Aero Energy, Inc. v. Circle C Drilling Co.

• Decision Date: 06 November 1985
• Docket Number: No. C-3728,C-3728
• Citation: 699 S.W.2d 821
• Parties: AERO ENERGY, INC. et al., Petitioners, v. CIRCLE C DRILLING COMPANY, Respondent.
• Court: Texas Supreme Court

Page 821

699 S.W.2d 821

AERO ENERGY, INC. et al., Petitioners, v. CIRCLE C DRILLING COMPANY, Respondent.

No. C-3728.

Supreme Court of Texas.

Nov. 6, 1985.

Rehearing Denied Dec. 18, 1985.

Maurice Bresenhan, Jr., Houston, for petitioners.

Doherty & Williamson, Larry J. Doherty, Sullins & Johnston, Gail Magers, Houston, for respondent.

KILGARLIN, Justice.

This suit to recover damages for breach of contract and fraud resulted in a post-jury trial judgment for Circle C Drilling Company against Aero Energy, Inc., Aero Energy, Ltd., and Coloma Petroleum, Inc. The judgment awarded Circle C damages for breach of contract, attorney's fees, and punitive damages for fraud. Coloma settled with Circle C while the case was pending in the court of appeals. In an unpublished opinion, that court affirmed the judgment against Aero, Inc. and Aero, Ltd. We reverse the judgment as to Aero, Inc. and remand to the trial court for further proceedings. We affirm the judgments of the courts below as to Aero, Ltd.

On May 25, 1981, Coloma executed a joint exploration and development agreement with Aero, Inc., a wholly-owned subsidiary of Aero, Ltd. The purpose of the agreement was to explore and develop oil and gas deposits in an area known as the Allied Program. Coloma was to provide expertise and control of physical operations under the agreement; Aero, Inc.'s responsibility was to finance the operations.

On August 26, 1981, Coloma, pursuant to the agreement, executed a drilling contract with Circle C. The drilling contract obligated Circle C to drill several wells within the Allied Program over a period of one year. Circle C drilled two wells in the Allied Program and drilled one well outside the area for Aero, Inc. On March 4, 1982, Coloma terminated the contract with Circle C. Circle C then brought this suit.

The jury found as follows: (1) that Coloma guaranteed one year of drilling activity to Circle C; (2) that Circle C relied on this representation and leased a drilling rig from Manufacturer's Hanover Leasing Corporation; (3) that Coloma and Aero, Ltd. were joint venturers; (4) that Aero, Ltd. was the alter ego of Aero, Inc.; and (5) that at the time of signing the contract Coloma did not intend to treat the contract as a one year drilling guarantee or to pay early termination compensation per contract terms. The trial court concluded that as a matter of law, Aero, Inc. and Coloma were joint venturers.

In their first point of error, Aero, Inc. and Aero, Ltd. contend that there was no evidence to support the jury's answer to issue fourteen that a joint venture existed between Coloma and Aero, Ltd. No evidence points must be preserved through one of the following procedural steps in the trial court: (1) a motion for instructed verdict; (2) a motion for judgment notwithstanding the verdict; (3) an objection to the submission of the issue to the jury; (4) a motion to disregard the jury's answer to a vital fact issue; or, (5) a motion for new trial. City of Austin v. Daniels, 160 Tex. 628, 335 S.W.2d 753 (1960); Commercial Insurance Co. of Newark v. Puente, 535 S.W.2d 948, 950 (Tex.Civ.App.--Corpus Christi 1976, writ ref'd n.r.e.).

A review of the record reveals that neither Aero, Inc. nor Aero, Ltd. made any of the above motions. While Aero, Inc. and Aero, Ltd. did object to issue fourteen, the Aero, Ltd./Coloma joint venture inquiry, it was not a no evidence objection. The objection to issue fourteen complained that the definition of joint venture was improper, and that "the issue should not be submitted in that ... Aero Energy, Ltd. is not a party to the contract in question, and furthermore, the contract that does exist specifically disclaims any partnership relationship between Coloma Petroleum, Inc. and Aero Energy, Ltd."

A party objecting to a charge must point out distinctly the matter to which he objects and the grounds of his objection. Tex.R.Civ.P. 274. We hold that the objection to issue fourteen was not sufficient to preserve a no evidence point because the objection did not distinctly point out that ground.

In oral argument, counsel for Aero, Inc. and Aero, Ltd. stated that they had properly preserved error and cited us to Litton Industrial Products, Inc. v. Gammage, 668 S.W.2d 319 (Tex.1984), and Howell v. Coca-Cola Bottling Co. of Lubbock, 599 S.W.2d 801 (Tex.1980). Both cases are, however, easily distinguished.

In Howell, this court was confronted with whether a motion for a new trial was required under Tex.R.Civ.P. 324 in a non-jury case. In refusing the application, no reversible error, we disapproved the language of the court of appeals requiring the complaining party to file a motion for a...