Alexander O&G, L.L.C. v. Nomad Land and Energy Resources, LLC

Filing 70

MEMORANDUM OPINION AND ORDER GRANTING IN PART, DENYING IN PART 33 MOTION for Summary Judgment .(Signed by Judge Gray H Miller) Parties notified.(rkonieczny, 4)

United States District Court
Southern District of Texas

UNITED STATES DISTRICT COURT
SOUTHERN DISTRICT OF TEXAS
HOUSTON DIVISION
ALEXANDER O&G, L.L.C.,
Plaintiff,
v.
NOMAD LAND AND ENERGY
RESOURCES, L.L.C.,
Defendant.

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ENTERED
July 23, 2018
David J. Bradley, Clerk

CIVIL ACTION H-16-2965

MEMORANDUM OPINION AND ORDER
Pending before the court is a motion for summary judgment filed by plaintiff and counterdefendant Alexander O&G, L.L.C. (“Alexander”). Dkt. 33. Defendant and counter-plaintiff Nomad
Land and Energy Resources L.L.C. (“Nomad”) responded. Dkt. 53. Alexander replied. Dkt. 55.
Nomad supplemented its response. Dkt. 59. Alexander supplemented its reply. Dkt. 62. On June
5, 2018, both parties presented oral arguments. Dkt. 68. Having considered the motion, response,
reply, supplemental briefing, record evidence, the parties’ oral arguments, and applicable law, the
court is of the opinion that Alexander’s motion should be GRANTED in PART and DENIED in
PART.
I. BACKGROUND
This dispute arises out of an attempted transaction between two oil and gas companies:
Alexander, the buyer, and Nomad, the seller. Dkt. 15-1 at 2; Dkt. 33 at 1. On June 28, 2016, the
parties signed a Purchase and Sale Agreement (“PSA”) for mineral interests (“MI”). Dkt. 1-4 at 6.
A.

The PSA

The PSA set the purchase price at $15,138.600. Dkt. 15-1 at 2. Under the PSA, Nomad
needed to give Alexander “all relevant title information which [Nomad] may possess” before July

2, 2016. Id. Alexander needed to object to title defects before August 1, 2016. Id. (“Any title
objections made by [Alexander] shall be presented to [Nomad] prior to August 1, 2016.”). If
Alexander did not object, closing would occur on August 12, 2016. Id.
However, if Alexander objected, the PSA gave Alexander “the right to have the purchase
price adjusted . . . for all acreage not ‘cured’ to [its] sole satisfaction prior to August 12, 2016.” Id.
Additionally, the PSA gave Nomad, “if necessary, 10 additional business days after . . . August 12,
2016 . . . to cure any defected acreage to [Alexander’s] sole satisfaction.” Id. If Nomad needed
those extra days to cure, Alexander would “close on all acreage cured to [its] sole satisfaction at the
end of said additional ten (10) days.” Id.
But “if any title objections submitted [we]re not satisfied by [Nomad], at [Alexander’s] sole
satisfaction,” the PSA gave Alexander “the option and . . . the right to remove the unsatisfied acreage
from the sale and have the purchase price reduced . . . or accept the property with the defect, and
proceed to closing.” Id.
The parties agreed that Alexander “shall tender [Nomad], in an agreed escrow agent’s
account, an earnest money deposit of $100,000 . . . which deposit shall be non-refundable, except
in the event that [Nomad] shall be unwilling or unable to perform his obligations . . . in which case
the entirety of the . . . deposit . . . shall be refunded to [Alexander].” Id. But “[i]f the agreement
close[d], as contemplated, the earnest money . . .[would] be applied toward the satisfaction of the
payment of the total consideration due and payable.” Id.
Finally, the parties agreed that the PSA“[wa]s contingent on [Alexander’s] confirmation of
title, verification of interest and verification of the information used by [Alexander] to derive the
offer, to . . . [its] sole satisfaction.” Id.

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B.

The events

After signing the PSA, Alexander asked Jones Gill LLP, a law firm, to hold the earnest
money for the PSA “in the event [that] the parties agreed to the terms of the proposed sale.” Dkt.
64 at 2 (emphasis added). Jones Gill: (1) agreed to hold the money if “all parties executed and
returned an escrow agreement”; and (2) drafted a proposed escrow agreement (“proposed
agreement”). Id. Both Alexander and Nomad received copies of the proposed agreement. Id.
On June 29, 2016, Alexander wired $100,000 to Jones Gill’s IOLTA account.1 Id. at 3.
Neither party returned a signed copy of the proposed agreement to Jones Gill. Id.
On July 7, 2016, Alexander contacted Jones Gill to: (1) inform the firm that the parties did
not sign the proposed agreement; and (2) ask for its money back. Id. On July 8, 2016, Jones Gill
wired the money back to Alexander. Id.
On July 27, 2016, Nomad emailed Jones Gill. Id. Nomad attached an unsigned copy of the
proposed agreement to that email. Id. It also asked for the escrow balance. Id. Jones Gill declined.
Id. at 4. And it alerted Nomad that it had returned the balance to Alexander. Id. at 4. On the same
day, Alexander told Nomad that it had: (1) concluded that Nomad lacked title to the acreage in the
PSA; and (2) notified Nomad that the PSA was terminated. Dkt. 33-2 at 3; Dkt. 56 at 1.
On August 23, 2016, Alexander sued Nomad to get a state court judgment declaring that the
PSA had been terminated. Dkt. 1-4 at 6.2 Nomad removed to this court. Dkt. 1. It also counter-

1

See also What is IOLTA?, IOLTA, http://www.iolta.org/what-is-iolta (“Interest on Lawyers
Trust Accounts (IOLTA) is a . . . way to increase access to justice for individuals and families living
in poverty . . .[whereby] interest from lawyer trust accounts is pooled to provide civil legal aid to the
poor and support improvements to the justice system.”).
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Alexander seeks a declaration that: (1) Nomad breached the PSA by not performing; (2)
Nomad repudiated it by refusing to perform; and (3) Nomad’s breach was material. Dkt. 1-4 at 6.
Alexander also asks for a declaration that its injuries were the natural, probable, and foreseeable
consequences of Nomad’s breach. Id.
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sued Alexander for: (1) breach of contract; (2) money had and received; and, alternatively,
(3) “promissory estoppel/unjust enrichment.” Dkt. 15 at 7–9. And it added Jones Gill and Michael
Jones as third-party defendants (collectively “Jones Gill”). See id.
On May 9, 2018, the court granted Jones Gill’s motion for summary judgment on all of
Nomad’s claims against it (the “Jones Gill order”). Dkt. 64. The court found that: (1) Alexander
wired $100,000 to Jones Gill’s IOLTA account; (2) Jones Gill wired it back to Alexander; (3) the
parties never agreed to an escrow agent; and (4) the parties never executed the proposed agreement.
Id.
C.

The hearing

At the hearing, the court asked the parties to explain how the Jones Gill order (Dkt. 64)
impacted the remaining claims in the case. Dkt. 68 at 3–4.
When asked if there “was there a valid contract to be breached in the first place[,]” Alexander
replied that “there was not a deal.” Id. at 4, 6. And when asked if “this PSA is a binding contract on
both parties[,]” Alexander responded: “[n]o, it needed to be supported by consideration. It was not.”
Id. at 12.
Alexander confirmed that Nomad “provide[d] . . . title information.” Id. at 10; see id. (“They
did.”). Alexander also acknowledged that it needed to object to title defects. Id. at 8 (court: “there
was a process by which any defects in the title or any deficiencies could be cured or addressed”); id.
at 9 (Alexander: “Sure.”); id. at 10 (Alexander: “It just says you have to object.”).
Initially, Alexander did not admit that it failed to object to title defects.3 Id. at 9 (court: “[b]ut

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Before the hearing, Alexander asserted that it “notif[ied] Nomad of its concerns and
objections regarding title confirmation.” Dkt. 33 at 4. The court reminds Alexander of its
obligations under the Local Rules. See, e.g., S.D. Tex. L.R., Appendix D (“[a] lawyer owes, to the
judiciary, candor.”).
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as I understand it . . . that procedure wasn’t followed[?]”); id. at 10 (“It just says you have to object.”).
Instead, it highlighted the lack of detail in the PSA. Id. at 10 (“It doesn’t say how a defect is to be .
. . delivered or to whom. The methodology is completely unstated.”). However, it later conceded that
“[t]he in-house counsel for [Alexander] . . . was not satisfied[,] [a]nd not being satisfied, he said no
to this deal.” Id. at 11.
D.

The instant motion

Alexander moves for summary judgment on its request for a declaratory judgment. Dkt. 33.
Alexander also moves for summary judgment on Nomad’s counterclaims for: (1) breach of contract;
(2) promissory estoppel; and (3) unjust enrichment.4 Id. Nomad objected to some of Alexander’s
summary judgment evidence. Dkt. 53 at 8. The court will address the objections before analyzing
the instant motion.
II. Legal Standard
A court shall grant summary judgment when a “movant shows that there is no genuine dispute
as to any material fact and the movant is entitled to judgment as a matter of law.” Fed. R. Civ. P.
56(a). “[A] fact is genuinely in dispute only if a reasonable jury could return a verdict for the
nonmoving party.” Fordoche, Inc. v. Texaco, Inc., 463 F.3d 388, 392 (5th Cir. 2006). The moving
party bears the initial burden of demonstrating the absence of a genuine issue of material fact.
Celotex Corp. v. Catrett, 477 U.S. 317, 323, 106 S. Ct. 2548 (1986). If the party meets its burden,
the burden shifts to the non-moving party to set forth specific facts showing a genuine issue for trial.
Fed. R. Civ. P. 56(c). The court must view the evidence in the light most favorable to the non-movant

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The court notes that the instant motion does not seek summary judgment on Nomad’s
counterclaim for money had and received.
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and draw all justifiable inferences in favor of the non-movant. Envtl. Conservation Org. v. City of
Dall., 529 F.3d 519, 524 (5th Cir. 2008).
III. ANALYSIS
A.

Objections
In support of its motion, Alexander offers the email it sent to Nomad to terminate the PSA.

Dkt. 33-2 at 2. Nomad objects to it as inadmissible “on the basis of surprise and prejudice.” Dkt. 53
at 8.
1.

Surprise

First, Nomad asserts that the email “was never received by Nomad and not produced in
discovery.” Id. Alexander argues that “[t]he email did not constitute a surprise to Nomad now or
when it was written [because] . . . [Nomad] admits receiving a telephone call delivering the same
message: that the . . . PSA . . . was terminated.” Dkt. 55 at 1. When Nomad filed the instant motion,
discovery had not yet closed. Dkt. 57. Accordingly, its “surprise” objection is without merit and it
is OVERRULED.
2.

Prejudice

Next, the court construes Nomad’s “prejudice” objection as made under Federal Rule of
Evidence 403. Dkt. 53 at 8. Rule 403 provides that “the court may exclude relevant evidence if its
probative value is substantially outweighed by a danger of . . . unfair prejudice.” Fed. R. Evid. 403.
Alexander’s email has probative value in that it purports to terminate the PSA and explain its reasons
for doing so. See Dkt. 33-2 at 2. Nomad has not explained what, if any, danger of unfair prejudice
exists. Compare Dkt. 53 at 8, with Fed. R. Evid. 403. Accordingly, this objection is OVERRULED.

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B.

Declaratory judgment

Alexander moves for summary judgment on its request for a declaratory judgment. Dkt. 33.
Initially, Alexander argued that: “(1) the [PSA] was a valid contract; (2) [Alexander] performed
according to the terms of the contract; and (3) Nomad breached the contract because Nomad could
not provide proof of title to the acreage in the PSA to the ‘sole satisfaction of [Alexander]’ as required
by the PSA.” Dkt. 62 at 5. However, at the summary judgment hearing, Alexander expressly
conceded that the PSA did not constitute a valid contract. See supra Section I.C. As a result,
Alexander cannot show that it is entitled to declaratory relief and has waived that request. See Smith
v. United States, 328 F.3d 760, 770 (5th Cir. 2003) (“[a] party’s concession of an issue means the
issue is waived.”). Therefore, the instant motion is DENIED with respect to Alexander’s request for
declaratory relief, and that request is DISMISSED with PREJUDICE.
C.

Nomad’s counterclaims

Alexander also moves for summary judgment on Nomad’s counterclaims for: (1) breach of
contract; (2) promissory estoppel; and (3) unjust enrichment. Dkt. 33; see also Dkt. 15 at 7–9
(Nomad’s counterclaims).
1.

Breach of contract

Alexander advances two grounds for granting summary judgment on Nomad’s breach of
contract claim. Dkt. 33 at 4. First, Alexander argues that because it “performed according to the
terms of the [PSA,]” Nomad’s claim fails. Id. But Alexander negates its own argument by conceding
that it did not perform under the PSA. See supra Section I.C. (acknowledging that it needed to object
but failed to do so). Accordingly, its first ground fails. See Smith, 328 F.3d at 770.
Next, Alexander argues that Nomad’s claim fails because the latter “did not sustain any
damages.” Dkt. 33 at 4. However, because Alexander did not meet its initial burden to show an

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absence of a triable fact issue, this ground also fails. See Celotex, 477 U.S. at 323; see also Dkt. 15-1
at 2. For these reasons, the instant motion is DENIED and Nomad’s claim for breach of contract
survives.
2.

Promissory estoppel

Promissory estoppel requires: (1) a promise; (2) foreseeability of reliance thereon by the
promisor; and (3) substantial reliance by the promisee to his detriment.” Int’l Energy Ventures
Mgmt., L.L.C. v. United Energy Grp., Ltd., 818 F.3d 193, 209 n.60 (5th Cir. 2016). “The function
of the doctrine of promissory estoppel is . . . defensive in that it estops a promisor from denying the
enforceability of a the promise.” Moore Burger, Inc. v. Phillips Petroleum Co., 492 S.W.2d 934, 937
(Tex. 1972). It “does not create a contract where none existed before” and it “does not operate to
create liability where it does not otherwise exist.” Allied Vista Inc. v. Holt, 987 S.W.2d 138, 141
(Tex. App.—Houston [14th Dist.] 1999, pet. denied).
Alexander argues that Nomad cannot recover for promissory estoppel on the basis of a
conditional promise. Dkt. 33 at 5 (citing Dkt.15-1 at 2). Nomad alleges Alexander made two
different promises. Dkt. 15 at 10. According to Nomad, Alexander is liable for (1) $100,000 for the
unexecuted escrow agreement; and (2) $2,329,000 for the PSA. Id.
a.

The proposed agreement

Nomad seeks to recover $100,000 for the proposed agreement.5 But the court determined that
the parties did not: (1) agree upon an escrow agent; nor (2) sign the proposed agreement. Dkt. 64 at
3, 9, 11, 13–15; see also Dkt. 68 at 4. As a result, Nomad cannot, as a matter of law, show that

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According to Nomad, Alexander “partially performed per the terms of the agreement among
[sic] [Alexander] and Nomad for [Alexander] to place the escrow monies into escrow by [Alexander]
causing the escrow funds in the amount of $100,000 to be placed into Jones Gill’s IOLTA account.”
Dkt. 15 at 10.
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Alexander made a promise about the $100,000. Cf. Int’l Energy, 818 F.3d at 209 n.60. Thus,
Alexander is entitled to judgment as a matter of law, the instant motion is GRANTED, and Nomad’s
claim for promissory estoppel as to the $100,000 is DISMISSED with PREJUDICE.
b.

The PSA

Nomad also seeks to recover $2,329,000 under a promissory estoppel theory. Dkt. 15 at 10.
Specifically, Nomad alleged that: (1) Alexander “promise[d] . . . Nomad that it would purchase the
minerals described in the PSA; (2) it “reasonably and substantially relied on the promise to its
detriment”; (3) its “reliance was foreseeable by [Alexander]”; and that “injustice can be avoided only
by enforcing [Alexander’s] promise.” Dkt. 15 at 10. Because Alexander failed to meet its initial
burden, the court DENIES the instant motion as to the PSA portion of Nomad’s promissory estoppel
claim.6
3.

Unjust enrichment

“Unjust enrichment is an implied-contract basis for requiring restitution when it would be
unjust to retain benefits received. Unjust enrichment allows recovery when one person has obtained
a benefit by fraud, duress, or the taking of an undue advantage.” Perales v. Bank of America, N.A.,
Civil Action No. H-14-1791, 2014 WL 3907793,*3 (S.D. Tex. Aug. 11, 2014) (Rosenthal, J.)
(quotations omitted).

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The court construes Alexander’s minimal briefing as an attempt to argue that Nomad’s
inability to meet the condition of Alexander’s promise bars Nomad from recovering for promissory
estoppel under the PSA. See Dkt. 55 at 5 (“the PSA was the only promise . . . and [it] was
conditional upon [its] sole satisfaction, which Nomad was unable to achieve.”); see also Dkt. 33 at
5 (citing Dkt. 15-1 at 2) (“This agreement is contingent upon [Alexander’s] confirmation of title,
verification of interest and verification of the information used by [Alexander] to derive their offer
to . . . [its] sole satisfaction.”). Characterizing a promise as conditional—even if true—fails as a
basis to grant the instant motion as to this claim.
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Nomad alleges that Alexander is liable for unjust enrichment. Dkt 15 at 11. Nomad asserts
that Alexander was unjustly enriched when it directed Jones Gill to refund its money. Id. Instead,
Jones Gill should have sent the $100,000 to Nomad “per the terms of the PSA.” Id.
Alexander advances one argument to assert that Nomad could not recover for unjust
enrichment. Dkt. 33 at 5. It argues that the existence of a valid contract (the PSA) bars recovery for
unjust enrichment. Id. Yet, Alexander conceded that no contract exists. See supra Section I.C.; see
also supra Section III.C.2. Thus, Alexander negates its sole ground for summary judgment on unjust
enrichment. Compare id., with Dkt. 33 at 5. Accordingly, the court DENIES the instant motion and
Nomad’s unjust enrichment claim survives summary judgment.

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IV. CONCLUSION
Because Alexander waived its request for declaratory relief, that request is DENIED, and it
is DISMISSED with PREJUDICE.

In addition, no triable issue of fact exists on Nomad’s

counterclaim for promissory estoppel on the proposed agreement. Accordingly, Alexander’s motion
for summary judgment is GRANTED in part and that counterclaim is DISMISSED with
PREJUDICE. However, because Alexander did not meet its initial burden on Nomad’s counterclaims
((1) breach of contract; (2) promissory estoppel as it relates to the PSA; and (3) unjust enrichment),
the instant motion is DENIED in PART.7
Signed at Houston, Texas on July 23, 2018.

___________________________________
Gray H. Miller
United States District Judge

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See Judge David Hittner & Lynne Liberato, Summary Judgments in Texas: State and
Federal Practice, 46 Hous. L. Rev. 1379, 1543 (2010) (“Effective advocacy in summary judgment
practice depends on strategic timing decisions, development and use of evidence, written persuasion,
and an understanding of the particular judge and his or her procedures. These factors, combined with
technical correctness, ultimately determine success in summary judgment practice.”) (emphasis
added).
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