Samedan Oil Corp. v. Intrastate Gas Gathering, Inc.

78 S.W.3d 425, 155 Oil & Gas Rep. 94, 2001 Tex. App. LEXIS 8556, 2001 WL 1153443
CourtCourt of Appeals of Texas
DecidedSeptember 28, 2001
Docket12-99-00242-CV
StatusPublished
Cited by18 cases

This text of 78 S.W.3d 425 (Samedan Oil Corp. v. Intrastate Gas Gathering, Inc.) 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
Samedan Oil Corp. v. Intrastate Gas Gathering, Inc., 78 S.W.3d 425, 155 Oil & Gas Rep. 94, 2001 Tex. App. LEXIS 8556, 2001 WL 1153443 (Tex. Ct. App. 2001).

Opinion

DAVIS, Chief Justice.

Intrastate Gas Gathering, Inc. and Sam-edan Oil Corporation have both filed motions for rehearing. Samedan Oil Corporation’s motion for rehearing is granted in part and denied in part. Likewise, Intrastate Gas Gathering, Inc.’s motion for rehearing is granted in part and denied in part. The opinion and judgment of June 20, 2001 are hereby withdrawn and the following opinion and judgment are substituted in their place.

Appellant, Samedan Oil Corporation (“Samedan”), appeals the trial court’s judgment following a jury trial. The jury returned its verdict and found Samedan liable for common law fraud, tortious interference with contract, and violation of the Texas Deceptive Trade Practices Act 1 (“DTPA”). The jury awarded actual damages of $5 million and exemplary damages of $5 million. Appellee, Intrastate Gas Gathering, Inc. (“Intrastate”), elected to recover only under the fraud and tortious interference claims. In five issues and multiple sub-issues, Samedan complains that the evidence is insufficient to support the trial court’s judgment for fraud, tor-tious interference, and actual damages, that the verdict is tainted by a multi-theory jury charge, and that the evidence is insufficient to support an alternative judgment under the DTPA. We affirm in part, and reverse and remand in part.

This is the second appeal of this case to this Court. Previously, Intrastate appealed the trial court’s grant of Samedan’s motion for directed verdict as to its DTPA, fraud, abuse of process, breach of contract and tortious interference claims. Same-dan cross-appealed the trial court’s directed verdict as to its breach of contract counterclaim. On appeal, this Court held that there was some evidence to support *433 Intrastate’s causes of action for tortious interference and common law fraud, and that Intrastate qualified as a consumer under the DTPA. See Intrastate Gas Gathering, Inc. v. Samedan Oil Corporation, No. 12-95-00225-CV, at 5-6, 8, 11 (Tex.App.—Tyler, March 31, 1997, writ denied) (unpublished opinion) (the “first appeal”). The Court further sustained Samedan’s cross-point, finding that its counterclaim could be presented at retrial. Id. at 13. However, the Court affirmed the trial court’s directed verdict as to Intrastate’s breach of contract claim because Intrastate had failed to cite any authority to support its position. However, the Court did not address the merits of Intrastate’s breach of contract claim. Id. at 11. The Court also affirmed the trial court’s directed verdict as to abuse of process, which is not at issue in the present appeal. Id. at 10. The present appeal stems from the retrial of this matter.

Factual Background

Intrastate’s predecessor in interest and Samedan executed a gas purchase agreement in 1981 and a gas transportation agreement in 1989. 2 In 1990, the rights and obligations under these agreements were assigned to Intrastate. Intrastate began operating the Houston County Gathering System (the “System”), which consisted of a gas processing plant, its associated gas pipeline, and the rights to buy, transport and process gas produced from the wells connected to the System. Samedan owned several wells connected to the System. At least three separate third-party wells (the “third-party wells”) were also connected to the system during the relevant time period.

After a series of disputes between Sam-edan and Intrastate, Samedan shut in its natural gas wells and sued Intrastate for breach of the 1981 gas purchase agreement. This was the first of several lawsuits between the parties. A subsequent court-ordered mediation resulted in a settlement agreement, which was finalized and signed by the parties in March 1994 (the “Settlement Agreement”). Paragraphs 1 through 3 of the Settlement Agreement identified the parties and released all the claims they had against one another in the pending lawsuits. Paragraph 4, which sets forth the basic business terms of the settlement agreement, provided as follows:

4. Terms of the Settlement. In consideration for this release:

(a) Samedan, Greenbrier, Christeve and Intrastate have terminated the August 4, 1981 Gas Purchase Agreement effective February 14, 1994;
(b) Intrastate shall pay Samedan $100,000.00 in.cash on February 21, 1994. Intrastate shall pay Samedan an additional $45,000 in cash either (i) thirty (30) days after the first day during which Samedan delivers one million cubic feet (1MMCF) of gas to Intrastate’s gas processing plant in Houston County or (ii) on August 15, 1994, whichever occurs first;
(c) The parties will dismiss with prejudice their claims against each other;
(d) Intrastate shall assign to Samedan one hundred percent (100%) ownership interest in the Houston County Gathering System with full warranty of title. The assignment shall be freely assignable by Samedan. Intrastate shall continue to own the *434 processing plant and the bullet tank. The Effective Date of the assignment shall be February 14, 1994. On the date the assignment is signed (the “Closing Date”), all' revenues, except liquid sales and revenues from gas purchased by Intrastate from third parties and transported pursuant to sub-paragraph (e)(6) below, attributable to the Houston County Gathering System shall pass to Samedan as of the Effective Date and all other attributes of ownership shall pass as of the Closing Date. All reasonable costs and expenses, except overhead, necessarily incurred or accrued in accordance with Generally Accepted Accounting Principles (GAAP) by Intrastate in operating the system subsequent to the Effective Date shall be paid by Sam-edan. All such costs and expenses incurred or accrued prior to the Effective Date shall be paid by Intrastate.
(e) Samedan and Intrastate shall enter into a processing agreement containing the following provisions:
(1) The processing agreement shall be for three (3) years beginning with the month Samedan brings on line or attempts to bring on line, as a reasonable and prudent operator would so attempt in the same or similar circumstances, the last well currently shut in by Samedan. Samedan intends to bring on line or to attempt to bring on line all six wells that are currently shut in;
(2) Samedan will deliver pipeline quality gas to Intrastate’s plant;
(3) Samedan will operate its wells as a reasonable and prudent operator, including workovers and evaluations of workovers on any existing wells;
(4) Intrastate shall have the right to process Samedan’s gas, sell the products extracted from Same-dan’s gas and receive the proceeds from the sale of those products;
(5) Intrastate shall keep Samedan whole on the liquids extracted at the plant on a heating content basis;

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Bluebook (online)
78 S.W.3d 425, 155 Oil & Gas Rep. 94, 2001 Tex. App. LEXIS 8556, 2001 WL 1153443, Counsel Stack Legal Research, https://law.counselstack.com/opinion/samedan-oil-corp-v-intrastate-gas-gathering-inc-texapp-2001.