TRIDENT STEEL CORPORATION v. Wiser Oil Co.

223 S.W.3d 520, 2006 Tex. App. LEXIS 7633, 2006 WL 2494742
CourtCourt of Appeals of Texas
DecidedAugust 29, 2006
Docket07-04-0357-CV
StatusPublished
Cited by9 cases

This text of 223 S.W.3d 520 (TRIDENT STEEL CORPORATION v. Wiser Oil Co.) 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
TRIDENT STEEL CORPORATION v. Wiser Oil Co., 223 S.W.3d 520, 2006 Tex. App. LEXIS 7633, 2006 WL 2494742 (Tex. Ct. App. 2006).

Opinion

OPINION

JAMES T. CAMPBELL, Justice.

Trident Steel Corporation appeals a judgment in favor of Wiser Oil Company for breach of contract and fraud in connection with the sale of oilfield tubing and casing that failed during use. We modify the trial court’s judgment and affirm it as modified.

Factual and Procedural Background

In May 2001 Wiser ordered 890 joints of production tubing from Trident. The order was based on a written quote from Trident for new 2 7/8-inch steel tubing that complied with American Petroleum Institute specification J-55, was electrical resistance welded and “full body normalized 2 after upset.” The quote and subsequent invoice also reflected that the tubing was manufactured by the C.A. Conduven steel mill in Venezuela. Wiser ordered an additional 660 joints of tubing meeting the same requirements in July 2001. Trident, located in St. Louis, Missouri, purchased the tubing from Fremak Industries, Inc. and Tradearbed, Inc. It then contracted with Tubular Services, L.P., of Houston, to receive the tubing, upset and thread the ends and perform the normalizing process. On performance of its tasks, Tubular certified the tubing met the API J-55 specification. After delivery in Odessa, Wiser *523 hired ICO Worldwide Inc., also of Odessa, to coat the inside of the tubing.

During the summer of 2001 Wiser installed tubing from Trident and other sources in several wells in its Wellman unit in Terry County. Failure of a submersible pump in one well, the no. 2-1 well, in early October required pulling the tubing and pump. During that operation some of the joints obtained from Trident became crimped. When the entire string was removed Wiser found some 76 of 220 joints from Trident had suffered crimping or were bent. None of the 35 joints in the string manufactured by Hyundai were crimped or bent.

In November 2001, Wiser experienced similar problems on another well where it had used Trident tubing, the Wellman 5-5. Testimony indicated that 67 of approximately 250 joints of tubing later pulled from the 5-5 well were visibly bent.

When Wiser later pulled the tubing from a third Wellman well, it found 64 joints of bent tubing. Wiser’s production foreman on the Wellman unit testified that during the previous two-and-a-half years the company had pulled some twenty thousand joints of tubing acquired from parties other than Trident and none suffered crimping or bending. Wiser notified Trident of the problems on the Wellman 2-1 the day after pulling the tubing and submitted two samples to Tubular for testing.

In December 2001, Wiser ordered 1500 feet of 9 5/8-inch casing from Trident. The contract required the casing to comply with the J-55 specification and be manu-factored by Conduven. The casing was delivered to a Wiser well then being drilled in Lavaca County, where all but a few feet shortly was installed as surface casing. Wiser resumed drilling, but within three days after installation of the surface casing, the drill string became hung in the casing at a depth of 300 feet. After the crew managed to remove the drill string, downhole measurements were performed, revealing that four joints of the casing had partially collapsed and were no longer round. Wiser abandoned the well, moved the drilling rig to the side and drilled a new well. Wiser did not pay the invoice for the casing.

An analysis of the damaged Well-man 2-1 tubing performed by Wiser’s expert revealed yield strength significantly below that required by the API specification. 3 In May 2002 Wiser filed suit against Trident and Tubular, asserting claims for breach of contract, breach of warranties, strict liability, negligence and negligent misrepresentation. Trident joined Fremak Industries, Inc., Tra-dearbed, Inc., and Conduven as third party defendants. 4 Trident’s pleadings alleged it purchased the tubing and casing from Fre-mak and Tradearbed, who had purchased it from Conduven. It also asserted a counterclaim against Wiser for payment for the casing.

The trial court granted summary judgment in favor of Fremak and Tradearbed. Through discovery, Wiser learned some of the tubing Trident supplied was manufactured by steel mills in Romania (Sileotobe) and Argentina (Acindar) rather than Con-duven. By amended petitions Wiser add *524 ed a claim for fraud and sought exemplary damages, and added a claim for conspiracy between Trident and Tubular.

At the nine-day jury trial, Wiser’s experts attributed the crimps and bends in the tubing and the collapse of the casing to defects in the steel and to improper performance of the normalizing process. At the trial’s conclusion, the jury charge first presented questions on each of Wiser’s claims concerning the tubing-breach of contract, fraud, conspiracy, breach of warranty and strict liability. A second group of questions addressed Wiser’s casing claims-breach of contract, breach of warranty, strict liability and negligence. The jury found there was no conspiracy between Trident and Tubular. The jury’s answers supported all of Wiser’s other claims against Trident, but none against Tubular. It found Wiser’s reasonable attorney’s fees through trial were $357,322 and awarded exemplary damages on the fraud claim of one dollar.

Wiser elected to recover on its breach of contract and fraud claims. The trial court rendered judgment that Wiser recover from Trident damages of $1,046,199, together with pre and post judgment interest. It ordered Wiser take nothing against Tubular Services, L.P. 5 and Trident take nothing against Wiser. A judgment nunc pro tunc added the dates for calculation of prejudgment interest.

Issues on Appeal

Trident now presents sixteen issues on appeal. Those issues fall into six areas: whether the law and facts support Wiser’s claims for breach of contract (issues 2, 3, 10); if not, did the election to recover for breach of contract estop Wiser from recovery on other theories (issue 1); whether the evidence supports claims for breach of warranty (issues 4, 5, 6, 7); and whether Wiser can recover on its fraud claim and recover exemplary damages (issues 8, 9, 11, 12). The final issue in Trident’s original brief concerns the trial court’s failure to render judgment for Trident on its counterclaim for payment on the casing contract. Three issues raised in a supplemental brief challenge the judgment nunc pro tunc. We address Trident’s issues in these groupings.

Breach of Contract

By its second and third issues, Trident contends that Wiser’s claims based on defects in the tubing and casing lay in breach of warranty rather than breach of contract.

The parties agree the transactions at issue are governed by articles one and two of the Texas version of the Uniform Commercial Code. Tex. Bus. <& Com.Code Ann. §§ 1.101-2.725 (Vernon 1994 & Supp. 2005). 6 The code displaces common law rules regarding breach of contracts within its scope. Glenn Thurman, Inc. v. Moore Const., Inc., 942 S.W.2d 768, 771 (Tex.

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Bluebook (online)
223 S.W.3d 520, 2006 Tex. App. LEXIS 7633, 2006 WL 2494742, Counsel Stack Legal Research, https://law.counselstack.com/opinion/trident-steel-corporation-v-wiser-oil-co-texapp-2006.