Court Jurisdiction, Procedure and Review: Standing Exploration and Development Agreement: Breach

摘要

In earlier litigation, Marrs and Smith Partnership v. D.K. Boyd Oil & Gas Co., Inc., 223 S.W.3d 1, 164 O.&G.R. 605 (Tex. App.—El Paso, rev. denied), relating to the development of a large ranch in West Texas, the court determines that Marrs & Smith tortiously interfered with Boyd's contractual relationship under which Boyd agreed to purchase the surface and mineral interests. This action involves two parties, Pagosa Oil & Gas (Pagosa) and Sombrero Oil & Gas (Sombrero) who agreed to participate with Boyd in another investment project denoted the Leiman Prospect, at about the same time that the Boyd/Marrs & Smith agreement was still in force. Pagosa and Sombrero file this action in 2006 asserting that Marrs & Smith's rescission of the Boyd lease injured them with regard to the Leiman Prospect. In 2006, Boyd and Sombrero enter into an agreement whereby Boyd assigns any potential causes of action it may have against Marrs & Smith to Sombrero. The trial court grants Marrs & Smith's motion for summary judgment. Held: affirmed in part, reversed in part and remanded. The court initially discusses a matter not raised in the trial court's order, namely the standing of either Pagosa or Sombrero to bring this breach of contract action since neither was a party to the original Boyd/Marrs & Smith agreement. A party must prove that it has contractual privity or is a third-party beneficiary in order to have standing to assert a breach of contract claim. As to Pagosa, there is no evidence that a contract exists between the participants in the Leiman Prospect agreements and Marrs & Smith. There is also no evidence showing that Pagosa is a third-party beneficiary to the Boyd/Marrs & Smith agreement or lease.