Kevin Geheb v. TransCanada Keystone Pipeline, L.P. ( 2017 )

ACCEPTED
09-17-00107-CV
NINTH COURT OF APPEALS
BEAUMONT, TEXAS
12/13/2017 2:20 PM
CAROL ANNE HARLEY
CLERK
No. 09-17-00107-CV
FILED IN
9th COURT OF APPEALS
IN THE NINTH COURT OF APPEALS BEAUMONT, TEXAS
BEAUMONT, TEXAS 12/13/2017 2:20:51 PM
CAROL ANNE HARLEY
Clerk
KEVIN GEHEB,
Plaintiff/Appellant,
v.
TRANSCANADA KEYSTONE PIPELINE, LP,
Defendant/Appellee.
On appeal from the 58th Judicial District Court
Jefferson County, Texas, Hon. Kent Walston, Judge Presiding
__________________________________________________________________
BRIEF OF APPELLEE TRANSCANADA KEYSTONE PIPELINE, LP
GERMER, P.L.L.C. ZABEL FREEMAN
Karen Bennett Thomas A. Zabel
State Bar No. 21702640 State Bar No. 22235500
P.O. Box 4915 James A. Freeman
Beaumont, Texas 77704 State Bar No. 00796580
(409) 654-6700 – telephone Nancy H. Elliott
(409) 835-2115 – fax State Bar No. 08701240
krbennett@germer.com 1135 Heights Blvd.
Houston, Texas 77008
(713) 802-9117 – telephone
(713) 802-9114 – fax
tzabel@zflawfirm.com
jfreeman@zflawfirm.com
nelliott@zflawfirm.com
ATTORNEYS FOR APPELLEE
TRANSCANADA KEYSTONE PIPELINE, LP
ORAL ARGUMENT REQUESTED
IDENTITY OF PARTIES AND COUNSEL
Kevin Geheb Plaintiff/Appellant
Robert Keith Wade Counsel for Plaintiff/Appellant
LAW OFFICES OF ROBERT KEITH WADE Kevin Geheb
650 North Ninth Street at McFaddin
Beaumont, Texas 77702
TransCanada Keystone Pipeline, LP Defendant/Appellee
Thomas A. Zabel Counsel for Defendant/Appellee
James A. Freeman TransCanada Keystone Pipeline, LP
Nancy H. Elliott
ZABEL FREEMAN
1135 Heights Blvd.
Houston, Texas 77008
Karen Bennett Counsel for Defendant/Appellee
GERMER, P.L.L.C. TransCanada Keystone Pipeline, LP
P.O. Box 4915
Beaumont, Texas 77704
i
TABLE OF CONTENTS
IDENTITY OF PARTIES AND COUNSEL ............................................................ i
INDEX OF AUTHORITIES.................................................................................... iv
REFERENCES ........................................................................................................ vi
STATEMENT OF THE CASE ............................................................................... vii
ISSUES PRESENTED .......................................................................................... viii
1. Did the trial court properly grant summary judgment in favor of
TransCanada on all of Geheb’s claims on the grounds that
Geheb settled, released, waived, and forever discharged all such
claims? ............................................................................................... viii
2. Did the trial court properly grant summary judgment in favor of
TransCanada on all of Geheb’s claims on the grounds that there
was no evidence of a “taking?” ......................................................... viii
STATEMENT OF FACTS ....................................................................................... 1
1. The Pipeline.......................................................................................... 1
2. The Landowner grants TransCanada an Easement on the
Property .............................................................................................. 2
3. TransCanada and the Landowner agree that TransCanada will
not be responsible for payment to any tenant, and the
Landowner will pay any compensation due the tenant ....................... 2
4. Geheb demands advance payment from TransCanada for 2012
crop damage ........................................................................................ 3
5. Geheb demands advance payment from TransCanada for 2013
crop damage ......................................................................................... 4
6. Geheb files suit against TransCanada ................................................. 5
ii
7. Geheb seeks irrelevant discovery related to TransCanada’s
status as a common carrier .................................................................. 6
8. The case is transferred to district court ............................................... 8
9. The trial court grants summary judgment in favor of
TransCanada on Geheb’s claims ......................................................... 9
STANDARD OF REVIEW .................................................................................... 10
SUMMARY OF THE ARGUMENT ..................................................................... 10
ARGUMENT .......................................................................................................... 13
I. Geheb Settled, Released, Waived, and Forever Discharged All of His
Claims Against TransCanada ....................................................................... 13
A. A Release of a Claim Extinguishes that Claim .................................. 13
B. Geheb’s Claims Fall Squarely within the Express Language of
the 2013 Release................................................................................. 14
1. Geheb ignores the 2013 Release .............................................. 14
2. The 2013 Release bars Geheb’s claims.................................... 15
II. TransCanada Did Not Exercise the Power of Eminent Domain to
Obtain the Easement on the Property that Geheb Leased for Rice
Farming ......................................................................................................... 18
A. The Landowner Granted the Easement to TransCanada—There
Has Been No “Taking” ....................................................................... 20
CONCLUSION AND PRAYER ............................................................................ 22
CERTIFICATE OF COMPLIANCE ...................................................................... 24
CERTIFICATE OF SERVICE ............................................................................... 24
iii
INDEX OF AUTHORITIES
CASES PAGE
Becon Constr. Co. v. Alonso,
444 S.W.3d 824 (Tex. App.—Beaumont 2014, pet. denied) ....................... 10
Chambers v. Pruitt,
241 S.W.3d 679 (Tex. App.—Dallas 2007, no pet.) ................................... n.3
Doggett v. Nitschke,
498 S.W.2d 339 (Tex. 1973) ....................................................................... n.3
Dresser Indus., Inc. v. Page Petroleum, Inc.,
853 S.W.2d 505 (Tex. 1993) ........................................................................ 14
D.R. Horton-Tex., Ltd. v. Savannah Props. Assocs., L.P.,
416 S.W.3d 217 (Tex. App.—Fort Worth 2013, no pet.) ............................. 16
Franks v. Brookshire Bros., Inc.,
986 S.W.2d 375 (Tex. App.—Beaumont 1999, no pet.) .............................. 13
Harris v. Phillips Pipe Line Co.,
517 S.W.2d 361 (Tex. Civ. App.—Austin 1974, writ ref’d n.r.e.) .......... 20-21
Hart v. Traders & Gen. Ins. Co.,
189 S.W.2d 493 (Tex. 1945) ........................................................................ 13
Henry v. Masson,
333 S.W.3d 825 (Tex. App.—Houston [1st Dist.] 2010, no pet.) .......... 13, 14
Keck, Mahin & Cate v. Nat’l Union Fire Ins. Co. of Pittsburgh, Pa.,
20 S.W.3d 692 (Tex. 2000) ..................................................................... 15-16
Long Distance Int’l, Inc. v. Telefonos de Mexico, S.A. de C.V.,
49 S.W.3d 347 (Tex. 2001) .......................................................................... 10
M.D. Anderson Hosp. & Tumor Inst. v. Willrich,
28 S.W.3d 22 (Tex. 2000) ............................................................................ 10
iv
Memorial Med. Center v. Keszler,
943 S.W.2d 433 (Tex. 1997) ........................................................................ 16
Mobil Pipe Line Co. v. Smith,
860 S.W.2d 157 (Tex. App.—El Paso 1993, writ dism’d w.o.j.) ............ 20-21
Naik v. Naik,
438 S.W.3d 166 (Tex. App.—Dallas 2014, no pet.) .................................... 13
Phillips Pipe Line Co. v. Razo,
420 S.W.3d 691 (Tex. 1967) ........................................................................ 20
Provident Life & Accident Ins. Co. v. Knott,
128 S.W.3d 211 (Tex. 2003) ........................................................................ 10
Reytec Constr. Resources, Inc. v. Baptist Hosps. of Se. Tex.,
No. 09-15-00085-CV, 2016 WL 6900874
(Tex. App.—Beaumont Nov. 23, 2016, no pet.) ......................................... 13
Roskey v. Texas Health Facilities Comm’n,
639 S.W.2d 302 (Tex. 1982) ........................................................................ 10
Schlumberger Tech Corp. v. Swanson,
959 S.W.2d 171 (Tex. 1997) ....................................................................... n.4
STATUTES AND RULES
TEX. GOV’T CODE § 25.0003(c)(1)............................................................................ 8
TEX. R. CIV. P. 166a(c) ............................................................................................ 10
v
REFERENCES
“Geheb” Defendant/Appellant Kevin Geheb is referred to as
“Geheb.”
“TransCanada” Plaintiff/Appellee TransCanada Keystone Pipeline, LP
is referred to as “TransCanada.”
“CR [page]” References to the Clerk’s Record are cited as “CR
[page].”
“[volume]RR [page]” References to the Reporter’s Record are cited as
“[volume]RR [page].”
“Geheb’s Br. at [page]” References to the Brief of Defendant/Appellant Kevin
Geheb are cited as “Geheb’s Br. at [page].”
vi
STATEMENT OF THE CASE
Nature of the Geheb initiated this case in January 2015, seeking damages
case: resulting from TransCanada’s alleged interference with
Geheb’s rights in a rice farming leasehold, including alleged
damages to Geheb’s “leasehold and crop.” CR 149-72.
Trial court: Honorable Kent Walston, 58th Judicial District Court,
Jefferson County, Texas.
Trial court’s In December 2016, TransCanada moved for summary
disposition: judgment on all of Geheb’s claims, on the grounds that Geheb
“settled, released, waived and forever discharged” all of his
claims against TransCanada, and additionally, that Geheb had
no evidence to support his claims, including his claim for
“taking.” CR 438-90. On February 8, 2017, the trial court
granted summary judgment in favor of TransCanada, ordered
that Geheb “take nothing” by virtue of his claims against
TransCanada, and entered a final summary judgment. CR
1021.
vii
ISSUES PRESENTED
1. In 2013, in exchange for consideration of $81,000.00, Geheb executed
an Advance Release of Damage Claims in which he acknowledged “receipt of
payment in full and in advance” for all crop and other foreseeable damages
“attributable to or arising from [TransCanada’s] proper exercise of its rights” under
an Easement TransCanada purchased from the Landowner. In the release, Geheb
“waive[d] and agree[d] to save, defend, hold harmless and indemnify
[TransCanada]” from all claims, causes of action, and damages “which arise out of,
are connected with, or relate in any way to . . . [TransCanada’s] proper exercise of
its rights granted under the Easement,” including all crop and other foreseeable
damages. CR 473.
Did the trial court properly grant summary judgment in favor of
TransCanada on all of Geheb’s claims for damages to his leasehold
and crop on the grounds that Geheb settled, released, waived, and
forever discharged all such claims?
2. TransCanada obtained the Easement by purchase from the Landowner,
and did not exercise the power of eminent domain to obtain the Easement.
Did the trial court properly grant summary judgment in favor of
TransCanada on all of Geheb’s claims on the grounds that there was
no evidence of a “taking?”
viii
STATEMENT OF FACTS
1. The Pipeline.
TransCanada owns and operates the U.S. portion of the Keystone Pipeline
System, which is comprised of approximately 2,151 miles of crude petroleum
pipelines originating in Hardisty, Alberta and traversing to U.S. Midwest markets
at Wood River and Patoka, Illinois and from Steele City, Nebraska, to Cushing
Oklahoma (“the Pipeline”). CR 56. The Pipeline delivers crude petroleum to
market hubs, where the oil is then shipped to refineries. CR 56-57. The Gulf
Coast Project is an addition to the Keystone Pipeline System that commences at
the crude petroleum supply hub at Cushing, Oklahoma, and terminates at existing
crude storage terminal facilities near Nederland and Houston, Texas. CR 57. The
Gulf Coast Project helps meet the increasing demand to transport domestic crude
supply in the Permian, Williston, Granite Wash, Niobrara, and Mississippi Lime
oil and gas producing basins. It decreases the demand for light domestic crude
from U.S. Midwest refineries due to conversion projects that rely extensively on
heavy crude supplies and pipeline capacity limitations between Cushing,
Oklahoma and the U.S. Gulf Coast. Id.
1
2. The Landowner grants TransCanada an Easement on the Property.
Geheb is a former rice farmer tenant on a tract of land (“the Property”)
owned by Michael Gaus (“the Landowner”) in Jefferson County, Texas.1 CR 173.
On November 18, 2010, in consideration for the payment of $403,920.00, the
Landowner granted TransCanada a 50-foot pipeline easement, specifically:
a nonexclusive right-of-way and easement, fifty-feet (50’) in width,
and temporary workspace for the purpose of laying, constructing,
maintaining, operating, replacing, protecting and removing only one
(1) thirty-six-inch (36”) in diameter . . . pipeline [] for the
transportation of crude oil, natural gas, hydrocarbons, petroleum
products and all by-products thereof over, through and across
Grantor’s lands, situated in Jefferson County, Texas . . . together with
the rights of ingress and egress to that easement[.]
CR 438, 459-67. Of significance to this appeal is the fact that TransCanada did
not obtain the Easement by condemnation—it obtained it by purchase from the
Landowner.
3. TransCanada and the Landowner agree that TransCanada will not be
responsible for payment to any tenant, and the Landowner will pay any
compensation due the tenant.
At the same time that the Landowner granted TransCanada the Easement,
the Landowner and TransCanada entered into a Letter Agreement in which they
agreed that (1) the $403,920.00 payment to the Landowner “constitutes payment
in full, covering all damages, loss of crops and laser leveling within the
[Easement],” (2) TransCanada will not be responsible for payment to any tenant
1
In 2013, the Landowner terminated the lease with Geheb for nonpayment and leased the
Property to another individual. CR 696-97; 1RR 13-14.
2
on the Property, “and any compensation due the tenant by way of the easement
and initial construction will be paid by [the Landowner],” and (3) TransCanada
will pay for any damages outside of the [Easement] that are in addition to the
damages contemplated in (1). CR 439, 468.
4. Geheb demands advance payment from TransCanada for 2012 crop
damage.
Prior to the start of construction on the Property, and before he would allow
TransCanada on the Property, Geheb demanded payment from TransCanada for
damages he claimed would result to his 2012 rice crop. CR 439, 469. Geheb
calculated these damages to be $51,840.00. CR 439, 469. Despite the
Landowner’s agreement that “any compensation due the tenant by way of the
easement and initial construction will be paid by [the Landowner],” TransCanada
nevertheless paid Geheb the $51,840.00 (“the 2012 Payment”) he demanded as
advance compensation for crop damage in order to ensure TransCanada’s ability
to immediately access the Property. In return for TransCanada’s payment, Geheb
executed an Advance Release of Damage Claims (“the 2012 Release”). CR 439,
470-71. The 2012 Release provided, in pertinent part, that:
In consideration of said advance payment, I/we and my/our heirs,
executors, administrators and assigns, do hereby release and forever
discharge [TransCanada] from any and all causes of action, suits,
debts, claims, expenses, general damages, interest, costs and demands
whatsoever, at law and in equity, against [TransCanada], which I/we
ever had, have now, or which I/we or my/our Insurers, heirs,
executors, administrators, successors or assigns hereafter can, shall or
3
may have in the future, relating to the damage items listed on
Appendix A, arising out of or in connection with, resulting or alleged
to have resulted from, construction or surveying, over, under or on
[the Property].
CR 470.2 The 2012 Release provided that the 2012 Payment by TransCanada
constituted “full payment and settlement, in advance, for all damages listed on the
Advance Damages Computation Form” attached to the 2012 Release. Id.
5. Geheb demands advance payment from TransCanada for 2013 crop
damage.
In March 2013, Geheb again demanded payment from TransCanada for
damages he allegedly would incur in connection with construction of the Pipeline.
CR 440, 472. This time, Geheb claimed that as a result of construction delays, he
would be unable to produce his 2013 rice crop, resulting in damages that he
calculated to be $115,375.51. CR 440, 472. Once again, despite the Landowner’s
agreement that “any compensation due the tenant by way of the easement and
initial construction will be paid by [the Landowner], and after negotiating with
Geheb as to the extent and amount of his claimed damages, TransCanada paid
Geheb $81,000.00 (“the 2013 Payment”). In exchange, Geheb signed another
Advance Release of Damage Claims (“the 2013 Release”). CR 440, 473. In the
2013 Release, Geheb expressly acknowledged:
receipt of payment in full and in advance for all tree, crop, plant,
timber, harvest or yield loss damages, diminution in value of the
2
Appendix A to the 2012 Release described the damages as “Damages Rice, 50 Acres, Total
Loss 324,000 lbs. @ .16 per lb.” for a total of $51,840.00. CR 206.
4
Property (if any), and/or any other reasonably foreseeable damages
attributable to or arising from [TransCanada’s] proper exercise of its
rights granted pursuant to that certain Permanent Easement and Right-
of-Way Agreement and Construction Access Road Agreement . . .
including, without limitation, those items listed on Appendix A
attached hereto.
CR 473 (emphasis added). The 2013 Release further provided that:
[Geheb] on behalf of [himself/themselves], and any other person or
entity claiming by or through [him/they] hereby waive(s) and agree(s)
to save, defend, hold harmless and indemnify [TransCanada] . . .
from and against any and all claims, causes of action, suits, debts,
expenses, general damages, interest, costs and demands whatsoever,
at law and in equity, against [TransCanada] . . . which arise out of,
are connected with, or relate in any way to [TransCanada’s]
acquisition of, or Owner’s conveyance of, the Easement or
[TransCanada’s] proper exercise of its rights granted under the
Easement, including, but not limited to, any and all tree, crop, plant,
timber, harvest or yield loss damages, diminution of the value of the
Property, or any other reasonably foreseeable damages[.]
Id. (emphasis added).
6. Geheb files suit against TransCanada.
On January 9, 2015, Geheb filed his Original Petition against TransCanada
in the County Court at Law No. 1 of Jefferson County, Texas. CR 6-22. Then
Geheb filed his First Amended Original Petition, asserting a hodgepodge of no
less than nine claims against TransCanada for (i) taking, (ii) breach of agreement,
(iii) tortious interference, (iv) negligence, (v) fraud, duress, and/or taking of undue
advantage, (vi) common law fraud, (vii) fraudulent misrepresentation, (viii) fraud
– negligent misrepresentation, (ix) fraud – suppression of facts, (x) exemplary
5
damages, and (xi) attorneys’ fees. He sought a “judgment declaring [Geheb’s]
rights” in the farming leasehold, and damages stemming from TransCanada’s
alleged interference with Geheb’s “express and implied, legal and equitable, rights
to the farming leasehold.” CR 149-172. At bottom, Geheb sought additional
compensation for alleged damages directly related to TransCanada’s proper
exercise of its rights under the Easement—damages that Geheb had settled,
released, and forever discharged.
7. Geheb seeks irrelevant discovery related to TransCanada’s status as a
common carrier.
Included with Geheb’s Original Petition was Plaintiff’s First Request for
Production, consisting of 40 categories of documents. CR 21, 23-26. None of the
requested documents were related to any damages Geheb might have actually
incurred, communications between the parties, or the 2012 and 2013 Payments
and Releases. See CR 23-26. Instead, all of the requests related to TransCanada’s
status as a common carrier pipeline (e.g., contracts related to the Pipeline, the
Pipeline’s operations, and filings with state and federal regulatory authorities). He
requested these despite the fact that TransCanada never filed an eminent domain
proceeding against either Geheb or the Landowner—TransCanada obtained the
Easement by purchase from the Landowner. See CR 173, 176.
When TransCanada refused to produce the requested documents, which
were irrelevant to any issue in this case, Geheb filed a Motion to Compel. CR
6
300-53. Geheb argued that TransCanada damaged his leasehold and crop, and that
TransCanada “attempted to justify its action by alleging it would perform a
‘public purpose’ in transporting” crude petroleum in the Pipeline. CR 300.
Geheb argued that because TransCanada had claimed common carrier status in
unrelated condemnation proceedings, it “must establish its right to condemn and
strict compliance with the law authorizing private property to be taken for public
use.” CR 301-02. Because TransCanada had not condemned, and did not seek to
condemn the Property against him or the Landowner, Geheb’s arguments were
nonsensical. See CR 177; 379; 382, 383-84.
Nevertheless, Geheb persisted in aggressively seeking discovery related to
TransCanada’s status as common carrier with the right and power of eminent
domain. Geheb noticed the deposition of Louis Fenyvesi—a Director of Business
Development for TransCanada who lives and works in Canada, and who has no
personal knowledge of any information related to any of Geheb’s claims for
damages. With the notice, Geheb included a subpoena duces tecum that mirrored
his First Request for Production of Documents. CR 178, 210-15, 227-28. In
response to TransCanada’s Motion to Quash Mr. Fenyvesi’s deposition, CR 229-
41, Geheb argued that the deposition was necessary to “test TransCanada’s bold
allegations” of “‘public purpose’ and ‘common carrier’ status’” in unrelated cases
by the “‘crucible of cross examination.’” CR 40. Geheb’s arguments continued
7
to make no sense for the plain reason that TransCanada had not condemned, and
did not seek to condemn, the Property.
8. The case is transferred to district court.
In his Petition in the County Court at Law No. 1, Geheb sought damages
stemming from TransCanada’s alleged interference with his “express and implied,
legal and equitable, rights to the farming leasehold,” and sought a “judgment
declaring [his] rights” in the farming leasehold. CR 14, 22. A leasehold is an
interest in real property. The County Court at Law No. 1 lacks jurisdiction over
disputes regarding the existence of a leasehold and questions of title to real
property.3 TransCanada, therefore, filed a Plea to the Jurisdiction, and included in
the motion as an additional basis that damages Geheb sought exceeded the
jurisdictional limit of the County Court at Law No. 1. See CR 248-54, 267-70
TEX. GOV’T CODE § 25.0003(c)(1).
Geheb did not dispute that his claims involved questions regarding the
existence of a leasehold and title to real property, or that he sought damages in
excess of the County Court at Law No. 1’s jurisdiction. See CR 295-99. Instead,
Geheb argued that “TransCanada has repeatedly judicially admitted that [the
County Court at Law No. 1] has jurisdiction, under § 21.001 of the Texas Property
3
See, e.g., Doggett v. Nitschke, 498 S.W.2d 339, 339 (Tex. 1973) (“A county court does not
have jurisdiction to try questions of title to land.”); Chambers v. Pruitt, 241 S.W.3d 679, 684
(Tex. App.—Dallas 2007, no pet.) (“District courts generally have exclusive jurisdiction to
determine title to real property.”).
8
Code, of matters involving TransCanada’s action as a purported common
carrier . . . with, among other things, the right and power to ‘enter on and
condemn the land, rights-of-way, easements and property . . . necessary for the
construction, maintenance, or operation of the common carrier pipeline,’” once
again citing unrelated condemnation proceedings. CR 296-97; see also CR 357.
Again, Geheb’s argument made no sense, as TransCanada was not claiming that it
was a common carrier with the right of eminent domain and had not instituted
condemnation proceedings in connection with the Easement.
On January 13, 2016, the County Court at Law No. 1 transferred this case to
the 60th Judicial District Court of Jefferson County, Texas “as required by §
21.002 of the Texas Property Code,” finding that “this case involves issues and
matters that cannot be fully adjudicated in this Court.” CR 366.
9. The trial court grants summary judgment in favor of TransCanada on
Geheb’s claims.
In December 2016, TransCanada moved for summary judgment on all of
Geheb’s claims against it (“Summary Judgment Motion”). CR 438-90. On
February 8, 2017, the trial court granted summary judgment in favor of
TransCanada, ordered that Geheb “take nothing” by virtue of his claims against
TransCanada, and entered a final summary judgment. CR 1021. Geheb
subsequently filed a Motion for Leave to File Amended Petition to Add
Responsible Third Party, a Motion to Reconsider, and a Request for Findings of
9
Fact and Conclusions of Law, all of which the trial court denied. CR 987-89,
1018-20, 1113, 1114, 1121-22, 1130. This appeal followed.
STANDARD OF REVIEW
A trial court’s grant of summary judgment is reviewed de novo. Becon
Constr. Co. v. Alonso, 444 S.W.3d 824, 828 (Tex. App.—Beaumont 2014, pet.
denied) (citing Provident Life & Accident Ins. Co. v. Knott, 128 S.W.3d 211, 215
(Tex. 2003)). To prevail on a traditional motion for summary judgment, the
movant must conclusively negate at least one essential element of each of the
plaintiff’s causes of action or conclusively establish each element of an
affirmative defense. TEX. R. CIV. P. 166a(c); Long Distance Int’l, Inc. v.
Telefonos de Mexico, S.A. de C.V., 49 S.W.3d 347, 250-51 (Tex. 2001). The
burden is on the movant to show that no genuine issue of material fact exists, and
that it is entitled to judgment as a matter of law. TEX. R. CIV. P. 166a(c); Roskey v.
Texas Health Facilities Comm’n, 639 S.W.2d 302, 303 (Tex. 1982). If the
movant establishes its entitlement to summary judgment, the burden shifts to the
nonmovant to raise a genuine issue of material fact. M.D. Anderson Hosp. &
Tumor Inst. v. Willrich, 28 S.W.3d 22, 23 (Tex. 2000).
SUMMARY OF THE ARGUMENT
TransCanada purchased a pipeline easement from the Landowner. In 2012
and again in 2013, Geheb, a rice farmer tenant on the Property, demanded advance
10
payment from TransCanada for alleged crop damages and other damages before
he would allow TransCanada on the Property. Although TransCanada had a
written agreement with the Landowner that TransCanada would not be responsible
for payment to any tenant on the Property, and that “any compensation due the
tenant by way of the easement and initial construction will be paid by [the
Landowner],” TransCanada nevertheless paid Geheb in order to ensure
TransCanada’s ability to immediately access the Property.
In exchange for the considerable consideration TransCanada paid to Geheb
in 2013, Geheb executed an Advance Release of Damage Claims. In it, he
acknowledged “receipt of payment in full and in advance” for all crop damages
and other reasonably foreseeable damages attributable to TransCanada’s exercise
of its rights under the Easement. Geheb also expressly waived and agreed to hold
TransCanada harmless from all claims, causes of actions, damages, and demands
whatsoever arising out of TransCanada’s exercise of its rights under the Easement,
including all crop damages and other reasonably foreseeable damages.
In this lawsuit, Geheb seeks additional compensation for alleged damages
directly related to TransCanada’s proper exercise of its rights under the Easement.
These are reasonably foreseeable damages that Geheb settled, released, and
forever discharged. Geheb has never disputed that his claims fall squarely within
the claims he released in the 2013 Release, nor has he ever challenged the validity
11
or enforceability of the 2013 Release. Moreover, Geheb’s claim for 2014 crop
damages is patently frivolous, as it is undisputed that the Landowner terminated
Geheb’s leasehold in 2013 for nonpayment. The trial court, therefore, properly
granted summary judgment in favor of TransCanada on the grounds that Geheb
settled and released all of his claims.
Geheb devotes nearly the entirety of his brief to arguing, as he did in the
trial court, that TransCanada failed to establish it is a common carrier with the
right and power of eminent domain. Based on this, Geheb claims he should be
allowed irrelevant discovery and the denial of TransCanada’s summary judgment
motion. This argument is nonsensical—TransCanada did not obtain the Easement
by condemnation.
The record conclusively establishes that TransCanada obtained the
Easement by consensual purchase from the Landowner, and not through
condemnation. Accordingly, it is irrelevant whether TransCanada is a common
carrier with the power of eminent domain. The trial court properly rejected
Geheb’s requests for irrelevant discovery and his argument that the trial court was
required to make a preliminary finding as to TransCanada’s common carrier status
under the Texas Natural Resources Code.
12
ARGUMENT
I. GEHEB SETTLED, RELEASED, WAIVED, AND FOREVER DISCHARGED ALL
OF HIS CLAIMS AGAINST TRANSCANADA.
A. A Release of a Claim Extinguishes that Claim.
“‘A release is an agreement or contract in which one party agrees that a
legal right or obligation owed by the other party is surrendered.’” Reytec Constr.
Resources, Inc. v. Baptist Hosps. of Se. Tex., No. 09-15-00085-CV, 2016 WL
6900874, *8 (Tex. App.—Beaumont Nov. 23, 2016, no pet.) (citation omitted).
See also Henry v. Masson, 333 S.W.3d 825, 844 (Tex. App.—Houston [1st Dist.]
2010, no pet.) (“A release is a writing which provides that a duty or obligation
owed to one party to the release is discharged immediately or upon the occurrence
of a condition.”). “Generally, a release is a bar to any right of action growing out
of the matter discharged, conclusively estopping the releasor from making further
efforts to enforce the claim released.” Franks v. Brookshire Bros., Inc., 986
S.W.2d 375, 377 (Tex. App.—Beaumont 1999, no pet.) (citing Hart v. Traders &
Gen. Ins. Co., 189 S.W.2d 493, 494 (Tex. 1945)); see also Naik v. Naik, 438
S.W.3d 166, 174 (Tex. App.—Dallas 2014, no pet.) (“A release is a contractual
arrangement that operates as a complete bar to any later action based upon matters
covered in the release.”).4 Accordingly, “[a] release of a claim or cause of action
4
“Texas law favors and encourages voluntary settlements and orderly dispute resolution.”
Schlumberger Tech. Corp. v. Swanson, 959 S.W.2d 171, 178 (Tex. 1997).
13
extinguishes the claim or cause of action.” Henry, 333 S.W.3d at 844 (citing
Dresser Indus., Inc. v. Page Petroleum, Inc., 853 S.W.2d 505, 508 (Tex. 1993)).
B. Geheb’s Claims Fall Squarely within the Express Language of
the 2013 Release.
1. Geheb ignores the 2013 Release.
The first argument in TransCanada’s Summary Judgment Motion was that
“[Geheb] Settled, Released, Waived and Forever Discharged All Claims Against
Keystone.” CR 443-47. In his brief, however, Geheb intentionally glosses over
the 2013 Release and its express provisions that bar his claims. In fact, Geheb
only mentions the 2012 and 2013 Releases in his Brief in three places. The first is
in a footnote in his Statement of the Case, in which he states:
While the pipeline construction was ongoing, TransCanada did make
a payment for some, but not all, of Geheb’s 2012 rice crop losses,
which Geheb compromised and accepted, and TransCanada later
made a payment for some, but not all, of Geheb’s 2013 rice crop
losses, which Geheb compromised and accepted. TransCanada
prepared and had Geheb sign release when each of the 2012 and 2013
rice crop loss payments were made. Geheb, in his action, sought no
further compensation for 2012 or 2013 crop losses.
Geheb’s Br. at n.3.
The next mention is in his Statement of Facts timeline, in which he states
that “TransCanada pays Geheb for a portion of Geheb’s 2012 rice crop already
planted by Geheb,” and “TransCanada pays Geheb for a portion of Geheb’s 2013
rice crop which Geheb could not plant due to pipeline construction.” Id. at 5.
14
Finally, in his Argument and Authorities section, Geheb quotes language from the
2013 Release regarding “reasonably foreseeable damages attributable to or
arising from [TransCanada’s] proper use of its rights granted pursuant to that
certain Permanent Easement[.]” He then argues that the Letter Agreement
between the Landowner and TransCanada conflicted with TransCanada’s
obligation to “correct level and restore to original ground level,” and, “therefore, it
could not have been a proper use of the rights granted by the recorded easement[.]”
He neither offers any authority for that proposition, nor explains why this
purported conflict made TransCanada’s use of the Easement improper. He also
argues that the damages of not so leveling could not have been foreseeable by him,
but fails to offer any authority for this proposition. Id. at 11. In total, Geheb’s
“legal argument” is unsupported by authority or competent evidence.
2. The 2013 Release bars Geheb’s claims.
To effectively release a claim, the releasing instrument must “mention” the
claim to be released. Keck, Mahin & Cate v. Nat’l Union Fire Ins. Co. of
Pittsburgh, Pa., 20 S.W.3d 692, 697-98 (Tex. 2000) (releasing “all demands,
claims or causes of action of any kind whatsoever, statutory, at common law or
otherwise, now existing or that might arise hereafter, directly or indirectly
attributable to the rendition [of] professional legal services” during a certain time
period). It is not necessary, however, for the parties to “anticipate and identify
15
each potential cause of action relating to the release’s subject matter.” Id. at 698
(citing Memorial Med. Center v. Keszler, 943 S.W.2d 433, 435 (Tex. 1997)).
Rather, “a valid release may encompass unknown claims and damages that
develop in the future.” Id.; see also D.R. Horton-Tex., Ltd. v. Savannah Props.
Assocs., L.P., 416 S.W.3d 217, 226 (Tex. App.—Fort Worth 2013, no pet.)
(“Although releases include claims existing at the time of execution, they may
also include unknown claims and damages that develop in the future.”).
The reason Geheb glosses over the 2013 Release is because it is fatal to his
claims. In the 2013 Release, Geheb expressly acknowledged:
receipt of payment in full and in advance for all tree, crop, plant,
timber, harvest or yield loss damages, diminution in value of the
Property (if any), and/or any other reasonably foreseeable damages
attributable to or arising from [TransCanada’s] proper exercise of
its rights granted pursuant to that certain Permanent Easement and
Right-of-Way Agreement and Construction Access Road
Agreement . . . including, without limitation, those items listed on
Appendix A attached hereto.
CR 473 (emphasis added). The 2013 Release further provided that Geheb:
on behalf of [himself/themselves], and any other person or entity
claiming by or through [him/they] hereby waive(s) and agree(s) to
save, defend, hold harmless and indemnify [TransCanada] . . . from
and against any and all claims, causes of action, suits, debts,
expenses, general damages, interest, costs and demands whatsoever,
at law and in equity, against [TransCanada] . . . which arise out of,
are connected with, or relate in any way to [TransCanada’s]
acquisition of, or Owner’s conveyance of, the Easement or
[TransCanada’s] proper exercise of its rights granted under the
Easement, including, but not limited to, any and all tree, crop, plant,
16
timber, harvest or yield loss damages, diminution of the value of the
Property, or any other reasonably foreseeable damages[.]
Id. (emphasis added). The 2013 Release clearly and unambiguously included both
existing claims and potential future claims related to TransCanada’s construction
activities on the Easement granted to it by the Landowner. Significantly, Geheb
never challenged the validity or enforceability of the 2013 Release.
All of Geheb’s claims arise out of TransCanada’s alleged damage to his
crops and failure to restore the leasehold to its condition in connection with
TransCanada’s exercise of its rights under the Easement. Thus, they fall squarely
within the express language of the 2013 Release. Geheb specifically asserted in
his Petition that he was the rice farmer tenant on the Property “until 2013, when
[TransCanada] caused damages to [Geheb’s] leasehold and crop[.]” CR 151. The
plain and unambiguous language of the 2013 Release releases TransCanada from
“any and all claims, causes of action, suits, debts, expenses, general damages,
interest, cost and demands whatsoever” that arise out of or relate to
TransCanada’s “proper exercise of its rights granted under the Easement,”
including all crop damages, diminution in value of the Property, or “any other
reasonably foreseeable damages.” CR 473. Geheb’s claims fall squarely within
the language of the 2013 Release. In fact, Geheb has never asserted that his
claims do not fall within the language of the 2013 Release.
17
Moreover, in his brief, Geheb admits that he compromised and settled his
claims for 2012 and 2013 crop losses. Geheb’s Br. at n.3 (“Geheb, in his action,
sought no further compensation for 2012 or 2013 crop losses.”). According to
Geheb, he initiated this lawsuit “to recover his damages for TransCanada’s failure
to correct level and restore to original ground level so that water may pass and
flow undisturbed and unimpeded across Geheb’s rice farm leasehold (i.e., laser-
level) upon completion of TransCanada’s pipeline construction and for 2014 rice
crop losses resulting from TransCanada’s failure to restore Geheb’s leasehold to
such leveled condition necessary for rice farming.” Id. at 1 (emphaseiadded)
(footnote omitted). It is undisputed, however, that the Landowner terminated
Geheb’s lease in 2013 for nonpayment, and Geheb did not lease the Property in
2014. CR 696-97.
The 2013 Release bars all of Geheb’s claims as a matter of law. Geheb did
not even attempt to raise a fact issue as to the validity or enforceability of the 2013
Release. Accordingly, the trial court properly granted TransCanada’s Summary
Judgment Motion and entered a take-nothing judgment on all of Geheb’s claims.
II. TRANSCANADA DID NOT EXERCISE THE POWER OF EMINENT DOMAIN TO
OBTAIN THE EASEMENT ON THE PROPERTY THAT GEHEB LEASED FOR
RICE FARMING.
Rather than address the bases on which the trial court granted
TransCanada’s Summary Judgment Motion, Geheb devotes nearly the entirety of
18
his Brief to addressing irrelevant issues related to TransCanada’s status as a
common carrier with the right and power of eminent domain under the Texas
Natural Resources Code—a power that TransCanada did not exercise to obtain the
Easement. See Geheb’s Br. at pp. 11-21. Specifically, Geheb argues that:
-- TransCanada failed to establish its common carrier bona fides (Id. at
pp. 11-17);
-- Tar sands are not considered to be crude petroleum under the Texas
Natural Resources Code (Id at p.17);
-- TransCanada is required to pay Geheb just compensation for its
interference with Geheb’s enjoyment of the Property in the exercise
of its eminent domain rights as a common carrier (Id. at p.18);
-- The trial court failed to make a preliminary inquiry as to
TransCanada’s common carrier status (Id. at pp. 19-20); and
-- The trial court failed to afford Geheb an opportunity to conduct
discovery as to TransCanada’s common carrier status (Id.at pp. 20-
21).
As TransCanada repeatedly urged in the trial court, none of these issues has
any relevance in this case for the simple and obvious reason that no taking ever
occurred. As Geheb acknowledges, TransCanada never exercised the right of
eminent domain to condemn the Easement on the Property—it obtained it by
purchase from the landowner. See Geheb’s Br. at 19 (“TransCanada failed to ever
institute proceedings to condemn[.]”).
19
A. The Landowner Granted the Easement to TransCanada—There
Has Been No “Taking.”
“An owner of land has title and is entitled to possession of the premises.”
Mobil Pipe Line Co. v. Smith, 860 S.W.2d 157, 159 (Tex. App.—El Paso 1993,
writ dism’d w.o.j.). “As the owner, that party may grant rights to other parties to
use either the surface or subsurface.” Id. “If a lease is given to farm the land, the
right to possession is divested from the owner during the term of the lease.” Id.
Even when the owner leases the surface, however, “the owner retains a right to
enter into agreements that will affect the surface.”
In Geheb’s cited authority, Mobil Pipe Line, the landowner executed a
right-of-way agreement in which she conveyed an easement to Mobil to “lay,
repair, maintain, operate and remove one 14” pipe line” across a tract of land on
which her nephew farmed under a lease at will. Id. at 158. The nephew did not
join in the easement, and denied Mobil access across the property. Id. Mobil
sought an injunction to obtain access over its right-of-way, which the trial court
denied. Id. Reversing the trial court’s denial of Mobil’s request for injunctive
relief, the court of appeals recognized that “the owner of the right-of-way has the
dominate estate.” Id. at 159 (citing Phillips Pipe Line Co. v. Razo, 420 S.W.2d
691, 695 (Tex. 1967)). The court further noted that “[a]ny grant of an easement
necessarily carries with it the right to do such things as are reasonably necessary
for the full enjoyment of the easement granted.” Id. (citing Harris v. Phillips Pipe
20
Line Co., 517 S.W.2d 361 (Tex. Civ. App.—Austin 1974, writ ref’d n.r.e.)). The
landowner, having granted an easement for a pipeline, has no right to make use of
the surface that might interfere with the use of such easement. Id. (citing Razo,
420 S.W.2d at 695). Thus, “[i]f the landowner cannot interfere with the full
enjoyment of the easement granted, certainly the lessee, who takes with
knowledge that landowner retains rights to grant a right-of-way, may not
interfere with the rights granted.” Id. at 159-60 (emphasis added).
The same is true in this case. TransCanada obtained the Easement from the
Landowner, and is undeniably the owner of the dominant estate on the Property.
As such, TransCanada had the contractual right to enter onto the Property and
complete the construction and installation of the Pipeline pursuant to the terms of
the Easement. TransCanada’s construction and installation of the Pipeline was not
only reasonably necessary for its full enjoyment of the Easement, it was the sole
purpose for which TransCanada and the Landowner executed the Easement.
In short, there was no “taking.” In order to enter the Property and construct
its Pipeline, TransCanada was not required to establish that it was a common
carrier under the Texas Natural Resources Code, and that the Pipeline was “to or
for the public for hire.” See Geheb’s Br. at 11-16. Nor was TransCanada required
to show that the tar sands to be transported through the Pipeline are considered
“crude petroleum” under the Texas Natural Resources Code. See id. at 17.
21
Likewise, TransCanada did not have an obligation to provide Geheb with
additional compensation for a “taking” that did not occur. See id. at 18.
For these same reasons, Geheb’s argument that the trial court failed “to
make preliminary inquiry into common carrier status” is equally meritless. See id.
at 19-21 (acknowledging that TransCanada never instituted “proceedings to
condemn Geheb’s possessory interest”). No authority exists to support Geheb’s
contention that the trial court was required to make a preliminary finding as to
TransCanada’s status as an “entity with ‘eminent domain authority,’” where
TransCanada’s right to enter the Property and construct the Pipeline was purely
contractual and not obtained through condemnation. The discovery Geheb sought
relating to TransCanada’s common carrier status was entirely irrelevant to any
issue in this case, its only purpose being to harass TransCanada.
CONCLUSION AND PRAYER
For all of the foregoing reasons, TransCanada Keystone Pipeline, LP
respectfully requests that the Court affirm the trial court’s judgment, and award
TransCanada such other and further relief to which it may be justly entitled.
22
Respectfully submitted,
ZABEL FREEMAN
By: ____/s/ Thomas A. Zabel______
Thomas A. Zabel
State Bar No. 22235500
James A. Freeman
State Bar No. 00796580
Nancy H. Elliott
State Bar No. 08701240
1135 Heights Blvd.
Houston, Texas 77008
Telephone: (713) 802-9117
Facsimile: (713) 802-9114
tzabel@zflawfirm.com
jfreeman@zflawfirm.com
nelliott@zflawfirm.com
GERMER, P.L.L.C.
Karen Bennett
State Bar No. 21702640
P.O. Box 4915
Beaumont, Texas 77704
Telephone: (409) 654-6700
Facsimile: (409) 835-2115
krbennett@germer.com
ATTORNEYS FOR APPELLEE
TRANSCANADA KEYSTONE
PIPELINE, LP
23
CERTIFICATE OF COMPLIANCE
Pursuant to Texas Rule of Appellate Procedure 9.4(i)(3), I hereby certify
that this brief was prepared in Times New Roman 14-point font, and contains
5,273 words, exclusive of the portions set forth in Rule 9.4(i)(1), and that this
number was calculated using the word count program of Microsoft Word, which
is the program that was used to prepare this document.
/s/ Nancy H. Elliott______
Nancy H. Elliott
CERTIFICATE OF SERVICE
I hereby certify that a true and correct copy of the foregoing Brief of
Appellee TransCanada Keystone Pipeline, LP has been served electronically and
via email on the following counsel of record this 13th day of December, 2017:
Robert Keith Wade
LAW OFFICES OF ROBERT KEITH WADE
650 North Ninth Street at McFaddin
Beaumont, Texas 77702
rwade-law@sbcglobal.net
/s/ Nancy H. Elliott__________
Nancy H. Elliott
24