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Forest Oil Corp. v. McAllen12/15/2005
Before Justices Hinojosa, Yañez, and Rodriguez.
Appellants, Forest Oil Corporation (Forest Oil), Daniel B. Worden (Worden), and ConocoPhillips Corporation (ConocoPhillips), bring this accelerated interlocutory appeal following the trial court's denial of their motion to compel arbitration with respect to appellees James Argyle McAllen (McAllen), El Rucio Land and Cattle Company, Inc., San Juanito Land Partnership, and McAllen Trust Partnership. By three issues, appellants contend the following: (1) the trial court erred in denying their motion to compel arbitration because appellants and appellees had agreed to arbitrate their claims; (2) appellees' allegation of fraudulent inducement with respect to the arbitration provision fails as a matter of law; and (3) an assertion of forum non conveniens may not invalidate an agreement to arbitrate in a specified location. We affirm.
I. Background
In 1999, a lawsuit involving the underpayment of royalties and non-development issues relating to oil and gas leases on the McAllen Ranch was settled. Appellant Forest Oil and Conoco, the predecessor-in-interest to appellant ConocoPhillips, signed the resulting settlement agreement and surface agreement. Although appellant Worden was not a party to either agreement, he is employed by Forest Oil as a senior pumper for the McAllen Ranch leases. Appellees are surface owners of the McAllen Ranch. Only appellee McAllen signed the settlement agreement.
Appellees McAllen, El Rucio Land and Cattle Co., Inc., and San Juanito Land Partnership signed the surface agreement. Appellee McAllen Trust Partnership is a successor-in-interest to the surface agreement.
Pursuant to the settlement agreement, McAllen released appellant Forest Oil and Conoco from the following:
all claims and causes of action . . . which presently or could assert, including but not limited to all claims and causes of action (i) in any manner relating to, arising out of or connected with the McAllen Ranch Leases . . . .
However, within the settlement agreement, McAllen reserved and excepted the following from the release:
(c) any rights and claims arising under the McAllen Ranch Leases, as amended, after the Effective Date of this Agreement, (d) any rights or claims . . . for environmental liability, surface damages, personal injury , or wrongful death occurring at any time and relating to the McAllen Ranch Leases . . . .
In addition, the settlement agreement provided that any disputes arising from claims excepted and reserved from the release were to be resolved in arbitration in Harris County pursuant to the Texas General Arbitration Act. The surface agreement, which was executed contemporaneously with the settlement agreement, provided that it was to become part of the settlement agreement and to be subject to the arbitration provision contained in the settlement agreement.
Appellees subsequently filed suit against appellants asserting numerous tort claims, including claims for environmental contamination on the McAllen Ranch. Relying on the arbitration provision found in the settlement agreement and incorporated into the surface agreement, appellants filed a motion to compel arbitration. In response to appellants' motion to compel arbitration, appellees asserted that the arbitration clause was unconscionable and induced by fraud and that it should be set aside. Appellees also argued that their claims did not implicate the settlement agreement or the surface agreement. After conducting an evidentiary hearing to summarily determine the existence of the arbitration provision, see TEX. CIV. PRAC. & REM. CODE ANN. § 171.021
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