prejudgment interest from multiple wells or sales or if the statute of limitations is in issue. Tex. Nat. Res. Code §§91.401–.406; Tex. Fin. Code §§ 304.101–.107.

241