Knight Oil Tools, Inc. v. Rippy Oil Company, Rippy Interest LLC, the Genecov Group, Inc., and John D. Proctor

Opinion

IN THE TENTH COURT OF APPEALS

No. 10-18-00284-CV

KNIGHT OIL TOOLS, INC., Appellant v.

RIPPY OIL COMPANY, RIPPY INTEREST LLC, THE GENECOV GROUP, INC., AND JOHN D. PROCTOR, Appellees

From the 278th District Court Leon County, Texas Trial Court No. O-10-498

MEMORANDUM OPINION

Rippy Oil Company brought suit against Knight Oil Tools, Inc. for damages that

occurred when a drill pipe broke while drilling a well. Knight filed a counterclaim

against Rippy for unpaid invoices. The jury found Knight liable for damages and also

found Rippy failed to pay certain invoices. The trial court signed a judgment ordering that Rippy recover $5,900,000.00 in damages from Knight Oil, less the amount of Knight’s

counterclaim of $361, 356.87, for a net recovery of $5,538,643.13. We affirm.

BACKGROUND FACTS

Knight Oil Tools rents drill pipe to oil companies and oil well operators for drilling

oil and gas wells. Rippy Oil Company made plans to drill a well in the Eagle Ford Shale

and contacted Knight to supply pipe for drilling the horizontal portion of the Easterling

1-H well. Rippy hired Leo Wiggins as a well consultant, and Larry Elkins to assist

Wiggins. Wiggins and Elkins had authority to order equipment as needed for drilling

and to accept delivery.

Knight delivered pipe and other equipment to the Easterling 1-H well site with a

delivery ticket and sent the invoice to the main office. The delivery ticket contained

language that the pipe measurements complied with the dimensions for American

Petroleum Institute (A.P.I.) premium class and/or Knight Oil Tools value. The testimony

at trial established that pipe marked with two white bands meets the standards for A.P.I.

premium pipe. The pipe delivered by Knight was marked with two white bands, but the

record shows that some of the pipe delivered did not comply with the dimensions for

A.P.I. premium class pipe.

On May 11, 2010, one of the drill pipes supplied by Knight broke while it was in

the well. The parties agree that the pipe failure was caused by fatigue. Rippy was not

able to recover the broken pipe and the drill string beyond it and eventually had to

Knight Oil Tools v. Rippy Oil Company Page 2 abandon the Easterling 1-H well. Rippy attempted to drill an offset well, Easterling 2-H,

but that effort was unsuccessful.

Rippy filed suit against Knight to recover damages for the lost well, and Knight

filed a counterclaim to recover for unpaid invoices. The jury found in favor of Rippy on

submitted questions of negligent representation, breach of implied warranty of fitness for

a particular purpose, and alternative damage findings. The jury further found in favor

of Knight on unpaid invoices. The trial court entered judgment, after offset, in favor of

Rippy.

SUFFICIENCY OF THE EVIDENCE

The case was submitted to the jury on two theories of liability: (1) negligent

misrepresentation, and (2) breach of warranty of fitness for a particular purpose. In its

first issue, Knight argues that the evidence is legally and factually insufficient to support

the jury’s findings regarding causation of the well failure under any theory. Specifically,

Knight argues that the evidence was insufficient to prove Knight’s conduct was a

proximate cause of the loss of the well under either theory submitted to the jury. In the

second issue, Knight argues that the evidence is legally and factually insufficient to

support the jury’s findings on breach of warranty of fitness for a particular purpose and

negligent representation.

In reviewing the jury's verdict for the legal sufficiency of the evidence, we consider

all of the evidence in the light most favorable to the prevailing party, "crediting favorable

Knight Oil Tools v. Rippy Oil Company Page 3 evidence if reasonable jurors could, and disregarding contrary evidence unless

reasonable jurors could not." City of Keller v. Wilson, 168 S.W.3d 802, 808 (Tex.2005). We

must not substitute our opinion on witness credibility for that of the jury. Id. at 816-17.

Jurors are the sole judges of the credibility of the witnesses and the weight to give their testimony. They may choose to believe one witness and disbelieve another. Reviewing courts cannot impose their own opinions to the contrary. Most credibility questions are implicit rather than explicit in a jury's verdict. Thus, reviewing courts must assume jurors decided all of them in favor of the verdict if reasonable human beings could do so. Courts reviewing all the evidence in a light favorable to the verdict thus assume that jurors credited testimony favorable to the verdict and disbelieved testimony contrary to it. ... Nor is it necessary to have testimony from both parties before jurors may disbelieve either. Jurors may disregard even uncontradicted and unimpeached testimony from disinterested witnesses. Even uncontroverted expert testimony does not bind jurors unless the subject matter is one for experts alone. Of course, "[t]he jury's decisions regarding credibility must be reasonable." Jurors cannot ignore undisputed testimony that is clear, positive, direct, otherwise credible, free from contradictions and inconsistencies, and could have been readily controverted. And as noted above, they are not free to believe testimony that is conclusively negated by undisputed facts. But whenever reasonable jurors could decide what testimony to discard, a reviewing court must assume they did so in favor of their verdict, and disregard it in the course of legal sufficiency review.

Id. at 819-20 (footnotes and citations omitted).

In a factual-sufficiency challenge, an appellate court must consider and weigh all

of the evidence. Cain v. Bain, 709 S.W.2d 175, 176 (Tex. 1986) (per curiam). The verdict

should be set aside only if it is so contrary to the overwhelming weight of the evidence

as to be clearly wrong and unjust. Id. We may not pass upon the witnesses' credibility Knight Oil Tools v. Rippy Oil Company Page 4 or substitute our judgment for that of the factfinder, even if the evidence would support

a different result. 2900 Smith, Ltd. v. Constellation New Energy, Inc., 301 S.W.3d 741, 746

(Tex. App. —Houston [14th Dist.] 2009, no pet.). If we determine the evidence is factually

insufficient, we must detail the evidence relevant to the issue and state in what regard

the contrary evidence greatly outweighs the evidence supporting the trial court's

judgment; we need not do so when affirming the judgment. Id.

PROXIMATE CAUSE

The components of proximate cause are cause-in-fact and foreseeability. See

Western Investments, Inc. v. Urena, 162 S.W.3d 547, 551 (Tex. 2005). The cause-in-fact

element is satisfied by proof that (1) the act was a substantial factor in bringing about the

harm at issue, and (2) absent the act ("but for" the act), the harm would not have

occurred. HMC Hotel Props. II Ltd. Partnership v. Keystone-Texas Prop. Holding Corporation,

439 S.W.3d 910, 913 (Tex. 2014). These elements cannot be established by mere conjecture,

guess, or speculation. Id.

Foreseeability, the other aspect of proximate cause, requires that a person of

ordinary intelligence should have anticipated the danger created by a negligent act or

omission. Doe v. Boys Clubs of Greater Dallas, Inc., 907 S.W.2d 472, 478 (Tex. 1995). The

question of foreseeability, and proximate cause generally, involves a practical inquiry

based on "common experience applied to human conduct." Id. It asks whether the injury

"might reasonably have been contemplated" as a result of the defendant's conduct. Id.

Knight Oil Tools v. Rippy Oil Company Page 5 Charles Rippy testified that after the lawsuit was filed, Knight provided serial

numbers for some of the drill pipe. Based on those serial numbers, evidence showed that

Knight Oil purchased the drill pipe in 1993 and delivered the pipe to the well site in April

2010. Charles Rippy further testified that some of the drill pipe had not been inspected

by Knight in over a year. The jury heard evidence that the fatigue cracks in the pipe were

present before the pipe was used by Rippy. Hilton Prejean, an A.P.I. member who helped

write the A.P.I. standards, testified by deposition that the pipe that broke was “scrap tool

joint” with excessive wear. Prejean found that the tool joint on the pipe had pre-existing

cracks before being used at the Rippy well and that it “should not have been on location

at all.”

Knight argues that Rippy was required to produce evidence that the pipe would

not have failed assuming it met A.P.I. premium standards citing BIC Pen Corporation v.

Carter, 346 S.W.3d 533 (Tex. 2011) as authority. In BIC, a six year-old girl was severely

burned when her five year-old brother started a fire with a BIC lighter. The plaintiff

alleged that the manufacturing defects in the lighter were the cause of the fire and the

girl’s injuries. The Supreme Court stated that there must have been some evidence that

the fire that burned the little girl started because of the specific manufacturing defects

and that absent those defects her injuries would not have occurred. Id. at 542. The Court

concluded that the evidence was insufficient to support the finding that manufacturing

defects in BIC's Subject Lighter were a cause-in-fact of the injuries. Id. at 545.

Knight Oil Tools v. Rippy Oil Company Page 6 We do not agree with Knight’s premise that under BIC, Rippy must show that the

pipe would not have failed assuming it met A.P.I. premium standards. Rather, pursuant

to BIC, Rippy must show that the condition of the pipe supplied by Knight was a

substantial factor in the loss of the well and that absent the condition of the pipe, the harm

would not have occurred.

The parties agree that the pipe broke as a result of fatigue failure. Knight

presented evidence that the fatigue failure could have been caused by corrosion of the

drill pipe. Knight also contends that that the drilling operation subjects the drill pipe to

significant forces that can fatigue the pipe.

Rippy offered evidence that the tool joint was worn excessively, did not meet A.P.I.

premium standards, and had pre-existing cracks before being used in the Rippy well.

The jury heard evidence that that A.P.I. premium pipe has a wider tool joint which

corresponds to less fatigue throughout the rest of the pipe. Rippy presented evidence

that the pipe should not have been on location at all and that it was an A.P.I. reject.

We must not substitute our opinion on witness credibility for that of the jury. City

of Keller v. Wilson, 168 S.W.3d at 816-17. The jury could conclude that the A.P.I reject pipe

was a substantial factor in bringing about the drill pipe separation, and absent the

condition of the pipe, the harm would not have occurred. We find that the evidence is

legally sufficient to support the jury’s finding on proximate cause. Additionally, we

Knight Oil Tools v. Rippy Oil Company Page 7 cannot say that the jury’s verdict on proximate cause is so contrary to the overwhelming

weight of the evidence as to be clearly wrong and unjust. We overrule the first issue.

NEGLIGENT MISREPRESENTATION

The jury was asked in Question 2 whether Knight Tool made a negligent

representation with respect to the condition of the drill pipe on which Rippy justifiably

relied and was a proximate cause of the drill pipe separation. The jury answered “yes,”

and Knight challenges the jury finding.

The elements of negligent misrepresentation are: (1) a defendant provided

information in the course of his business; (2) the information supplied was false; (3) the

defendant did not exercise reasonable care or competence in obtaining or communicating

the information; (4) the plaintiff justifiably relied on the information; and (5) the plaintiff

suffered damages proximately caused by the reliance. Retherford v. Castron, 378 S.W.3d

29, 37 (Tex. App. — Waco 2012, pet. den’d); Larsen v. Carlene Langford & Associates, 41

S.W.3d 245, 249-50 (Tex. App. —Waco 2001, pet. den’d).

Charles Rippy, the President of Rippy Oil, testified that Rippy requested A.P.I.

premium pipe for the Easterling 1-H well. The evidence shows that A.P.I. premium pipe

is marked with two white bands to signify that it is premium. Daniel Rogers, a corporate

representative for Knight, testified by deposition that if the drill pipe supplied by Knight

had two white bands, the customer could rely on the pipe being A.P.I. premium pipe and

Knight Oil Tools v. Rippy Oil Company Page 8 that “the whole world” could rely on it being premium pipe. Rogers further stated that

Knight intended to represent the pipe as being inspected to A.P.I. premium standards.

The record shows that the pipe that failed did not meet A.P.I. premium standards.

The pipe broke in the well, and the well was lost. Viewing the evidence in the light most

favorable to the jury’s verdict, we find that a rational factfinder could conclude that

Knight made a false representation about the quality of the drill pipe, that Knight did not

use reasonable care in obtaining or communicating the information, and that Rippy

justifiably relied on the representation.

We find that the evidence is legally sufficient to support the jury’s finding on

negligent representation. Additionally, we cannot say that the jury's verdict as to this

claim is so contrary to the overwhelming weight of the evidence as to be clearly wrong

and unjust. When the judgment rests on multiple theories of recovery, we need not

address all causes of action if any one theory is valid. EMC Mortgage Corp. v. Jones, 252

S.W.3d 857, 870 (Tex. App. —Dallas 2008, no pet.); Checker Bag Co. v. Washington, 27

S.W.3d 625, 634 (Tex. App. — Waco 2000, pet. den’d). Therefore, we need not address

Knight’s complaint on appeal as to the sufficiency of the evidence to support the jury’s

answer on breach of breach of implied warranty of fitness for a particular purpose. We

overrule Knight’s second issue.

Knight Oil Tools v. Rippy Oil Company Page 9 NEGLIGENCE

In the fourth issue, Knight argues that the evidence is factually insufficient to

support the jury’s failure to find that Rippy and Gyrodata were negligent. In Question 3,

the jury was asked if the negligence of the Rippy Oil Company and/or Gyrodata

proximately caused the occurrence in question. The jury answered “No” for both Rippy

Oil Company and Gyrodata.

Knight contends that there were problems in the well prior to the drill pipe

breaking. Early on in the drilling process of the Easterling 1-H well, a mud motor

supplied by Gyrodata broke off in the well causing Rippy to have to drill off course from

its planned well. Knight also addresses Gyrodata’s equipment failure in drilling the

Easterling 2-H well; however, that was not before the jury in Question 3.

Charles Rippy testified that they encountered a trouble spot while drilling the

Easterling 1-H, but that it was not a “catastrophe” and was fairly common. Rippy also

testified that they had to make adjustments after the Gyrodata motor broke off in the well.

In Question 3 the jury was asked if the negligence of Rippy or Gyrodata

proximately caused the “occurrence” in question. As stated, the components of

proximate cause are cause-in-fact and foreseeability. See Western Investments, Inc. v.

Urena, 162 S.W.3d 547, 551 (Tex. 2005). Occurrence was defined for the jury as “the drill

pipe separation that occurred on the Easterling No. 1-H well on May 11, 2010.”

Knight Oil Tools v. Rippy Oil Company Page 10 The jury could conclude that the Gyrodata motor breaking was not a substantial

factor in bringing about the drill pipe separation on the Easterling 1-H well. Knight does

not specifically argue any act of negligence on the part of Rippy that was a proximate

cause of the drill pipe separation. We cannot say that the jury’s answer to Question 3 is

so contrary to the overwhelming weight of the evidence as to be clearly wrong and unjust.

We overrule the fourth issue.

SUMMARY JUDGMENT

In the third issue, Knight argues that the trial court erred in granting summary

judgment. We review a trial court's summary judgment de novo. Provident Life &

Accident Insurance Co. v. Knott, 128 S.W.3d 211, 215 (Tex. 2003). The movant in a

traditional summary judgment motion must show that there is no genuine issue of

material fact and that he is entitled to judgment as a matter of law. See TEX. R. CIV.

P. 166a(c); Nixon v. Mr. Prop. Mgmt. Co., Inc., 690 S.W.2d 546, 548 (Tex. 1985). In reviewing

a traditional motion for summary judgment, we must consider whether reasonable and

fair-minded jurors could differ in their conclusions in light of all of the evidence

presented. See Goodyear Tire & Rubber Co. v. Mayes, 236 S.W.3d 754, 755 (Tex. 2007). We

must consider all the evidence in the light most favorable to the nonmovant, indulging

every reasonable inference in favor of the nonmovant and resolving any doubts against

the motion. See id. at 756. In our review, we take the nonmovant's competent evidence

as true. Diversicare Gen. Partner, Inc. v. Rubio, 185 S.W.3d 842, 846 (Tex. 2005).

Knight Oil Tools v. Rippy Oil Company Page 11 A no-evidence motion for summary judgment is essentially a motion for pretrial

directed verdict. Mack Trucks, Inc. v. Tamez, 206 S.W.3d 572, 581 (Tex. 2006); see also

Humphrey v. Pelican Isle Owners Ass'n, 238 S.W.3d 811, 813 (Tex. App. —Waco 2007, no

pet.). Once such a motion is filed, the burden shifts to the nonmoving party to present

evidence raising an issue of material fact as to the elements specified in the motion.

Tamez, 206 S.W.3d at 583. The nonmovant must produce "summary judgment evidence

raising a genuine issue of material fact." TEX. R. CIV. P. 166a (i). When determining if

more than a scintilla of evidence has been produced, the evidence must be viewed in the

light most favorable to the nonmovant. Ford Motor Co. v. Ridgway, 135 S.W.3d 598, 601

(Tex.2004).

The pipe was delivered to the well site with a delivery ticket that had a provision

on the front indicating that the customer agrees to the terms and conditions on the reverse

side of the document. The reverse side of the delivery ticket contained terms and

conditions including a paragraph on release and indemnity and a paragraph on waiver

of warranty.

In its answer, Knight pled the affirmative defenses of release and indemnity based

upon the terms and provisions on the delivery ticket. Knight argued that Rippy’s

designated agents, Wiggins and Elkins, had authority to bind Rippy to the terms and

conditions on the delivery ticket. Rippy argues that the evidence does not show that

Wiggins and Elkins had authority to bind Rippy to release or indemnity provisions.

Knight Oil Tools v. Rippy Oil Company Page 12 The trial court initially granted the motion without stating the basis for its ruling.

During trial, Knight moved for reconsideration of the trial court’s ruling. The trial court

denied the motion for reconsideration and found that the Release Discharging Indemnity

Agreement on the back of the invoice was not negotiated between the parties. The trial

court further found that “neither Elkins or Wiggins had apparent, implied, or actual

authority on behalf of Rippy to bind them to the indemnity, discharge and release

provisions….”

In Rourke v. Garza, the Court stated that the doctrine of apparent authority is based

on estoppel, and one seeking to charge a principal through the apparent authority of an

agent to bind the principal must prove such conduct on the part of the principal as would

lead a reasonably prudent person, using diligence and discretion, to suppose that the

agent has the authority he purports to exercise. Rourke v. Garza, 530 S.W.2d 794, 802 (Tex.

1975). The Court found that there was no authority based upon the agent’s position as

general superintendent. Rourke v. Garza, 530 S.W.2d at 804. The Court stated,

“Contracts indemnifying one against his distribution of defective products should

be viewed as exceptions to the usual business practice, in the same manner as those

indemnifying one against his own negligence.” Rourke v. Garza, 530 S.W.2d 794, 804 (Tex.

1975). The Court further stated that such contracts may have great financial impact on

the parties and are therefore not of the kind ordinarily executed by a superintendent of

job sites. Id.

Knight Oil Tools v. Rippy Oil Company Page 13 Leo Wiggins and Larry Elkins were well consultants on the Easterling 1-H well,

but they were not employees of Rippy. The summary judgment evidence shows both

Wiggins and Elkins had authority to order equipment, to accept delivery of equipment,

and to supervise operations at the well. In his deposition, Charles Rippy stated that

Wiggins and Elkins did not have authority to negotiate any agreement on behalf of Rippy

on release and indemnity.

The record shows that Wiggins placed the order for the drill pipe for the Easterling

1-H. The pipe was delivered by a third-party trucking company. The delivery tickets in

evidence are signed primarily by Elkins; however, there are some signed by Wiggins and

one ticket in evidence is signed by another unknown person. The delivery tickets prior

to the pipe failure are signed by Elkins. The delivery tickets produced by Knight as

summary judgment evidence do not provide a copy of the reverse side of the ticket that

contains the terms and conditions on release and indemnity.

We find Rourke v. Garza to be controlling. Wiggins and Elkins were well

consultants, and they had authority to order pipe and accept delivery. However, they

did not have authority to negotiate any agreement on behalf of Rippy on release and

indemnity. As stated in Rourke, such contracts may have great financial impact on the

parties and are therefore not of the kind ordinarily executed by a superintendent of job

sites. Rourke v. Garza, 530 S.W.2d 794, 804 (Tex. 1975). As in Rourke, Knight was unaware

who actually signed the tickets upon delivery. The pipe was delivered by a third-party

Knight Oil Tools v. Rippy Oil Company Page 14 company and not always signed by the person who ordered it. The trial court did not err

in granting Rippy’s motion for summary judgment. We overrule the third issue.

DAMAGES

In issues five and six, Knight argues that the evidence is insufficient to support the

jury’s finding on damages, that the trial court erred in admitting evidence and refusing

jury charge instructions, and that the trial court erred in wording jury questions.

In Question 5, the jury was asked if the Easterling No. 1-H well was capable of

being reproduced by drilling another well as it existed at the time of the occurrence in

question. The jury answered “No.” In Question 6, the jury was asked what would have

been the reasonable and necessary costs of drilling and equipping the Easterling 2-H well

in the condition the Easterling 1-H well was equipped before the occurrence in question

less the salvage value. The jury answered that the reasonable and necessary drilling and

equipping costs for the Easterling No. 2-H well were $1.5 million. In Question 7, the jury

was asked the reasonable fair market value of the Easterling 1-H well immediately before

the occurrence in question and immediately after the occurrence in question. The jury

was instructed that fair market value means the price a willing seller not obligated to sell

can obtain from a willing buyer not obligated to buy. The jury answered that the value

of the Easterling 1-H before the occurrence was 5.9 million dollars and after the time of

the occurrence was 0.

Knight Oil Tools v. Rippy Oil Company Page 15 Charles Rippy testified that the fair market value of the Easterling 1-H well just

prior to the drill pipe breaking was nine million dollars. Charles Rippy explained that

they drilled the Sims 3-H as a concept well to gather information before drilling the

Easterling 1-H. Charles Rippy explained that he used the production data from the Sims

3-H to help determine the fair market value of the Easterling 1-H.

Knight produced evidence that the fair market value of the Easterling 1-H before

the drill pipe break was between $1,053,315 and $2,231,600. Knight’s fair market value

made reductions for potential mechanical problems. Knight’s expert explained in detail

how he arrived at those values.

A jury generally has discretion to award damages within the range of evidence

presented at trial. Gulf States Utilities. Co. v. Low, 79 S.W.3d 561, 566 (Tex. 2002). It may

not, however, "arbitrarily assess an amount neither authorized nor supported by the

evidence presented at trial." First State Bank v. Keilman, 851 S.W.2d 914, 930 (Tex. App.

Austin —1993, writ denied). The jury heard differing methods for arriving at the value

of the well and for discounting the value for risk. The jury’s answer of 5.9 million dollars

is in the range of evidence presented at trial.

Knight cites Basic Energy Services, Inc. v. D-S-B Props., Inc. as authority on the

proper measure of damages when the damaged property is an oil or gas well. See Basic

Energy Services, Inc. v. D-S-B Props., Inc., 367 S.W.3d 254 (Tex. App. —Tyler 2011, no pet.).

In Basic Energy Services, Inc., the Court stated:

Knight Oil Tools v. Rippy Oil Company Page 16 The measure of damages for the destruction of an oil well that can be reproduced is the lower of two values: (1) the cash market value of the old well or (2) the cost of reproducing the well with a new well equipped like the old one, less any salvage value of the old well.

Basic Energy Services, Inc. v. D-S-B Props., Inc., 367 S.W.3d at 262. Knight states that the

trial court should have entered judgment on the jury’s answer in Question 6 rather than

the jury’s finding in Question 7.

If the well can be reproduced by drilling another one, the proper measure of

damages is the cost of drilling and equipping another such well, less the value of any

salvage; provided that this cost does not exceed the reasonable cash market value of the

well immediately before the tubing collapse. Atex Pipe & Supply, Inc. v. Sesco Production

Co., 736 S.W.2d 914, 917 (Tex. App. —Tyler 1987, writ den’d). If the well cannot be

reproduced or if the cost of reproduction exceeds the value of the well, the proper

measure of damages is the difference in the reasonable cash market value of the well, as

equipped, immediately before and immediately after the tubing collapse. Id.

In Question 5, the jury found that the Easterling No. 1-H well was not capable of

being reproduced by drilling another well as it existed at the time of the occurrence in

question. The trial court did not abuse its discretion in submitting Question 5 to the jury.

Because the jury found the well could not be reproduced, the proper measure of damages

is the difference in the reasonable cash market value of the well, as equipped,

immediately before and immediately after the drill pipe failure as found by the jury in

Question 7. See Atex Pipe & Supply, Inc. v. Sesco Production Co., 736 S.W.2d at 917. Knight Oil Tools v. Rippy Oil Company Page 17 We overrule the fifth and sixth issues on appeal.

CONCLUSION

We affirm the trial court’s judgment.

REX D. DAVIS Justice

Before Chief Justice Gray, Justice Johnson, and Justice Davis1 (Chief Justice Gray dissents with a note)* Affirmed Opinion delivered and filed November 10, 2021 [CV06]

*(Chief Justice Gray dissents. A separate opinion will not issue. Chief Justice Gray notes, however, that prior to the jury trial the trial court granted a motion for summary judgment on the affirmative defenses of indemnity and release. The basis of the motion was that the person who had the authority to order and accept delivery of the pipe for Rippy did not have the authority to accept the terms and conditions on the delivery ticket. The question thus framed was the scope of the agency; was he a "company man" or was he merely a "job superintendent" with no real authority to contract on behalf of the company. Chief Justice Gray believes that Rippy did not conclusively prove through summary judgment evidence that the well consultants did not have that limitation on their authority. The evidence established that they had the authority to agree to the terms necessary to order equipment and accept delivery on behalf of the company. At the very least the scope of the agency was disputed. Moreover, because the evidence regarding these defenses also impacts the reasonableness of the reliance on the representation of Knight, the evidence of the defenses has evidentiary implications on the reasonableness of Rippy's reliance upon the representations of Knight as to the quality/condition of the pipe that was delivered, thus potentially impacting the jury findings on the elements of

1 The Honorable Rex Davis, Senior Justice (Retired) of the Tenth Court of Appeals, sitting by assignment of the Chief Justice of the Texas Supreme Court. See TEX. GOV'T CODE §§ 74.003, 75.002, 75.003.

Knight Oil Tools v. Rippy Oil Company Page 18 Rippy's claims. Therefore, in fairness, a new trial is warranted which is not limited to the affirmative defenses. Because the Court affirms the trial court's judgment, Chief Justice Gray respectfully dissents.)

Knight Oil Tools v. Rippy Oil Company Page 19