Face Challenges Confidently

069 Atkinson Gas Co. v. Albrecht

Wednesday, September 2nd, 2015

Richard F. Brown

The following is not a legal opinion. You should consult your attorney if the case may be of significance to you.
Atkinson Gas Co. v. Albrecht, 878 S.W.2d 236 (Tex. App.–Corpus Christi 1994 writ den.) Involves a lease that terminated for failure to produce in paying quantities and the lessee’s refusal to give a release. The lessee sued for injunctive relief to force the lessor to let him back on the lease, and the lessor counterclaimed for trespass, slander of title and breach of contract in connection with the loss of a new lease opportunity on the same tract. Lessor won and was awarded $30,000.00 in damages.
Held: affirmed. The lease had a specific clause that obligated lessee to give a release “within thirty days after lease termination.” The lessee had some arguable defenses to lease termination, but for various reasons, all of those defenses failed, and the court held that the lease had in fact terminated. Lessee was then held liable for loss of a leasing opportunity which arose while he was contesting the issue of termination.
Express release clauses are not uncommon. The significance of this case is that it illustrated how unfairly such a clause can operate as to lessee, if the fact of termination is disputed or unknown. Lessee could protect himself by making the delivery of a release conditioned upon receipt of a written request from lessor and by adding to the release clause: “unless lessee is in good faith then contesting the fact of lease termination.”