Croslin v. Enerex, Inc.

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Defendant-appellant offered to purchase plaintiffs-appellees' mineral interest in Seminole County. At the time, plaintiffs did not know that they had inherited the mineral interest, that the mineral interest was included in a pooling order, or that proceeds had accrued under the pooling order. Defendant admitted it knew about the pooling order and the accrued proceeds but did not disclose these facts in making the offer. Plaintiffs signed the mineral deeds which defendant provided, and subsequently, they discovered the pooling order and the accrued proceeds. Plaintiffs filed suit against defendant for rescission and damages, alleging misrepresentation, deceit and fraud. The trial court entered summary judgment in favor of plaintiffs. The Court of Civil Appeals reversed. The issues before the Supreme Court on appeal were: (1) whether the summary judgment record on appeal established that defendant owed the plaintiffs a duty to disclose the pooling order and the accrued mineral proceeds when it made an unsolicited offer to purchase their undivided mineral interest in Seminole County and provided the mineral deeds to be executed; and if so, (2) whether rescission of the mineral deeds was a remedy for defendant's breach of the disclosure duty. The Court held that defendant owed a duty to disclose the accrued mineral proceeds to plaintiffs when it offered to purchase the mineral interest and provided the mineral deeds conveying the mineral interest and assigning the accrued mineral proceeds, if any. Furthermore, the Court held that rescission is an appropriate remedy in this case for the breach of defendant's disclosure duty. View "Croslin v. Enerex, Inc." on Justia Law