Lyle v. Midway Solar, LLC: Does the Accommodation Doctrine Apply in a Dispute Between Owners of Mineral Rights and Solar Rights Lyle v. Midway Solar, LLC — S.W.3d —-, 2020 WL 7769632, (Tex.App. – El Paso [83rd Dist.] 2020)
Texas law has established the mineral estate as the “dominant” estate wherein the mineral owner has the right to use so much of the surface as is reasonably necessary for exploration and development of the minerals. However, the mineral estate owner’s rights are not absolute and are tempered by the accommodation doctrine. The accommodation doctrine was adopted in Getty Oil Co. v. Jones, 470 S.W.2d 618 (Tex. 1971) and holds that the mineral and surface owners must “exercise their respective rights with due regard.” The Lyles own 27.5% of the mineral estate in a 315-acre tract in Pecos County, Texas. The minerals were severed from the surface in 1948. No mineral development has occurred on the tract, and the Lyles have never executed an oil and gas lease on the tract. Midway Solar, LLC (“Midway”) is the lessee of a solar lease executed by the owners of the surface estate in the 315-acre tract. The solar lease allows Midway to build a solar facility on the tract, and grants the right to place solar panels, transmission lines, and cable lines anywhere on the tract. It expressly recognized that the surface owner did not own the mineral estate in the tract, and that ownership of minerals in third parties constituted a title encumbrance. The solar lease was subsequently amended to provide “Designated Drill Site Tracts” on the property. Specifically, the amendment designated an 80- acre tract at the north end of the tract, and a 17-acre tract on the south end of the tract, which were stated to be for the benefit of any present or future operator. Midway then placed solar panels on that part of the tract not designated as “Designated Drill Site Tracts.” Prior to constructing the solar facility, which was located on the 315-acre tract as well as adjacent lands, Midway obtained waiver agreements from mineral owners in adjacent tracts, as is customary. Although the opinion does not state whether it attempted to obtain such an agreement from the Lyles, one would presume that it attempted to do so but was unsuccessful. Some of the waivers from the adjacent mineral owners erroneously purported to waive surface rights on the 315-acre tract. Some were subsequently amended, and Midway filed a
“Disclaimer of Interest” in which it states that the waivers did not grant any rights to Midway on the 315-acre tract. After Midway constructed its solar facility, the Lyles sued Midway, the surface owners, and the parties who signed the mineral waiver agreements on the adjacent lands. There are several claims asserted by the plaintiffs; the focus of this article is whether the accommodation doctrine applies to the claim that Midway and the surface owners denied the Lyles reasonable access to their minerals by covering 70% of the surface with solar panels and transmission lines. The Lyles argued that the accommodation doctrine did not apply because the deed in which the mineral estate was severed expressly describes the rights of the parties, which makes application of the doctrine unnecessary and inappropriate. Although the El Paso Court of Appeals held that the accommodation doctrine could apply to the dispute, its application was premature until the mineral owner actually seeks to develop its minerals. The Court acknowledged that Texas public policy strongly favors freedom of contract, and if the express terms of a deed determines the parties’ rights with respect to surface use, then the accommodation doctrine would not apply. However, the Court disagreed with the Lyles’ argument that the quoted language was intended to determine the rights of the parties and supplant the application of the accommodation doctrine.
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