In Shell Trading (US) Company v. Lion Oil Trading & Transportation, Ware, Jackson, Lee, O’Neill, Smith & Barrow, LLP partners win summary judgment of no liability for breach of four crude oil buy/sell agreements defeating claims of nearly $15,000,000. Affirmed on appeal.
Partners Don Jackson and Eileen O’Neill represented our client, an independent oil refiner. Our client entered into 5 buy/sell agreements with Shell Trading to secure crude oil to run in its refinery in September 2008. The basic agreement was that Lion would swap barrels of West Texas Intermediate crude for barrels of Gulf of Mexico crude. Lion delivered the barrels it contracted to deliver, but due to disruptions caused by Hurricane Ike, Shell Trading was unable to deliver its barrels in September. Lion Oil, needing crude oil for its refinery, covered by purchasing crude on the open market. After September, the price of crude dropped dramatically. Shell Trading then took the position that the buy/sell agreements permitted it to deliver the barrels sometime in the future and obligated Lion Oil to take the barrels and to pay the September contract price. Lion Oil offered to accept those barrels at a lower current market price, but refused to accept the late-delivered barrels at the higher contract price. On four of the five contracts the trial court granted summary judgment in favor of our client. That was upheld on appeal. See, Shell Trading (US) Company v. Lion Oil Trading & Transportation, 2012 WL 3958029 (Tex. App. – Houston [14th Dist.], 2013, pet. denied). After the judgment was affirmed, the parties settled the remaining contract. Other team members included associate Michelle Meriam.