Horse Hollow Generation Tie, LLC v. Whitworth-Kinsey 2, Ltd.

504 S.W.3d 324, 2016 WL 1565519, 2016 Tex. App. LEXIS 3830
CourtCourt of Appeals of Texas
DecidedApril 14, 2016
DocketNO. 03-13-00599-CV
StatusPublished
Cited by1 cases

This text of 504 S.W.3d 324 (Horse Hollow Generation Tie, LLC v. Whitworth-Kinsey 2, 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
Horse Hollow Generation Tie, LLC v. Whitworth-Kinsey 2, Ltd., 504 S.W.3d 324, 2016 WL 1565519, 2016 Tex. App. LEXIS 3830 (Tex. Ct. App. 2016).

Opinion

OPINION

Bob E. Shannon, Justice

Appellant, Horse Hollow Generation Tie, LLC (the Company) appeals from the judgment of the district court of Concho County rendered in a trial to the court, The pivotal appellate issue stems from the district court’s refusal to reform three electric-transmission easements. Appel-lees are Whitworth-Kinsey # 3, Whit-worth-Kinsey #2, and David Whitworth. Whitworth-Kinsey # 2 is also cross-appellant.1 We will affirm the judgment in part and reverse it in part.

In 2008 and 2009 the Company constructed a 200-mile electric-transmission line to connect its wind farms near Abilene with a substation close to San Antonio. Operating on an aggressive schedule, the Company completed the line in about fourteen to eighteen months.

The Company’s landmen negotiated with about 270 landowners to create the 180-foot easement corridor along the 200-mile [326]*326transmission route. The Company followed industry standards in the manner of compensating landowners. Upon agreement of the price per linear foot, the land-man would estimate the easement’s length in linear feet. The landowners then would be paid one-half of the estimated length. The remaining sum would be paid, based upon the final surveyed footage, after the transmission line was completed. The surveyed line might be longer than the estimated footage or it might be shorter. The final payment, being based upon the surveyed footage, “trued-up” the estimate.

In the farm and ranch country of Con-cho and McCulloch Counties the transmission route passed over the Whitworth properties. The Company pleaded that before it and the Whitworth partners executed the respective transmission easements, they understood and agreed that the Company would compensate them for the actual surveyed length of the easements. The Company pleaded further that the easements, as written, did not properly reflect the parties’ agreement. Instead, the Company asserted, the easements incorrectly stated that the Company would estimate the length of the easement and pay the landowners one-half of that estimate up front and then pay the remaining one-half of such estimate after the transmission line was completed.

The Company maintained that the landowners- had agreed and understood that they would be compensated based upon the actual surveyed length of the easements, not on their estimated length and that the parties were mutually mistaken that the language of the easements was legally sufficient to describe that agreement. By way of relief, the Company moved the- court to reform the easements to reflect the parties’ agreement that payment should be based on surveyed actual length.

W-K #3 and David Whitworth filed answers and counterclaims asserting, among other things, breach of contract by the Company in failing to compensate them based on the estimated length of the easements as set out in the easement agreements.

Upon trial, the district court denied the Company’s plea for reformation. The court concluded, instead, that the Company failed to prove that the written transmission easements did not reflect the true agreement of the parties because of a mutual mistake. The court rendered judgment that Whitworth-Kinsey # 3 and David Whitworth, individually, recover against the Company $528,000 and $18,240, respectively.

The Company’s appeal

The Company contends on appeal that it conclusively established facts entitling it to reformation of the easements. See City of Keller v. Wilson, 168 S.W.3d 802, 814-15 (Tex.2005) (citing Robert W. Calvert, “No Evidence” & “Insufficient Evidence” Points of Error, 38 Tex. L.Rev. 361-64 (I960)).

The objective of reformation is the correction of a mutual mistake made in preparing a written instrument so that the instrument reflects the original agreement of the parties. Cherokee Water Co. v. Forderhause, 741 S.W.2d 377, 379 (Tex. 1987) (citing Brinker v. Wobaco Trust Ltd., 610 S.W.2d 160, 163 (Tex.Civ.App.—Texarkana 1980, writ ref'd n.r.e.)). Reformation requires two elements: (1) an original agreement and (2) a mutual mistake made after the original agreement in reducing the original agreement to writing. Cherokee Water Co., 741 S.W.2d at 379. A mutual mistake is one common to both or all parties, wherein each labors under the same misconception respecting a material fact, the terms of the agreement, or the [327]*327provisions of a written instrument designed to embody such an agreement. Allen v. Berrey, 645 S.W.2d 550, 553 (Tex. App.—San Antonio 1982, writ ref'd n.r.e.) (citing Capitol Rod & Gun Club v. Lower Colo. River Auth., 622 S.W.2d 887, 892 (Tex.App.—Austin 1981, writ ref'd n.r.e.). The fact that an error was caused by a scrivener’s or draftsman’s failure to embody the true agreement of the parties in a written instrument is a proper ground for reformation on the basis of mutual mistake. Gail v. Berry, 343 S.W.3d 520, 524 (Tex.App.—Eastland 2011, pet. denied) (holding that existence of mineral reservation in sales contract and affidavit testimony that lack of same reservation in deed was result of “inadvertent failure to copy the reservation from the sales contract” was mutual mistake subject to reformation (citing Cornish v. Yarbrough, 558 S.W.2d 28, 32 (Tex.Civ.App.—Waco 1977, no writ)); Hatch v. Williams, 110 S.W.3d 516, 522 (Tex.App.—Waco 2003, no pet.) (affirming trial court’s reformation of deed based on mutual mistake where evidence showed attorney who handled transaction erroneously attached wrong property description). :

The signed easements of the Whitworth properties were worded in such a way as to provide for a first payment based on the initial estimate, and the second payment also based upon the same estimate, instead of the final, surveyed length. Matt Gesin, the Company representative, testified that the statement in the easement that the second payment would be based upon the same estimate was a mistake. In all the years that he. had worked as a landman, he explained, he had never seen the second easement payment based on anything other then the final surveyed footage.

The original agreement and its relevant terms were conclusively established by the testimony and actions of David Whitworth. Although Ms. Quinn undoubtedly retained the right to sign the easement contract for W-K # 3, she never denied that her brother, David Whitworth, had the authority to negotiate for W-K #3. In fact, Whit-worth negotiated both the price and terms of compensation on behalf of himself, W-K #2, and W-K #3 to reach easement agreements between each of them and the Company. He rejected as “insignificant” or “ridiculously low” the Company’s initial offers of payment per linear foot. He did some checking around to learn what might be a fair price. In time, he agreed upon the sum of $100 per linear foot.

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504 S.W.3d 324, 2016 WL 1565519, 2016 Tex. App. LEXIS 3830, Counsel Stack Legal Research, https://law.counselstack.com/opinion/horse-hollow-generation-tie-llc-v-whitworth-kinsey-2-ltd-texapp-2016.