Texas High Court Rules Against 3rd-Party Lessor Seeking Contract Benefits

AUSTIN, Texas - Ruling on a question certified from the U.S. 5th Circuit Court of Appeals, the Texas Supreme Court has ruled that a third-party lessor is not entitled to royalties for non-operating wells either as a third-party beneficiary of the lessee's contracts or through privity of estate. Tawes v. Barnes, No. 10-0581 (Texas Sup. Ct.).

Having found against the lessor on that issue, the high court did not address other questions certified by the federal appeals court.

Doris Barnes sought additional royalty payments from a joint-drilling venture between parties that had leased drilling rights on an adjoining parcel, and …