Valence Operating Co. v. Texas Genco, LP

255 S.W.3d 210, 2008 Tex. App. LEXIS 1561, 2008 WL 553220
CourtCourt of Appeals of Texas
DecidedFebruary 27, 2008
Docket10-06-00252-CV
StatusPublished
Cited by5 cases

This text of 255 S.W.3d 210 (Valence Operating Co. v. Texas Genco, LP) 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
Valence Operating Co. v. Texas Genco, LP, 255 S.W.3d 210, 2008 Tex. App. LEXIS 1561, 2008 WL 553220 (Tex. Ct. App. 2008).

Opinion

OPINION

BILL VANCE, Justice.

In this accommodation doctrine case, Appellee Texas Genco, LP sought a permanent injunction to prevent Appellant Valence Operating Co. from drilling Well No. 9 of its Holmes “A” Gas Unit 1 within cells 8 and 12 of Texas Genco’s ash-disposal landfill. Valence, which has mineral rights in the Holmes Unit, obtained a per *213 mit from the Railroad Commission to drill Well 9 as a 297-foot directional well (referred to by the parties and in this opinion as the 300-foot directional well). The trial court entered a temporary injunction, and Valence counterclaimed for damages for wrongful temporary injunction and for declaratory relief that it could also drill Well 9 as a straight-hole well. A jury found for Texas Genco on all issues, and the trial court issued a permanent injunction and ordered that Valence take nothing on its counterclaim.

Valence appeals, complaining in five issues about the jury charge and the sufficiency of the evidence. We will affirm.

Background

These parties were recently before us in what they call the “Well 8” case. See Texas Genco, LP v. Valence Operating Co., 187 S.W.3d 118 (Tex.App.-Waco 2006, pet. denied). Because the landfill’s background facts are essentially identical, we borrow them from the Well 8 case:

Genco’s Limestone Plant began operations in 1985 and is projected to continue operating for twenty or thirty more years. To produce electricity, the plant burns lignite coal from an adjacent mine near Jewett and coal from the Wyoming Powder River Basin. The coal burning process produces coal combustion products — such as fly ash and bottom ash— that require Genco to have a Class II industrial landfill to dispose of this waste.
In 1985, Genco deed-recorded approximately 450 acres1[ 2 ]:1 of land for its landfill, which is regulated by the Texas Commission on Environmental Quality (TCEQ). It redesigned the landfill in 1994 to include an approximately 91-acre tract containing the location at which Valence wants to straight-hole drill its Holmes Unit No. 8 well. Genco deed-recorded this 91-acre tract as part of its industrial landfill and registered the landfill expansion with TCEQ.[ 3 ]
The coal combustion products are disposed of in the landfill in predetermined areas called cells. Each cell has a three-foot clay liner to control rainwater and prevent water table contamination. The waste ash is placed on top of the clay to the allowable landfill plan height, and then the waste is covered by a three-foot clay layer. While the cell is open (waste is being actively deposited there), the cell is surrounded by a drainage ditch that controls and directs runoff water to a settling pond. Once a cell reaches the permitted height and grade, topsoil and grass are placed on top of the cell’s clay cover, and the cell is considered closed. Genco cannot deposit waste over its entire landfill at one time because the TCEQ allows only a certain number of acres to be open at one time. TCEQ also regulates the height and grade of the landfill. Generally, the larger the overall area of the landfill’s footprint, the higher the landfill can be built.

Id. at 120-21.

When the landfill began operations in 1985, there was one preexisting gas well (the Holmes A-l Well, drilled by Valence’s predecessor in 1979) within the landfill’s footprint, i.e., the area used and to be used for ash disposal. The landfill’s initial cell sequencing order was designed to avoid the A-l Well, and Texas Genco (then known as Houston Lighting & Power) ex *214 pected that it would be depleted and plugged by the time the cell progression reached it. Texas Genco thus began filling its landfill counter-clockwise away from the A-l Well. Over the next thirteen years, Texas Genco filled and closed cells 1 through 5 with no additional gas drilling activity in the landfill area. 4

In 1998, while Texas Genco was working on cell 6 and preparing to move to cell 9, Valence drilled two wells (the Reed E-4 and Reed E-5) just inside the landfill’s border. At that time, Texas Genco was willing and able to “notch around” those wells because they were located at the landfill’s very edge and Texas Genco believed it had viable landfill options in other directions. Another five years then passed with no gas drilling activity in the landfill area, and the landfill progressed through cells 9 and 10. In 2003, Valence drilled Well 3, which Texas Genco was again able to notch around because it was at the landfill’s outer edge. Valence then drilled Wells 4, 5, and 7, which removed Texas Genco’s option to expand the landfill to the east, northeast, and north. Because Texas Genco’s landfill was in effect surrounded by wells, which eliminated all possible options for expansion of the landfill, Texas Genco objected to Valence’s proposals to drill Wells 8 and 9 within the landfill’s footprint and attempted to persuade Valence to directionally drill the wells.

The Well 8 and Well 9 lawsuits followed. In the Well 8 case, we held that the evidence was sufficient to support favorable jury findings for Texas Genco on its accommodation doctrine claim with respect to cell 20 of the landfill. Based largely on our Well 8 opinion, in the present case the trial court submitted the following jury questions:

QUESTION NO. 1
Do you find that Texas Genco has no other practicable and reasonable use of the surface at the proposed Well No. 9 Surface Location other than as a landfill?
Answer Wes” or “No”_
QUESTION NO. 2
Is Valence’s proposed drilling at the Well No. 9 Surface Location not reasonably necessary?
Instructions
You are instructed that Valence’s proposed use of the surface at the Well No. 9 Surface Location is not reasonably necessary if:
(1) Texas Genco has an existing use of the surface at the proposed Well No. 9 Surface Location that would be precluded or substantially impaired if Valence drills Well No. 9 at that location, and
(2) directional drilling is an industry-established practice that provides Valence reasonable access to its minerals.
Answer “Yes” or “No”_

The jury answered “yes” to both questions. Valence does not complain about Question No. 1 in this appeal. Thus, we focus on the issues that address Question No. 2, as well as issues of law.

Issues on Appeal
Valence raises five issues:
1. Does the accommodation doctrine give Texas Genco the power to force Valence to drill Holmes Unit Well No.

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Bluebook (online)
255 S.W.3d 210, 2008 Tex. App. LEXIS 1561, 2008 WL 553220, Counsel Stack Legal Research, https://law.counselstack.com/opinion/valence-operating-co-v-texas-genco-lp-texapp-2008.