Reversed and Remanded and Opinion filed April 30, 2015.




                                      In The

                    Fourteenth Court of Appeals

                              NO. 14-14-00034-CV

 A. REAGAN CLARK, INDIVIDUALLY AND AS REPRESENTATIVE OF
       THE ESTATE OF LOIS CLARK, DECEASED, Appellant
                                        V.
     CONOCOPHILLIPS COMPANY, DCP MAINSTREAM LP,
  CONOCOPHILLIPS GAS COMPANY, AND DCP MARKETING, LLC,
                       Appellees

                    On Appeal from the 268th District Court
                           Fort Bend County, Texas
                    Trial Court Cause No. 99-DCV-107968B

                                 OPINION
      Appellant A. Reagan Clark, individually and as the representative of the
estate of his mother, Lois Clark, intervened in an ongoing lawsuit against appellees
ConocoPhillips Company, DCP Midstream, LP, ConocoPhillips Gas Company,
and DCP Midstream Marketing, LLC (collectively ConocoPhillips). Clark alleged
that ConocoPhillips underpaid royalties it owed him and his mother pursuant to oil
and gas leases of their mineral rights in Fort Bend County. ConocoPhillips filed a
motion for summary judgment asserting Clark’s claims for underpayment of
royalties were barred by the four-year statute of limitations. The trial court granted
the motion.

      On appeal, Clark asserts in a single issue that the trial court erred in granting
ConocoPhillips’s motion for summary judgment because the running of the
limitations period was tolled so long as Clark’s claims against ConocoPhillips were
part of a previously filed class-action lawsuit alleging that ConocoPhillips had
underpaid royalties. According to Clark, that tolling ended when the Supreme
Court of Texas affirmed the decertification of his part of the class, and he timely
intervened in the ongoing royalty underpayment lawsuit thereafter. Because we
agree with Clark, we sustain his single issue on appeal, reverse the trial court’s
summary judgment, and remand this matter to the trial court for further
proceedings in accordance with this opinion.

                                   BACKGROUND

      The facts of this case are undisputed and the issue on appeal raises only legal
questions. We therefore set out only a brief summary of the facts relevant to the
resolution of this appeal.

      A.      The Clarks sign oil and gas leases.

      In 1993, Clark and his mother, Lois Clark, each executed an oil and gas
lease to Phillips Petroleum Company 1 of mineral interests located in Fort Bend
County. ConocoPhillips commenced work on the first Clark well in 1996, the well
started producing natural gas in late 1996, and the first sales were reported in
January 1997.        A second well began production in December 1998.
      1
         Phillips Petroleum Company merged with Conoco, Inc., and ConocoPhillips is the
successor entity.

                                          2
ConocoPhillips operated the Clark wells and paid royalties through December
2003.

        The Clark Leases are two-pronged or hybrid leases because they provide for
the payment of a one-sixth royalty on natural gas production based on either the
proceeds of sales or the market value of the gas, depending on the point of sale.2
The Clark Leases also contain express marketing provisions.3

        B.        The Bowden class-action lawsuit is filed.

        On February 16, 1999, a class-action lawsuit styled Kathryn Aylor Bowden,
et al. v. ConocoPhillips Company, et al., was filed in Fort Bend County, Texas.
The Bowden plaintiffs alleged that ConocoPhillips had underpaid oil and gas
royalties. The first class certification motion filed in the Bowden lawsuit sought to
certify one class of underpaid royalty owners. The trial court certified a single
class with three subclasses of plaintiffs. Clark contends that his claims and those
of his mother were included in Subclass 1, which covered those royalty owners
whose leases provided for payment on a proceeds or market value basis and whose
gas had been sold by Phillips Petroleum Company to Phillips Gas Marketing
Company. ConocoPhillips filed an interlocutory appeal contesting each certified

        2
            The specific royalty clause provides:
        As royalty, lessee covenants and agrees: . . . [t]o pay lessor on gas and casinghead
        gas produced from said land (1) when sold by lessee, [one-sixth] of the amount
        realized by lessee, computed at the mouth of the well, or (2) when used by said
        lessee off said land or in the manufacture of gasoline or other products, the market
        value, at the mouth of the well, of [one-sixth] of such gas and casinghead gas.
        3
            The express marketing provision provides:
        Lessee covenants and agrees to use reasonable diligence to produce, utilize, or
        market the minerals capable of being produced from said wells, but in the exercise
        of such diligence, lessee shall not be obligated to install or furnish facilities other
        than well facilities and ordinary lease facilities of flow lines, separator, and lease
        tank, and shall not be required to settle labor trouble or to market gas upon terms
        unacceptable to lessee.

                                                    3
subclass.

       C.     The trial court’s first class certification order is reversed.

       This Court reversed the trial court’s certification of Subclass 1 because it
included the claims of both market-value lessors and proceeds lessors. See Phillips
Petroleum Co. v. Bowden, No. 14-00-01184-CV, 2001 WL 1249995, at *5 (Tex.
App.—Houston [14th Dist.] Oct. 18, 2001, no pet.) (not designated for
publication). The case was remanded to the trial court without prejudice to further
consideration of class certification. Id.

       D.     The trial court certifies the Bowden subclasses a second time.

       Following remand, the Bowden plaintiffs filed an amended motion for class
certification asking the trial court to certify new subclasses. The revised Subclass
1, which was certified by the trial court in June 2002, included lessors who were
paid royalties based on proceeds of sales. 4

       E.     The second class certification order is reversed.

       ConocoPhillips once again filed an interlocutory appeal of the trial court’s
class certification order.      On May 1, 2003, this Court issued its opinion and
judgment reversing the class certification and remanding the case. See Phillips
Petroleum Co. v. Bowden, 108 S.W.3d 385, 404 (Tex. App.—Houston [14th Dist.]
2003), aff’d in part, rev’d in part, 247 S.W.3d 690 (Tex. 2008). The Bowden
plaintiffs petitioned for review by the Supreme Court of Texas. The supreme court
granted the petition, heard oral arguments on December 1, 2004, and issued its
opinion affirming the decertification of the revised Subclass 1 on February 15,
2008. See Bowden, 247 S.W.3d at 709. The supreme court’s mandate issued on
       4
         The trial court again certified three subclasses. It is undisputed however, that Clark’s
claims do not fit within either Subclass 2 or Subclass 3. We therefore need not further address
those subclasses.

                                               4
March 28, 2008.

      F.     Clark intervenes in the remanded Bowden lawsuit.

      Following the decertification of revised Subclass 1, Clark intervened in the
Bowden litigation on February 12, 2010. Clark alleged that ConocoPhillips had
underpaid royalties for gas produced from the Clark Leases from 1996 through
November 2003. The trial court severed Clark’s claims into a separate case.

      ConocoPhillips moved for summary judgment on two grounds: (1) Clark’s
lawsuit was barred because the statute of limitations had expired prior to his
intervention in the Bowden litigation; and (2) the filing of the Bowden class-action
suit did not toll the running of limitations because Clark’s claims did not fit within
Subclass 1. The trial court granted the motion without specifying the grounds.
This appeal followed.

                                     ANALYSIS

      In a single issue on appeal, Clark contends the trial court erred when it
granted ConocoPhillips’s motion for summary judgment because (1) the running of
limitations on his claims against ConocoPhillips was tolled by the filing of the
Bowden class-action lawsuit; and (2) he timely intervened once that tolling ended.

I.    Standard of review

      We review a trial court’s order granting a traditional summary judgment de
novo. Mid-Century Ins. Co. v. Ademaj, 243 S.W.3d 618, 621 (Tex. 2007). To
prevail on a traditional motion for summary judgment, a movant must prove
entitlement to judgment as a matter of law on the issues set out in the motion. Tex.
R. Civ. P. 166a(c). When the movant is a defendant, a trial court should grant
summary judgment only if the defendant (1) negates at least one element of each of
the plaintiff’s causes of action, or (2) conclusively establishes each element of an

                                          5
affirmative defense. Primo v. Great Am. Ins. Co., No. 14-13-00492-CV, 2014 WL
7237330, at *3 (Tex. App.—Houston [14th Dist.] Dec. 18, 2014, no pet.).

       A defendant moving for summary judgment on the affirmative defense of
limitations must conclusively prove that defense as a matter of law. Diaz v.
Westphal, 941 S.W.2d 96, 97–98 (Tex. 1997). To meet this summary judgment
burden, the defendant must conclusively negate any relevant tolling doctrines the
plaintiff raised in the trial court. Id. at 98.

II.    ConocoPhillips did not conclusively prove its affirmative defense of
       limitations.
       ConocoPhillips asserted in its motion for summary judgment that Clark’s
claims were barred by the four-year statute of limitations because they concerned
royalties paid between 1997 and 2003 but were not filed until February 2010.
Clark responded that his suit was timely because the running of limitations was
tolled during the pendency of the Bowden class-action suit filed in February 1999
and decertified in 2008. In addressing Clark’s tolling argument, ConocoPhillips
has not disputed (either in the trial court or on appeal) that the filing of a putative
class-action suit in a Texas state court suspends the running of limitations for all
purported members of the class. See Grant v. Austin Bridge Co., 725 S.W.2d 366,
370 (Tex. App.—Houston [14th Dist.] 1987, no writ) (citing Am. Pipe & Constr.
Co. v. Utah, 414 U.S. 538, 554 (1974)). This doctrine, which was first recognized
by federal courts applying similar federal class-action rules, is commonly known
as American Pipe tolling.

       Instead, ConocoPhillips notes that limitations remains tolled only “until
class certification is denied,” id., and ConocoPhillips contends that any tolling was
too short to render Clark’s claims timely for two reasons. First, ConocoPhillips
argues that tolling ceased when the trial court signed its second class certification

                                              6
order in June 2002 because Clark’s claims were not included in revised Bowden
Subclass 1. 5 Second, it argues that even if Clark’s claims were part of revised
Subclass 1, any tolling ceased when this Court reversed the certification of the
revised subclass in May 2003, not when the supreme court affirmed that reversal
and issued its mandate in 2008. We address each argument in turn.

       A.     The tolling of limitations on Clark’s claims did not cease in June
              2002 because they fit within revised Bowden Subclass 1.
       Revised Bowden Subclass 1 consisted of:

       Royalty owners who own or owned royalty interests under leases
       located in the state of Texas; where Phillips Petroleum Company is
       the lessee; under the terms of the lease, the payment of royalty of
       natural gas production is based on proceeds or amount realized; from
       which Phillips Petroleum produced natural gas (including natural gas
       liquids) that was directly sold or indirectly sold or transferred to
       Phillips Gas Marketing for marketing or resale; and during the period
       February 1995 through the present.
Bowden, 247 S.W.3d at 695. ConocoPhillips contends it has conclusively shown
that Clark’s claims were not included in this subclass because the two-pronged
Clark Leases based the payment of royalty on either proceeds or market value, and
Clark’s expert performed a damage calculation based on market value. Clark
responds that his claims challenge ConocoPhillips’s payment of royalties under the
proceeds prong of the Clark Leases based on the amounts realized from its sales to
Phillips Gas Marketing, and therefore his claims for underpayment of royalties and
breach of marketing obligations fall within revised Subclass 1 regardless of how

       5
          ConocoPhillips did not argue in its motion for summary judgment, and has not argued
on appeal, that American Pipe tolling ended when this Court issued its 2001 opinion rejecting the
trial court’s first class certification order. See Bowden, 2001 WL 1249995, at *1; cf. Odle v.
Wal-Mart Stores, Inc., 747 F.3d 315, 320–23 (5th Cir. 2014) (holding American Pipe tolling
continued when court of appeals reversed district court’s class certification but remanded for
further proceedings on certification as to subclass that included plaintiff).

                                               7
his damages are calculated. We agree with Clark.

      The supreme court observed that many of the leases in revised Subclass 1—
including the leases of the named subclass representatives—contained two-prong
gas royalty clauses identical to Clark’s clause. Id. at 699 & n.2. The putative
members of revised Subclass 1 alleged that ConocoPhillips failed to market the gas
reasonably because it sold the gas to a wholly-owned subsidiary, Phillips Gas
Marketing. Id. at 696, 699–700. In addition, ConocoPhillips recognized in its own
motion for summary judgment that revised Bowden Subclass 1 “include[d] royalty
owners with gas royalty clauses requiring Phillips to calculate the royalty as a
percentage of the proceeds Phillips receives for selling the gas.”

      In his own petition, similarly, Clark alleged that ConocoPhillips breached
the leases by underpaying royalties because ConocoPhillips based the royalty
payments on the proceeds it received from sales to an affiliated company, Phillips
Gas Marketing. In Clark’s view, this action violated ConocoPhillips’s duty to
market the gas reasonably and diligently. Because Clark’s claims fit within those
alleged in revised Subclass 1, we hold that tolling continued as to those claims
when revised Subclass 1 was certified. See Bowden, 247 S.W.3d at 696 (“The
revised Subclass 1 only includes claims from royalty owners paid on an amount-
realized or proceeds basis and who assert claims for breach of an implied covenant
or express covenant to market.”).

      B.       Tolling ceased when the supreme court affirmed the reversal of
               revised Subclass 1.

      Having determined that American Pipe tolling continued to apply to Clark’s
claims following the second class certification, we next consider when “class
certification [was] denied” and tolling came to an end. Grant, 725 S.W.2d at 370.
ConocoPhillips contends that tolling ended when this Court issued its opinion and

                                          8
judgment reversing the certification of revised Subclass 1 in May 2003. See
Bowden, 108 S.W.3d at 404. We disagree.

       ConocoPhillips brought an interlocutory appeal of the trial court’s second
class certification order. See Tex. Civ. Prac. & Rem. Code Ann. § 51.014(a)(3)
(West 2011). Our appellate rules provide that “[t]he appellate court’s judgment on
an appeal from an interlocutory order takes effect when the mandate is issued.”
Tex. R. App. P. 18.6.           Our court never issued its mandate reversing the
certification of revised Subclass 1 because the Bowden plaintiffs filed a petition for
review that the supreme court granted. See Tex. R. App. P. 18.1(a). Thus, our
May 2003 judgment reversing the certification of revised Subclass 1 did not take
effect, and we hold class certification was not denied for tolling purposes at that
time. Rather, class certification was denied and tolling ended when the supreme
court affirmed this portion of our Court’s judgment in 2008.6

       In arguing against this result, ConocoPhillips cites federal appellate
decisions holding that tolling ends when a federal district court denies class
certification. In these decisions, courts reason that even if the named plaintiffs (as
putative class representatives) seek permission to appeal that denial, the court of
appeals might choose not to permit an appeal, and in any event it is no longer
reasonable after the denial for unnamed class members to rely on the named
plaintiffs to protect their interests.7




       6
          We need not decide whether American Pipe tolling ended when the supreme court
issued its opinion and judgment on February 15, 2008, or when the supreme court issued its
mandate on March 28, 2008. As explained below, Clark’s claims are timely using either date.
       7
          See Fed. R. Civ. P. 23(f); Hall v. Variable Annuity Life Ins. Co., 727 F.3d 372, 375–6
(5th Cir. 2013); Armstrong v. Martin Marietta Corp., 138 F.3d 1374, 1380–85 (11th Cir. 1998)
(en banc) (collecting cases).

                                               9
       These cases are distinguishable because unlike in the federal system,
interlocutory orders of Texas courts granting or denying class certification are
appealable as of right.        Tex. Civ. Prac. & Rem. Code Ann. § 51.014(a)(3).
Moreover, the trial court in this case granted class certification. As the Fifth
Circuit has recognized, once a class has been certified, “members of the certified
class may continue to rely on the class representative to protect their interests
through the entire prosecution of the suit, including appeal.” Taylor v. United
Parcel Serv., Inc., 554 F.3d 510, 520–21 (5th Cir. 2008); see also id. at 517
(discussing “the bedrock premise that a party who sues on a cause of action tolls
the statute of limitations during the entire prosecution of the action, including the
prosecution of any appeal; otherwise, a plaintiff could not count on an appeal to
protect his or her rights”). A contrary rule would require certified class members
to intervene or file individual suits while the appeal was pending, leading to the
“‘needless multiplicity of actions’” that tolling was intended to prevent and
“ignor[ing] the intended benefit of certification—efficient representation of a class
of claimants.” Id. at 521 (quoting Crown, Cork & Seal Co. v. Parker, 462 U.S.
345, 351 (1983)).

       ConocoPhillips also points to two federal district court decisions holding
that tolling ceased when the court of appeals issued its judgment reversing a
district court’s class certification order. According to these decisions, plaintiffs no
longer had reason to rely on the named plaintiffs to advance their claims once the
court of appeals issued its judgment, and the subsequent issuance of the mandate
was merely a formality. 8 Another federal district court has disagreed, concluding
that once a class is certified, tolling continues through all appellate proceedings
until the case is returned to the district court by way of a mandate reversing class
       8
         See Kelly v. Capital One, N.A., 717 F. Supp. 2d 805, 807–08 (E.D. Wis. 2010); Davis v.
U.S. Steel Corp., 528 F. Supp. 220, 221–22 (E.D. Pa. 1981).

                                              10
       These cases are distinguishable because unlike in the federal system,
interlocutory orders of Texas courts granting or denying class certification are
appealable as of right.        Tex. Civ. Prac. & Rem. Code Ann. § 51.014(a)(3).
Moreover, the trial court in this case granted class certification. As the Fifth
Circuit has recognized, once a class has been certified, “members of the certified
class may continue to rely on the class representative to protect their interests
through the entire prosecution of the suit, including appeal.” Taylor v. United
Parcel Serv., Inc., 554 F.3d 510, 520–21 (5th Cir. 2008); see also id. at 517
(discussing “the bedrock premise that a party who sues on a cause of action tolls
the statute of limitations during the entire prosecution of the action, including the
prosecution of any appeal; otherwise, a plaintiff could not count on an appeal to
protect his or her rights”). A contrary rule would require certified class members
to intervene or file individual suits while the appeal was pending, leading to the
“‘needless multiplicity of actions’” that tolling was intended to prevent and
“ignor[ing] the intended benefit of certification—efficient representation of a class
of claimants.” Id. at 521 (quoting Crown, Cork & Seal Co. v. Parker, 462 U.S.
345, 351 (1983)).

       ConocoPhillips also points to two federal district court decisions holding
that tolling ceased when the court of appeals issued its judgment reversing a
district court’s class certification order. According to these decisions, plaintiffs no
longer had reason to rely on the named plaintiffs to advance their claims once the
court of appeals issued its judgment, and the subsequent issuance of the mandate
was merely a formality. 8 Another federal district court has disagreed, concluding
that once a class is certified, tolling continues through all appellate proceedings
until the case is returned to the district court by way of a mandate reversing class
       8
         See Kelly v. Capital One, N.A., 717 F. Supp. 2d 805, 807–08 (E.D. Wis. 2010); Davis v.
U.S. Steel Corp., 528 F. Supp. 220, 221–22 (E.D. Pa. 1981).

                                              10
judicial resources is the very result that the tolling doctrine was designed to
prevent. Taylor, 554 F.3d at 521; see Crown, Cork & Seal, 462 U.S. at 350–51;
American Pipe, 414 U.S. at 553–54 (observing that “a rule requiring successful
anticipation of the determination of the viability of the class would breed needless
duplication of motions” to intervene and “would deprive . . . class actions of the
efficiency and economy of litigation which is a principal purpose of the
procedure”).

      Decisions on tolling should “balance the competing interests of class action
litigation (efficiency and economy)” against “those of statutes of limitation
(protection against stale claims).” Odle, 747 F.3d at 320. As we have explained,
continuing tolling through supreme court review promotes efficiency and
economy. In addition, the filing of the class action provided ConocoPhillips with
stale-claim protection by giving it notice of the claims Clark raises and the general
identities of the plaintiffs who had such claims, allowing it to preserve relevant
evidence and witnesses.        See Crown, Cork & Seal, 462 U.S. at 352–53.
ConocoPhillips contends that the length of tolling is abusive and that allowing
Clark’s individual claims disturbs society’s interest in repose.          But it is
ConocoPhillips that for many years fought against class-based resolution of these
claims; the result of its success is that it must now defend timely individual
lawsuits alleging those same claims. Odle, 747 F.3d at 323 n.45; see Crown, Cork
& Seal, 462 U.S. at 353 (“[A]lthough a defendant may prefer not to defend against
multiple actions in multiple forums once a class has been decertified, this is not an
interest that statutes of limitations are designed to protect.”).




                                           12
       C.     Clark timely intervened after tolling ceased.

       Finally, we turn to the question whether Clark timely intervened after the
supreme court’s affirmance of this Court’s judgment decertifying revised Subclass
1 brought tolling to an end. We conclude that he did so.

       The limitations period governing underpayment of royalty claims is four
years—or at least 1,460 days 10—from the date the claim accrues. See Houston
Endowment Inc. v. Atlantic Richfield Co., 972 S.W.2d 156, 159 (Tex. App.—
Houston [14th Dist.] 1998, no pet.) (applying four-year breach-of-contract statute
of limitations to case involving payment of oil and gas royalties).                     Unless
addressed by the lease, a claim regarding underpayment of royalties accrues ninety
days after the end of the calendar month in which the produced gas is sold. See
Tex. Nat. Res. Code Ann. § 91.402(a)(2) (West 2011).

       Using this accrual rule, there is no dispute that Clark’s earliest claim accrued
on April 1, 1997. A total of 687 days had passed when the Bowden class-action
lawsuit was filed on February 16, 1999, tolling the running of the limitations
period. The running of limitations remained tolled at least until February 15, 2008,
the day the supreme court issued its opinion and judgment finally rejecting the trial
court’s certification of revised Subclass 1. See supra at 9 n.6; Grant, 725 S.W.2d
at 370. Clark intervened in the Bowden litigation 728 days later on February 12,
2010. Thus, a total of 1,415 days had passed between the accrual of Clark’s
earliest potential claim and Clark’s intervention.

       10
          The limitations period may be longer if it includes any leap days. In this case, the
limitations period was running during one leap day (February 29, 2008) if tolling ended when the
supreme court issued its opinion and judgment on February 15, 2008, but not if tolling ended
when the supreme court issued its mandate on March 28, 2008. See supra at 9 n.6. We need not
decide when tolling ended, however. As explained above, Clark’s claims are timely even if
tolling ended on the earlier judgment date and the limitations period was 1,461 days (including
one leap day).

                                              13
       C.     Clark timely intervened after tolling ceased.

       Finally, we turn to the question whether Clark timely intervened after the
supreme court’s affirmance of this Court’s judgment decertifying revised Subclass
1 brought tolling to an end. We conclude that he did so.

       The limitations period governing underpayment of royalty claims is four
years—or at least 1,460 days 10—from the date the claim accrues. See Houston
Endowment Inc. v. Atlantic Richfield Co., 972 S.W.2d 156, 159 (Tex. App.—
Houston [14th Dist.] 1998, no pet.) (applying four-year breach-of-contract statute
of limitations to case involving payment of oil and gas royalties).                     Unless
addressed by the lease, a claim regarding underpayment of royalties accrues ninety
days after the end of the calendar month in which the produced gas is sold. See
Tex. Nat. Res. Code Ann. § 91.402(a)(2) (West 2011).

       Using this accrual rule, there is no dispute that Clark’s earliest claim accrued
on April 1, 1997. A total of 687 days had passed when the Bowden class-action
lawsuit was filed on February 16, 1999, tolling the running of the limitations
period. The running of limitations remained tolled at least until February 15, 2008,
the day the supreme court issued its opinion and judgment finally rejecting the trial
court’s certification of revised Subclass 1. See supra at 9 n.6; Grant, 725 S.W.2d
at 370. Clark intervened in the Bowden litigation 728 days later on February 12,
2010. Thus, a total of 1,415 days had passed between the accrual of Clark’s
earliest potential claim and Clark’s intervention.

       10
          The limitations period may be longer if it includes any leap days. In this case, the
limitations period was running during one leap day (February 29, 2008) if tolling ended when the
supreme court issued its opinion and judgment on February 15, 2008, but not if tolling ended
when the supreme court issued its mandate on March 28, 2008. See supra at 9 n.6. We need not
decide when tolling ended, however. As explained above, Clark’s claims are timely even if
tolling ended on the earlier judgment date and the limitations period was 1,461 days (including
one leap day).

                                              13
