                               Fourth Court of Appeals
                                      San Antonio, Texas
                                                 OPINION
                                         No. 04-11-00550-CV

                            BP AMERICA PRODUCTION COMPANY,
                                         Appellant

                                                   v.

   Carlos M. ZAFFIRINI Sr., Dolores Angelina De la Garza, Clarissa De La Garza, Cristina
   Lorena Benavides, Servando Roberto Benavides, Delia Hilda Benavides Martinez, Maria
     Eugenia Benavides Gutierrez, Las Tinajas Minerals, Ltd., and Diana Benavides Solis,
                                         Appellees

                      From the 49th Judicial District Court, Webb County, Texas
                                Trial Court No. 2010CVF000798D1
                             The Honorable Joe Lopez, Judge Presiding

Opinion by:       Patricia O. Alvarez, Justice

Sitting:          Catherine Stone, Chief Justice
                  Sandee Bryan Marion, Justice
                  Patricia O. Alvarez, Justice

Delivered and Filed: August 30, 2013

AFFIRMED IN PART, REVERSED IN PART, AND REMANDED

           This is an appeal from the trial court’s judgment denying Appellant’s motions for summary

judgment and granting Appellees’ motions for summary judgment in a suit involving the

construction of an oil and gas lease. Appellant BP America Production Company executed two

separate leases to produce oil and gas from the same mineral estate in Webb County. When a

dispute arose over one of the leases, BP filed a declaratory-judgment action and various claims

against all the lessors. In turn, the lessors counterclaimed against BP. Later, BP and the lessors
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filed competing summary judgment motions. The trial court denied BP’s motions, granted the

lessors’ motions, and BP appealed. We affirm in part and reverse in part the trial court’s judgment,

render in part, and remand the cause to the trial court for further proceedings consistent with this

opinion.

                                                    BACKGROUND

         BP executed two separate leases to produce oil and gas from the same mineral estate on

approximately 7,520 acres of the Santa Elena Ranch in Webb County. It first executed a lease

with Diana Solis (Solis lease) for her 30% interest in the undivided mineral estate. Shortly

thereafter, BP intensified its negotiations with the lessors holding the remaining 70% interest; we

refer to the combined 70% interest holders as Lessors. 1

         BP and Lessors repeatedly negotiated the bonus provision terms—the central question in

this appeal. BP finally executed a second lease (Zaffirini lease) with Lessors, including Solis’s

family members, who are co-owners of the remaining 70% interest. When a dispute arose over

the amount of bonus BP was required to pay under the Zaffirini lease’s Favored-Nations 2 clause,

BP filed a declaratory-judgment action for the court to determine its obligations under the Zaffirini

lease. Lessors, Solis, and BP filed competing summary judgment motions. The trial court denied


1
  The trial court judgment and the parties’ briefs divide the Zaffirini lease lessors into two groups: the Zaffirini Lessors
and the Jones Lessors. The Zaffirini Lessors are Carlos M. Zaffirini Sr., Dolores Angelina de la Garza, Clarissa de la
Garza, Cristina Lorena Benavides, Servando Roberto Benavides, and Delia Hilda Benavides Martinez. Zaffirini is an
attorney who represented the Solis family members in an earlier dispute and was compensated by acquiring an
ownership interest in the mineral interest; he is also one of the attorneys representing the Zaffirini Lessors in this suit.
The Jones Lessors are Maria Eugenia Benavides Gutierrez and Las Tinajas Minerals, Ltd. The Jones Lessors are
represented by James K. Jones Jr., who is also the general partner in Las Tinajas Minerals, Ltd. For purposes of this
opinion, we will use the term Lessors to include all of the Zaffirini lease lessors: the Zaffirini Lessors and the Jones
Lessors.
2
  A favored-nations clause in an oil and gas contract is derived from a most-favored-nation clause: “A clause in an
agreement between two nations providing that each will treat the other as well as it treats any other nation that is given
preferential treatment.” See BLACK’S LAW DICTIONARY 1035 (8th ed. 2004); see also Lone Star Gas Co. v. Howard
Corp., 556 S.W.2d 372, 374 (Tex. Civ. App.—Texarkana 1977), writ ref’d n.r.e., 568 S.W.2d 129 (Tex. 1978) (per
curiam) (describing a favored-nations clause).



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BP’s summary judgment motions, granted Lessors’ summary judgment motions, and awarded

Lessors (and Diana Solis) a total of approximately $3.9 million in damages and attorney’s fees.

A. Solis Lease

           We first address the Solis lease because of its role in this dispute between BP and Lessors.

In the Solis lease, BP agreed to pay Solis $1,300 per acre as bonus. The Solis lease also contains

a Favored-Nations clause. The clause requires that while Solis’s lease is in effect, 3 if BP agrees

to more favorable bonus or royalty terms with any other co-owner in the same mineral estate, BP

must pay Solis according to the more favorable terms. This requirement to pay Solis additional

bonus is the predicate for BP’s dispute with Lessors—as described below.

B. Zaffirini Lease

           After BP executed the Solis lease, it continued negotiations with Lessors: Solis’s family

members, some others, and Carlos M. Zaffirini Sr. BP initially offered Lessors a $1,300 per acre

bonus. Lessors countered by asking for a $1,300 per acre bonus and a separate $700 per acre

consent-to-assignment fee that the parties would not treat as bonus. BP increased their offer to

$1,750 per acre and proposed specific bonus provision language. After more negotiations, Lessors

accepted BP’s payment offer and the bonus provision language, and the parties executed the

Zaffirini lease.

C. BP’s Payment to Solis

           Immediately after the parties executed the Zaffirini lease, BP sent Solis a payment for

approximately $1,026,000. According to BP, under the Solis lease Favored-Nations clause, BP

was obligated to pay Solis an additional $450 per acre bonus because it had granted Lessors a more

favorable bonus term than it had negotiated with her. After BP paid Solis, Lessors demanded that



3
    The Solis lease’s Favored-Nations clause applied to a grant of more favorable bonus prior to October 1, 2011.

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                                                                                      04-11-00550-CV


BP pay them another $450 per acre as bonus under the Zaffirini lease Favored-Nations clause

claiming they had been paid only $1,300 per acre bonus.

D. BP Sues Lessors

       BP rejected Lessors’ demand and sued Lessors. BP’s original petition sought declaratory

relief, costs of suit, and attorney’s fees; BP later added fraud and other claims against Lessors. In

its fifth amended petition, BP asked the court to declare that, inter alia, Lessors were not entitled

to any additional bonus, BP was entitled to a lease extension, and BP was entitled to costs and

attorney’s fees.

       BP argued in the alternative—in case the court found that only $1,300 per acre of its

payment to Lessors was bonus—that Solis was not entitled to an additional bonus payment, Solis

must return the overpayment, and Lessors are not entitled to any additional bonus.

       BP pled in the further alternative that the lease was ambiguous and extrinsic evidence

should be considered. BP sued Solis to recover the additional $450 per acre it paid her; BP claimed

money had and received, unjust enrichment, and unilateral mistake.

E. Lessors’ Counterclaims

       Lessors counterclaimed for breach of contract, specifically alleging that BP failed to pay

Lessors the additional bonus it owed them under the Zaffirini lease’s Favored-Nations clause.

They sued BP for damages based on BP’s alleged breach of “utmost good faith and fair dealing”

standard of conduct that was provided in a lease clause. Lessors also alleged that BP’s conduct

was fraudulent, malicious, and grossly negligent, and they were entitled to exemplary damages.




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F. Competing Motions for Summary Judgments

        After a discovery period, the parties filed competing motions for summary judgment. 4 The

Zaffirini Lessors and Jones Lessors filed separate motions that each included traditional and

no-evidence motions. In return, BP filed a single traditional motion against Lessors; it filed

separate no-evidence motions against the Zaffirini Lessors and the Jones Lessors. We address

each of the parties’ motions below.

        1. Zaffirini Lessors’ Traditional Motion

        The Zaffirini Lessors moved for traditional summary judgment on their counterclaim that

BP breached the lease and the Zaffirini Lessors were entitled to damages, additional damages

under lease paragraph 36.14, and attorney’s fees. The Zaffirini Lessors also moved for summary

judgment against BP’s claim that the Zaffirini Lessors had a duty to cooperate and BP’s claims of

fraud, fraudulent inducement, promissory estoppel, fraud by nondisclosure, and negligent

misrepresentation. Finally, the Zaffirini Lessors moved for traditional summary judgment against

BP’s declaratory-judgment claim that it was entitled to a lease extension.

        2. Zaffirini Lessors’ No-Evidence Motion

        In their no-evidence motion, the Zaffirini Lessors asserted that BP produced no evidence

of the Zaffirini Lessors’ breach of contract, breach of duty to cooperate, fraud, fraudulent

inducement, fraudulent concealment, fraud by nondisclosure, or negligent misrepresentation. The

Zaffirini Lessors also asserted that BP produced no evidence that it was entitled to damages based

on promissory estoppel or was entitled to a lease extension.




4
 Diana Solis moved for traditional summary judgment on BP’s claims against her, and the trial court granted her
motion. On appeal, BP does not challenge the portion of the judgment granting Solis’s motion.

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                                                                                    04-11-00550-CV


       3. Jones Lessors’ Joinder

       The Jones Lessors joined the Zaffirini Lessors’ traditional and no-evidence motions for

summary judgment.

       4. BP’s Traditional Motion

       In its traditional motion, BP moved for summary judgment against Lessors on its claims

for declaratory judgment, breach of contract, breach of the duty to cooperate, fraud, fraudulent

inducement, fraud by nondisclosure, promissory estoppel, and negligent misrepresentation, and

sought attorney’s fees and costs. BP also moved for summary judgment on its challenges to

Lessors’ claims that BP breached the lease, that BP breached its duty of utmost good faith and fair

dealing, and that BP was liable for exemplary damages.

       5. BP’s No-Evidence Motion (Jones Lessors)

       BP moved for no-evidence summary judgment against the Jones Lessors. It asserted they

provided no evidence on their claims against BP for breach of contract, breach of the duty of good

faith and fair dealing, fraud, gross negligence, and liability for additional damages under lease

section 36.14.

       6. BP’s No-Evidence Motion (Zaffirini Lessors)

       BP also moved for no-evidence summary judgment against the Zaffirini Lessors’ claims.

It asserted there was no evidence of BP’s alleged breach of contract, breach of the duty of good

faith and fair dealing, fraud, gross negligence, and liability for additional damages under lease

section 36.14. BP’s no-evidence motion also asserted that the Zaffirini Lessors presented no

evidence on their affirmative defenses of BP’s alleged non-reliance on their representations, BP’s

non-reliance disclaimer condition, BP’s alleged failure to use due diligence or its own actions

caused its injury, or contractual disclaimer. Finally, BP’s no-evidence motion contended that the



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Zaffirini Lessors presented no evidence on their affirmative defenses of estoppel, promissory

estoppel, quasi-estoppel, waiver, acquiescence, or release.

       7. Jones Lessors’ Summary Judgment Responses

       The Jones Lessors also sought to join and adopt as their own the Zaffirini Lessors’ June

27, 2011 response to BP’s traditional and no-evidence motions for summary judgment.

G. Summary Judgment

       After a June 30, 2011 hearing on the motions, the trial court granted the Zaffirini Lessors’

and Jones Lessors’ traditional and no-evidence motions and granted Solis’s traditional motion. It

declared that the disputed $450 per acre payment was not bonus and stated that “Solis is entitled

under equity and good conscience to retain the $1,026,000 that BP voluntarily paid [her].” It

awarded to the lessors the following amounts:

                                                Zaffirini Lessors     Jones Lessors
                Damages                           $2,062,179.00        $294,789.93
                Attorneys’ Fees                       $687,393.00      $110,546.22
                Additional Damages                    $687,393.00        $73,697.43
                (Lease paragraph 36.14)

The trial court awarded Diana Solis $160,000.00 for attorneys’ fees through trial, and additional

amounts in case of appeal or petition.

       The trial court denied BP’s traditional and no-evidence motions against the Zaffirini

Lessors, the Jones Lessors, and Diana Solis, ordered that BP take nothing on any of its claims

against any defendant, and taxed all costs of appeal against BP.

                                    STANDARDS OF REVIEW

       To prevail on a traditional motion for summary judgment, the movant must show “there is

no genuine issue as to any material fact and the [movant] is entitled to judgment as a matter of

law.” TEX. R. CIV. P. 166a(c); accord Nixon v. Mr. Prop. Mgmt. Co., 690 S.W.2d 546, 548 (Tex.

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                                                                                      04-11-00550-CV


1985). In our review of the trial court’s judgment, we examine “the evidence presented in the

motion and response in the light most favorable to the party against whom the summary judgment

was rendered, crediting evidence favorable to that party if reasonable jurors could, and

disregarding contrary evidence unless reasonable jurors could not.” Mann Frankfort Stein & Lipp

Advisors, Inc. v. Fielding, 289 S.W.3d 844, 848 (Tex. 2009); see City of Keller v. Wilson, 168

S.W.3d 802, 827 (Tex. 2005). “We indulge every reasonable inference and resolve any doubts in

the nonmovant’s favor.” Rhȏne-Poulenc, Inc. v. Steel, 997 S.W.2d 217, 223 (Tex. 1999); accord

Goodyear Tire & Rubber Co. v. Mayes, 236 S.W.3d 754, 756 (Tex. 2007) (per curiam). A

defendant moving for traditional summary judgment must conclusively disprove at least one

essential element of each of the plaintiff’s claims. Elliott–Williams Co. v. Diaz, 9 S.W.3d 801,

803 (Tex. 1999); Doe v. Boys Clubs of Greater Dall., Inc., 907 S.W.2d 472, 476–77 (Tex. 1995).

“When both sides move for summary judgment and the trial court grants one motion and denies

the other, the reviewing court should review both sides’ summary judgment evidence[,] . . .

determine all questions presented[,] . . . [and] render the judgment that the trial court should have

rendered.” FM Props. Operating Co. v. City of Austin, 22 S.W.3d 868, 872 (Tex. 2000) (citations

omitted); accord Mann Frankfort, 289 S.W.3d at 848.

       We review a no-evidence summary judgment using a legal sufficiency standard. King

Ranch, Inc. v. Chapman, 118 S.W.3d 742, 750–51 (Tex. 2003). “We review the evidence

presented by the motion and response in the light most favorable to the party against whom the

summary judgment was rendered, crediting evidence favorable to that party if reasonable jurors

could, and disregarding contrary evidence unless reasonable jurors could not.” Mack Trucks, Inc.

v. Tamez, 206 S.W.3d 572, 582 (Tex. 2006) (citing City of Keller, 168 S.W.3d at 827). A trial

court may not properly grant a no-evidence motion for summary judgment if the nonmovant’s

summary judgment evidence contains “more than a scintilla of probative evidence to raise a
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genuine issue of material fact.” Smith v. O’Donnell, 288 S.W.3d 417, 424 (Tex. 2009); see TEX.

R. CIV. P. 166a(i).

         Determining whether a contract is ambiguous and construing an unambiguous contract are

questions of law which we review de novo. See Willis v. Donnelly, 199 S.W.3d 262, 275 (Tex.

2006); Coker v. Coker, 650 S.W.2d 391, 394 (Tex. 1983).

                                            OPINION ORGANIZATION

         The procedural posture of the underlying case is cumbersome. 5                          It comprises BP’s

declaratory judgment action and additional claims, Lessors’ counterclaims, and competing

motions for traditional and no-evidence summary judgment. To ensure that we address each of

the causes of action, affirmative defenses, motions, and responses, we have organized the opinion

according to the parties’ live pleadings and motions.

         First, we address BP’s declaratory-judgment action. It is the principal question in this

appeal, and its resolution affects almost all of the parties’ other claims and affirmative defenses.

Second, we address BP’s other claims and Lessors’ corresponding responses. Third, we address

Lessors’ claims and BP’s responses. Finally, we address BP’s attorney disqualification issue.

                                     DECLARATORY-JUDGMENT ACTION

         In its traditional motion, BP moved for summary judgment on its declaratory-judgment

claim that the Zaffirini lease was unambiguous and required BP to pay Lessors $1,750 per acre as

bonus for Lessors’ execution of the lease. The trial court rejected BP’s argument and decided the

Zaffirini lease contains an implicit allocation of the $1,750 per acre payment into a $1,300 per acre



5
  The procedural posture includes, e.g., BP’s initial declaratory judgment action, its additional claims against Lessors,
the Zaffirini Lessors’ counterclaims, the Jones Lessors’ counterclaims, the Zaffirini Lessors’ traditional and no-
evidence motions, the Jones Lessors’ traditional and no-evidence motions, BP’s traditional motion against Lessors
and its separate no-evidence motions against the Zaffirini and Jones Lessors respectively, the Zaffirini Lessors’
response to BP’s no-evidence motion, the Jones Lessors’ motion to adopt the Zaffirini Lessors’ no-evidence response,
and BP’s responses to Lessors’ no evidence motions, and the trial court’s final judgment.

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bonus payment and a $450 per acre consent-to-assignment fee that is not bonus. We must

determine whether the trial court erred in its construction of the bonus provisions of the Zaffirini

lease.

A. Lease Provisions

         The parties agree the lease is unambiguous, but they dispute the meaning of the lease

agreement provisions. The principal lease provisions follow:

         10.1 . . . . Part of the consideration herein paid by Lessee to Lessor for this lease
         agreement includes One Thousand Seven Hundred-Fifty ($1,750.00) Dollars per
         net mineral acre as paid up bonus and as Lessor’s consent for Lessee to
         subsequently assign all or a portion of this leasehold to Lewis Petro Properties, Inc.
         and to related entities of Lewis Petro Properties, Inc. Furthermore, as to other future
         assignments to other parties or entities, Lessor shall not unreasonably withhold such
         consent.
         ....
         10.3 The net mineral acres information upon which Lessor’s bonus payment has
         been calculated has been provided by Lessor and title to same [has] not been
         confirmed by Lessee. Such net mineral acres have been used solely for the payment
         of bonus consideration. If Lessee’s title examination should later reveal a larger
         amount of net mineral acres for Lessor, then Lessee shall pay the difference on the
         basis of the above referenced One Thousand Three Hundred ($1,300.00) Dollars
         and Four Hundred [sic] ($450.00) Dollars per net mineral acre (for a total of One
         Thousand Seven Hundred Fifty ($1,750.00) Dollars) to Lessor. However should
         the title examination reveal less acres, then Lessor shall not be obligated to
         reimburse Lessee for the difference in net mineral acres.

B. BP’s Argument

         BP argues that the trial court erred when it segregated the $450 per acre “as separate

consideration” from the bonus payment because (1) the lease’s plain language specifies a $1,750

per acre bonus payment with no provision to exclude the $450 per acre from being treated as bonus,

and (2) the surrounding circumstances show that BP expressly rejected any allocation between

bonus and consent-to-assignment for its upfront payments. BP insists that the only interpretation

of the lease that incorporates the well-established meaning of bonus with the express terms of

sections 10.1 and 10.3 is that “the $450 per acre referenced in section 10.3 is the bonus amount


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paid for the specific assignment right, while the remaining $1,300 per acre represents the bonus

consideration paid for all of Lessors’ other concessions.”

C. Lessors’ Argument

       Lessors argue that the trial court properly interpreted the lease by characterizing the $450

per acre payment as a consent-to-assignment fee that is separate and distinct from a bonus payment

because (1) the plain language of the lease expressly calls for such a segregation, (2) “[t]he well-

established industry term of art ‘bonus’ does not bar [Lessors’] interpretation of the contract,” and

(3) surrounding circumstances are inapposite because the lease is unambiguous.

D. Lease Bonus Provisions

       To determine whether the lease is ambiguous and to find its proper construction, we

examine the plain language of the lease. We also consider the lease viewed in light of the

circumstances surrounding the lease negotiations.

       1. Plain Language Construction Principles

        “If [a] written instrument is so worded that it can be given a certain or definite legal

meaning or interpretation, then it is not ambiguous and the court will construe the contract as a

matter of law.” Coker, 650 S.W.2d at 393; see Heritage Res., Inc. v. NationsBank, 939 S.W.2d

118, 121 (Tex. 1996). “In construing an unambiguous oil and gas lease our task is to ascertain the

parties’ intentions as expressed in the lease.” Heritage Res., Inc., 939 S.W.2d at 121; accord

Anglo-Dutch Petrol. Int’l, Inc. v. Greenberg Peden, P.C., 352 S.W.3d 445, 451 (Tex. 2011); see

Griffith v. Taylor, 156 Tex. 1, 5, 291 S.W.2d 673, 675 (1956). We examine the plain language of

the entire lease agreement, consider the interaction between each of its provisions, and seek “to

harmonize and give effect to all the [lease] provisions.” See Valence Operating Co. v. Dorsett,

164 S.W.3d 656, 662 (Tex. 2005); accord Heritage Res., 939 S.W.2d at 121. If a lease term has a

generally accepted meaning in the oil and gas industry, we use its generally accepted meaning.
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See Heritage Res., 939 S.W.2d at 121; Brannon v. Gulf States Energy Corp., 562 S.W.2d 219,

222–23 (Tex. 1977); Griffith, 156 Tex. at 6, 291 S.W.2d at 676; see also Lamar Homes, Inc. v.

Mid-Continent Cas. Co., 242 S.W.3d 1, 8 (Tex. 2007) (examining a term’s meaning in an insurance

policy and opining that “[t]erms that are not defined in a [contract] are given their generally

accepted or commonly understood meaning”).

         In Texas oil and gas leases, the generally accepted meaning of bonus 6 is “‘the cash

consideration paid or agreed to be paid for the execution of the lease.’” See Griffith, 156 Tex. at

6, 291 S.W.2d at 676 (quoting Tex. Co. v. Fontenot, 8 So. 2d 689, 693 (La. 1942)) (reciting with

approval the meaning of bonus given by the Supreme Court of Louisiana); In re Estate of

Slaughter, 305 S.W.3d 804, 811 (Tex. App.—Texarkana 2010, no pet.) (“‘Bonus’ is defined as

‘[a] payment that is made in addition to royalties and rent as an incentive for a lessor to sign an

oil-and-gas lease.’” (quoting BLACK’S LAW DICTIONARY 206 (9th ed. 2009))); see also Schlittler

v. Smith, 128 Tex. 628, 630, 101 S.W.2d 543, 544 (1937) (“The words ‘royalty,’ ‘bonus,’ and

‘rentals’ have a well-understood meaning in the oil and gas business.”).

         2. Plain Language Analysis

         To determine whether the plain language of the Zaffirini lease is ambiguous and to construe

its meaning, we review the lease agreement. See Anglo-Dutch Petrol., 352 S.W.3d at 449–50;

accord Hous. Exploration Co. v. Wellington Underwriting Agencies, Ltd., 352 S.W.3d 462, 469

(Tex. 2011); Valence Operating Co., 164 S.W.3d at 662.




6
  The right to receive bonus payments is one of the five interests in a mineral estate. Altman v. Blake, 712 S.W.2d
117, 118 (Tex. 1986) (“There are five essential attributes of a severed mineral estate: (1) the right to develop (the right
of ingress and egress), (2) the right to lease (the executive right), (3) the right to receive bonus payments, (4) the right
to receive delay rentals, (5) the right to receive royalty payments.”); accord French v. Chevron U.S.A. Inc., 896 S.W.2d
795, 797 (Tex. 1995).

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               a. Relevant Lease Sections

       In its unnumbered “Definitions” section, the Zaffirini lease defines terms such as

“production in paying and/or commercial quantities,” “drilling operations,” and “shut-in”; it does

not define the term “bonus.” Section 10.1 states that “[p]art of the consideration herein paid by

[BP] to [Lessors] for this lease agreement includes One Thousand Seven Hundred-Fifty

($1,750.00) Dollars per net mineral acre as paid up bonus and as [Lessors’] consent for [BP] to

subsequently assign all or a portion of this leasehold” to a third party. (Emphasis added). Section

10.3 specifies the procedure to apply if the number of actual net mineral acres differs from the

Lessors’ specified amount. Under section 10.3, if the number of net mineral acres proves to be

more than originally calculated, BP must “pay the difference on the basis of the above referenced

One Thousand Three Hundred ($1,300.00) Dollars and Four Hundred [Fifty] ($450.00) Dollars

per net mineral acre (for a total of One Thousand Seven Hundred Fifty ($1,750.0) Dollars) to

Lessor.”

       Section 19, which addresses the place of payment, identifies the types of lease payments:

“bonus, royalties, shut-in royalties, minimum income payments, [and] force majeure payments.”

Section 19 also references “other compensation and/or damages which may be due and payable to

Lessor,” but only does so after enumerating the types of lease payments. Section 36.12, the

“Favored[-]Nations” clause, addresses BP’s duties to Lessors regarding an equivalent bonus and

royalty fraction, but the section does not separately mention any consent-to-assignment fee or

otherwise distinguish any such fee as not being included in bonus.

               b. Construction of the Lease

       In this case, the parties refer to the others’ negotiators as having many years’ experience in

negotiating oil and gas leases. We assume the parties understood the generally accepted meaning

of bonus when they negotiated the lease. See Sun Oil Co. (Del.) v. Madeley, 626 S.W.2d 726, 732
                                               - 13 -
                                                                                    04-11-00550-CV


(Tex. 1981); Zurich Am. Ins. Co. v. Hunt Petrol. (AEC), Inc., 157 S.W.3d 462, 465 (Tex. App.—

Houston [14th Dist.] 2004, no pet.). The lease does not define the term bonus. Therefore, in

deciding the questions of ambiguity and interpretation, we will use the generally accepted meaning

of the term bonus. See Lamar Homes, Inc., 242 S.W.3d at 8 (“Terms that are not defined in a

policy are given their generally accepted or commonly understood meaning.”); Heritage Res., 939

S.W.2d at 121; Griffith, 156 Tex. at 6, 291 S.W.2d at 676; Pratt-Shaw v. Pilgrim’s Pride Corp.,

122 S.W.3d 825, 833 (Tex. App.—Dallas 2003, pet. denied) (“Where terms are not defined in

agreements, we will use the plain, ordinary and generally accepted meaning attributed to the term

or word.”).

       The plain language of section 10.1 requires BP to pay $1,750 per acre “as paid up bonus

and as [Lessors’] consent for [BP] to subsequently assign” their rights in the leasehold. No part

of the lease expressly requires a $1,300 per acre bonus and a $450 per acre consent-to-assignment

fee. In fact, the only place in the lease that subdivides the $1,750 per acre bonus into $1,300 per

acre and $450 per acre components is section 10.3. However, section 10.3 does not define bonus,

it merely provides the procedure to follow should the initial amount of net mineral acres be in

error. Further, no part of the lease expressly excludes the $450 per acre from being considered

bonus. We can readily harmonize and give effect to all the lease sections by determining that the

$450 per acre is the consideration to execute a lease with a consent-to-assignment provision and

the $1,300 per acre was the consideration to execute a lease with the remaining lease provisions.

See Coker, 650 S.W.2d at 393.

       Lessors assert that the plain language of the lease is unambiguous and can be interpreted

only to mean that the $450 per acre payment is a separate consent-to-assignment fee that is not

considered bonus. Referencing spud fees, seismic fees, and assignment fees, Lessors insist that



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the right to contract allows them to negotiate for any fee to which the parties mutually agree, and

that such fees are not included in bonus.

       We decline to adopt Lessors’ interpretation of the lease for at least two reasons. First, we

have construed the lease as a matter of law, and the plain language of the lease expressly excludes

their interpretation. See Coker, 650 S.W.2d at 393. Second, to adopt Lessors’ interpretation would

require us to reject the generally accepted meaning of bonus: “the cash consideration paid or agreed

to be paid for the execution of the lease.” See Griffith, 156 Tex. at 6, 291 S.W.2d at 676 (quoting

Tex. Co., 8 So. 2d at 693) (internal quotation marks omitted); In re Estate of Slaughter, 305 S.W.3d

at 811 (defining bonus as “[a] payment that is made in addition to royalties and rent as an incentive

for a lessor to sign an oil-and-gas lease” (quoting BLACK’S LAW DICTIONARY 206 (9th ed. 2009))

(internal quotation marks omitted)). Such a redefinition would, in this case, defeat the rights of

another interest holder; this we cannot do. See Griffith, 156 Tex. at 7, 291 S.W.2d at 676–77

(refusing to construe a lease provision in a manner that would change the established oil and gas

industry-specific meaning of royalty and thereby “defeat the rights” of another with an interest in

the same mineral estate).

       Thus, we conclude that the Zaffirini lease is unambiguous and the parties’ intent as

expressed in the lease is that the bonus is $1,750 per acre. See Anglo-Dutch Petrol., 352 S.W.3d

at 451; Heritage Res., 939 S.W.2d at 121. This interpretation is consistent with the commonly

understood meaning of bonus, harmonizes the sections, and does not render any section

meaningless. See Valence Operating Co., 164 S.W.3d at 662; Heritage Res., 939 S.W.2d at 121;

Griffith, 156 Tex. at 5, 291 S.W.2d at 675.

       In addition to the plain language analysis, we also look to the circumstances surrounding

the lease negotiations.



                                                - 15 -
                                                                                       04-11-00550-CV


       3. Surrounding Circumstances Principles

       BP argues that we must look to the surrounding circumstances—the lease negotiations—

to construe the lease. We agree, and we find further support in the surrounding circumstances for

our determination that the lease is unambiguous and calls for an unallocated $1,750 per acre bonus.

       “Whether a contract is ambiguous is a question of law that must be decided by examining

the contract as a whole in light of the circumstances present when the contract was entered.”

Anglo-Dutch Petrol., 352 S.W.3d at 449–50 (quoting David J. Sacks, P.C. v. Haden, 266 S.W.3d

447, 451 (Tex. 2008) (per curiam)) (internal quotation marks omitted); accord Hous. Exploration

Co., 352 S.W.3d at 469. We construe a contract or lease “to give effect to the parties’ intent

expressed in the text as understood in light of the facts and circumstances surrounding the

contract’s execution, subject to the parol evidence rule.” Hous. Exploration Co., 352 S.W.3d at

469; accord Madeley, 626 S.W.2d at 731.            We consider surrounding circumstances as a

construction aid to determine the parties’ intentions as expressed in the plain language of the lease.

See Hous. Exploration Co., 352 S.W.3d at 469–72 (allowing courts to consider the parties’ act of

deleting contract language in discerning the parties’ intentions in the contract language).

       Surrounding circumstances include contract negotiations, and they “may have some

relevance in ascertaining the dominant purpose and intent of the parties embodied in the contract

interpreted as a whole.” Id. at 469–70. “[N]egotiations prior to or contemporaneous with the

adoption of a writing are admissible in evidence to establish . . . (c) the meaning of the writing,

whether or not integrated.” Id. at 470 n.28 (second alteration in original) (quoting RESTATEMENT

(SECOND)   OF   CONTRACTS § 214 (1981)) (internal quotation marks omitted).            See generally

RESTATEMENT (SECOND)       OF   CONTRACTS § 214 cmt. b, illus. 1–4 (1981) (providing examples

where negotiations informed the meaning of the contract terms). The parol evidence rule “does



                                                - 16 -
                                                                                       04-11-00550-CV


not prohibit consideration of surrounding circumstances that inform, rather than vary from or

contradict, the contract text.” Hous. Exploration Co., 352 S.W.3d at 469.

       4. Negotiations Surrounding the Zaffirini Lease

       We now turn to the circumstances surrounding the Zaffirini lease negotiations. In the initial

negotiations, BP offered Lessors $1,300 per acre to execute the lease. Lessors rejected BP’s offer

and proposed a $2,000 per acre payment. When BP asked to subsequently assign all or part of the

leasehold to a third party of its choice, Lessors proposed a $1,300 per acre bonus and a separate

$700 per acre consent-to-assignment fee.

       BP asserts that Zaffirini wanted to maintain the bonus at $1,300 per acre and create the

separate consent-to-assignment fee so that Solis would not benefit from an increased bonus amount

in the Zaffirini lease. BP insists that Zaffirini sought this segregation because of an ongoing history

of bitter, internecine disputes between Solis and Lessors. BP rejected Lessors’ proposal but

offered $1,750 per acre as bonus. Carlos Zaffirini, responding for Lessors, stated “I understood

the Bonus was $1300 and $450 was for the Lessor’s consent to assign. Am I mistaken?” BP

reiterated that the bonus would be $1,750 per acre and again rejected the split that Lessors

proposed. Nevertheless, Lessors sent BP a draft lease which provided for $1,300 per acre “as paid

up bonus” and $450 per acre “as Lessor’s consent for Lessee to subsequently assign all or a portion

of this leasehold to” a third party of BP’s choice. BP again responded that it “wants $1,750 bonus

not $1,300 bonus and $450 assign fee.”

       Undeterred, Lessors sent BP a revised draft which still proposed a $1,300 per acre bonus

and a separate $450 per acre consent-to-assignment fee. This time, BP specifically instructed

Lessors to revise section 10.1 to read “$1,750 per net mineral acre as paid up bonus and as Lessor’s

consent for Lessee to subsequently assign.” Lessors sent BP yet another draft that retained the

$1,300 per acre bonus and separate $450 consent-to-assignment fee. BP again insisted on bonus
                                                 - 17 -
                                                                                       04-11-00550-CV


of $1,750 per acre with no separate consent-to-assignment fee, and Lessors deleted the following

language that they had repeatedly proposed:

       Part of the consideration herein paid by Lessee to Lessor for this lease agreement
       includes One Thousand Three Hundred ($1,[3]00.00) Dollars per net mineral acre
       as paid up bonus and Four Hundred [Fifty] ($450.00) Dollars per net mineral acre
       as Lessor’s consent for Lessee to subsequently assign all or a portion of this
       leasehold to Lewis Petro Properties, Inc. and to related entities of Lewis Petro
       Properties, Inc.

In its place, Lessors inserted BP’s language:

       Part of the consideration herein paid by Lessee to Lessor for this lease agreement
       includes One Thousand Seven Hundred-Fifty ($1,750.00) Dollars per net mineral
       acre as paid up bonus and as Lessor’s consent for Lessee to subsequently assign all
       or a portion of this leasehold to Lewis Petro Properties, Inc. and to related entities
       of Lewis Petro Properties, Inc.

BP sent Lessors a Mineral Ownership Report that applied a bonus of $1,750 per acre, and the

parties executed the lease. Immediately thereafter, BP paid Solis an additional $450 per acre under

the Solis lease’s Favored-Nations clause.

       5. Lease Negotiations Support Unallocated Bonus

       In this case, we consider the parties’ actions in their lease negotiations for those actions’

“relevance in ascertaining the dominant purpose and intent of the parties embodied in the [lease]

interpreted as a whole.” See Hous. Exploration, 352 S.W.3d at 469–70 (quoting Tanner Dev. Co.

v. Ferguson, 561 S.W.2d 777, 781 (Tex. 1977)) (internal quotation marks omitted).

       The record shows that throughout the lease negotiations, the parties’ respective positions

on the bonus and consent-to-assignment questions were consistent and mutually exclusive: Lessors

wanted an allocation between a bonus payment and a separate consent-to-assignment fee that the

parties would not treat as bonus; BP wanted a single bonus payment as cash consideration to

execute the lease with all of its provisions including the consent-to-assignment provision. Lessors

repeatedly offered lease drafts that included the split allocation, and BP consistently rejected those


                                                - 18 -
                                                                                     04-11-00550-CV


drafts.    BP consistently and repeatedly insisted on an all-inclusive bonus and rejected any

allocation for a separate consent-to-assignment fee.

          The facts and circumstances of the lease negotiations are consistent with the lease terms

that specify an unallocated bonus of $1,750 per acre. See Anglo-Dutch Petrol., 352 S.W.3d at

449–50; accord Hous. Exploration, 352 S.W.3d at 469. The negotiations inform and confirm the

lease terms; they do not vary from or contradict the lease provisions. See Hous. Exploration, 352

S.W.3d at 469.

          For these reasons, we conclude that the plain language of the lease and the negotiations

surrounding the execution of the lease show that the lease is unambiguous and it requires an

unallocated $1,750 per acre bonus.

E. BP’s Attorney’s Fees

          As part of its declaratory-judgment action, BP also moved for costs and reasonable and

necessary attorney’s fees. See TEX. CIV. PRAC. & REM. CODE ANN. § 37.009 (West 2008); Ridge

Oil Co., Inc. v. Guinn Invs., Inc., 148 S.W.3d 143, 161 (Tex. 2004); see also Edwards Aquifer

Auth. v. Chem. Lime, Ltd., 291 S.W.3d 392, 405 (Tex. 2009). The trial court denied BP’s request

for costs and attorney’s fees, but it erred in construing the lease.

          Applying the proper lease construction, we conclude that BP satisfied its bonus payment

obligation to Lessors and BP is the prevailing party on its declaratory-judgment claim. See EOG

Res., Inc. v. Killam Oil Co.., 239 S.W.3d 293, 304 (Tex. App.—San Antonio 2007, pet. denied).;

State Farm Lloyds v. C.M.W., 53 S.W.3d 877, 894 (Tex. App.—Dallas 2001, pet. denied) (“It is

appropriate to award attorneys’ fees to the prevailing party in a declaratory-judgment action if the

trial court believes such fees to be reasonable and necessary and the award of such fees to be

equitable and just.”).



                                                 - 19 -
                                                                                                  04-11-00550-CV


F. Declaratory-Judgment Action Disposition

        Having considered the plain language of the entire lease and the lease in light of the

surrounding circumstances, we conclude that the lease is unambiguous and expresses the parties’

intent that the cash consideration to execute the lease is an unallocated $1,750 per acre, and such

cash consideration is bonus as a matter of law. See Hous. Exploration Co., 352 S.W.3d at 469–

70; Heritage Res., 939 S.W.2d at 121; Coker, 650 S.W.2d at 393. The undisputed summary

judgment evidence conclusively proves that BP paid Lessors $1,750 per acre. Thus, BP (1) did

not breach the lease agreement by failing to pay Lessors an additional $450 per acre, (2) does not

owe Lessors any additional bonus payment, (3) is the prevailing party in the declaratory-judgment

action, and (4) is entitled to a reconsideration on remand of its request for attorney’s fees under its

declaratory-judgment action. The trial court erred in determining otherwise. Accordingly, we

sustain BP’s first issue; BP’s second issue is moot. 7

                              BP’S OTHER CLAIMS, LESSORS’ RESPONSES

        Having determined that the lease required BP to pay $1,750 per acre as bonus, and that the

entire amount is bonus, we turn to BP’s other claims and Lessors’ corresponding responses.

        In its fifth amended petition, BP claimed that Lessors breached the lease agreement;

breached their implied duty to cooperate; committed common-law fraud, fraudulent inducement,

and fraud by nondisclosure; and engaged in negligent misrepresentation. BP moved for traditional

summary judgment on its claims; Lessors moved for no-evidence summary judgment on BP’s

claims. The trial court granted Lessors’ motions, and denied BP’s motion. On appeal, BP

complains that the trial court erred in granting summary judgment for Lessors and against BP on



7
 The issue numbers in BP’s opening brief “Issues Presented” and “Argument” sections are inconsistent. For purposes
of disposing of each of BP’s appellate issues, we refer to the issues as they are numbered in the “Issues Presented”
section of the opening brief. See TEX. R. APP. P. 38.1(f), (i).

                                                       - 20 -
                                                                                                     04-11-00550-CV


its claims against Lessors for fraud, fraudulent inducement, fraud by nondisclosure, and

promissory estoppel. 8 We address each of its claims in turn.

A. Common-Law Fraud

         BP claimed Lessors made numerous misrepresentations to it during the lease negotiations

and thereby committed common-law fraud. In their no-evidence motions, Lessors challenged each

element of common-law fraud and moved for summary judgment. BP asserted that the summary

judgment evidence conclusively proved each element of fraud, it was entitled to judgment as a

matter of law, and moved for traditional summary judgment. On BP’s common-law fraud claim,

the trial court granted Lessors’ no-evidence motion and denied BP’s traditional motion.

         1. Applicable Law

For a common-law fraud claim, a party must prove the following:

         (1) that a material representation was made;
         (2) that it was false;
         (3) that the speaker knew it was false when made or that the speaker made it
         recklessly without any knowledge of the truth and as a positive assertion;
         (4) that he made it with the intention that it be acted upon by the other party;
         (5) that the party acted in [justifiable] reliance upon it; and
         (6) damage.

T.O. Stanley Boot Co. v. Bank of El Paso, 847 S.W.2d 218, 222 (Tex. 1992); accord Ernst &

Young, L.L.P. v. Pac. Mut. Life Ins. Co., 51 S.W.3d 573, 577 (Tex. 2001). A plaintiff-movant is

not entitled to a traditional summary judgment on a common-law fraud claim if the summary

judgment evidence shows there is a genuine issue of material fact as to any essential element of


8
  BP does not complain that the trial court erred when it denied BP’s claims that Lessors breached the lease agreement,
that Lessors breached their duty to cooperate, or that BP was entitled to a Kothmann lease extension. See Kothmann
v. Boley, 158 Tex. 56, 60–61, 308 S.W.2d 1, 4 (1957) (extending the term of an oil and gas lease based on the lessor’s
misconduct). Similarly, BP does not complain that the trial court granted Lessors’ respective traditional and
no-evidence motions on their challenges to BP’s claims of fraudulent concealment and negligent misrepresentation.
Further, BP did not complain that the trial court denied its no-evidence motion against Solis. Because BP did not raise
or brief these questions, we will not disturb the specific portions of the trial court’s judgment that dispose of these
claims. See Mack Trucks, Inc. v. Tamez, 206 S.W.3d 572, 577 (Tex. 2006) (“Except for fundamental error, appellate
courts are not authorized to consider issues not properly raised by the parties.”).

                                                        - 21 -
                                                                                     04-11-00550-CV


the claim. See TEX. R. CIV. P. 166a(c); Elliott-Williams Co. v. Diaz, 9 S.W.3d 801, 803 (Tex.

1999) (requiring a defendant-movant to conclusively disprove an essential element to be entitled

to traditional summary judgment); Nixon v. Mr. Prop. Mgmt. Co., 690 S.W.2d 546, 548 (Tex.

1985). Likewise, a defendant-movant is not entitled to a no-evidence summary judgment if there

is more than a scintilla of summary judgment evidence on each essential element of the plaintiff’s

fraud claim. See TEX. R. CIV. P. 166a(i); King Ranch, Inc. v. Chapman, 118 S.W.3d 742, 750–51

(Tex. 2003); In re Guardianship of Patlan, 350 S.W.3d 189, 198 (Tex. App.—San Antonio 2011,

no pet.); Moritz v. Bueche, 980 S.W.2d 849, 853, 857 (Tex. App.—San Antonio 1998, no pet.).

       2. BP’s Traditional Motion

       As movant, BP was not entitled to traditional summary judgment on its common-law fraud

claim if the summary judgment evidence, when viewed in the light most favorable to Lessors,

showed there was at least one genuine issue of material fact on any of the essential elements of

common-law fraud. See Ernst & Young, 51 S.W.3d at 577; T.O. Stanley Boot Co., 847 S.W.2d at

222. In its motion, BP asserted that Zaffirini knowingly made false material representations that

BP justifiably relied on to BP’s detriment.      As summary judgment evidence, BP provided

deposition excerpts from Pat Taylor—BP’s land man and lease negotiator. BP asserted that

Zaffirini told Taylor that under the Zaffirini lease terms, BP could pay Solis an additional $450

per acre “without further obligation to any parties.” Taylor also testified that BP relied on

Zaffirini’s representations and that Zaffirini’s misrepresentations had denied BP “the benefit of

the bargain” for which it had negotiated. BP also provided an affidavit from one of its petroleum

engineers that BP had not been able to develop the leasehold because of Lessors’ lawsuit, and BP

was thus prohibited from realizing a return on its investment. BP insists that it justifiably relied

on Zaffirini’s false representations, entered into the contract, Lessors sued, and BP suffered

damage.
                                               - 22 -
                                                                                     04-11-00550-CV


       In their traditional motions for summary judgment, Lessors challenged BP’s claim that BP

justifiably relied on Lessors’ representations. Lessors’ summary judgment evidence included

deposition excerpts from Taylor’s testimony in which—according to Lessors—Taylor admits that

BP relied on its own lawyers and did not rely on Lessors’ statements. Lessors contend that Taylor’s

deposition testimony, BP’s nonreliance disclaimer condition, and the amendment clause in the

Zaffirini lease all show that BP either could not or did not justifiably rely on Zaffirini’s

representations.

       Viewing the evidence in the light most favorable to Lessors, we conclude that there are

genuine issues of material fact as to the element of justifiable reliance in BP’s common-law fraud

claim. See TEX. R. CIV. P. 166a(c); Elliott-Williams Co., 9 S.W.3d at 803; Nixon, 690 S.W.2d at

548. Therefore, BP is not entitled to traditional summary judgment on its common-law fraud

claim. See Ernst & Young, 51 S.W.3d at 577; T.O. Stanley Boot Co., 847 S.W.2d at 222.

       3. Lessors’ No-Evidence Motions

       As no-evidence movants, Lessors’ motions had to specify the essential elements of BP’s

common-law fraud claim for which there is no evidence. See TEX. R. CIV. P. 166a(i); Callaghan

Ranch, Ltd. v. Killam, 53 S.W.3d 1, 3 (Tex. App.—San Antonio 2000, pet. denied). Lessors are

not entitled to no-evidence summary judgment on BP’s common-law fraud claim if there is more

than a scintilla of summary judgment evidence on the challenged elements of BP’s claim. See

TEX. R. CIV. P. 166a(i); Ford Motor Co. v. Ridgway, 135 S.W.3d 598, 600 (Tex. 2004); Moritz,

980 S.W.2d at 853, 857. In their no-evidence motions, Lessors challenged BP’s evidence only on

the elements of reliance and damage.

       In its response, BP provided Pat Taylor’s affidavit in which Taylor testified that BP relied

on Zaffirini’s representations and that Zaffirini’s misrepresentations had denied BP “the benefit of

the bargain” for which it had negotiated. BP also provided an affidavit from one of its petroleum
                                               - 23 -
                                                                                    04-11-00550-CV


engineers that BP had not been able to develop the leasehold because of Lessors’ lawsuit, and BP

was thus prohibited from realizing a return on its investment.

       Viewing the evidence in the light most favorable to BP, we conclude that BP produced

more than a scintilla of evidence on the challenged elements of justifiable reliance and damage,

and Lessors are not entitled to no-evidence summary judgment on BP’s common-law fraud claim.

See Ridgway, 135 S.W.3d at 600; Moritz, 980 S.W.2d at 853.

       4. Lessors’ Traditional Motions

       In their traditional motions for summary judgment against BP’s common-law fraud claim,

Lessors challenged the reliance and damage elements. To prevail on their traditional motions,

Lessors had to present summary-judgment proof that there are no genuine issues of material fact

on either element and Lessors are entitled to judgment as a matter of law. See TEX. R. CIV. P.

166a(c); Nixon, 690 S.W.2d at 548. Lessors could do so by conclusively disproving either reliance

or damage—each an essential element of BP’s fraud claim. See Elliott-Williams Co., 9 S.W.3d at

803; Dove v. Graham, 358 S.W.3d 681, 684 (Tex. App.—San Antonio 2011, pet. denied).

However, as previously noted, BP’s summary judgment evidence included deposition testimony

that BP relied on Lessors’ representations and had been damaged thereby. We conclude that BP’s

summary judgment evidence raises genuine issues of material fact on the elements of reliance and

damage. Therefore, Lessors did not conclusively disprove an essential element of BP’s fraud claim

and are not entitled to traditional summary judgment. See TEX. R. CIV. P. 166a(c); Elliott-Williams

Co., 9 S.W.3d at 803; Nixon, 690 S.W.2d at 548.

B. Fraudulent Inducement

       1. Applicable Law

       Fraudulent inducement is a species of fraud; it comprises each element of common-law

fraud, and each element must “relate to an agreement between the parties.” Haase v. Glazner, 62
                                               - 24 -
                                                                                     04-11-00550-CV


S.W.3d 795, 798–99 (Tex. 2001); accord Holloway v. Dekkers, 380 S.W.3d 315, 325 (Tex. App.—

Dallas 2012, no pet.). Fraudulent inducement also requires an additional element: “the existence

of a contract.” Haase, 62 S.W.3d at 798–99; accord Holloway, 380 S.W.3d at 325.

       2. BP’s Traditional Motion

       BP moved for traditional summary judgment on its fraudulent-inducement claim against

Lessors. However, Lessors again cited Pat Taylor’s deposition testimony, BP’s nonreliance

disclaimer condition, and the amendment clause in the Zaffirini lease to show that BP could not

justifiably rely on Zaffirini’s representations. Lessors’ summary judgment evidence raised a

genuine issue of material fact on the essential element of reliance. Because justifiable reliance is

an essential element of fraud in the inducement, and Lessors raised a genuine issue of material fact

on that element, BP is not entitled to traditional summary judgment on its fraud-in-the-inducement

claim. See TEX. R. CIV. P. 166a(c); Elliott-Williams Co., 9 S.W.3d at 803; Nixon, 690 S.W.2d at

548.

       3. Lessors’ No-Evidence Motions

       Lessors’ no-evidence motions challenged only the reliance and damage elements of BP’s

fraud claims, including its fraud in the inducement claim. BP responded with Pat Taylor’s

deposition testimony that BP relied on Zaffirini’s representations and its engineer’s deposition

testimony that BP had not been able to develop the leasehold and had suffered damage. As we

have previously concluded, BP produced more than a scintilla of evidence on the challenged fraud

elements of reliance and damage. Further, BP’s evidence of alleged fraud in the inducement is

“related to an agreement between the parties” and the evidence conclusively proves the existence

of a contract. See Haase, 62 S.W.3d at 798–99; Holloway, 380 S.W.3d at 325. Therefore, Lessors

are not entitled to summary judgment on their no-evidence motion against BP’s fraud in the



                                               - 25 -
                                                                                      04-11-00550-CV


inducement claim. See TEX. R. CIV. P. 166a(i); Ridgway, 135 S.W.3d at 600; Moritz, 980 S.W.2d

at 853.

          4. Lessors’ Traditional Motions

          Lessors’ traditional motions challenged the reliance and damage elements of BP’s fraud in

the inducement claim. However, as we have noted above, BP’s affidavits raise genuine issues of

material fact on the elements of reliance and damage. Therefore, Lessors did not conclusively

disprove an essential element of BP’s fraud in the inducement claim and are not entitled to

traditional summary judgment. See TEX. R. CIV. P. 166a(c); Elliott-Williams Co., 9 S.W.3d at 803;

Nixon, 690 S.W.2d at 548.

C. Fraud by Nondisclosure

          1. Applicable Law

          Fraud by nondisclosure is another species of fraud. See Schlumberger Tech. Corp. v.

Swanson, 959 S.W.2d 171, 181 (Tex. 1997). Like common-law fraud, fraud by nondisclosure

includes the elements of justifiable reliance and damage. See Horizon Shipbuilding, Inc. v. BLyn

II Holding, LLC, 324 S.W.3d 840, 850 (Tex. App.—Houston [14th Dist.] 2010, no pet.); see also

Bradford v. Vento, 48 S.W.3d 749, 754–55 (Tex. 2001).

          2. BP’s Traditional Motion

          BP moved for summary judgment on its claim against Lessors for fraud by nondisclosure.

However, Lessors cited Pat Taylor’s deposition testimony, BP’s nonreliance disclaimer condition,

and the amendment clause in the Zaffirini lease to show that BP could not justifiably rely on

Zaffirini’s representations. Lessors’ summary judgment evidence raised a genuine issue of

material fact on the essential element of reliance. Because justifiable reliance is also an essential

element of fraud by nondisclosure, and Lessors raised a genuine issue of material fact on that



                                                - 26 -
                                                                                     04-11-00550-CV


element, BP is not entitled to traditional summary judgment on its fraud by nondisclosure claim.

See TEX. R. CIV. P. 166a(c); Nixon, 690 S.W.2d at 548.

          3. Lessors’ No-Evidence Motions

          Lessors’ no-evidence motions challenged only the reliance and damage elements of BP’s

fraud claims, including its fraud by nondisclosure claim. BP responded with Pat Taylor’s

deposition testimony that BP relied on Zaffirini’s representations and its engineer’s deposition

testimony that BP had not been able to develop the leasehold and had suffered damage. Thus, BP

produced more than a scintilla of evidence on the challenged fraud elements of reliance and

damage. Therefore, Lessors are not entitled to summary judgment on their no-evidence motion

against BP’s fraud by nondisclosure inducement claim. See TEX. R. CIV. P. 166a(i); Ridgway, 135

S.W.3d at 600; Moritz, 980 S.W.2d at 853.

          4. Lessors’ Traditional Motions

          Lessors’ traditional motions challenged the reliance and damage elements of BP’s fraud by

nondisclosure claim. Again, as we have noted above, BP’s affidavits raise genuine issues of

material fact on the elements of reliance and damage. Lessors did not conclusively disprove an

essential element of BP’s fraud by nondisclosure claim and are not entitled to traditional summary

judgment. See TEX. R. CIV. P. 166a(c); Elliott-Williams Co., 9 S.W.3d at 803; Nixon, 690 S.W.2d

at 548.

D. Promissory Estoppel

          BP contends that during lease negotiations on December 18, 2009, Zaffirini promised BP

that Lessors would agree to a $1,750 per acre bonus with no allocation between bonus and

consent-to-assignment fee. According to BP, after Zaffirini promised to accept BP’s bonus terms,

the parties incorporated BP’s proposed language into the lease, and the parties executed the lease.

BP asserts that it “entered into the contract based on Zaffirini’s promise to abandon his allocation
                                                - 27 -
                                                                                    04-11-00550-CV


provision that called for a $1,300 [per acre] bonus with a $450 [per acre] ‘assignment fee’ and

rather accept a $1,750 [per acre] bonus as BP had proposed all along.” BP raised a promissory-

estoppel claim against Lessors, and moved for traditional summary judgment on its claim.

       1. Applicable Law

       “The requisites of promissory estoppel are: (1) a promise, (2) foreseeability of reliance

thereon by the promisor, and (3) substantial reliance by the promisee to his detriment.” English v.

Fischer, 660 S.W.2d 521, 524 (Tex. 1983); accord Richter v. Wagner Oil Co., 90 S.W.3d 890, 899

(Tex. App.—San Antonio 2002, no pet.). However, “[p]romissory estoppel is not applicable to a

promise covered by a valid contract between the parties.” Richter, 90 S.W.3d at 899; accord

Doctors Hosp. 1997, L.P. v. Sambuca Hous., L.P., 154 S.W.3d 634, 636 (Tex. App.—Houston

[14th Dist.] 2004, pet. abated). “If an alleged promise is part of a valid contract, the promisee

cannot disregard the contract and sue for reliance damages under the doctrine of promissory

estoppel.” Stable Energy, L.P. v. Kachina Oil & Gas, Inc., 52 S.W.3d 327, 336 (Tex. App.—

Austin 2001, no pet.); accord Doctors Hosp. 1997, 154 S.W.3d at 636.

       2. BP’s Promissory-Estoppel Claim Fails

       BP sought damages from Lessors based on its promissory-estoppel claim. By its claim,

BP seeks to enforce Zaffirini’s promise that the bonus provision language in the lease agreement

would mean an unallocated $1,750 per acre bonus. However, the lease agreement is a valid

contract, and the promise BP seeks to enforce is part of that contract. See Richter, 90 S.W.3d at

899; Stable Energy, 52 S.W.3d at 336. Therefore, BP may not seek damages from Lessors on its

bonus provision promissory-estoppel claim. See Richter, 90 S.W.3d at 899; Stable Energy, L.P.,

52 S.W.3d at 336.




                                               - 28 -
                                                                                      04-11-00550-CV


       3. Promissory-Estoppel Claim Properly Denied

       The trial court did not err in denying BP’s traditional motion for summary judgment on its

promissory-estoppel claim. Likewise, the trial court properly granted Lessors’ no-evidence

motions on BP’s promissory-estoppel claim. Lessors’ promissory-estoppel defenses in their

traditional motions are moot.

E. BP’s No-Evidence Motion Against the Zaffirini Lessors

       The same day the Zaffirini Lessors filed their traditional and no-evidence motions against

BP, they also filed a first amended original answer. In their amended answer, Zaffirini Lessors

pled numerous affirmative defenses. In its no-evidence motion, BP contended that the Zaffirini

Lessors presented no evidence on their affirmative defenses to BP’s claims.

       1. Applicable Law

       To defeat a no-evidence summary-judgment motion, the nonmovant must provide

summary-judgment proof that raises a genuine issue of material fact on each challenged element.

See Ford Motor Co. v. Ridgway, 135 S.W.3d 598, 600 (Tex. 2004); Moritz v. Bueche, 980 S.W.2d

849, 853 (Tex. App.—San Antonio 1998, no pet.). Conclusory statements are insufficient to raise

a genuine issue of material fact on a challenged element and will not defeat a no-evidence summary

motion. See IHS Cedars Treatment Ctr. of DeSoto, Tex., Inc. v. Mason, 143 S.W.3d 794, 803

(Tex. 2004); Gonzales v. Shing Wai Brass & Metal Wares Factory, Ltd., 190 S.W.3d 742, 746

(Tex. App.—San Antonio 2005, no pet.) (“A conclusory statement is one that does not provide the

underlying facts to support the conclusion, and is insufficient to create a question of fact to defeat

summary judgment.”). The nonmovant’s response must “specifically identify the supporting

[summary judgment evidence] that it seeks to have considered by the trial court.” Shing Wai Brass,

190 S.W.3d at 746; accord Arredondo v. Rodriguez, 198 S.W.3d 236, 238 (Tex. App.—San

Antonio 2006, no pet.). “Attaching entire documents . . . to a response and referencing them only
                                                - 29 -
                                                                                     04-11-00550-CV


generally does not relieve the party of pointing out to the trial court where in the documents the

issues set forth in the . . . response are raised.” Shing Wai Brass, 190 S.W.3d at 746; accord

Arredondo, 198 S.W.3d at 238–39.

       2. Zaffirini Lessors’ Fraud Defenses

       BP asserted various fraud claims against Lessors based on Lessors’ alleged

misrepresentations to BP. In response, Lessors raised affirmative defenses that each of BP’s fraud

claims fails because BP did not justifiably rely on Lessors’ representations. See Grant Thornton

LLP v. Prospect High Income Fund, 314 S.W.3d 913, 923 (Tex. 2010) (fraud requires justifiable

reliance); Ernst & Young, L.L.P. v. Pac. Mut. Life Ins. Co., 51 S.W.3d 573, 577 (Tex. 2001). In

its no-evidence motion, BP challenged the no-reliance element of the Zaffirini Lessors’ affirmative

defenses; it asserted that the Zaffirini Lessors presented no evidence that BP did not rely on

Lessors’ representations. See TEX. R. CIV. P. 166a(i); Callaghan Ranch, Ltd. v. Killam, 53 S.W.3d

1, 3 (Tex. App.—San Antonio 2000, pet. denied). In their response, the Zaffirini Lessors asserted

that BP was not entitled to summary judgment because, according to the Zaffirini Lessors, Pat

Taylor admitted in his deposition that BP did not rely on Zaffirini’s representations. The Zaffirini

Lessors included Taylor’s deposition as an appendix to their response. Viewing the evidence in

the light most favorable to the Zaffirini Lessors, their response raised a genuine issue of material

fact on the reliance element that BP challenged. See Ridgway, 135 S.W.3d at 600; Moritz, 980

S.W.2d at 853. Therefore, BP was not entitled to summary judgment on its no-evidence motion

challenging the Zaffirini Lessors’ nonreliance affirmative defenses to BP’s claims of fraud,

fraudulent inducement, and fraud by nondisclosure. See TEX. R. CIV. P. 166a(i); Ridgway, 135

S.W.3d at 600.




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       3. Miscellaneous Defenses

       In their first amended original answer, the Zaffirini Lessors pled the “affirmative defenses”

of estoppel, quasi-estoppel, promissory estoppel, BP’s lack of diligence, comparative negligence,

contractual disclaimer, waiver, acquiescence, and release.        In its no-evidence motion, BP

challenged at least one element of each of these defenses. See TEX. R. CIV. P. 166a(i) (movant

must state challenged element); Killam, 53 S.W.3d at 3 (same).

       The Zaffirini Lessors’ ninety-nine page response was supplemented by a 929 page

appendix consisting of thirty-nine exhibits, for a total of 1,028 pages. In each paragraph that

responded to the challenged affirmative defense, the Zaffirini Lessors identified the elements that

BP had challenged, and then provided a list of exhibits under the heading “Responsive Evidence.”

See Shing Wai Brass, 190 S.W.3d at 746 (general references are inadequate). The exhibits were

attached in their entirety, and none of the response’s paragraphs specifically identified the portion

or portions of the generally referenced exhibits that provided supporting evidence. See Arredondo,

198 S.W.3d at 238–39 (requiring a respondent to “point[] out to the trial court where in the

documents the issues set forth in the motion or response are raised”). Further, none of the

response’s paragraphs provided any explanation of how the evidence within any listed exhibit

raised a genuine issue of material fact. See Arredondo, 198 S.W.3d at 238–39; Shing Wai Brass,

190 S.W.3d at 746.

       This court has no obligation to wade through the Zaffirini Lessors’ voluminous response

in search of respondent’s proof. See Arredondo, 198 S.W.3d at 238–39; Shing Wai Brass, 190

S.W.3d at 746. The Zaffirini Lessors failed to specifically identify the summary judgment

evidence that raised a genuine issue of material fact on their affirmative defenses of estoppel,

quasi-estoppel, promissory estoppel, BP’s lack of diligence, comparative negligence, contractual

disclaimer, waiver, acquiescence, and release. Therefore, BP was entitled to summary judgment
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on these Zaffirini Lessors’ defenses, and the trial court erred by denying these portions of BP’s

no-evidence motion against the Zaffirini Lessors’ motion. See Arredondo, 198 S.W.3d at 238–39;

Shing Wai Brass, 190 S.W.3d at 746. 9

                                  LESSORS’ CLAIMS, BP’S RESPONSES

        Having addressed BP’s claims and Lessors’ corresponding responses, we turn to Lessors’

claims and BP’s corresponding responses. In their separate but essentially identical traditional

motions for summary judgment, the Zaffirini Lessors and Jones Lessors moved for judgment on

their claims that BP breached the Zaffirini lease agreement’s Favored-Nations clause (section

36.12) by not paying them the mandatory additional bonus or providing them the required

additional information. In reply, BP moved for traditional and no-evidence summary judgment on

its challenges to Lessors’ claims. We first address BP’s no-evidence motion challenging Lessors’

claims. See Ford Motor Co., 135 S.W.3d at 600 (analyzing a no-evidence motion before a

traditional motion because the disposition of the no-evidence motion could moot the traditional

motion); Blackard v. Fairview Farms Land Co., 346 S.W.3d 861, 867 (Tex. App.—Dallas 2011,

no pet.) (same).

A. No-Evidence Summary Judgment Response Requirements

        If a party moves for a no-evidence summary judgment, the nonmovant must file a response

sufficient to raise a genuine issue of material fact. See TEX. R. CIV. P. 166a(i); Ridgway, 135

S.W.3d at 600. To have its response considered, the nonmovant must file the response “not later

than seven days prior to the day of hearing,” and may not file a response after the deadline “[e]xcept

on leave of court.” TEX. R. CIV. P. 166a(c); accord Benchmark Bank v. Crowder, 919 S.W.2d 657,



9
  The Zaffirini Lessors failed to meet their no-evidence burden on BP’s promissory-estoppel claim. However, as
previously discussed, BP’s promissory-estoppel claim fails as a matter of law. The Zaffirini Lessors’ affirmative
defense of promissory estoppel is therefore moot.

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663 (Tex. 1996) (traditional motion). If a response is filed late, we presume the trial court did not

consider it unless there is an affirmative indication in the record that the trial court granted leave

to file the response. See Crowder, 919 S.W.2d at 663; Neimes v. Ta, 985 S.W.2d 132, 138 (Tex.

App.—San Antonio 1998, pet. dism’d by agr.) (traditional motion). If the nonmovant fails to

timely file a response, the record does not affirmatively show the trial court granted leave to file,

and the motion meets the requirements of Rule 166a(i), the trial court must grant the no-evidence

motion. See Landers v. State Farm Lloyds, 257 S.W.3d 740, 746 (Tex. App.—Houston [1st Dist.]

2008, no pet.); Roventini v. Ocular Sciences, Inc., 111 S.W.3d 719, 724 (Tex. App.—Houston [1st

Dist.] 2003, no pet.); cf. Crowder, 919 S.W.2d at 663 (“Summary judgment evidence may be filed

late, but only with leave of court.”); Neimes, 985 S.W.2d at 138. Likewise, if “the evidence

establishes conclusively the opposite of the vital fact,” the trial court must grant the no-evidence

motion. City of Keller v. Wilson, 168 S.W.3d 802, 810 (Tex. 2005) (quoting Robert W. Calvert,

“No Evidence” & “Insufficient Evidence” Points of Error, 38 TEX. L. REV. 361, 362–63 (1960))

(internal quotation marks omitted); Castillo v. Gulf Coast Livestock Mkt., L.L.C., 392 S.W.3d 299,

302–03 (Tex. App.—San Antonio 2012, no pet.).

B. Zaffirini Lessors’ Contract, Tort Claims Against BP

       In their traditional motion and first amended counterclaim, the Zaffirini Lessors claimed

BP breached the lease, acted fraudulently, committed gross negligence, and owes them additional

damages under lease section 36.14. BP filed a no-evidence motion against the Zaffirini Lessors’

claims that specifically challenged at least one essential element in each of the Zaffirini Lessors’

claims. The Zaffirini Lessors timely filed a response to BP’s no-evidence motion, and the trial

court denied BP’s no-evidence motion against the Zaffirini Lessors’ claims. We address each of

the Zaffirini Lessors’ claims and BP’s corresponding responses.



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       1. Zaffirini Lessors’ Breach of Contract Claims

       In their traditional motion and first amended counterclaim, the Zaffirini Lessors claim BP

breached section 36.12 of the lease agreement—the Favored-Nations clause—for two reasons: (1)

BP did not pay them the additional $450 per acre bonus; and (2) BP breached its contractual

obligation of good faith and fair dealing by not providing them the required Solis lease information.

In its no-evidence motion against the Zaffirini Lessors’ breach of contract and breach of good faith

and fair dealing claims, BP challenged the elements of breach and damage. It asserted that there

was no evidence that BP breached the lease, no evidence that it failed to provide information under

section 36.12, and no evidence that the Zaffirini Lessors sustained any damage as the result of

BP’s alleged breach of contract. See Killeen, 248 S.W.3d at 349 (breach of contract elements);

Southwell, 974 S.W.2d at 354 (same). The trial court granted the Zaffirini Lessors’ traditional

motion for summary judgment on their claim that BP breached the lease agreement; it denied BP’s

no-evidence motion.

               a. Bonus Payment

       The Zaffirini Lessors claimed that BP breached section 36.12 of the Zaffirini lease by not

paying them an additional $450 per acre after BP paid Solis an additional $450 per acre. The

Zaffirini Lessors admit that BP paid them $1,750 per acre, but argue that only $1,300 per acre was

bonus and the remaining $450 per acre was a separate consent-to-assignment fee not included in

bonus. However, we have rejected the Zaffirini Lessors’ interpretation of the Zaffirini lease. The

correct interpretation required BP to pay the Zaffirini Lessors $1,750 per acre as bonus. See

Heritage Res., Inc. v. NationsBank, 939 S.W.2d 118, 121 (Tex. 1996); Coker v. Coker, 650 S.W.2d

391, 393 (Tex. 1983). Under the proper interpretation of the lease, the evidence establishes

conclusively that BP did not breach the lease agreement by refusing to pay Lessors an additional

$450 per acre. See City of Keller v. Wilson, 168 S.W.3d 802, 810 (Tex. 2005) (recognizing the
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court must grant a no-evidence motion if “the evidence establishes conclusively the opposite of

the vital fact”) (quoting Robert W. Calvert, “No Evidence” & “Insufficient Evidence” Points of

Error, 38 TEX. L. REV. 361, 362–63 (1960)) (internal quotation marks omitted)); Ridgway, 135

S.W.3d at 600. BP was entitled to no-evidence summary judgment against the Zaffirini Lessors’

claim that BP breached the contract by failing to pay them an additional $450 per acre. See

Ridgway, 135 S.W.3d at 600.

                 b. Solis Lease Information

          The Zaffirini Lessors also claimed BP breached its contractual obligation of good faith and

fair dealing by failing to provide them with full and complete information regarding the Solis lease.

The Zaffirini lease’s Favored-Nations clause has two provisions that are relevant here: a trigger

and an obligation; in this case, the trigger provision is dispositive. The obligation to provide

Lessors with a copy of the more favorable lease and “grant [Lessors] an equivalent increase” is

triggered only if BP or its successors “extend or grant more favorable bonus . . . to any other owner

or owners of any mineral interest in the leased premises.” The Zaffirini Lessors assert that BP

paid them only $1,300 per acre bonus; they segregate the remaining $450 per acre as a consent-to-

assignment fee separate from bonus. Following the Zaffirini Lessors’ logic, when BP paid Solis

an additional $450 per acre bonus (after BP executed the Zaffirini lease), BP granted Solis a more

favorable bonus, and thus triggered the “equivalent increase” and lease copy requirements of

section 36.12. But under the correct interpretation of the Zaffirini lease, BP’s $1,750 per acre

payment to the Zaffirini Lessors was all bonus. See Coker, 650 S.W.2d at 393 (reiterating that

courts construe an unambiguous contract as a matter of law); see also Heritage Res., 939 S.W.2d

at 121.

          As a matter of law, BP’s payment of an additional $450 per acre to Solis under the Solis

lease’s Favored-Nations clause to match the $1,750 per acre bonus BP had already paid to Lessors
                                                 - 35 -
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did not “extend or grant more favorable bonus” to Solis and did not trigger any obligation under

section 36.12. Accordingly, the Zaffirini Lessors’ response provided no evidence that BP breached

any obligation of good faith and fair dealing to provide information under the Zaffirini lease’s

Favored-Nations clause. See City of Keller, 168 S.W.3d at 810; Castillo, 392 S.W.3d at 302–03.

BP was entitled to summary judgment on its no-evidence challenge to the Zaffirini Lessors’ breach

of contract claim.

               c. Section 36.14 Damages

       The Zaffirini Lessors claimed that BP breached the contract and thus owed them additional

damages under lease section 36.14. By its plain language, section 36.14 requires BP to pay

damages to the Zaffirini Lessors if Lessors “obtain a non-appealable judgment” against BP for

money damages. However, the trial court’s judgment expressly states that the judgment is

appealable, and thus conclusively disproves section 36.14’s prerequisite for a “non-appealable

judgment.” See City of Keller, 168 S.W.3d at 810; Castillo, 392 S.W.3d at 302–03. BP was

entitled to judgment on its no-evidence motion against the Zaffirini Lessors’ claim for additional

damages under section 36.14.

               d. Attorney’s Fees

       The Zaffirini Lessors sought attorney’s fees based on BP’s breach of contract. See TEX.

CIV. PRAC. & REM. CODE ANN. § 38.001 (West 2008). The trial court granted the Zaffirini Lessors’

traditional motion on breach of contract and awarded the Zaffirini Lessors attorney’s fees. As we

have already determined, BP did not breach the contract; therefore, the Zaffirini Lessors were not

entitled to attorney’s fees for breach of contract and BP was entitled to summary judgment on its

corresponding no-evidence motion.      See id.; Green Int’l, 951 S.W.2d at 390 (“To recover

attorney’s fees under Section 38.001, a party must (1) prevail on a cause of action for which

attorney’s fees are recoverable, and (2) recover damages.”).
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                                                                                      04-11-00550-CV


               e. BP Did Not Breach Zaffirini Lease

       Under the proper construction of the unambiguous contract, the evidence establishes

conclusively that BP did not breach section 36.12 of the lease agreement under any basis claimed

by the Zaffirini Lessors. See City of Keller, 168 S.W.3d at 810; Coker, 650 S.W.2d at 393

(construing contracts). Therefore, the trial court erred when it (1) granted the Zaffirini Lessors’

and Jones Lessors’ traditional motions for summary judgment against BP on their claims that BP

breached the Zaffirini lease; (2) awarded the Zaffirini Lessors and the Jones Lessors damages for

breach of contract; (3) awarded the Zaffirini Lessors and Jones Lessors attorney’s fees, costs, and

additional damages under lease section 36.14; and (4) denied BP’s no-evidence motion against

Lessors’ claims that BP breached the lease agreement. Because BP was entitled to summary

judgment on its no-evidence motion against all of the Zaffirini Lessors’ and Jones Lessors’ breach

of contract claims, we need not consider the corresponding challenges BP raised in its traditional

motion. See Ridgway, 135 S.W.3d at 600.

       2. Zaffirini Lessors’ Fraud, Gross Negligence Claims

       In their first amended counterclaim, the Zaffirini Lessors contended that BP’s conduct was

“fraudulent, malicious and grossly negligent, and justifies an award of exemplary damages.” In

its no-evidence motion contesting the Zaffirini Lessors’ fraud claim, BP challenged the elements

of a false, material representation; reliance; and resulting injury. See In re FirstMerit Bank, N.A.,

52 S.W.3d 749, 758 (Tex. 2001) (fraud elements); Landers, 257 S.W.3d at 746; Roventini, 111

S.W.3d at 724. On the Zaffirini Lessors’ gross negligence claim, BP challenged the elements of

extreme risk, BP’s actual, subjective awareness of the risk, and its acting with conscious

indifference to the rights of others. See Lee Lewis Const., Inc. v. Harrison, 70 S.W.3d 778, 785

(Tex. 2001) (gross negligence elements); Landers, 257 S.W.3d at 746; Roventini, 111 S.W.3d at

724.
                                                - 37 -
                                                                                     04-11-00550-CV


               a. Summary Judgment Response

       In their summary-judgment response, the Zaffirini Lessors identified seven elements of

fraud. See T.O. Stanley Boot Co. v. Bank of El Paso, 847 S.W.2d 218, 222 (Tex. 1992) (identifying

the elements of fraud). For each element of fraud, the Zaffirini Lessors provided a list of exhibits

under the heading “Responsive Evidence.” Contra Gonzales v. Shing Wai Brass & Metal Wares

Factory, Ltd., 190 S.W.3d 742, 746 (Tex. App.—San Antonio 2005, no pet.) (rejecting—as failing

to meet the nonmovant’s burden—the practice of “[a]ttaching entire documents to a . . . summary

judgment . . . response and referencing them only generally”); see Arredondo v. Rodriguez, 198

S.W.3d 236, 238 (Tex. App.—San Antonio 2006, no pet.) (same). The exhibits were attached in

their entirety, and none of the response’s seven subparagraphs specifically identified the portion

or portions of the generally referenced exhibits that provided supporting evidence. See Arredondo,

198 S.W.3d at 238–39 (requiring a respondent to “point[] out to the trial court where in the

documents the issues set forth in the motion or response are raised”). Further, only one of the

seven subparagraphs on the elements of fraud provided any explanation of how the evidence within

any listed exhibit raised a genuine issue of material fact; the one response subparagraph on gross

negligence also failed to provide any explanation. See Arredondo, 198 S.W.3d at 238–39; Shing

Wai Brass, 190 S.W.3d at 746.

               b. Response Failed to Meet Burden

       The Zaffirini Lessors’ response to BP’s no-evidence motion failed to meet their burden to

specifically identify the summary judgment evidence that supported their claims of fraud and gross

negligence. See Arredondo, 198 S.W.3d at 238–39 (“Because [nonmonvants’] response did not

direct the trial court to any specific portion of their summary judgment evidence, [nonmovants]

failed to raise a fact issue sufficient to defeat [movant’s] no-evidence motion for summary

judgment.”); Shing Wai Brass, 190 S.W.3d at 746. Therefore, BP was entitled to summary
                                               - 38 -
                                                                                       04-11-00550-CV


judgment on its no-evidence challenges to the Zaffirini Lessors’ fraud and gross negligence claims,

and the trial court erred by denying these portions of BP’s no-evidence motion. See Arredondo,

198 S.W.3d at 238–39; Shing Wai Brass, 190 S.W.3d at 746. Further, because the Zaffirini

Lessors’ have no surviving tort claims against BP, they are not entitled on remand to any

consideration of exemplary damages against BP. See Tony Gullo Motors I, L.P. v. Chapa, 212

S.W.3d 299, 304 (Tex. 2006) (noting that exemplary damages may be available for tort claims but

are not available for breach of contract); accord Jim Walter Homes, Inc. v. Reed, 711 S.W.2d 617,

618 (Tex. 1986).

C. Jones Lessors’ Contract, Tort Claims Against BP

       In their traditional motion and counterclaim, the Jones Lessors claimed BP breached the

lease, acted fraudulently, committed gross negligence, and owes them additional damages under

lease section 36.14. In return, BP filed a no-evidence motion that challenged the Jones Lessors’

claims. To avoid having their claims dismissed, the Jones Lessors had to (1) file a response that

raised a genuine issue of material fact on each challenged element and (2) have that response

considered by the trial court. See Landers, 257 S.W.3d at 746; cf. Neimes, 985 S.W.2d at 138.

       1. Jones Lessors’ Response

       The Zaffirini Lessors timely filed a response to BP’s no-evidence motion. On the day of

the hearing, the Jones Lessors filed two motions for leave: one for another purpose not relevant

here, and a second for leave to adopt and incorporate the Zaffirini Lessors’ responses as their own.

The appellate record shows the trial court granted one of the motions for leave, but does not show

the trial court granted the Jones Lessors’ motion for leave to adopt the Zaffirini Lessors’ responses.

Cf. Crowder, 919 S.W.2d at 663; Neimes, 985 S.W.2d at 138.




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       2. Adopted Response Fails

       Assuming arguendo that the trial court granted the Jones Lessors’ motion and considered

the adopted response, the result for the Jones Lessors is the same. As we have already decided,

the Zaffirini Lessors’ response failed to meet its burden to defend its claims against BP’s no-

evidence motion. The Jones Lessors’ claims were the same as the Zaffirini Lessors’ claims.

Therefore, even applying the adopted Zaffirini Lessors’ response, BP was entitled to summary

judgment on its no-evidence challenges against all of the Jones Lessors’ claims.

       The trial court erred by granting the Jones Lessors’ traditional motion for breach of contract

and by denying BP’s corresponding no-evidence motion.

D. Disposition of Lessors’ Claims, BP’s Responses

       BP was entitled to summary judgment on its no-evidence challenges to the Zaffirini

Lessors’ and Jones Lessors’ claims for breach of contract and associated attorney’s fees, additional

damages under section 36.14, fraud, and gross negligence. We sustain BP’s issues three, four,

five, and seven.

                                 ATTORNEY DISQUALIFICATION

   BP contends that attorneys Carlos M. Zaffirini Sr. and James K. Jones Jr. violated the lawyer–

witness rule by representing clients in this case because each one’s testimony is necessary to

establish essential facts on behalf of his clients. See TEX. DISCIPLINARY RULES PROF’L CONDUCT

R. 3.08(a), reprinted in TEX. GOV’T CODE ANN. tit. 2, subtit. G, app. A (West 2005) (TEX. STATE

BAR R. art. X, § 9). BP moved to disqualify Zaffirini and Jones on June 27, 2011, three days

before the hearing on the motions for summary judgment. BP asserts that it believed Zaffirini was

appearing only pro se until it learned otherwise on April 20, 2011. Likewise, BP asserts that it

first learned on June 8, 2011, that Jones was representing a client in this case. BP admits it waived


                                                - 40 -
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its disqualification complaint as to Jones, but complains that the trial court should not have denied

its motion to disqualify Zaffirini.

A. Standard of Review

       We review a trial court’s decision on a motion to disqualify an attorney using an abuse of

discretion standard. See In re Sanders, 153 S.W.3d 54, 57 (Tex. 2004) (orig. proceeding) (per

curiam); Spears v. Fourth Court of Appeals, 797 S.W.2d 654, 656 (Tex. 1990) (orig. proceeding).

A trial court acts within its discretion when it correctly applies the applicable law and its decision

is not unreasonable, arbitrary, or made “without any reference to guiding rules or principles.” See

In re Meador, 968 S.W.2d 346, 353 (Tex. 1998) (orig. proceeding); Spears, 797 S.W.2d at 656.

This court “may not reverse for abuse of discretion merely because it disagrees with a decision by

the trial court, if that decision was within the trial court’s discretionary authority.” Beaumont

Bank, N.A. v. Buller, 806 S.W.2d 223, 226 (Tex. 1991); see also Nat’l Med. Enters., Inc. v. Godbey,

924 S.W.2d 123, 135 (Tex. 1996) (orig. proceeding) (Baker, J., joined by Enoch, J., dissenting);

Ghidoni v. Stone Oak, Inc., 966 S.W.2d 573, 579 (Tex. App.—San Antonio 1998, pet. denied) (op.

on reh’g).

B. Applicable Law

       With a few exceptions, the lawyer–witness rule prohibits a lawyer from representing a

client in court “if the lawyer knows or believes that the lawyer is or may be a witness necessary to

establish an essential fact on behalf of the lawyer’s client.” TEX. DISCIPLINARY RULES PROF’L

CONDUCT R. 3.08(a). One remedy for violation of a disciplinary rule is to disqualify the attorney.

In re Sanders, 153 S.W.3d at 57. A party who seeks to disqualify opposing counsel has the burden

to “establish with specificity a violation of one or more of the disciplinary rules.” Spears, 797

S.W.2d at 656. Further, “[a] party who fails to file its motion to disqualify opposing counsel in a

timely manner waives the complaint.” In re EPIC Holdings, Inc., 985 S.W.2d 41, 52 (Tex. 1998)
                                                - 41 -
                                                                                     04-11-00550-CV


(orig. proceeding) (alteration in original) (quoting Vaughan v. Walther, 875 S.W.2d 690 (Tex.

1994) (orig. proceeding) (per curiam)) (internal quotation marks omitted). In considering the

timeliness of the motion, the court considers, inter alia, the length of time between when the

conflict was apparent and when the motion was filed. See Vaughan, 875 S.W.2d at 690–91;

Wasserman v. Black, 910 S.W.2d 564, 568 (Tex. App.—Waco 1995, orig. proceeding).

C. Timeliness of Disqualification Motion

       In BP’s original petition filed on May 7, 2010, BP sued Zaffirini, six other individuals, and

Las Tinajas Minerals, Ltd. On June 4, 2010, Carlos M. Zaffirini, Sr. filed a pro se original answer,

and the other Zaffirini Lessors filed an original answer that was signed by attorney Guadalupe

Castillo, Zaffirini’s law practice partner. At a November 29, 2010 hearing on BP’s motion for

continuance, Donato Ramos Jr., one of BP’s attorneys, told the court that Zaffirini and Jones were

“plaintiffs in addition to being counsel.” Ramos Jr. also told the court that “[t]here was a

Favored[-]Nations Clause in Mr. Zaffirini’s clients[’] oil and gas lease.” Ramos Jr. heard Jones

complain to the court about BP’s planned depositions “especially when a bunch of our clients

didn’t even go to any of the negotiations.”

       BP first moved to disqualify Zaffirini and Jones on June 27, 2011, three days before the

summary-judgment hearing, and almost seven months after the hearing in which BP’s counsel

stated that Zaffirini was representing clients and heard that Jones was likewise representing others

in the suit. See Vaughan, 875 S.W.2d at 690–91 (holding that party waived disqualification

complaint by filing her motion six and one-half months after learning of the potential conflict); In

re Davila, 04-99-00571-CV, 1999 WL 735164, at *3 (Tex. App.—San Antonio Sept. 22, 1999,

orig. proceeding) (concluding that petitioner waived its disqualification complaint filed seven days

before the hearing and after “an unexplained four month delay”). BP explained its delay in filing



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the motions to disqualify by stating it did not know until April 20, 2011, for Zaffirini and June 8,

2011, for Jones, that they were representing others in this case.

D. Attorney Disqualification Waived

       Considering (1) the almost seven months period between when the conflict was apparent

until BP filed its motions to disqualify Zaffirini and Jones, (2) BP’s explanation for the delay, and

(3) BP’s filing the motions three days before the hearing, we cannot say the trial court abused its

discretion in denying BP’s motion to disqualify Zaffirini and Jones and in denying BP’s motions

to strike Zaffirini’s and Jones’s affidavits. See Vaughan, 875 S.W.2d at 690–91; In re Davila,

1999 WL 735164, at *3. We overrule BP’s issue six.

                                           CONCLUSION

       BP argues the Zaffirini lease is unambiguous and supports their position that the entire

$1,750 per acre payment is bonus; we agree. The plain language of the lease and the circumstances

surrounding the lease negotiations show that the lease unambiguously expresses the parties’ intent

that the cash consideration to execute the lease is an unallocated $1,750 per acre, and such cash

consideration is bonus as a matter of law. See Hous. Exploration Co., 352 S.W.3d at 469–70;

Heritage Res., 939 S.W.2d at 121; Coker, 650 S.W.2d at 393. It is undisputed that BP paid Lessors

$1,750 per acre, and we declare that (1) the entire amount was bonus, (2) BP did not breach the

lease agreement by failing to pay Lessors an additional $450 per acre, (3) Lessors are not entitled

to attorney’s fees for breach of contract, (4) BP does not owe Lessors any additional bonus

payment, and (5) BP is the prevailing party in the declaratory-judgment action.

       With respect to BP’s fraud claims against Lessors, we conclude that neither BP nor Lessors

were entitled to summary judgment on BP’s fraud, fraudulent inducement, and fraud by

nondisclosure claims. However, as a matter of law, BP could not pursue its promissory-estoppel

cause of action against Lessors because the promise it sought to enforce was embodied in the lease.
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       As we have explained, BP was entitled to judgment on its no-evidence motion against the

Zaffirini Lessors’ and Jones’ Lessors’ causes of action for breach of contract, breach of contractual

duty of good faith and fair dealing, fraud, gross negligence, and additional damages under lease

section 36.14, and against the Zaffirini Lessors’ affirmative defenses of estoppel, promissory

estoppel, quasi-estoppel, failure to use due diligence, disclaimer, waiver, acquiescence, and

release.

       Accordingly, we sustain BP’s issues one, three, four, five, and seven; BP’s second issue is

moot; and we overrule BP’s issue six. We affirm the trial court’s judgment in part, reverse it in

part, and remand the cause to the trial court for further proceedings consistent with this opinion.

We tax court costs for trial and appeal against Lessors.



                                                   Patricia O. Alvarez, Justice




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