R.J.B. Gas Pipeline Co. v. Colorado Interstate Gas Co.

813 P.2d 14
CourtCourt of Civil Appeals of Oklahoma
DecidedJune 17, 1991
Docket68742, 70123 and 70660
StatusPublished
Cited by20 cases

This text of 813 P.2d 14 (R.J.B. Gas Pipeline Co. v. Colorado Interstate Gas Co.) is published on Counsel Stack Legal Research, covering Court of Civil Appeals of Oklahoma primary law. Counsel Stack provides free access to over 12 million legal documents including statutes, case law, regulations, and constitutions.

Bluebook
R.J.B. Gas Pipeline Co. v. Colorado Interstate Gas Co., 813 P.2d 14 (Okla. Ct. App. 1991).

Opinion

OPINION

HANSEN, Presiding Judge:

This case involves claims brought by RJB Gas Pipeline Company (Plaintiff/Ap-pellee) and thirty-three other Plaintiffs against Colorado Interstate Gas Co. (Defendant/Appellant) for alleged breach of the take-or-pay provisions of seven gas purchase agreements. The thirty-four Plaintiffs claim to be the working interest owners in gas wells covered by the seven gas purchase agreements. The seven gas purchase agreements, referred to as Contract Nos. 337, 338, 651, 662, 834, 840A and 995, cover eighteen different gas wells located in southeastern Colorado from which CIG purchases gas. Defendant is an interstate natural gas pipeline company, and is regulated by the Federal Energy Regulatory Commission (“FERC”). The wells are directly connected to CIG’s pipeline system. Plaintiff Samson Oil Company (“Samson”) acts as the operator of the wells.

Plaintiffs commenced this action in April, 1984, seeking actual damages for Defendant’s alleged failure to make take-or-pay payments under the contracts. Plaintiffs also alleged Defendant had anticipatorily repudiated the contracts. Plaintiffs further sought punitive damages for Defendant’s alleged failure to pay. Defendant answered, denying liability and raising numerous defenses. Defendant moved to strike the punitive damages claim. The court granted the motion. On July 15, 1986, the trial court granted Plaintiffs’ motion to strike Defendant’s defense of commercial impracticability.

The case came to trial on February 9, 1987. Plaintiffs sought approximately $5,000,000 for past breach of contract and $13,000,000 for anticipatory repudiation. At the close of Plaintiffs’ case-in-chief, Defendant demurred to all the evidence. The court sustained Defendant’s demurrer to the evidence on Plaintiffs’ claims for anticipatory breach and overruled it in all other respects. At the close of Defendant’s casein-chief, the court directed a verdict for Plaintiffs as to liability on the take-or-pay claims. At the close of all the evidence, the trial court overruled Defendant’s demurrer to the evidence in the take-or-pay claims. On March 5, 1987, the jury returned a verdict for Plaintiffs in the aggregate amount of $4,147,245.49. Defendant’s motion for judgment notwithstanding the verdict and alternative motion for a new trial were denied.

Following trial, the trial court awarded Plaintiffs $465,481.18 in prejudgment interest. It further ruled Plaintiffs were entitled to costs and attorneys’ fees in an amount to be determined in an evidentiary hearing.

In appeal number 68,742, Defendant appeals the denial of its motion for new trial and seeks review of the judgment entered in Plaintiffs’ favor on Plaintiffs’ breach of contract claims. It also appeals the trial court’s striking its defense of commercial impracticability. Plaintiffs counter-appeal seeking review of the trial court’s order striking their prayers for punitive damages and the trial court’s subsequent refusal to allow them to offer evidence in support of their tort claim. They further seek review of that portion of the judgment awarding makeup volumes to Defendant upon satisfaction of the judgment entered against Defendant.

On October 6, 1987, Defendant filed a Petition for New Trial based on Newly Discovered Evidence, and in appeal number 70,123, Defendant appeals the trial court’s *19 order overruling such petition. In appeal number 70,660, Defendant appeals the trial court’s decision awarding attorney fees and costs to Plaintiffs. The three appeals have been consolidated under the surviving number 68,742.

I. Defendant’s Appeal

A. The Ownership Issue

For its first proposition of error, Defendant contends the trial court erred in directing a verdict as to liability on the take- or-pay claims. At the close of Defendant’s case, the trial court directed a verdict for Plaintiffs in accordance with the ownership interests represented in a summary introduced as PX-92. Defendant contends the trial court erred in admitting this summary as Plaintiffs' proof of ownership and in refusing to allow it to introduce evidence contradicting Plaintiffs’ claims of ownership.

Each of the 34 Plaintiffs claims some right or entitlement to receive take-or-pay payments under the various contracts. A comparison of the list of Plaintiffs to the parties to the contracts indicates many of the parties obtained their interests subsequent to the execution of the contracts. According to PX-92, many Plaintiffs obtained their interests by assignment from the original signatories to the contracts. Each of the contracts contains a provision requiring notice of any assignment before such is binding upon Defendant.

At trial Robert J. Beam, an officer of RJB and Samson, attempted to prove ownership by reading a list of ownership interests. The trial court sustained Defendant’s objection and ruled Plaintiffs needed to trace by assignments or some other legal instrument, the individual Plaintiffs’ right to recover under the contracts. Plaintiffs then introduced PX-92, a summary of the asserted assignments showing the division of ownership in each well under each contract. Plaintiffs also presented PX-93-98 which is the list of purported assignments for each contract from Plaintiffs that had executed the contract to Plaintiffs that had not. These exhibits include a list of the Plaintiffs that originally executed the contracts, or amendments thereto, and the Plaintiffs that had received an assignment from the signatories. Beams also presented PX-99, a summary showing the aggregate ownership of Plaintiffs in each well under each contract. Based on the above-described evidence, the trial court concluded all Plaintiffs were entitled to recover and set out each Plaintiff’s interest.

Defendant contends these lists of ownership interests of the Plaintiffs, introduced over its objections, do not establish Plaintiffs’ interests in the wells. Defendant strenuously argues the trial court erred in denying it an opportunity to present any evidence to rebut Plaintiffs’ entitlement to recover. We agree.

First, there is no evidence Plaintiffs provided Defendant with notice, 1 as required by the contracts, of any contract assignments. Nor was “a true copy” of such an assignment furnished to Defendant. Moreover, Exhibits 92-99 do not consist of either the instruments creating the working interests or the valid assignments thereof.

Although 12 O.S.1981 § 3004(4) provides that the original of a document is not required and other evidence of the contents of a writing is admissible if the writing “is not closely related to a controlling issue,” PX-92-99 are not admissible because the ownership of the working interests herein is a critical issue to the determi *20 nation of ownership and apportionment of damages. Moreover, Mr. Beams testified he had not compared RJB’s business records with PX-92 to ascertain whether the representations contained in PX-92 were true and correct. Thus, the above-mentioned exhibits are not admissible as business records under 12 O.S.1981 § 2803(6). They do not summarize ownership shown in public records, and are not admissible as business records under 12 O.S.1981 § 3005.

Plaintiffs also argue they are not required to prove their ownership in the wells because of a.

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Bluebook (online)
813 P.2d 14, Counsel Stack Legal Research, https://law.counselstack.com/opinion/rjb-gas-pipeline-co-v-colorado-interstate-gas-co-oklacivapp-1991.