to the pooling can amount to ratification as a matter of law. Again, the Court cited Yelderman, which provided that “[a] creditor who accepts and cashes a check tendered as full payment of a disputed claim cannot vary the legal effect of such acceptance as an accord and satisfaction by protesting that he is accepting the check as part payment only.” However, the Court distinguished the situation in Strickhausen by explaining that pooling was not the only reason that Strickhausen was owed money. Rather, the Court found that she could have reasonably seen the checks as payment towards what she believed she was owed absent pooling. In support of its argument, BPX cited Hooks v. Samson Lone Star, Limited Partnership , 457 S.W.3d 52 (Tex. 2015), to advance a categorical rule that when a lessor accepts payments of royalties calculated on a pooled basis, it always amounts to ratification of pooling as a matter of law. The Court disagreed, noting that in Hooks nor its predecessors, did the Court hold that ratification occurs as a matter of law whenever a party commits an act inconsistent with intent to avoid a contract in the case. 3 The Court reasoned that the holding in Hooks rested on the confluence of facts that pointed toward ratification, not any single act. The Court reasoned that if that were the standard, ratification would be a trap for the unwary who had committed an act that could be portrayed as inconsistent with rejecting the former agreement. Further, the Court noted that intent would no longer be the controlling question if such a standard were adopted. Therefore, the Court found that BPX did not establish ratification as a matter of law. Ultimately, the Texas Supreme Court determined that implied ratification as a matter of law should only be found when the party’s actions clearly evidence an objective intent to ratify. This case emphasizes how important the agreed terms are in a lease. Despite actions to the contrary, the agreed _____________________________________ 3 The Court also specified that none of their prior decisions support a bright line rule that acceptance of royalties cal- culated on a pooled basis always constitutes ratification of pooling regardless of contrary evidence of intent.
terms in a lease may be controlling without express written consent to the contrary. If you have any questions regarding this case law update or suggestions for topics to be covered in future issues, please call Kiefaber & Oliva LLP at 713-229-0360 or contact
Brad Gibbs Partner bgibbs@kolawllp.com
Emily Sheffield Attorney esheffield@kolawllp.com
Eli Kiefaber Partner rkiefaber@kolawllp.com
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