Bryan C. Wagner et al. v. Apache Corp
April 21, 2021
AZA prevailed at the Supreme Court of Texas in April 2021 on behalf of client Apache Corp. This victory paved the way for Apache to proceed in its arbitration against Wagner Oil to recover in excess of $15 million under an indemnity provision in Apache’s agreement with Wagner Oil.
The ruling rejected arguments by Wagner Oil to discard an arbitration provision contained in a 2001 purchase and sale agreement for oil and gas wells, mineral leases and fee interests and property to operate the wells. The justices agreed that based on the plain language in the provision, the two parties are bound to arbitrate their dispute over Wagner Oil’s alleged failure to honor its indemnity obligations when third-party surface landowners brought lawsuits for alleged environmental contamination.
After the oil and gas sale transaction, Wagner Oil assigned the assets purchased from Apache to parties related to Wagner. When faced with Apache’s indemnity claims stemming from the third-party environmental litigation, Wagner and its related entities claimed that the assignees were not bound by the arbitration clause in the original purchase and sale agreement.
A trial court initially agreed with Wagner Oil, but on appeal, the Texas 2nd Court of Appeals ruled in Apache’s favor in 2018, holding that the arbitration clause in the purchase and sale agreement applied to the assignees. In Oct. 2020, the Supreme Court of Texas denied Wagner’s request to hear the case, but later reversed and allowed the appeal to proceed.
AZA lawyers: Jane Langdell Robinson, Tim Shelby , Foster C. Johnson and Nathan Campbell.