Shivers v. Texaco Exploration & Production, Inc.

965 S.W.2d 727, 141 Oil & Gas Rep. 606, 1998 Tex. App. LEXIS 1622, 1998 WL 114493
CourtCourt of Appeals of Texas
DecidedMarch 17, 1998
Docket06-97-00062-CV
StatusPublished
Cited by19 cases

This text of 965 S.W.2d 727 (Shivers v. Texaco Exploration & Production, 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
Shivers v. Texaco Exploration & Production, Inc., 965 S.W.2d 727, 141 Oil & Gas Rep. 606, 1998 Tex. App. LEXIS 1622, 1998 WL 114493 (Tex. Ct. App. 1998).

Opinion

*730 OPINION

CORNELIUS, Chief Justice.

This is an appeal from a summary judgment rendered in favor of Texaco Exploration and Production, Inc. in a suit for damages filed against Texaco by Linward Shivers, Roland Shivers, and Jenelle Jacobs Brooks, Trustee of the Herman Jacobs Trust, individually and on behalf of all others similarly situated.

Section 29 of the Internal Revenue Code grants an income tax credit for natural gas produced from a “tight formation.” 26 U.S.C.A. § 29(a),(c) (West Supp.1997). The Shivers group owns royalty interests in leases in which Texaco is the lessee. The wells on these leases produce from the Cotton Valley formation, which is classified as a tight formation. Linward Shivers was an experienced oil and gas attorney who for many years prepared his own tax returns, but he never took note of the availability of the Section 29 credit which was described in his Form 1040 instruction booklet. It was not until 1990 that he actually became aware of the Section 29 credit. His brother Roland, who had usually prepared his own tax returns as well, also learned of the Section 29 credit that year. The brothers engaged an accountant to help them claim the credit on their 1990 tax returns, and they also had the accountant file amended returns to claim the credit for 1987, 1988, and 1989. They were unable to claim the credit for any tax year before 1987 because the limitations period for amended returns is three years. See 26 U.S.C.A. § 6511(a), (b) (West Supp.1997). Similar dates applied to Jenelle Jacobs Brooks for herself and the trust.

Shivers initially sued Texaco on June 21, 1994, to recover damages for Texaco’s failure to inform them of the availability of the Section 29 credit. Shivers amended their petition on January 17, 1997 to include a claim that Texaco breached the implied covenant to reasonably develop the Section 29 leases. Shivers filed a motion for partial summary judgment, which the court denied. Texaco also moved for summary judgment. It based its motion on three claims. First, it said it did not owe Shivers any duty to inform them of the availability of the Section 29 tax credit. Second, Texaco asserted that its failure to inform Shivers did not cause Shivers’ alleged injuries. Third, it claimed that all of Shivers’ claims were barred by the statute of limitations. Shivers filed a response to Texaco’s summary judgment motion, and the trial court granted Texaco’s motion without stating the reasons. Shivers argues that Texaco owed the duty, based on the law of agency or contract principles under the doctrine of implied covenants, to inform them of facts and information to enable them to compute and claim the Section 29 tax credit. Further, Shivers argues that Texaco has a statutory duty under Tex. Nat. Res.Code Ann. § 91.502 (Vernon 1993) to disclose information to them about “other deductions or adjustments,” including the tight formation classification of its wells. Shivers relies on the discovery rule to avoid the limitations bar asserted by Texaco. Finally, Shivers argues that the trial court erred in rendering summary judgment against them on their claim that Texaco breached the implied covenant of reasonable development by failing to drill additional wells before January 1,1993.

Texaco first argues that the trial court’s ruling should be upheld because (1) it raised three grounds on which the trial court could have granted the summary judgment and Shivers only replied to two of those grounds; (2) it did not owe Shivers any duty to inform them of the applicability of the Section 29 credit; (3) even if it did owe a duty, its breach of the duty was not the cause of Shivers’ damages; and (4) Shivers’ claims are barred by the statute of limitations.

An appellate court’s review of a trial court’s summary judgment ruling is de novo. Toonen v. United Servs. Auto. Ass’n, 935 S.W.2d 937, 942 (Tex.App.—San Antonio 1996, no writ). The question on appeal, as well as in the trial court, is whether the movant establishes that there is no genuine issue of material fact and that it is entitled to judgment as a matter of law. Tex.R. Crv. P. 166a(e); Lear Siegler, Inc. v. Perez, 819 S.W.2d 470, 471 (Tex.1991); Smiley v. Hughes, 488 S.W.2d 64, 67 (Tex.1972); Gibbs v. General Motors Corp., 450 S.W.2d 827, 828 *731 (Tex.1970); Stevens v. State Farm Fire and Cos. Co., 929 S.W.2d 665, 669 (Tex.App.—Texarkana 1996, writ denied). The movant has the burden in a summary judgment proceeding, and the court must resolve against the movant all doubts as to the existence of a genuine issue of fact. Roskey v. Texas Health Facilities Comm’n, 639 S.W.2d 302, 303 (Tex.1982); Stevens v. State Farm Fire and Cos. Co., 929 S.W.2d at 669. A defendant moving for summary judgment must disprove at least one element of each theory pleaded by the plaintiff, or conclusively prove by summary judgment evidence each essential element of an affirmative defense. See Hanssen v. Our Redeemer Lutheran Church, 938 S.W.2d 85, 90 (Tex.App.—Dallas 1996, writ denied); Vest v. Gulf Ins. Co., 809 S.W.2d 531, 533 (Tex.App.$Dallas 1991, writ denied); see generally, Dean M. Swanda, Summary Judgment Practice, 46 Baylor L. Rev. 721, 725 (1994). A plaintiff/nonmovant can thwart the defendant’s summary judgment motion in three ways. First, the non-movant may present evidence that creates a fact question on those elements of the plaintiffs case under attack by the defendant. Second, the nonmovant may produce summary judgment evidence creating a fact question on at least one element of each affirmative defense advanced by the defendant. Torres v. Western Cas. and Sur. Co., 457 S.W.2d 50, 52 (Tex.1970); Hanssen v. Our Redeemer Lutheran Church, 938 S.W.2d at 90. Third, the nonmovant may concede that the material facts are undisputed but argue that the defendant’s legal position is unsound. Hanssen v. Our Redeemer Lutheran Church, 938 S.W.2d at 90; Estate of Devitt, 758 S.W.2d 601, 602 (Tex.App.-Amarillo 1988, writ denied). A summary judgment can be granted for a movant even if the movant failed to produce summary judgment evidence in support of the motion, if the motion was based on a point of law, with undisputed facts. Segrest v. Segrest, 649 S.W.2d 610, 611 (Tex.1983); DiGrazia v. Atlantic Mut. Ins. Co., 944 S.W.2d 731 (Tex.App.—Texarkana 1997, no writ).

If the movant does not meet its burden of proof, there is no burden on the nonmovant, City of Houston v. Clear Creek Basin Auth., 589 S.W.2d 671, 678 (Tex.1979), but if the movant has established a right to a summary judgment, the burden shifts to the nonmovant,

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Bluebook (online)
965 S.W.2d 727, 141 Oil & Gas Rep. 606, 1998 Tex. App. LEXIS 1622, 1998 WL 114493, Counsel Stack Legal Research, https://law.counselstack.com/opinion/shivers-v-texaco-exploration-production-inc-texapp-1998.