A series of emails between an energy company and landowners over pricing and other terms of a pipeline construction easement fail to constitute a written, enforceable contract, the Texas Supreme Court said Friday.
The decision ends an effort by landowners in Lavaca and Dewitt Counties to obtain compensation from Copano Energy LLC for a proposed pipeline that was never built.
The case offered the court an opportunity to discuss the use of email as a form of written communication ubiquitous in modern business transactions. Justice Jimmy Blacklock, in his unanimous opinion, noted that email “is used by nearly everyone for nearly every type of communication, from the flippantly inconsequential to the bindingly formal.”
The litigation dates to December 2012 when Copano approached the landowners, who had the year earlier granted easement for an initial pipeline, about constructing a second one.
The court examined emails sent between the parties starting in December 2012 and ending March 2013. After the pipeline project fell through, the landowners in 2014 sued Copano and Kinder Morgan, which had merged with Copano, for breach of contract. The landowners claimed that emails between their representatives and Copano’s agents amounted to an enforceable contract.
The trial court granted summary judgment on the defendants’ argument that the contract claim was barred by the statute of frauds. The 13th Court of Appeals reversed.
The Supreme Court focused on email exchanges between the parties on Dec. 7, 2012 and Jan. 30, 2013. The December emails discussed the size and location of the easement and whether the pipeline would transport dry or liquid gas. Blacklock said these exchanges were made in the context of a future meeting and contain future-tense phrasing, showing they were not intended to bind Copano to specific easement terms.
In the January exchange, a landman for Copano offered $70 per foot for easements to accommodate the 24-inch pipeline. A lawyer for the landowners wrote in acceptance and authorized the landman to survey the property.
In February, however, another landman acting on behalf of Copano sent letters offering only $15 or $25 per foot. The letter offers were not accepted. Subsequent emails discussed a payment of $20 to $40 per foot.
The Supreme Court said it could not “piece together with certainty and clarity a collection of writings showing the essential terms of an easement contract and the parties’ agreement to be bound by those terms.”
“The January 30 e-mails surely contain an offer and an acceptance,” said Blacklock. “But just as surely, they do not say what is being offered and accepted. Other than the price per foot and the pipeline’s size, the January 30 e-mails contain none of the ‘essential elements of the agreement.’”
The Supreme Court rejected the 13th Court of Appeals’ reasoning that the December emails supplied the missing essential terms.
“Viewed in their context, the December 7 e-mails are nothing more than a request to negotiate at a later meeting. They describe the terms [Copano landman] Sanford anticipates offering at the anticipated meeting, but they do not offer those terms,” Blacklock said.
D. Mitchell McFarland with Houston’s Munsch Hardt, represented Copano. Kyle Lawrence with Houston’s Beck Redden represented Stanley Bujnoch and the other landowners.
Read the court’s opinion in Copano Energy LLC, et al. v. Stanley Bujnoch Life Estate, et al.