Cactus Well Service, Inc. v. Energico Production, Inc.

• Court: Court of Appeals of Texas
• Decided: January 22, 2015
• Docket: 02-13-00186-CV
• Status: Published

Opinion

COURT OF APPEALS SECOND DISTRICT OF TEXAS FORT WORTH

NO. 02-13-00186-CV

CACTUS WELL SERVICE, INC. APPELLANT AND APPELLEE

V.

ENERGICO PRODUCTION, INC. APPELLEE AND APPELLANT

----------

FROM THE 43RD DISTRICT COURT OF PARKER COUNTY TRIAL COURT NO. CV07-2700

SUPPLEMENTAL MEMORANDUM OPINION 1 ON REHEARING

On November 20, 2014, we reversed the trial court’s judgment, rendered a

take-nothing judgment on appellee Energico Production, Inc.’s claims, and

rendered a judgment in favor of appellant Cactus Well Service, Inc. on its breach-

of-contract counterclaim. Energico has filed a motion for rehearing. We deny the

motion but issue this supplemental opinion to address Energico’s argument that

1 See Tex. R. App. P. 47.4. we erred to render a take-nothing judgment because Energico obtained favorable

jury findings on other theories of recovery. 2 See Tex. R. App. P. 49.3. We do

not withdraw our prior opinion and judgment. See, e.g., Anderton v. Cawley, 378

S.W.3d 38, 64 (Tex. App.—Dallas 2012, no pet.) (supp. op. on reh’g).

We will not restate the applicable facts other than to emphasize that

Energico submitted three theories of recovery to the jury—negligence, negligent

misrepresentation, and breach of contract—and elected to recover under its

negligent-misrepresentation claim. Energico now argues that the reversal of

Energico’s recovery for negligent misrepresentation should result in rendition of

judgment in favor of Energico on its breach-of-contract or negligence claim as

found by the jury. This is an argument Energico may raise for the first time on

rehearing. See, e.g., Beal Bank, S.S.B. v. Schleider, 124 S.W.3d 640, 650 (Tex.

App.—Houston [14th Dist.] 2003, pet. denied) (op. on reh’g). Indeed, Cactus

does not argue that Energico may not raise this argument for the first time on

rehearing.

The jury found that Cactus was negligent and breached its contract with

Energico as well as finding that Cactus made negligent misrepresentations to

Energico. In the damages questions regarding Energico’s breach-of-contract

and negligence claims, the jury found that the “reasonable cash market value of

2 We do not address Energico’s argument that we erred by concluding that the independent-injury rule barred Energico’s negligent-misrepresentation claim. Our November 20, 2014 memorandum opinion sufficiently addressed this issue.

2 the Well immediately before the incident” was “$0.00.” The jury also found that

the “cost of drilling a replacement Well to the point of the incident, less salvage

value of the Well” was $1,080,000. The applicable measure of damages for the

destruction of an oil well that can be reproduced is the lower of (1) the

reasonable cash market value of the well immediately before the incident or (2)

the cost of reproducing the well with a new well equipped like the old well, less

any salvage value of the old well. See Basic Energy Serv., Inc. v. D-S-B Props.,

Inc., 367 S.W.3d 254, 262 (Tex. App.—Tyler 2011, no pet.) (op. on reh’g); see

also Gilbert Wheeler, Inc. v. Enbridge Pipelines (E. Tex.), L.P., 57 Tex. Sup. Ct.

J. 1465, 2014 WL 4252273, at *3–4 (Aug. 29, 2014) (stating measure of

damages in tort or contract for permanently damaged property where restoration

is not possible is the difference in value immediately before injury and its value

immediately after, i.e., “the loss in fair market value of the property as a whole”);

Dresser Indus., Inc. v. Page Petroleum, Inc., 853 S.W.2d 505, 512 (Tex. 1993)

(holding plaintiff could recover cost of expenditure to save well and cost of new

well when well could not be saved but recognizing damages could not exceed

fair market value of well prior to damage). See generally 55A Tex. Jur. 3d Oil

and Gas § 602 (2011) (explaining where “well is destroyed by a drilling

contractor’s lack of care,” recoverable damages are “the difference between its

market value immediately before its destruction and the market value of the

salvage remaining after deducting the expense of salvaging, provided this

expense does not exceed the value of the salvage”) Because the jury found that

3 the value of the well immediately before the incident was zero—a finding

Energico did not attack in the trial court and does not attack on appeal with any

specificity other than to argue that the “better policy” would be to “disregard” the

finding—it could not recover damages under its claims for breach of contract or

negligence. Additionally, for the reasons Energico’s negligent-misrepresentation

recovery was barred by the independent-injury rule, its negligence recovery was

likewise barred.

/s/ Lee Gabriel

LEE GABRIEL JUSTICE

PANEL: MCCOY, MEIER, and GABRIEL, JJ. 3

DELIVERED: January 22, 2015

3 Justice McCoy was a member of the original panel but has retired in the interim. The two remaining justices ruled on this motion. See Tex. R. App. P. 49.3(b).