Sitting for the court: Justice Paul W. Green, Justice Nathan L. Hecht, Chief Justice Wallace B. Jefferson, Justice Phil Johnson, Justice David Medina, Justice Dale Wainwright, Justice Don R. Willett, Justice Eva Guzman, Justice Debra Lehrmann
Wendell Reeder v. Wood County Energy, LLC, et al.
from Wood County and the 12th District Court of Appeals, Tyler
For petitioner: Charles Watson, Austin
For respondents: Greg Smith, Tyler
The principal issues are (1) whether the exculpatory clause in a model joint-operating agreement, allowing liability only for gross negligence or willful misconduct, extends to a working-interest operatorís alleged breach of the operating agreement by neglect and (2) whether the appeals court erred by assessing the legal and factual evidence against a contract-breach standard instead of gross negligence or willful conduct. In this case Reeder sued to claim exclusive right, as operator, to use oil wellbores in a designated production unit. The working-interest holders countersued Reeder, claiming he breached the joint-operating agreement and allowed by his inaction the production unit to expire. On appeal, Reeder argued that the juryís award for the working-interest holders was based on insufficient evidence that he acted with gross negligence or willful misconduct even if the joint-operating agreement applied to him. Wood County and the other working-interest holders contended the gross-negligence and willful-conduct standard did not apply to the breach question and should not have been included in the jury instructions. The court of appeals determined that the gross-negligence and willful-misconduct standards from the exculpatory clause should not have been included in the jury questions, but held that Reeder breached his duties under the joint-operating agreement.
This advisory serves only as an abbreviated guide to oral argument. Summaries are prepared by the Court's staff attorney for public information and reflect his judgment alone on facts and legal issues and in no way represent the Court's opinion about case merits.
Texas Supreme Court advisory
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