Texas Supreme Court Holds That Limitations Not Tolled As A Matter Of Law Where Publicly Filed Records Are Not Conclusive

Everyone knows that land title records create constructive notice which prevents limitations from being tolled until a plaintiff receives actual notice, right? Not always. It depends on what the public records say. If the records are inconclusive, whether a plaintiff was diligent in discovering the information in them is a question of fact for the jury. That was the holding of Hooks v. Samson Lone Star Limited Partnership, No. 12-0920, 2015 Tex. LEXIS 56 (Jan. 30, 2015).

In several recent cases, the Texas Supreme Court has held that land title records and probate proceedings create an irrebuttable presumption of actual notice, which prevents the accrual of a claim from being delayed for purpose of limitations. In BP America Production Co. v. Marshall, 342 S.W.3d 59 (Tex. 2011), the court held that the statute limitations was not tolled when BP fraudulently represented that it was maintaining continuous operations on a lease because Railroad Commission records disclosed that BP was not conducting good faith continuous operations. The plaintiff was charged with constructive notice of the content of the records.

Similarly, in Shell Oil Co. v. Ross, 356 S.W.3d 924 (Tex. 2011), the court held untimely claims made by Ross that Shell had underpaid royalties despite Shell's allegedly fraudulent representations because a publicly available price index illuminated the underpayments, as did General Land Office records demonstrating that Shell paid higher royalties to the State even though it owed the Rosses the same royalty. In both cases the court held that the plaintiffs did not exercise reasonable diligence as a matter of law.

So one might have expected the same result in Hooks. There, Hooks executed a lease with Samson Lone Star Limited Partnership. The lease included "offset obligations" providing that if a gas well were completed within 1,320 feet of Hooks' lease line but was not unitized with Hooks' acreage, then Samson would either drill an offset well, pay Hooks compensatory royalties, or release the offset acreage. In 2000, Samson drilled a well that bottomed within the 1,320-foot protected zone. But, instead of complying with the lease, Samson asked Hooks to amend the lease to pool...