Cressman Tubular Products Corp. v. Kurt Wiseman Oil & Gas, Ltd.

322 S.W.3d 453, 2010 Tex. App. LEXIS 7775, 2010 WL 3703235
CourtCourt of Appeals of Texas
DecidedSeptember 23, 2010
Docket14-08-01039-CV
StatusPublished
Cited by14 cases

This text of 322 S.W.3d 453 (Cressman Tubular Products Corp. v. Kurt Wiseman Oil & Gas, Ltd.) is published on Counsel Stack Legal Research, covering Court of Appeals of Texas primary law. Counsel Stack provides free access to over 12 million legal documents including statutes, case law, regulations, and constitutions.

Bluebook
Cressman Tubular Products Corp. v. Kurt Wiseman Oil & Gas, Ltd., 322 S.W.3d 453, 2010 Tex. App. LEXIS 7775, 2010 WL 3703235 (Tex. Ct. App. 2010).

Opinion

OPINION

TRACY CHRISTOPHER, Justice.

This is a double appeal of a case in which multiple theories of liability were asserted against four defendants for damages caused by the sale of goods for use in an oil well. After the defendant found liable for 99% of the plaintiffs’ damages filed for bankruptcy protection, the trial court severed those claims from this case and entered judgment requiring all of the plaintiffs’ damages and attorney’s fees to be paid by the defendant that the jury found to be 1% responsible. On appeal, that defendant contends that all of the plaintiffs’ damages sound in tort, and thus, the trial court erred in disregarding a jury finding allocating responsibility for breach of an express warranty and in awarding attorney’s fees to the plaintiffs. The plaintiffs argue that all of their damages sound in contract, and they contend that the trial court erred in failing to disregard the jury’s finding allocating responsibility for breach of implied warranties, failing to hold the defendants jointly and severally liable, and failing to include the jury’s breach-of-contract finding as an alternative basis for the judgment against one of the defendants. We conclude that the plaintiffs’ express-warranty claim against appellant sounds in contract, but their implied-warranty claims against the cross-appel-lees sound in tort; thus, the trial court did not err in disregarding the proportionate-responsibility finding as to the express warranty claim against one defendant and in refusing to disregard a similar finding as to the implied warranty claims against two other defendants. Finally, we further conclude that the trial court did not err in refusing to include alternative bases for its judgment, and we affirm the trial court’s judgment.

I. Factual and PROCEDURAL Background

Kurt Wiseman is the owner of Kurt Wiseman Oil & Gas, Ltd., which owns a working interest in the Gerdes No. 1 well in Lavaca County, Texas. He also is the president of Escondido Petroleum, which is the well operator. We refer to all three collectively as “Wiseman.”

The Gerdes No. 1 well had been shut in for some time and the existing casing was damaged, but Wiseman planned to perform a fracture stimulation to return the well to production. In this procedure, the rock surrounding the oil reservoir is fractured by fluid mixed with increasing concentrations of proppant pumped at high pressure into the well down a tubing string, which consists of joints of pipe connected to one another by couplings. The proppant holds the fracture open to allow oil and gas to drain into the well bore. The proppant and fluids are then removed and oil can be produced through the same tubing string.

Wiseman ordered the tubing string from Cressman Tubular Products Corporation and specified that the components were to be API P110, which means that they were to meet a particular toughness standard set by the American Petroleum Institute. Cressman ordered the tubing string from *456 Sepco Tublar, Inc.; Sepco ordered the couplings from United Casing, Inc.; and United Casing bought the couplings from the manufacturer, Colaco Tubular Services, Inc. When delivered by Colaco, the couplings had been painted white, which in industry custom signified that they met the API P110 standard. United Casing sent the couplings to Sepco, and Sepco attached the couplings to the joints of pipe before shipping them to Cressman, who then shipped them Wiseman.

A. The Tubing String Failures

The joints of pipe were assembled into a tubing string and used in the planned fracture stimulation in January 2004. Because the easing in the well narrowed from 7 5/8 inches to 5 inches in diameter, wider pipe joints were used in the upper part of the tubing string and narrower pipe was used in the lower part.

After about sixty percent of the fluid and twenty percent of the proppant had been pumped down the well, the tubing string failed and there was a sudden dramatic loss of pressure. The fracture stimulation could not be completed, and mud entered the formation so that a mixture of fracture fluid, proppant, and mud were mixed with the condensate that flowed from the well. As Kurt Wiseman later testified, “The mud went into the fracture, made it to the point where the well was actually showing skin damage, which is damage near the well bore, not allowing it to flow. So, yes, the mud was obviously damaging [the formation].” Wiseman’s expert Richard Klem explained at trial that the “skin damage” from the mud or “positive skin” meant that the perforations in the well casing were blocked.

Wiseman hired consultants who were unable to find a physical obstruction to the tubing string, and eventually, a well service company was able to circulate the mud in the well 1 and remove part of the string, which was found to have lost a coupling from its upper, wider part. The coupling could not be found, and as Kurt Wiseman later testified, he was concerned that it might have fallen to the area where the casing and tubing string narrowed such that removing the entire tubing string could allow the coupling to fall deeper into the well bore and “junk” the well, 2 potentially rendering it unusable. Wise-man decided to leave the narrower part of the tubing string in place, and reattached the wider portion of the string to it using an “overshot packoff.” 3 Fluids and mud were washed out from the well in sufficient quantities for the well to begin producing oil.

Production stopped in May 2004 when Wiseman again found mud inside the tubing string. When a crew attempted to remove it, the tubing string parted and two couplings were found to have split from the wider portion of the string. Wiseman was able to quickly obtain only a *457 dozen couplings, and as explained at trial, Wiseman would lose its lease if production was interrupted for more than thirty or sixty days. Wiseman therefore replaced the split couplings and those adjacent to them, and the well was returned to production. The split couplings and those that had been replaced were tested, and it was found that the split couplings did not meet API P110 standards.

In January 2005, the well again stopped producing, and once more Wiseman found that a coupling had failed and mud had entered the tubing string. This time, he was able to obtain enough couplings to replace all of the approximately 300 couplings from the wider portion of the tubing string to the overshot packoff. In 2006, the well was no longer producing enough gas to lift the oil condensate, and Wiseman began using a gas lift to raise the oil from the well. Wiseman’s lease was secured by a second producing well on the same property in 2007, and he was able to interrupt production on the Gerdes No. 1 well to remove the overshot packing, replace the entire tubing string, and perform a second fracture stimulation without jeopardizing the lease of the property. After the second fracture stimulation, the well produced enough gas to allow Wiseman to discontinue the use of the gas lift.

B. The Trial

Wiseman sued Cressman and Sepco in September 2005, and added United Casing and Colaco as defendants in 2006.

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322 S.W.3d 453, 2010 Tex. App. LEXIS 7775, 2010 WL 3703235, Counsel Stack Legal Research, https://law.counselstack.com/opinion/cressman-tubular-products-corp-v-kurt-wiseman-oil-gas-ltd-texapp-2010.