Background and Procedural Posture

Gary M. Prater owns a 540-acre property in Jones County, Texas, on which 5L Properties operates an oil and gas lease. The lease obligates 5L to "pay for all damages resulting from operations on [the] premises, including, but not limited to, the surface of the land ... grass [and] ... livestock," but does not specify when payment becomes due or what interest rate applies.

In August 2019, the parties settled a lawsuit relating to 5L's ongoing operation of the lease, and the trial court rendered an agreed judgment reflecting the settlement terms. Approximately two months later, Prater sent a demand letter to 5L alleging that two cows had been killed because of a saltwater leak from one of 5L's tank batteries. Prater's demand sought compensation of $4,500 for the loss of the cows and damage to the land, and stated that "[n]on [p]ayment will result in 18% interest per month till paid." On June 7, 2020, Prater sent another demand letter indicating that a total of six cows had died and demanding $7,200, with the letter stating that "interest of 18% per month will accrue" effective on the date of the demand.

Several weeks later, Prater filed a pro se lawsuit against 5L, alleging that 5L had breached the oil and gas lease, resulting in damage to the surface estate and other property. However, in his prayer for relief, Prater sought only a declaration that 5L was "bound by the lease," together with his costs of court. On October 7, 2020, Prater filed a document requesting a "hearing" on the case, though this request did not explicitly indicate that Prater was seeking a jury trial. It appears undisputed that Prater tendered a jury fee at the same time. 5L answered and filed two counterclaims against Prater, including a counterclaim for usury.

The Trial Court's Rulings

The trial court refused to hear Prater's claim for damage to his property but granted his request for declaratory relief. The trial court also awarded $2,000 to 5L for usury, together with its attorney's fees and costs. Prater, now represented by counsel, appealed the trial court's judgment.

The Appellate Court's Decision

The Eastland Court of Appeals issued a memorandum opinion affirming in part, reversing and rendering in part, and reversing and remanding in part. The court applied Texas's fair notice pleading standard and examined whether Prater's petition adequately pleaded a claim for damages despite the limited prayer for relief.

The court's analysis focused on whether the allegations in Prater's petition, when read as a whole, provided 5L with fair notice of the claims being asserted. The opinion noted that while Prater's prayer for relief requested only declaratory judgment and costs, his petition alleged that 5L had breached the lease and caused damage to the surface estate and other property.

Regarding the usury counterclaim, the court addressed whether Prater's demand letters seeking 18% monthly interest on unpaid surface damage claims violated the Texas Finance Code's usury provisions. The trial court had awarded 5L $2,000 for usury, along with attorney's fees and costs, which Prater challenged on appeal.