Texas Property Code 31.002 – Cause of Action for Bad Faith Washout
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Terms Used In Texas Property Code 31.002
- Defendant: In a civil suit, the person complained against; in a criminal case, the person accused of the crime.
- Evidence: Information presented in testimony or in documents that is used to persuade the fact finder (judge or jury) to decide the case for one side or the other.
- Lease: A contract transferring the use of property or occupancy of land, space, structures, or equipment in consideration of a payment (e.g., rent). Source: OCC
A person may bring a cause of action for a bad faith washout of the person’s overriding royalty interest in an oil and gas lease. The person is entitled to a remedy under this chapter if the person proves by a preponderance of the evidence that:
(1) the person owned or had a legal right to the overriding royalty interest;
(2) the defendant had control over the oil and gas lease burdened by the overriding royalty interest;
(3) the defendant caused a washout of the person’s overriding royalty interest; and
(4) the defendant acted in bad faith by knowingly or intentionally causing the washout.