Oil and Gas Lawyer Blog
On May 22 the Texas Supreme Court issued opinions in Boerschig v. Rio Grande Electric Cooperative, No. 24-0213. Four Justices joined the majority opinion by Justice Busby; Justice Hawkins also filed a concurring opinion; and Justice Bland, joined by Chief Justice Blacklock and Justices Lehrmann and Huddle, filed a dissent.
The case concerns an old electric line running across property owned by John Boerschig. Rio Grande Electric wanted to update and add to the line, and Boerschig objected. The result was a lawsuit, filed in 2014, tried to a jury, and finally reaching the Texas Supreme Court. The implications of the case troubled the electric and pipeline industries who filed several amicus briefs, including the the Texas Electric Cooperatives, the Texas Pipeline Association, Oncor Electric, Southwestern Public Service, Texas New Mexico Power, American Electric Power, and CenterPoint Energy. Two amicus briefs were filed by those advocating for Mr. Boerschig’s position, Texas Farm Bureau and Texas Land & Mineral Owners Association.
Rio Grande Electric was formed in 1945 by ranchers in South Texas as part of the electrification of rural America. A member-owned non-profit utility, it began acquiring easements to lay electric lines using “blanket” easements that only describe the land across which the line will be laid and not the actual line location. Such blanket easements were common for electric lines and pipelines in the early part of the last century. Between one-third and one-half of Rio Grande’s lines are built on such easements. In 1947 Rio Grande acquired such an easement from the Estate of Mary Clamp to place electric lines on her 5,684-acre Ranch. Rio Grande constructed a line across some 1.6 miles of the Clamp property.
In 2002 Boerschig bought the Clamp ranch. In 2012 Rio Grande notified Boerschig that it planned to upgrade its line across his ranch in order to serve a Lone Star Gas pipeline compressor station and a new electric substation. The old line had twenty poles rising about thirty feet and carrying four wires across the ranch, but the upgraded line would use sixty poles rising thirty-seven feet and carrying seven wires. Boerschig objected and sued Rio Grande for trespass.
At first Rio Grande was unable to locate the 1947 Clamp easement, which had not been recorded. After suit was filed it found the easement and countersued, claiming that easement allowed it to improve the existing line.
The issues were submitted to a jury:
Does RGEC have an easement by estoppel across the Power Line Route?
To establish an easement by estoppel, a landowner or his predecessor must have made a representation, either by words or conduct, that was believed by RGEC and upon which RGEC relied:
Answer: Yes
Did the construction of the Power Line Upgrade across John Boerschig’s property exceed the scope of the prescriptive easement or easement by estoppel that you found in response to Question 2 or 3?
The scope of an easement created by prescription or estoppel is fixed by the use through which it was created.
Answer: No
Based on those answers the trial court entered judgment for Rio Grande. The Court of Appeals affirmed.
The Supreme Court majority held that legally sufficient evidence supports the jury’s finding of an easement by estoppel, but that “the upgraded line exceeds the scope of this easement as a matter of law.” The dissenters would hold that there was evidence that the upgraded line was within the scope of the easement and so would affirm the jury’s verdict.
First, the Court said Boerschig was bound by the Clamp easement even though it was not recorded because he knew of the existing line when he bought the ranch. The majority opinion and the dissent disagreed on who had the burden of proof to show that the upgrade exceed the scope of the easement; the majority said Rio Grande had to show that the upgrade did not exceed the scope of the easement, whereas the dissent said the burden was on Boerschig to prove that it did.
Boerschig did not complain that the trial court’s instruction incorrectly placed the burden of proof. Instead he argued that the evidence showed Rio Grande’s upgrade exceeded the scope of the easement as a matter of law. (The Supreme Court does not have jurisdiction to overturn a fact finding of the jury unless there is “no evidence” to support that finding.) This is where the majority and dissent disagreed. Justice Bland cited the following evidence in support of the jury’s verdict:
Contrary to the Court’s recitation that Rio Grande offered ‘no evidence” that the upgrade was necessary to continue its use of the power line route, Rio Grande’s witnesses described the line as a “backbone feeder” for “lots of different consumers,” including Boerschig. The video of the power line route shows fields planted only on either side of the line route and no haying or farming in the area under and around the line even before the upgrade. A Rio Grande employee testified that nothing in the route interferes with haying, ranching, or hunting. The new, safer poles resemble the replaced wooden poles in style and color and have a slightly larger diameter, with some in the identical location as the replaced poles. The number of guy wires securing directional changes in the line did not increase.
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The jury reasonably concluded that Rio Grande relied on the easement to transmit electricity in the footprint of the route and the upgrade was necessary to continue using the easement to serve existing customers. … The jury reasonably concluded that reconstruction of the line imposed no material additional burden on the property.
The majority opinion cited Houston Pipe Line Company v. Dwyer, 374 S.W.2d 662, 664, 666 (Tex. 1964) in support of its holding.
For example, in Houston Pipeline Company v. Dwyer, we held as a matter of law that when a utility installed an 18-inch gas pipeline, “the extent of [its] easement rights under [its]agreement [with the original landowner] became fixed and certain,” and the easement’s grant of authority only to “lay, construct, maintain, operate (and repair) a pipeline did not “authorize[] [the utility] to … replace it with a line of substantially greater size.”
This case significantly impairs the value of old blanket easements that do not expressly provide for upgrades and expansions.