Killam Oil Co. v. Bruni
Texas Court of Appeals
806 S.W.2d 264 (Tex. 1991)
Relevant factsFree
The Bruni Trust (plaintiff) leased gas rights to Killam and Hurd (defendants), retaining royalties on gas produced or sold, and the lessees signed a gas-sales contract with UTTCO containing a take-or-pay provision requiring UTTCO to either take gas annually or pay for gas not taken. When UTTCO neither took gas nor paid, Killam sued and settled for $4 million, and Hurd separately settled for $2.8 million; the Trust sued the lessees for royalties on those settlement payouts, and the trial court granted the Trust summary judgment.
IssueFree
Whether an oil and gas lessor is entitled to royalties for settlement proceeds resulting from the breach of a take-or-pay provision in a gas-purchase contract.
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