Crescent Terminals, LLC v. Saybolt, LP

Court of Appeals of Texas·Decided February 8, 2018·No. 09-16-00386-CV·Published

Opinion

In The

Court of Appeals

Ninth District of Texas at Beaumont

NO. 09-16-00386-CV

CRESCENT TERMINALS, LLC Appellant V.

SAYBOLT, LP, Appellee

On Appeal from the 136th District Court Jefferson County, Texas

Trial Cause No. D-194,189

MEMORANDUM OPINION

Crescent Terminals, LLC appeals from a summary judgment ruling in favor of Saybolt, LP, who was employed to act as Crescent’s and ExxonMobil Oil Corporation’s (Exxon) mutually agreed inspector to evaluate the quality of a cargo of crude oil that Crescent sold to Exxon. Crescent raises three issues in its appeal of the trial court’s take-nothing judgment, arguing the summary judgment evidence

reveals the existence of fact issues on the breach of fiduciary duty, tortious interference with contract, and business disparagement claims that it filed against Saybolt. We affirm the trial court’s judgment.

Background

In June 2012, Crescent agreed to sell 100,000 barrels of crude oil to Exxon.

The transaction was based on a written agreement, contract number 1470, which includes terms that specify the quality of the cargo. One of the terms of the contract required that Crescent’s cargo of crude oil “be marketable and acceptable in the applicable common or segregated stream of the carriers involved but not to exceed 1% S[ediment] & W[ater].” The contract also required that Crescent deliver the cargo to a storage tank facility operated by Sunoco Partners Marketing & Terminals, L.P. (Sunoco) in Nederland, Texas. Crescent filed suit against Exxon and later sued Saybolt when Saybolt reported that the sediment and water content of the cargo that Crescent delivered in discharging its duties under contract 1470 exceeded one percent.

The summary judgment evidence reflects that Crescent discharged the cargo from barges into storage tanks that Exxon leased from Sunoco. Several other provisions that are in contract number 1470 are relevant to the trial court’s resolution of Saybolt’s motion. For instance, the contract required the cargo that Crescent

delivered to Exxon to be inspected for quantity and quality by a “mutually agreed independent inspector, with costs to be shared equally.” The contract also provides that the inspection “shall be as specified by [Exxon], but not to exceed the quality warranties contained in this contract and shall be based on composite vessel sample or automatic inline sampler prior to discharge, unless otherwise mutually agreed in writing.”

Saybolt is the company that Crescent and Exxon chose to use as their mutually agreed inspector with respect to contract number 1470. When Saybolt performed its duties to inspect Crescent’s cargo, its employees performed tests to determine the sediment and water content on samples that its employees obtained from the barge as it was being discharged and from samples that Sunoco’s representatives gathered from Sunoco’s automatic inline sampler during Crescent’s discharge of its cargo. The tests on the samples taken from the two sources were significantly different, as the samples tested from the automatic inline sampler showed that Crescent’s cargo failed to comply with the less than one percent sediment and water requirement that is in contract number 1470.1 Had Saybolt based its final discharge report regarding

1 Saybolt’s final discharge report reflects that Crescent’s cargo, delivered to Exxon under contract number 1470, contained approximately fourteen percent sediment and water, by volume.

Crescent’s cargo on the tests Saybolt performed on the composite vessel samples, its report would have indicated that the cargo contained less than one percent water and sediment, by volume. Viewed in the light most favorable to Crescent, the summary judgment evidence established that Saybolt based its final discharge report on the tests that it performed on the samples that came from Sunoco’s automatic inline sampler because Exxon directed Saybolt’s manager to issue its report based on its testing of those samples.

In 2013, Crescent sued Exxon because Exxon had based the payment that it made to Crescent for the cargo delivered pursuant to contract number 1470 on Saybolt’s report showing that the cargo contained more than one percent sediment and water, by volume.2 In 2014, Crescent added Saybolt as another party to its suit. In Crescent’s second amended petition (the live pleading before the trial court at the time that it ruled on Saybolt’s motion) Crescent alleged that Saybolt owed it a fiduciary duty regarding the numbers it chose to report to Exxon regarding the water and sediment in the cargo it sold to Exxon, and that it had breached its duties to Crescent by providing Exxon with a final discharge report that Saybolt based on the

2 Before the trial court ruled on Saybolt’s motion for summary judgment, Crescent nonsuited its claims against Exxon. Therefore, Exxon was not a party to the case when the trial court ruled on Saybolt’s motion, and it is also not a party to the appeal.

tests that it had performed on the samples taken from Sunoco’s automatic inline sampler. According to Crescent, Saybolt’s report should have been based on the composite vessel samples that its employees took during the discharge of the cargo, or Saybolt should have issued a report stating that no final report could be issued given the discrepancies in the tests that it did on all of the samples that it tested. In addition to its breach of fiduciary duty claim, Crescent asserted a claim against Saybolt for tortious interference with its relationship with Exxon, for falsely disparaging Crescent’s business practices, for fraud, and for conspiring with Exxon to damage Crescent’s business.

On appeal, Crescent filed a brief that challenges the rulings the trial court made on Crescent’s breach of fiduciary duty, tortious interference, and business disparagement claims. Crescent does not challenge the trial court’s rulings on Crescent’s fraud and civil conspiracy claims.

Saybolt challenged the claims that are the subject of Crescent’s appeal by filing a combined traditional and no-evidence motion for summary judgment. In response to Saybolt’s combined motion, Crescent filed a response, and it attached several exhibits for the trial court to consider in evaluating Saybolt’s request. The exhibits that Crescent filed, and that the trial court considered, are comprised of three

affidavits and one unsworn declaration;3 excerpts from three depositions taken by the parties in the discovery phase of the case;4 a copy of an e-mail that Brian Goff, a Saybolt employee, sent to David Sifuentes and Alyssa Fritz, Exxon employees, which explains that Saybolt’s tests on the composite vessel samples showed that the

3 Crescent’s response includes affidavits and an unsworn declaration from the following witnesses: (1) David Robinson, who indicated that he was familiar with the automatic inline sampler used at Sunoco’s terminal, and that the system could sample a barge in a manner that could “lead to false indications of high water[;]” (2) Jacob Feldman, a former employee of Crest Energy Partners, L.P., which refuted allegations by Exxon in its counterclaim that the product Crescent delivered to Sunoco’s terminal in June 2012 had been mixed with slop oil that Crest purchased in June 2012 from another refinery; (3) Annette Kroll, an authorized representative of Exxon, who indicated that Exxon paid for the oil it received from Crescent based on the automatic inline sampler results, which she asserted “were not erroneous[;]” and (4) the affidavit of Paxton Crew, an attorney for Crescent, who verified that the documents other than the affidavits and unsworn declaration consisted of true and correct copies of documents that Crescent obtained during discovery in the litigation of its claims.

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