Dbms Investments, L.P. v. Exxonmobil Corporation F/K/A Humble Oil and Refining Company

NUMBER 13-08-00449-CV

COURT OF APPEALS

THIRTEENTH DISTRICT OF TEXAS

CORPUS CHRISTI - EDINBURG

DBMS INVESTMENTS, L.P., Appellant,

v.

EXXONMOBIL CORPORATION F/K/A
HUMBLE OIL AND REFINING COMPANY, Appellee.

On appeal from the 105th District Court of Nueces County, Texas.

MEMORANDUM OPINION
Before Justices Rodriguez, Garza, and Vela
Memorandum Opinion by Justice Garza

This dispute pertains to allegations of underground water and sub-surface soil

contamination by appellee, ExxonMobil Corporation f/k/a Humble Oil and Refining

Company (“ExxonMobil”), the prior operator of a gas plant. By two issues, appellant,

DBMS Investments, L.P. (“DBMS”), appeals the trial court’s granting of ExxonMobil’s
traditional motion for summary judgment and plea to the jurisdiction.1 We affirm.

I. BACKGROUND

The property in question is the Colonia del Rey RV Park (the “Park”) located in Flour

Bluff, Texas. The Park is adjacent to a tract of land where ExxonMobil and its

predecessor, Humble Oil and Refining Company, once operated a gas plant.2 On June 20,

1972, the property where the Park is now situated was conveyed to Raymond Sims.

Raymond and his wife, Robbie Faye Sims, conveyed the property to their son, Ernest

Sims, on April 18, 1990. Ernest conveyed the property to DBMS on December 27, 2002.

DBMS has owned the property continuously since Ernest’s conveyance. On November 28,

2005, Raymond and Robbie Faye executed a written assignment of their rights to any

causes of action involving the property to Ernest, and Ernest, on the same day, executed

a similar written assignment to DBMS.3

After learning that the underground water and sub-surface soil had been

contaminated, Ernest filed his original petition on January 23, 2006, against Pittencrieff

1
In its notice of appeal, DBMS nam ed Ernest Sim s as a party to this appeal; however, the record
reflects that DBMS nonsuited Ernest.

2
It is undisputed that ExxonMobil ceased to operate the gas plant on October 1, 1990.

3
Raym ond and Robbie Faye’s written assignm ent specifically provided that:

NOW , THEREFORE, RAYMOND N. SIMS and ROBBIE FAYE SIMS hereby assign and
transfer unto ERNEST SIMS, his heirs, representatives and assigns, all rights, causes and
claim s that RAYMOND N. SIMS and ROBBIE FAYE SIMS, or either of them , m ay have had
as of the date of said Deed [April 18, 1990] against any third party for dam ages to the said
Property and its appurtenances, including but not lim ited to any claim s against any third party
for the presence of, or by reason of the presence of, hazardous substance and/or solid waste
in, on or under the Property, the presence of which was the result of action or inaction by a
third party, or the presence of which was caused, generated, released, disposed of or
produced by a third party.

The written assignm ent from Ernest to DBMS contained virtually the sam e language as Raym ond and Robbie
Faye’s assignm ent to Ernest.

2
America, Inc. (“Pittencrieff”), a subsequent owner and operator of the gas plant. On

February 20, 2006, Ernest and DBMS jointly filed a first amended original petition adding

ExxonMobil and others that are not parties to this appeal. In their first amended petition,

Ernest and DBMS asserted causes of action for negligence, trespass, nuisance, and

breach of contract against Pittencrieff,4 and gross negligence and malice against

ExxonMobil relating to the contamination of the Sims Tract by petroleum hydrocarbons and

other toxic materials and wastes.

ExxonMobil filed its original answer to Ernest and DBMS’s first amended petition on

March 27, 2006, generally denying the claims made by Ernest and DBMS and asserting

numerous affirmative defenses, including statute of limitations and standing. ExxonMobil

also noted that “Plaintiffs failed to exercise due diligence necessary to invoke the discovery

rule as an exception to the statute of limitations. Plaintiffs[’] damages claim, if any, was not

inherently undiscoverable to Plaintiffs.”

On November 1, 2007, the trial court signed a docket control order setting a

December 30, 2007 deadline for “Amendment of Pleadings and Claims for Damages.” See

TEX . R. CIV. P. 166. Despite the trial court’s docket control order, Ernest and DBMS filed

their second amended petition on April 18, 2008, asserting negligence, trespass, nuisance,

and gross negligence and malice actions against ExxonMobil. Ernest and DBMS also

pleaded, for the first time, that the discovery rule tolled the applicable statute of limitations.5

Specifically, Ernest and DBMS argued that:

4
Pittencrieff was later nonsuited.

5
It is undisputed that a two-year statute of lim itations period applies in this m atter. See T EX . C IV .
P RAC . & R EM . C OD E A N N . § 16.003(a) (Vernon Supp. 2008).

3
 Plaintiffs did not discover, and in the exercise of reasonable diligence could
not have discovered, the condition of the property, the wrongful acts of
Defendant, and the resultant injury until less than two years prior to the filing
of this lawsuit. Further, the injury is of a continuous nature.

ExxonMobil filed a motion to strike Ernest and DBMS’s second amended petition, arguing

that Ernest and DBMS violated the trial court’s docket control order and failed to secure

leave of the trial court to file an untimely second amended petition. In response to

ExxonMobil’s motion to strike, Ernest and DBMS filed a motion for leave to file their

amended pleading. The record does not reflect that the trial court ruled on ExxonMobil’s

motion to strike or granted Ernest and DBMS’s motion for leave.

On April 9, 2008, ExxonMobil filed a plea to the jurisdiction, asserting that Ernest

and DBMS did not have standing to sue. Specifically, ExxonMobil argued that: (1) the

November 28, 2005 assignment from Raymond and Robbie Faye to Ernest was ineffective

because it was an attempt to assign Raymond and Robbie Faye’s rights to a cause of

action that had expired more than thirteen years ago; and (2) the November 28, 2005

assignment from Ernest to DBMS was ineffective because the underlying cause of action

had expired and, therefore, Ernest did not have a cause of action to assign. ExxonMobil

also argued that Ernest lacked standing because he was not the owner of the property at

the time the lawsuit was filed.

On April 18, 2008, Ernest and DBMS filed a response to ExxonMobil’s plea to the

jurisdiction. In their response, Ernest and DBMS argued that: (1) a fact issue existed as

to whether the limitations period had run; (2) Ernest and DBMS had standing because

Raymond and Robbie Faye’s rights to the causes of action pertaining to the property had

been properly assigned to Ernest and, in turn, DBMS; and (3) it was improper for

4
ExxonMobil to raise its limitations defense in its plea to the jurisdiction. Moreover, Ernest

and DBMS noted in their response that the contamination occurred between 1973 and

October 1, 1990, and that the contamination was inherently undiscoverable to the owners

of the property.

The trial court conducted a hearing on ExxonMobil’s plea to the jurisdiction on April

23, 2008. At the hearing, counsel for Ernest and DBMS argued that their causes of action

were kept alive by the discovery rule. Counsel for ExxonMobil objected, contending that

Ernest and DBMS failed to properly plead the discovery rule. After hearing arguments from

both parties, the trial court took the matter under advisement.

Later, Ernest and DBMS filed a no-evidence motion for summary judgment, alleging

that ExxonMobil had not provided any evidence to support, among other things, its

affirmative defense of “failure to ‘ . . . exercise due diligence necessary to invoke the

discovery rule . . . .’” ExxonMobil filed a traditional motion for summary judgment on May

8, 2008. In its traditional motion for summary judgment, ExxonMobil stated that as a

matter of law, Ernest and DBMS filed their lawsuit after the statute of limitations had

expired. Ernest and DBMS filed a response to ExxonMobil’s traditional motion for

summary judgment on June 17, 2008.6 Among other things, Ernest and DBMS asserted

that the discovery rule applied in this case and served to toll the limitations period.7

On May 9, 2008, the trial court signed an order setting all pending motions for a

6
On the sam e day, ExxonMobil filed a supplem ental opposition to Ernest and DBMS’s no-evidence
m otion for sum m ary judgm ent.

7
ExxonMobil later filed objections to Ernest and DBMS’s sum m ary judgm ent evidence and specifically
objected to Ernest and DBMS’s argum ents pertaining to the discovery rule. ExxonMobil once again contended
that Ernest and DBMS failed to properly plead the discovery rule and, therefore, the issue was not properly
before the trial court.

5
hearing on June 24, 2008. At the hearing, Ernest and DBMS withdrew their no-evidence

motion for summary judgment and notified the trial court of their intent to nonsuit Ernest.8

See TEX . R. CIV. P. 162. After hearing arguments from both parties, the trial court orally

granted ExxonMobil’s traditional motion for summary judgment and plea to the jurisdiction.

In its written order granting ExxonMobil’s plea to the jurisdiction, the trial court noted that

“THE COURT FINDS Plaintiffs, Ernest Sims and DBMS Investments, L.P. lack standing

to assert claims for injury to real property against Defendant ExxonMobil Corporation.

Therefore, this COURT lacks Subject[-]Matter Jurisdiction.” In its written order granting

ExxonMobil’s traditional motion for summary judgment, the trial court noted that “[a]fter

consideration of the pleadings of the parties, the motion, response, evidence on file and

the arguments of counsel, the Court FINDS that the Motion for Summary Judgment on the

Issue of Limitations is meritorious and should be GRANTED. . . . This judgment is FINAL,

disposes of all claims and parties, and is appealable.” This appeal ensued.

II. ANALYSIS

A. ExxonMobil’s Motion for Summary Judgment

By its first issue, DBMS argues that the trial court erred in granting ExxonMobil’s

traditional motion for summary judgment on limitations. Specifically, DBMS contends that

the discovery rule was properly before the trial court and that fact issues exist as to the

8
Ernest and DBMS orally announced their intent to nonsuit Ernest from the case. See T EX . R. C IV .
P. 162; Greenberg v. Brookshire, 640 S.W .2d 870, 872 (Tex. 1992) (orig. proceeding) (per curiam ); Strawder
v. Thomas, 846 S.W .2d 51, 59 (Tex. App.–Corpus Christi 1992, no pet.) (“The case law . . . clearly reflects
that taking of a nonsuit does not necessitate the filing of any other pleadings or observing other technical
rules, but m erely requires the appearance before the court or clerk by a plaintiff, or intervenor, through its
representative or attorney, and the transm ittal to the clerk of the party abandoning its claim s. No particular
procedure is required to take a nonsuit.”). The nonsuit is effective the m om ent it is announced. See
Greenberg, 640 S.W .2d at 871. Thus, Ernest is not a proper party to this appeal. As such, we reference
DBMS only.

6
application of the discovery rule. Thus, ExxonMobil was not entitled to summary judgment.

ExxonMobil counters by arguing that DBMS failed to plead the discovery rule and that even

if the discovery rule was properly plead, the statute of limitations had run as to all the

claims asserted.

1. Standard of Review

The standards for reviewing summary judgment are well established. See TEX . R.

CIV. P. 166a(c); Nixon v. Mr. Prop. Mgmt. Co., 690 S.W.2d 546, 548-49 (Tex. 1985). Under

a traditional motion for summary judgment, the movant must establish that no material fact

issue exists and that it is entitled to judgment as a matter of law. TEX . R. CIV. P. 166a(c);

Sw. Elec. Power Co. v. Grant, 73 S.W.3d 211, 215 (Tex. 2002). After the movant

produces evidence sufficient to show it is entitled to summary judgment, the nonmovant

must then present evidence raising a fact issue. Walker v. Harris, 924 S.W.2d 375, 377

(Tex. 1996).

2. Injuries to Land

Texas courts have held that “[w]here injury to land results . . . the right of action for

all the damages resulting from the injury accrues to the owner of the land at the time the

thing that causes the injury commences to effect the land.” Vann v. Bowie Sewerage Co.,

127 Tex. 97, 90 S.W.2d 561, 562 (1936) (addressing injury arising from a nuisance)

(emphasis added); see Senn v. Texaco, Inc., 55 S.W.3d 222, 225 (Tex. App.–Eastland

2001, pet. denied). “The right to sue for the injury is a personal right that belongs to the

person who owns the property at the time of the injury.” Exxon Corp. v. Pluff, 94 S.W.3d

22, 27 (Tex. App.–Tyler 2002, pet. denied); see Senn, 55 S.W.3d at 225-26; Lay v. Aetna

Ins. Co., 599 S.W.2d 684, 686 (Tex. Civ. App.–Austin 1980, writ ref’d n.r.e.) (“A cause of

7
action for injury to real property accrues when the injury is committed.”); City of Dallas v.

Winans, 262 S.W.2d 256, 259 (Tex. Civ. App.–Dallas 1953, no writ); Williams v. State, 177

S.W.2d 106, 109 (Tex. Civ. App.–Waco 1943, writ ref’d).

However, Texas courts have crafted the following exception to this rule:

A subsequent purchaser cannot recover for an injury committed
before his purchase absent an express provision in the deed, or as here an
assignment, granting him that power. To recover on an assigned cause of
action, the party claiming the assigned right must prove a cause of action
existed that was capable of assignment and the cause was in fact assigned
to the party seeking recovery.

Ceramic Tile Int’l, Inc. v. Balusek, 137 S.W.3d 722, 724 (Tex. App.–San Antonio 2004, no

pet.) (citations omitted) (emphasis added). In other words, a purchaser of real property

cannot recover for injury to the property committed before his purchase unless an express

provision in the deed or an assignment grants the subsequent property owner that power.

Id.; see Exxon Corp. v. Emerald Oil & Gas Co., L.C., No. 05-0729, 2009 Tex. App. LEXIS

114, at **15-16 (Tex. Mar. 27, 2009). This is because the right to sue for injuries to real

property is a personal right that does not run with the land. Pluff, 94 S.W.3d at 27; Senn,

55 S.W.3d at 225-26; Abbott v. City of Princeton, 721 S.W.2d 872, 875 (Tex. App.–Dallas

1986, writ ref’d n.r.e.), overruled in part on other grounds by Schneider Nat’l Carriers, Inc.

v. Bates, 147 S.W.3d 264, 281-82 (Tex. 2004).

In the instant case, it is undisputed that: (1) DBMS was not the owner of the Park

at the time the alleged injury to the property first occurred; and (2) the alleged injury to the

property last occurred on October 1, 1990. DBMS did not obtain ownership of the Park

until December 27, 2002. Therefore, DBMS did not have legal claim to Raymond and

Robbie Faye’s potential causes of action pertaining to the Park until those causes of action

8
were assigned on November 28, 2005. See Pluff, 94 S.W.3d at 27; Abbott, 721 S.W.2d

at 875. DBMS attempts to use the November 28, 2005 assignment it received from Ernest

to support its contention that the it has the right to bring suit for the alleged contamination

to the land.

3. Whether the Discovery Rule Was Properly Pleaded

In analyzing this issue, we must first determine whether DBMS properly pleaded the

discovery rule. Rule 63 of the rules of civil procedure requires leave of court to amend a

pleading after a court-prescribed deadline. See TEX . R. CIV. P. 63, 166; see also Goswami

v. Metro. Sav. & Loan Ass’n, 751 S.W.2d 487, 490 (Tex. 1988). However, rule 63 is to be

liberally construed. See Lee v. Key W. Towers, Inc., 783 S.W.2d 586, 588 (Tex. 1989);

Diesel Fuel Injection Serv. v. Gabourel, 893 S.W.2d 610, 611 (Tex. App.–Corpus Christi

1994, no writ). Texas appellate courts apply a liberal interpretation in determining whether

a trial court granted leave to file an amended pleading beyond the prescribed deadline.

See Johnson v. Rollen, 818 S.W.2d 180, 183 (Tex. App.–Houston [1st Dist.] 1991, no writ)

(finding that the trial court granted leave to file a late pleading where the pleading was filed

after the deadline imposed by a docket control order).

Goswami directs us to presume that the trial court granted leave to file a late

pleading even if the filer did not ask for leave when: (1) the record fails to show that the

trial court did not consider the amended pleading; and (2) no surprise or prejudice is

shown. Lee, 783 S.W.2d at 588; Goswami, 751 S.W.2d at 490; see Wilson v. Korthauer,

21 S.W.3d 573, 578 (Tex. App.–Houston [14th Dist.] 2000, pet. denied).

DBMS first pleaded the discovery rule in its second amended petition filed on April

18, 2008. This pleading was filed approximately four months after the December 30, 2007

9
deadline for filing amended pleadings imposed by the trial court’s docket control order. In

response to DBMS’s second amended petition, ExxonMobil filed a motion to strike the

pleading. DBMS subsequently filed a motion for leave with the trial court. The trial court

did not rule on either ExxonMobil’s motion to strike or DBMS’s motion for leave. At the

June 24, 2008 hearing, DBMS presented the trial court with its arguments pertaining to the

discovery rule. ExxonMobil re-asserted its motion to strike at the hearing, but the trial

court, once again, did not rule on the motion. Instead, the trial court, after hearing DBMS’s

arguments pertaining to the discovery rule and considering all pleadings on file, granted

ExxonMobil’s motion for summary judgment on limitations. Upon reviewing the record, we

conclude that the trial court considered DBMS’s discovery rule arguments and that

ExxonMobil did not demonstrate surprise or prejudice. See Wilson, 21 S.W.3d at 578

(concluding that the resisting party did not prove surprise or prejudice because he did not

secure a ruling on his motion to strike). As such, we presume that the trial court granted

DBMS leave to file its second amended petition addressing the discovery rule.9 See Lee,

783 S.W.2d at 588; Goswami, 751 S.W.2d at 490. Therefore, we must examine the

summary judgment evidence to determine, as a matter of law, if the discovery rule tolled

the applicable limitations period.

9
On appeal, ExxonMobil also argues that the language used by DBMS in its second am ended petition
did not fairly raise the discovery rule. In Texas, the general rule is that pleadings will be construed as
favorably as possible to the pleader. See Gonzalez v. City of Harlingen, 814 S.W .2d 109, 112 (Tex.
App.–Corpus Christi 1991, writ denied). “The court will look to the pleader’s intendm ent and the pleading will
be upheld even if som e elem ent of a cause of action has not been specifically alleged. Every fact will be
supplied that can be reasonably inferred from what is specifically stated.” Pitman v. Lightfoot, 937 S.W .2d
496, 511 (Tex. App.–San Antonio 1996, writ denied) (quoting Gulf, Colorado & Santa Fe Ry. Co. v. Bliss, 368
S.W .2d 594, 599 (Tex. 1963)). W e note that ExxonMobil did not file any special exceptions raising this
argum ent in the trial court. See T EX . R. C IV . P. 90. ExxonMobil’s m otion to strike m erely alleged that DBMS
neither tim ely filed its second am ended petition nor secured leave of court to file the untim ely am ended
petition. W e therefore conclude that ExxonMobil has waived this argum ent. See T EX . R. C IV . P. 90; T EX . R.
A PP . P. 33.1.

10
 4. The Discovery Rule

Accrual of limitations is a question of law for the court. See Knott, 128 S.W.3d at

221. Generally, a cause of action accrues and limitations begin to run when facts exist that

authorize a claimant to seek judicial relief. See Schneider Nat’l Carriers, Inc., 147 S.W.3d

at 279. In determining when a cause of action begins to accrue, the supreme court has

stated the following:

Accrual of a cause of action is deferred in two types of cases. In one
type, those involving allegations of fraud or fraudulent concealment, accrual
is deferred because a person cannot be permitted to avoid liability for his
actions by deceitfully concealing wrongdoing until limitations has run. The
other type, in which the discovery rule applies, comprises those cases in
which “the nature of the injury incurred is inherently undiscoverable and the
evidence is objectively verifiable.”

S.V. v. R.V., 933 S.W.2d 1, 6 (Tex. 1996).

In rare cases where the nature of the injury is inherently undiscoverable and

evidence of the injury is objectively verifiable, courts have recognized the discovery rule

as an exception to the general accrual rule. See, e.g., Computer Assocs. Int'l, Inc. v. Altai,

Inc., 918 S.W.2d 453, 455 (Tex. 1996). The discovery rule is a very limited exception to

limitations and is construed strictly. See id.; S.V., 933 S.W.2d at 25 (noting that

applications of discovery rule "should be few and narrowly drawn"). The rule has been

limited to matters that are properly characterized as inherently undiscoverable. Johnson

v. Abbey, 737 S.W.2d 68, 69-70 (Tex. App.–Houston [14th Dist.] 1987, no writ). An injury

is inherently undiscoverable if, by its very nature, it is unlikely to be discovered within the

prescribed limitations period despite the exercise of due diligence. Wagner & Brown, Ltd.

v. Horwood, 58 S.W.3d 732, 734-35 (Tex. 2001); see S.V., 933 S.W.2d at 7 (stating that

a party need not prove that the injury was impossible to discover, but only that it was

11
difficult to learn of the injury). Whether an injury is inherently undiscoverable is determined

on a categorical basis, because such an approach "brings predictability and consistency

to the jurisprudence." See Apex Towing Co. v. Tolin, 41 S.W.3d 118, 122 (Tex. 2001).

Thus, the focus is on whether a type of injury, rather than a particular injury, was

discoverable. Via Net v. TIG Ins. Co., 211 S.W.3d 310, 314 (Tex. 2006).

When the discovery rule applies, a cause of action accrues when the plaintiff knows,

or through the exercise of reasonable care and diligence should have discovered, the

nature of his injury and the likelihood that it was caused by the wrongful acts of another.

See Childs v. Haussecker, 974 S.W.2d 31, 40 (Tex. 1998). Thus, accrual is not delayed

until the plaintiff learns of actual causes and possible cures for his injuries. PPG Indus.,

Inc. v. JMB/Houston Ctrs. Partners Ltd. P'ship, 146 S.W.3d 79, 93 (Tex. 2004). Instead,

a plaintiff who invokes the discovery rule must have sought information about his injuries

and their likely cause once apprised of facts that would prompt a reasonably diligent

person to make an inquiry that would lead to discovery of the cause of action. Pirtle v.

Kahn, 177 S.W.3d 567, 571 (Tex. App.–Houston [1st Dist.] 2005, pet. denied).

If, as here, the plaintiff pleads the discovery rule as an exception to limitations, the

defendant moving for summary judgment must negate it. KPMG Peat Marwick v. Harrison

County Hous. Fin. Corp., 988 S.W.2d 746, 748 (Tex. 1999). This may be done by

demonstrating that the discovery rule does not apply or by proving, as a matter of law, that

there is no genuine issue of material fact as to when the plaintiff discovered, or in the

exercise of reasonable diligence should have discovered, the nature of his injury. Childs,

974 S.W.2d at 44.

12
 5. The State of the Evidence

In response to ExxonMobil’s traditional motion for summary judgment on limitations,

DBMS attached the affidavit and report of J. Jay Klein, an environmental consultant, and

affidavit of Ernest, among other things. In his affidavit, Klein stated that:

Based on my investigation in this case, I can also state based on a
reasonable degree of engineering probability that the contamination that is
presently on the Colonia del Rey RV Park, which is the property that is the
subject of the above-captioned and styled case, emanated onto that property
from the adjoining property previously owned and operated by Defendant
ExxonMobil approximately beginning in 1985 but no later than October 1,
1990[,] and was caused by Defendant ExxonMobil in that time period.

Based on my investigation in this case, I can further state based on
a reasonable degree of engineering probability that the contamination under
the Colonia del Rey RV Park, which is the property that is the subject of the
above-captioned and styled case, that emanated onto that property from the
adjoining property previously owned and operated by Defendant ExxonMobil
is inherently undiscoverable, meaning that, regardless of when the
contamination occurred:

a. There is no indicia of contamination on the subject property
that can be detected by a visual inspection of the surface of
the subject property;

b. The nature of the contamination on the subject property, which
is subsurface soil and groundwater contamination, cannot be
detected by a visual inspection of the surface of the subject
property;

c. There are no public records that would have or could have put
the owners of the subject property on notice, constructive or
actual, that the subject property was contaminated; and

d. Absent someone with actual knowledge of the contamination
informing the owner of the property that the subject property is
contaminated, the subsurface soil and water contamination is
not discoverable through the exercise of reasonable diligence.

DBMS also included a copy of Klein’s environmental liability assessment report, remedial

13
action plan, and remediation cost estimate. In his report, Klein relied on several aerial

photographs of the land surrounding the Park. In a letter, dated September 29, 2006, Klein

noted the following with respect to the aerial photographs:

Historical aerial photographs indicate that waste disposal pits were
formerly located on the Gas Plant adjacent to the northwestern property
boundary [of the Park]. The photographs also indicate some storage tanks
to the northeast in relation to the subject property. In addition, the historical
aerial photographs indicate that a large petroleum storage tank was located
west across Waldron Road in relation to the Colonia Del Rey RV Park.

....

An aerial photograph from January 18, 1985 shows that the waste
disposal pits/surface impoundment were closed by that time; however, the
Defendants have apparently failed to take prudent action to determine the
degree and extent of soil and groundwater contamination caused by these
pits.

In addition to the pits, aerial photos from 1989 through 2000 show that
three (3) aboveground storage tanks were present on the Gas Plant property
approximately 200-feet northeast of the subject property boundary (see
attached aerial photograph dated April 30, 1989). Based on the interpreted
groundwater flow direction shown on Figure 7, these tanks appear to be
located hydraulically upgradient of the contaminated northeast corner of the
subject property. The tanks, which appear to have been used to store
petroleum hydrocarbons, represent a second potential source of
hydrocarbons that could have leaked onto the adjacent Gas Plant property
and migrated onto the Colonia Del Rey tract contaminating onsite soils and
groundwater.

In addition, Klein’s report included a site location map, which demonstrated that, in addition

to the above mentioned landmarks, the Park was surrounded by numerous oil wells.

In his affidavit, Ernest stated that he is the managing partner of DBMS, which owns

the Park, and that for the two years preceding the filing of the initial lawsuit, he had “no

knowledge of any contamination on, at, or under the Colonia del Rey RV Park.” Ernest

also averred that the Park was operated by his father for seventeen years preceding

14
Ernest’s acquisition of the Park in 1990, and that during that time, no one advised him of

any potential contamination “on, at, or under the property.” DBMS did not submit evidence

indicating Raymond and Robbie Faye’s knowledge or lack thereof of the alleged

contamination.

In its opposition to DBMS’s no-evidence motion for summary judgment, ExxonMobil

attached numerous exhibits to its response and referenced previously filed pleadings in

arguing, among other things, that DMBS’s discovery rule contention should fail.10 In

interrogatories sent by ExxonMobil, Ernest and DBMS admitted that at the time the

property was conveyed, they had knowledge that the Park abutted the gas plant previously

operated by ExxonMobil and that gas pipelines ran underneath the Park. In addition, a real

estate appraisal report prepared by Tasador, Inc. on March 5, 2002, prior to DBMS’s

acquisition of the Park, noted the following: “The concentration of long term industrial use

properties and their accompanying environmental hazards are the primary detrimental

influence in the neighborhood.” The appraisal report further noted that:

Potentially Detrimental Conditions

10
On appeal, DBMS argues that the evidence referenced by ExxonMobil in its original opposition and
supplem ental opposition to DBMS’s no-evidence m otion for sum m ary judgm ent is not part of the sum m ary
judgm ent record. W e disagree. Ordinarily, a reviewing court’s scope of review is lim ited to the sum m ary
judgm ent record. C.M. Asfahl Agency v. Tensor, Inc., 135 S.W .3d 768, 787 (Tex. App.–Houston [1st Dist.]
2004, no pet.); see Nixon v. Mr. Prop. Mgmt. Co., 690 S.W .2d 546, 548-49 (Tex. 1985). The evidence
referenced by ExxonMobil was filed in response to DBMS’s no-evidence m otion for sum m ary judgm ent which
was filed after ExxonMobil filed its traditional m otion for sum m ary judgm ent on lim itations. However, the
record does not contain an objection filed by DBMS com plaining about ExxonMobil’s inclusion of this evidence
in the sum m ary judgm ent record; DBMS raises this argum ent for the first tim e on appeal. See T EX . R. A PP .
P. 33.1(a)(1) (providing that to preserve error, a party m ust m ake a tim ely com plaint to the trial court); In re
Estate of Schiwetz, 102 S.W .3d 355, 360 (Tex. App.–Corpus Christi 2003, pet. denied) (holding that the failure
to obtain written rulings on objections to sum m ary judgm ent evidence waives the issue, unless the record
reflects an im plicit ruling by the trial court); see also Nevins v. W hitley, No. 13-04-486-CV, 2005 Tex. App.
LEXIS 6942, at *21 (Tex. App.–Corpus Christi Aug. 25, 2005, no pet.) (m em . op.) (holding that several
affidavits were properly part of the sum m ary judgm ent record because the record did not contain a ruling,
written order, or other indication that the trial court had im plicitly or explicitly sustained objections to the
sum m ary judgm ent evidence).

15
 ....

Hazardous Materials & Waste: A “Phase I” Environmental Site
Assessment (ESA) is necessary to identify obvious environmental
impairment. The subject, being an industrial property, could be suspect to
contamination from prior unknown uses. Consequently, an environmental
impact study is recommended. Because this procedure is beyond the scope
of this report and the appraiser’s expertise, the site is assumed to be free of
all potentially detrimental hazardous waste and materials. The appraiser
recommends that a site assessment be performed to determine if in fact any
contamination exists. The value conclusion for this tract is based upon the
premise that no contamination exists, and the appraisers reserve the right to
adjust the value conclusion should a professional examination of the site
reveal contamination.

ExxonMobil also included several letters and reports indicating several remediation efforts

involving the land surrounding the Park. The following is a brief summary of the letters

included:

• A July 1, 1999 letter from the Texas Railroad Commission authorizing Pittencrieff
to dispose of recovered groundwater from a former tank battery used in remediation
efforts.

• A March 22, 2000 letter from the Texas Railroad Commission to Texas Crude
Energy acknowledging an incident reported on October 5, 1999, and notifying Texas
Crude Energy that it had not timely filed a Leak Report Form with the Texas
Department of Transportation.

• An April 4, 2000 incident report involving a leak caused by a corroded gas pipeline
operated by Texas Crude Energy.

• An October 25, 2000 letter from Pittencrieff to the Texas Railroad Commission
addressing a modification of the remediation plan.

• An April 5, 2001 letter from Pittencrieff to the Texas Railroad Commission regarding
a proposed plan to remediate the former tank battery referenced in the above
mentioned July 1, 1999 letter.

Based on this information that was publicly available, ExxonMobil alleged that DBMS had

not been diligent in discovering the alleged contamination.

16
 ExxonMobil also provided documentation of several incidents of spills that had

previously occurred in and around the Park. The following is a summary of ExxonMobil’s

evidence:

• March 22, 1993: a broken pipeline operated by Headington caused a crude oil spill
in the area.

• September 14, 1994: two barrels of crude oil leaked into a drainage ditch and
eventually ran into the Laguna Madre. Pittencrieff filed the incident report and took
responsibility for the spill.

• March 13, 1995: a ten-gallon diesel-fuel spill occurred in the area. Pittencrieff filed
the incident report and took responsibility for the spill.

• December 1, 2001: three gallons of condensate spilled into a drainage ditch in the
area. Texas Crude Energy filed the incident report and took responsibility for the
spill.

• March 26, 2005: two gallons of condensate spilled in the area. Texas Crude
Energy filed the incident report and took responsibility for the spill.

ExxonMobil also included an affidavit from the custodian of records at the Texas General

Land Office demonstrating that the above mentioned incident reports were business

records of the Texas General Land Office. In addition, several of the reports included

stamps indicating that the reports were also filed at either the Texas Commission on

Environmental Quality or the Texas Railroad Commission.

5. Constructive Notice and the Discovery Rule

Most of the evidence presented by ExxonMobil undermined Klein’s conclusions that

the contamination was inherently undiscoverable. For instance, Klein alleged that

information about the alleged contamination was not available to the public; however,

publicly available records at the Texas Railroad Commission, Texas Commission on

Environmental Quality, and the Texas General Land Office indicated that several oil and

17
gas spills had occurred on the land surrounding the Park. See HECI Exploration Co. v.

Neel, 982 S.W.2d 881, 887 & n.1 (Tex. 1998) (stating that “filings and other materials

publicly available from the Railroad Commission are a ready source of information, and a

cause of action for failure to provide that same information is not inherently

undiscoverable,” but disagreeing that “that all Railroad Commission records are

constructive notice . . . simply because they are a matter of public record”) (emphasis

added).

In conducting his investigation, Klein used aerial photographs of the land

surrounding the Park. These photographs dated back to 1979 and demonstrated that the

Park abutted the gas plant, several waste pits, and several storage tanks, many of which

were the subject of the incident reports filed with the Texas General Land Office.11 The

record also included the report of the appraisal conducted prior to DBMS’s acquisition of

the Park, which indicated that the appraiser suspected that the land underneath the Park

11
Though not on all fours with the present case, the reasoning in HECI Exploration Co. v. Neel is
instructive. 982 S.W .2d 881, 886 (Tex. 1998). In analyzing claim s brought by royalty interest owners against
the operator of an adjoining property for overproducing oil, i.e. drainage, the suprem e court noted the
following:

As owners of an interest in the m ineral estate, the Neels [royalty interest owners] had som e
obligation to exercise reasonable diligence in protecting their interests. This includes
exercising reasonable diligence in determining whether adjoining operators have inflicted
damage. Royalty owners cannot be oblivious to the existence of other operators in the area
of the existence of a common reservoir. In som e cases, wells visible on neighboring
properties m ay put royalty owners on inquiry. In any event, a royalty owner should determ ine
whether a com m on reservoir underlies its lease because it knows or should know that, when
there are other wells drilled in a com m on reservoir, there is the potential for drainage or
dam age to the reservoir.

Id. (em phasis added). Essentially, the suprem e court held that even if the Railroad Com m ission records were
not available to the public, the Neels could not ignore the surrounding operations and that they had a duty to
exercise reasonable diligence to protect their interests. See id. In the instant case, a visual survey of the
surrounding land would have put DBMS on notice that ExxonMobil and its predecessors and successors in
interest were conducting oil and gas operations on the land surrounding the Park. Like the Neels, DBMS
could not ignore the surrounding operations nor the possibility that the operations would cause contam ination
to the land. As previously noted, DBMS adm itted in interrogatories propounded by ExxonMobil that the Park
abutted the gas plant and that num erous oil and gas pipelines ran underneath the Park land.

18
was contaminated and suggested that the land be tested. See Baylor Health Care Sys.

v. Maxtech Holdings, Inc., 111 S.W.3d 654, 658 (Tex. App.–Dallas 2003, pet. denied)

(holding that a report stating the land to be acquired “may pose an environmental concern

to the [used car lot]” put Baylor on notice to further investigate possible contamination to

the land).

We find that a reasonably diligent property owner would have inquired about the

operations of the abutting gas plant and investigated the records at the Texas General

Land Office, Texas Railroad Commission, and Texas Commission on Environmental

Quality prior to acquiring the property, especially considering aerial photographs dating

back to 1979 indicated that the gas plant had several waste pits and storage tanks

surrounding the Park land. See Hicks v. Humble Oil & Ref. Co., 970 S.W.2d 90, 94 (Tex.

App.–Houston [14th Dist.] 1998, no pet.) (concluding that disclosure of the presence of oil

pits constituted actual notice to a landowner of a “dangerous condition”). We therefore

conclude that the alleged contamination was not inherently undiscoverable and that had

DBMS and its predecessors in interest been reasonably diligent in investigating the alleged

contamination, it would have been able to file suit within the applicable statute of

limitations. See S.V., 933 S.W.2d at 7.

We do not believe that this lawsuit, which was filed more than fifteen years after

ExxonMobil ceased operating the gas plant, was timely filed. We hold that the evidence

establishes that the discovery rule did not serve to toll the applicable limitations period.12

12
Our conclusion is further supported by the holding in Senn v. Texaco, Inc. 55 S.W .3d 222, 227
(Tex. App.–Eastland 2001, pet. denied). In Senn, the plaintiffs alleged that Texaco’s oil and gas operations
had caused perm anent and tem porary injury to their land by contam inating the aquifer underlying plaintiff’s
land. Id. at 224. In response to the plaintiff’s attem pt to assert the discovery rule, the Tyler Court of Appeals
stated that:

19
Thus, the November 28, 2005 assignments conveyed causes of action that were time-

barred. Accordingly, we conclude that the trial court did not err in granting ExxonMobil’s

traditional motion for summary judgment. See KPMG Peat Marwick, 988 S.W.2d at 748;

Childs, 974 S.W.2d at 44. Accordingly, we overrule DBMS’s first issue on appeal.

III. CONCLUSION

Because we have concluded that the discovery rule did not serve to toll the

applicable limitations period, we need not address DBMS’s second issue on appeal

regarding standing. See TEX . R. APP. P. 47.1. We affirm the judgment of the trial court.

DORI CONTRERAS GARZA,
Justice

Memorandum Opinion delivered and
filed this the 11th day of June, 2009.

[T]he question of lim itations cannot arise unless the plaintiff has standing to com e into court.
. . . The discovery rule cannot work to transfer the ownership of a cause of action from one
person to another simply because the second person claims to have discovered the injury.
The rule stated in Vann and Lay is sim ple, straightforward, and easily applied. It lends
certainty to transactions involving real property by producing clearly defined rights and
liabilities. W e see no reason to riddle it with an exception engrafted from an entirely
unrelated area of law.

Id. at 225-26 (em phasis added). The plaintiffs in Senn neither had an express assignm ent of the previous
landowner’s causes of action pertaining to the land nor a warranty in the deed from the previous landowner
about the condition of the land. See id. at 225, 227.

20