Discovery Operating, Inc. v. BP America Production Co.

311 S.W.3d 140, 173 Oil & Gas Rep. 697, 2010 Tex. App. LEXIS 2629, 2010 WL 1509796
CourtCourt of Appeals of Texas
DecidedApril 15, 2010
Docket11-08-00127-CV, 11-08-00171-CV
StatusPublished
Cited by24 cases

This text of 311 S.W.3d 140 (Discovery Operating, Inc. v. BP America Production Co.) 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
Discovery Operating, Inc. v. BP America Production Co., 311 S.W.3d 140, 173 Oil & Gas Rep. 697, 2010 Tex. App. LEXIS 2629, 2010 WL 1509796 (Tex. Ct. App. 2010).

Opinion

OPINION

TERRY McCALL, Justice.

Discovery Operating, Inc. encountered a highly pressurized water flow while drilling an oil well. After investigating the matter, Discovery believed that BP America Production Company’s operation of two injection wells caused the water flow. Discovery brought suit against BP to recover damages that allegedly resulted from the water flow. Discovery asserted claims for negligence, negligence per se, and common-law and statutory waste. The trial court granted summary judgment to BP on Discovery’s negligence per se claims and severed those claims from the remainder of the case. 1 The parties proceeded to a jury trial on Discovery’s other claims. The jury returned a verdict in favor of BP, and the trial court rendered a take-nothing judgment against Discovery.

In Cause No. 11-08-00127-CV, Discovery asserts that the trial court erred in granting summary judgment on its negligence per se claims. Based on the Texas Supreme Court’s recent holding in Exxon Corp. v. Emerald Oil & Gas Co., L.C., — S.W.3d - (Tex.2009, reh’g granted), and as explained in this opinion, we con- *146 elude that the trial court erred in granting summary judgment to BP on Discovery’s negligence per se claims. Because Discovery’s negligence per se claims are inextricably intertwined with its other claims, we conclude that the error in granting summary judgment on the negligence per se claims harmed Discovery in the presentation of its entire case. Therefore, the error in granting summary judgment in Cause No. 11-08-00127-CV necessitates a reversal and a remand of each of the trial court’s judgments in both appellate causes.

In Cause No. 11-08-00171-CV, Discovery complains of four evidentiary rulings. Discovery asserts that the trial court erred in the following respects:

(1) in admitting testimony from BP’s expert, William D. Griffin, that Discovery encountered a cavern while drilling its well because Griffin’s “cavern” testimony was based on speculation and constituted a new opinion that had not been disclosed before trial;
(2) in admitting testimony from BP’s experts, Roy C. Williamson and Dr. William M. Cobb, about injection pressure data relating to Queen injection projects because such testimony amounted to a previously undisclosed expert opinion that the Queen projects caused the water flow that Discovery encountered in drilling its well;
(3) in excluding testimony from Discovery’s expert, Don Sparks, that BP violated the standard of care for operating its injection wells because the issue of whether BP violated the standard of care for operating such wells is not a matter -within the knowledge and experience of the average juror; and
(4)in admitting expert testimony from two Texas Railroad Commission employees, Stephen Christopher Boger and Joe Millhollon, that no correlation existed between BP’s injection wells and the water flow in Discovery’s well because their testimony had not been tested during the Daubert 2 proceedings.

For the reasons stated in this opinion, we conclude that the trial court erred (1) in admitting Griffin’s “cavern” testimony, (2) in admitting Williamson’s and Dr. Cobb’s pressure injection data testimony, and (3) in excluding testimony from Don Sparks that BP violated the standard of care for operating its injection wells. We also conclude that the evidentiary errors harmed Discovery and necessitate reversal of the trial court’s judgment in Cause No. 11-08-00171-CV.

Therefore, based on the trial court’s erroneous summary judgment on Discovery’s negligence per se claims, we reverse the judgments of the trial court in Cause No. 11-08-00127-CV and Cause No. 11-08-00171-CV. In addition, based on the trial court’s erroneous evidentiary rulings, we reverse the trial court’s judgment in Cause No. 11-08-00171-CV. We remand both causes to the trial court for further proceedings consistent with this opinion.

Introduction

Discovery encountered a highly pressurized flow of brine water at a depth of about 3,895 feet while drilling its Gerónimo 15, No. 6 well. 3 Initially, the water flowed from the well at a rate of about 1,500 to 1,600 barrels per hour, and water continued to flow from the well until Discovery brought the well under control six or seven days later. As a result of the water flow *147 and actions that had to be taken to control the well, Discovery could not complete it.

Because no similar problems had occurred in the area in the past, Discovery concluded that the water flow in the 15-6 well had not been caused by a natural occurrence but, instead, had been caused by man-made subsurface injection. After investigating various injection projects in the area, Discovery concluded that BP’s operation of its Sanders A 25 injection well (the 25 well) and its Sweetie Peck 2D injection well (the 2D well) caused the water flow in Discovery’s 15-6 well. Therefore, Discovery brought this suit against BP.

Discovery and BP designated experts on the issues of negligence, causation, and damages, and all of these issues were hotly contested. The trial court conducted Dau-bert proceedings to determine whether the designated experts were qualified to testify as expert witnesses at trial. During the Daubert proceedings, the trial court heard testimony on eight days during a period of about four months. The trial court ruled that all of the witnesses who had testified during the Daubert proceedings were qualified to testify as expert witnesses at trial. The jury trial was dominated by detailed, sophisticated, and complex expert testimony. The jury heard testimony on thirteen days.

The case involved the following central issue: What caused the water flow in the 15-6 well? Discovery encountered the water flow in the 15-6 well at a depth of 3,895 feet, which was either at the base of the Seven Rivers formation or at the top of the Queen formation. Initially, Discovery believed that the water flow had been caused by BP’s injections into its 25 well and its 2D well. The Texas Railroad Commission had issued permits allowing BP to use these wells as injection wells. 4 With the 25 well, BP injected fluids into the War-San San Andres (WSSA) reservoir, which was part of the San Andres formation, at a depth of about 6,100 feet. With the 2D well, BP injected fluids into the San Andres formation at a depth above the WSSA reservoir.

At trial, Discovery’s experts testified that BP’s injections into its 25 well caused the water flow in the 15-6 well. Discovery did not offer expert testimony that BP’s injections into its 2D well caused the water flow in the 15-6 well, and the trial court granted a verdict in BP’s favor on Discovery’s claims relating to the 2D well. Thus, the primary disputed causation issue at trial was whether BP’s injections into its 25 well at a depth of about 6,100 feet in the WSSA reservoir caused the water flow encountered by Discovery in its 15-6 well at a depth of 3,895 feet in the Seven Rivers formation or the Queen formation.

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Cite This Page — Counsel Stack

Bluebook (online)
311 S.W.3d 140, 173 Oil & Gas Rep. 697, 2010 Tex. App. LEXIS 2629, 2010 WL 1509796, Counsel Stack Legal Research, https://law.counselstack.com/opinion/discovery-operating-inc-v-bp-america-production-co-texapp-2010.