Exxon Corp. v. Breezevale Ltd.

82 S.W.3d 429, 157 Oil & Gas Rep. 785, 2002 Tex. App. LEXIS 2407, 2002 WL 501092
CourtCourt of Appeals of Texas
DecidedApril 4, 2002
Docket05-98-02050-CV
StatusPublished
Cited by185 cases

This text of 82 S.W.3d 429 (Exxon Corp. v. Breezevale 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
Exxon Corp. v. Breezevale Ltd., 82 S.W.3d 429, 157 Oil & Gas Rep. 785, 2002 Tex. App. LEXIS 2407, 2002 WL 501092 (Tex. Ct. App. 2002).

Opinion

OPINION

Opinion By Justice David F. FARRIS (Retired).

Exxon Corporation (Exxon) appeals the trial court’s judgment following a jury verdict awarding Breezevale Limited (Breeze-vale) $34.3 million as damages for breach of an oral contract, $1 million for breach of a contract implied in law, and $3,495 million in attorneys’ fees. In its first three issues, Exxon asserts (1) the evidence is legally and factually insufficient to support a finding that the parties reached an enforceable oral agreement, (2) the claimed agreement is not enforceable under the statute of frauds, and (3) the trial court incorrectly instructed the jury regarding the doctrine of promissory estoppel. In its *434 final five issues, Exxon complains about the lost profits award, the attorneys’ fees award, some of the trial court’s evidentiary rulings, and the judgment being contrary to public policy.

Breezevale brings three issues in a cross appeal. Breezevale first contends the trial court erred in its calculation of interest on the breach of contract award. In two conditional cross-points, Breezevale complains of the trial court’s dismissal of its breach of fiduciary duty claim by directed verdict and the trial court’s exclusion of evidence.

For the reasons that follow, we reverse the trial court’s award of $34.3 million on Breezevale’s breach of contract claim, affirm the award of $3,495 million in attorneys’ fees, and affirm the trial court’s directed verdict on Breezevale’s breach of fiduciary duty claim. 2

FACTUAL BACKGROUND

In the early 1990s, the Nigerian government opened its deepwater offshore to oil and gas exploration, inviting bids from international oil companies for deepwater blocks. Exxon submitted a bid requesting blocks 209 and 210. In June 1993, the Nigerian government formally awarded block 209 to Exxon. Exxon subsequently leveraged some of its interest in block 209, through trades and farm-ins, to acquire interests in other blocks that had been awarded to other companies.

This case arises from a dispute between Exxon and Breezevale, a company hired by Exxon to provide local assistance in its effort to procure exploration rights in Nigeria. Breezevale, a London-based cor- • poration, operated in various countries in Europe, the Middle East, and Africa, including Nigeria. Exxon contacted Breeze-vale in 1990, requesting its assistance with services such as arranging appointments, conducting briefings, obtaining information and technical data on available blocks of interest to Exxon, and speaking with government officials on Exxon’s behalf. Breezevale provided these types of services to Exxon over a period of approximately eighteen months, with no formal agreement in place as to Breezevale’s compensation for its services. As the business relationship progressed, the parties began negotiating the terms of a contract to formalize their relationship. Although Exxon initially pursued only a short-term services agreement with Breezevale, Breezevale expressed an interest in a more involved, long-term relationship in which Breezevale would share the risk and rewards of Exxon’s Nigerian exploration. Representatives of Exxon and Breezevale met several times to discuss their business relationship.

The last of these meetings occurred on April 3, 1992. In this and previous meetings, the parties discussed both a services contract and a participation agreement. The parties discussed different options that would provide Breezevale with a participation interest in Exxon’s Nigerian exploration and production, including a 2½ percent paid working interest, whereby Breezevale would pay 2½ percent of the costs of production and receive 2⅞ percent of the production profits. The parties’ dispute as to whether an oral working interest agreement was reached at the April 3rd meeting became the basis for Breeze-vale’s lawsuit against Exxon. Breezevale claimed Exxon offered, and it accepted, a 2½ percent working interest in all of Exxon’s Nigerian oil operations. Exxon *435 claimed an agreement on essential terms was never reached and it terminated negotiations with Breezevale before a contract was formed. Neither party disputes an agreement on the services contract was never reached.

The day after the April 3, 1992 meeting, Exxon’s main contact at Breezevale, Habib Bou-Habib, traveled to Nigeria to speak with the Ministry of Petroleum on Exxon’s behalf. Breezevale contends the trip was made at the request of Exxon; Exxon asserts it never requested nor authorized the visit. On April 9, 1992, Habib contacted Gerald Mudd, an Exxon representative, telling him to “[g]o open the champagne,” because Exxon had been awarded a block. Block 209 was formally awarded to Exxon by the Nigerian government in June 1993.

On April 13, 1992, Exxon sent Breeze-vale a letter terminating its relationship with Breezevale and enclosing a $30,000 check to cover Breezevale’s services. According to Mudd, Exxon had begun to have concerns about Habib’s actions in Nigeria; consequently, Exxon decided to terminate the business relationship. Ha-bib returned the check.

Breezevale sued Exxon, claiming, among other things, that Exxon breached its oral contract with Breezevale and its fiduciary duty to Breezevale. The case was tried to a jury. After Breezevale rested its case, Exxon moved for a directed verdict on all counts. The trial court granted Exxon’s motion for a directed verdict with regard to Breezevale’s breach of fiduciary duty claim, but denied the remainder of the motion. The jury found the parties had entered into an oral agreement that Breezevale would acquire a 2½ percent working interest in “any deepwater blocks awarded to Exxon by the government of Nigeria” and “any deepwater blocks in which Exxon obtains a farm-in from a private company by trading any interest awarded to Exxon by the government of Nigeria.” The jury valued the working interest at $34.3 million and additionally awarded Breezevale $1 million for sendees on an implied contract in law, and $3,495 million for attorneys’ fees. The trial court entered judgment on the jury verdict. Exxon appealed.

EXXON’S APPEAL

In its first three issues, Exxon attacks the jury’s findings that an enforceable contract existed between the parties. Specifically, Exxon claims there is no or insufficient evidence to support the jury’s finding that the parties reached an agreement on all the material terms necessary to the formation of an enforceable agreement. Additionally, Exxon contends that, as a matter of law, the claimed oral agreement is unenforceable under the statute of frauds. Finally, Exxon argues the trial court erred, in its submission of the jury question on promissory estoppel. Because we agree with Exxon that the statute of frauds applies, we assume without deciding the parties reached an oral agreement, and address Exxon’s second issue regarding the applicability of the statute of frauds.

Statute of Frauds

The statute of frauds, in section 26.01 of the Texas Business and Commerce Code, provides in pertinent part:

(a) A promise or agreement described in subsection (b) of this section is not enforceable unless the promise or agreement, or a memorandum of it, is
(1) in writing; and

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Cite This Page — Counsel Stack

Bluebook (online)
82 S.W.3d 429, 157 Oil & Gas Rep. 785, 2002 Tex. App. LEXIS 2407, 2002 WL 501092, Counsel Stack Legal Research, https://law.counselstack.com/opinion/exxon-corp-v-breezevale-ltd-texapp-2002.