Integras Operating, LLC v. the Re-Entry People, Inc.

• Court: Court of Appeals of Texas
• Decided: March 18, 2004
• Docket: 11-03-00089-CV
• Status: Published

Opinion

                                                             11th Court of Appeals

                                                                  Eastland, Texas

                                                             Memorandum Opinion

Integras Operating, LLC

Appellant

Vs.                   No. 11-03-00089-CV -- Appeal from Jones County

The Re-Entry People, Inc. 

Appellee

Pursuant to an oral agreement, The Re-Entry People, Inc. attempted to re-drill an abandoned oil and gas well for Integras Operating, LLC.  The reentry attempt failed, and Integras refused to pay.  Re-Entry subsequently sued Integras to collect on the account.  Re-Entry also sought to foreclose upon its mineral interest lien and sued various AIn Rem@ defendants.  The AIn Rem@ defendants have not filed an appeal.  After a bench trial, the trial court rendered judgment in favor of Re-Entry as follows:  $22,468.45 as the principal sum due on the account, prejudgment interest of $2,478.30, attorney=s fees of $3,500.00, costs of court, and foreclosure of the lien against the leasehold interest.  The trial court also dismissed with prejudice the defendants= counterclaim for breach of contract.  Integras appeals.  We affirm. 

Integras presents six issues for review.  In the first and second issues, Integras challenges the trial court=s evidentiary rulings in admitting Plaintiff=s Exhibit No. 1, a copy of the billing invoice sent to Integras, and Plaintiff=s Exhibit No. 4, daily time sheets showing the work performed by Re-Entry employees.  Integras contends that both exhibits were inadmissible hearsay and that the time sheets were also inadmissible under TEX.R.EVID. 902(10). 

The record shows that these exhibits were introduced during the testimony of Re-Entry=s president, Karen Martin.  Martin testified that she ran the office and performed all of the accounting duties for Re-Entry.  Martin testified that she prepared the invoice as part of her regular duties at Re-Entry, that the invoice was prepared at the time of the activities noted in the invoice, that the invoice was prepared and maintained in the regular course of business, and that the information used to prepare the invoice came from Re-Entry=s Adaily punch tickets.@  These daily punch tickets or time sheets were admitted as Plaintiff=s Exhibit No. 4.  Martin testified that the time sheets were made out daily in the regular course of business by Re-Entry=s operator, Joe Zapata.  Martin used the daily time sheets to prepare the employee payroll and the customer invoices. 

These exhibits were admissible under TEX.R.EVID. 803(6), the business records exception to the hearsay rule.  Rule 803(6) provides that the following type of evidence is not excluded by the hearsay rule:

A memorandum, report, record, or data compilation, in any form, of acts, events, conditions, opinions, or diagnoses, made at or near the time by, or from information transmitted by, a person with knowledge, if kept in the course of a regularly conducted business activity, and if it was the regular practice of that business activity to make the memorandum, report, record, or data compilation, all as shown by the testimony of the custodian or other qualified witness, or by affidavit that complies with Rule 902(10), unless the source of information or the method or circumstances of preparation indicate lack of trustworthiness. 

As the custodian of records and the president of Re-Entry, Martin was qualified to testify regarding the invoice and the daily time sheets without an affidavit complying with Rule 902(10).  Martin prepared the invoice from information contained in the daily time sheets, which in turn were prepared by Zapata, a person with knowledge of the information contained therein.  The invoice and the daily time sheets were kept in the regular course of Re-Entry=s business, and it was Re-Entry=s regular practice to prepare such records.  The trial court did not abuse its discretion in admitting the invoice or the daily time sheets into evidence.  The first and second issues are overruled.

In the third issue, Integras contends that the judgment is erroneous because the unopposed evidence showed a failure of consideration for the contract upon which the open account was based.  The Afailure of consideration@ is an affirmative defense that must be asserted in the pleadings.  TEX.R.CIV.P. 94.  Integras did not plead failure of consideration and, therefore, waived that defense.  Rule 94; see Kinnear v. Texas Commission on Human Rights, 14 S.W.3d 299, 300 (Tex.2000) (defense of immunity waived by failure to plead).  Moreover, the record shows that Re-Entry performed under the agreement as testified to by Martin.  The third issue is overruled.

In its fourth issue, Integras contends that the trial court erred in denying any recovery on its counterclaim for breach of contract.  The counterclaim for breach of contract was based upon the existence of a contract where the terms were that Re-Entry agreed to reenter the well and drill to a depth of approximately 4,700 feet.  It is undisputed that Re-Entry=s attempt to re-drill the well did not succeed because the drill bit kept gliding off the cement plug, which was below the surface casing, and veering off into the Ared bed.@  The evidence does not indicate, however, that success in the reentry was a term of the agreement. 

Martin testified that the verbal agreement between Re-Entry and Integras=s agent, Eddie Bumpass, was that Re-Entry Awould go out and furnish the equipment necessary to go out and attempt a reentry on the Maris Number Two for an hourly rate.@  The agreed-upon rate was $180.00 per hour for the rig time, $90.00 per hour for driving time, and $100.00 per day for the use of the tongs.  Martin testified that Re-Entry did not guarantee success in the reentry and that, if there had been any kind of guarantee, they would have entered into a written Aturn-key contract.@  According to Martin, Re-Entry has not received any payments from Integras even though Re-Entry billed Integras on the account.  According to Martin=s calculations, the amount owed for work performed under the agreement was $22,468.45. 

The president of Integras, James Linnemann, testified that Re-Entry was hired to drill to a depth of approximately 4,700 feet.  However, Linnemann admitted that he had no personal knowledge of the terms of the agreement actually entered into between Re-Entry and Integras.  Linnemann acknowledged that Bumpass was the person who dealt directly with Re-Entry.  Bumpass did not testify at trial.  Because Linneman had no personal knowledge and because Bumpass did not testify, Integras failed to show that a term of the agreement was for Re-Entry to reach a certain depth.  Thus, Integras has not shown that Re-Entry breached a contract.  The fourth issue is overruled. 

In the fifth issue, Integras argues that the trial court erred in the award of attorney=s fees and costs to Re-Entry because the amount of the account sued upon was unjust and because Re-Entry failed to prove-up its attorney=s fees.  Re-Entry=s attorney, Kara Smith, testified regarding attorney=s fees.  Smith testified that she had 20 hours of time invested in this case; that she expected to work another 5 hours in this case; that she charged $100.00 per hour; and that, based upon her experience in the Abilene area, $100.00 per hour was a reasonable rate for the services provided.  Smith=s 20 hours were spent reviewing paperwork, sending out a demand letter, preparing the lien, preparing the petition, conducting discovery in this matter, preparing for trial, and attending the trial.  Smith also testified that, in addition to the time spent working on this case, various other expenses were incurred.  These expenses -- for title work, filing fees, and copies -- totaled $1,300.00.  Thus, at the time of Smith=s testimony, the attorney=s fees and costs totaled $3,300.00, with an additional amount of $500.00 expected.  The trial court awarded $3,500.00. 

Pursuant to statute, in addition to the amount of the claim and costs, reasonable attorney=s fees may be recovered in a suit involving services rendered, labor performed, or an oral or written contract.  TEX. CIV. PRAC. & REM. CODE ANN. ' 38.001 (Vernon 1997).  As the trier of fact, the trial court must take into account various factors in awarding attorney=s fees, such as:  the nature and complexity of the case; the nature of the services provided by counsel; the time and labor required; the fee customarily charged for similar legal services in the area; the amount of money involved; the client=s interest that is at stake; the responsibility imposed upon counsel; and the skill and expertise required.  Arthur Andersen & Co. v. Perry Equipment Corporation, 945 S.W.2d 812, 818 (Tex.1997)(quoting TEX. DISCIPLINARY R. PROF=L CONDUCT 1.04, reprinted in TEX. GOV=T CODE ANN., tit. 2, subtit. G app. A (Vernon 1998)(TEX. STATE BAR R. art. X, ' 9)); Ragsdale v. Progressive Voters League, 801 S.W.2d 880, 881 (Tex.1990).  The trial court=s award of attorney=s fees will not be disturbed absent an abuse of discretion.  Ragsdale v. Progressive Voters League, supra.  In the present case, Smith=s testimony was sufficient to support the award of attorney=s fees.  The fifth issue is overruled. 

In the final issue, Integras contends that the trial court erred in allowing Re-Entry to foreclose its security interest in the lease because neither Re-Entry=s affidavit for lien nor its notice to Integras was timely under TEX. PROP. CODE ANN. ' 56.021 (Vernon 1995).  However, Integras did not include such an assertion in its pleadings and did not otherwise bring this issue to the attention of the trial court.  Because this is a Amatter constituting an avoidance or affirmative defense,@ it must have been pleaded.  Rule 94; see Gilbert v. Smedley, 612 S.W.2d 270, 275 (Tex.Civ.App. - Fort Worth 1981, writ ref=d n.r.e.); see also Gill Savings Association v. International Supply Company, Inc., 759 S.W.2d 697, 701 (Tex.App. - Dallas 1988, writ den=d)(holding that, under TEX.R.CIV.P. 54, issue regarding timely filing of lien was waived by defendant=s failure to specifically deny such condition precedent to a valid lien in its pleadings); Sunbelt Construction Corporation, Inc. v. S & D Mechanical Contractors, Inc., 668 S.W.2d 415, 417-18 (Tex.App. - Corpus Christi 1983, writ ref=d n.r.e.)(holding that lien was established under Rule 54 because of defendant=s failure to specifically deny condition precedent in its pleadings).  We hold that the issue was waived in the present case because it was not asserted in Integras=s pleadings.  Integras cannot raise this issue for the first time on appeal.  The sixth issue is overruled. 

The judgment of the trial court is affirmed. 

TERRY McCALL

JUSTICE

March 18, 2004

Not designated for publication.  See TEX.R.APP.P. 47.2(a).

Panel consists of: Arnot, C.J., and

Wright, J., and McCall, J.