At Looper Reed we advise our clients that it is good business to accommodate your neighbor informally, if you can. Sometimes that leads to attempted world domination, as Chamberlain learned from Hitler in 1938. Closer to home it is my college-age son using his bedroom floor as a summertime closet. It can also lead to litigation. This is how it was at the Texas Supreme Court in Merriman v. XTO Energy.
What is the accommodation doctrine?
If the mineral owner has only one method for developing and producing the minerals, that method may be used regardless of whether it precludes or substantially impairs an existing use of the serving surface estate. On the other hand, if the mineral owner has reasonable alternative uses, one of which permits the surface owner to continue to use the surface in the manner intended and one of which would preclude that use by the surface owner, the mineral owner must use the alternative that allows continued use of the surface by the surface owner.
What must the surface owner prove?
The surface owner must prove that (1) the lessee’s use completely precludes or substantially impairs the existing use; and (2) there is no reasonable alternative method available to the surface owner by which the existing use can be continued. If he carries that burden, then he must further prove that given the particular circumstances there are alternative, reasonable and customarily industry accepted methods available to the lessee which would allow both uses.
How did he do in this case?
Merriman owns a 40 acre tract with a home and a barn, permanent fencing, and corrals used in cattle operation. He leases several other tracts and once a year brings his cattle to the 40 acres for a round-up.
XTO was lessee of the severed mineral estate. Merriman claimed the proposed location would interfere with his cattle operation and that XTO failed to accommodate his existing use of the surface, exceeded its rights in the mineral estate, and trespassed.
This decision turned on some inside-baseball summary judgment evidence rules. It is best to leave your trial lawyers in charge of such details. The point is that Mr. Merriman did not produce evidence that he had no reasonable alternatives for his cattle operation. The good news was that a surface owner need not prove that he has no reasonable alternative for general agricultural purposes.
The court concluded that the well was an inconvenience to Mr. Merriman and would result in some amount of additional expense and reduced profitability. That hindrance does not rise to the level of evidence that the surface owner has no reasonable alternative method to maintain the existing use.
Is there an unspoken issue?
XTO’s lease was of the severed minerals. You can count on a surface owner who will never benefit from a well in his backyard to be a tougher customer than the royalty owner who stands to receive a fat monthly check for his troubles.
We offer Mr. Merriman our condolences and this musical tribute to his cattle operation. Or you might prefer this one.