BP America Prod. Co., et al. v. Marshall, et al.

This case involved two related oil and gas mineral lease disputes that were jointly tried. One of the disputes was between petitioners, BP American Production Co., Atlantic Richfield Co., and Vastar Resources, Inc. (collectively, "BP"), the lessee and operator, and respondents, the Marshall family, the lessors. The other dispute was between BP's successors-in-interest, Wagner Oil Co. (collectively, "Wagner"), and another lessor, respondents Vaquillas Ranch Co. Ltd. ("Vaquillas"). At issue was whether limitations barred the Marshall family's fraud claim against BP and whether Vaquillas lost title by adverse possession after Wagner succeeded to BP's interests, took over the operations, and produced and paid Vaquillas royalties for nearly twenty years. The court held that, because the Marshall family injury was not inherently undiscoverable and BP's fraudulent representations about its good faith efforts to develop the well could have been discovered with reasonable diligence before limitations expired, neither the discovery rule nor fraudulent concealment extended limitations and therefore, the Marshall family's fraud claims against BP were time barred. The court also held that by paying a clearly labeled royalty to Vaquillas, Wagner sufficiently asserted its intent to oust Vaquillas to acquire the lease by adverse possession.