Capitan Enterprises, Inc. v. Jackson
| Decision Date | 22 December 1994 |
| Docket Number | No. 08-93-00309-CV,08-93-00309-CV |
| Citation | 903 S.W.2d 772 |
| Parties | CAPITAN ENTERPRISES, INC., West Texas Water Supply, and Great Plains Water Systems, Inc., Appellants, v. Darrell JACKSON, Appellee. |
| Court | Texas Court of Appeals |
Carol Barry, Jeff Armstrong, Kuperman, Orr, Mouer & Albers, Austin, for appellants.
Kevin B. Jackson, Andrews, James L. Musselman, Houston, for appellee.
Before BARAJAS, C.J., and LARSEN and McCOLLUM, JJ.
This appeal stems from a judgment in favor of plaintiff Darrell Jackson, in which he was awarded 5% of gross billings of defendants Capitan Enterprises, Inc. and its subsidiaries West Texas Water Supply and Great Plains Water Systems, Inc. for salt water oilfield flooding. We reverse and render.
In the early 1970's, plaintiff Darrell Jackson and members of his family owned Andrews Industrial Water, Inc. (AIWI), a company engaged in the sale of fresh water for oilfield flooding in Andrews County. 1 Andrews Industrial Water was a small company, owning only a few water wells, a one-mile pipeline, and possessing a take-or-pay contract with only one customer. In 1971, Andrews sold his stock to a company called GPWC for $364,715.64. GPWC was owned by a larger company called Telecom, or TCC. The AIWI sale included a non-competition agreement prohibiting Jackson from selling water for oilfield flooding in Andrews or Lea Counties for ten years. In return for that agreement, he was to receive:
5% of AIWI's, GPWC's, TCC's or any Related Company's, their successors or assigns, prior month's actual gross billings from sales to any oilfield waterflood units in Andrews County, Texas, or Lea County, New Mexico under contracts consummated after Closing Date.... [Emphasis added].
In 1977, GPWC sold its assets to Great Plains Water Corp. In the sales contract, Great Plains Water Corp. specifically assumed liability for GPWC's promissory note to Jackson, but the contract was silent as to the 5% payments which were compensation for the non-competition agreement. Nevertheless, Great Plains Water Corp. paid 5% of its gross billings for water sales in Andrews County to Darrell Jackson. It continued to make these payments until 1983, when it sold its assets to Great Plains Water System, Inc, a subsidiary of Capitan Enterprises. GPWC, Great Plains Water Corp., and Great Plains Water System, Inc. 2 were all involved in supplying fresh water for oilfield injection. None owned salt water systems.
Meanwhile, Shell Oil Company had owned and operated a large salt water system in the same area, the West Texas Water Supply System. In 1983, it sold that system (needing millions of dollars in repairs) to T. Lee Enterprises, which later became Capitan Enterprises, Inc. After acquiring the Shell system, Capitan made large salt water sales to various oilfield customers, including some in Andrews County. The Great Plains fresh water system and Capitan salt water systems were completely independent. Capitan paid Darrell Jackson nothing on its salt water sales.
Shell, in preparing for the sale of its West Texas Water Supply System, had solicited bids. Darrell Jackson was one of those bidding on the system, and was therefore given detailed maps showing the system's delivery points, estimates of expected water deliveries, including those in Andrews County, and was even taken on a personal tour of the system. He was thoroughly familiar with it before the ultimate decision was made to accept Capitan's bid in 1983.
The only connection between Jackson and Capitan Enterprises (excluding their competitive bids on the Shell system) was the string of purchases wherein GPWC acquired Andrews Industrial Water in its entirety in 1971 (a stock sale); Great Plains Water Corp. acquired the assets of GPWC in 1983; and Great Plains Water System, Inc. (a subsidiary of Capitan) acquired the assets of Great Plains Water Corp. in 1983.
Jackson, although he had known since the Shell sale in 1983 that Capitan was selling water in Andrews County, never suggested until 1990 that he was owed money on the salt water sales. In April 1990, Jackson asked to audit Capitan's records, and for the first time claimed he was entitled to 5% of Capitan's billings for the salt water system. In October 1990, Jackson filed this lawsuit claiming that amount was owed him, and urging that Capitan is a "related company" under the terms of his 1971 non-competition agreement with GPWC.
Both Capitan and Jackson filed motions for summary judgment in the trial court. They agreed that the term "related company" was unambiguous. The trial court granted Jackson's motion and denied Capitan's, holding that Capitan was a "related company" under the contract. A jury trial ensued, and the jury found that Great Plains Water System had assumed the obligations to Jackson arising from the 1971 contract, through the intermediate assumption of those obligations by Great Plains Water Corp. The trial court, adopting Jackson's theory of Capitan's liability as a related company, entered judgment for Jackson for $269,475.90 for unpaid royalties on the salt water system from 1988 through 1991, as well as attorneys fees and interest. Defendants Capitan Enterprises, Inc., West Texas Water Supply System, and Great Plains Water System, Inc. appeal. For clarity, we will refer to them collectively as "Capitan."
In its Point of Error One, Capitan urges that the trial court erred in granting partial summary judgment to Jackson holding that Capitan was a "related company" under the 1971 agreement; in its Point of Error Two, Capitan urges that the trial court erred in denying its own motion for summary judgment, urging that the 1971 agreement, as a matter of law, could not entitle Jackson to a percentage of Capitan's gross billings. In its related Point of Error Three, Jackson challenges the trial court's entry of declaratory relief based on its rulings challenged in the first two points. We therefore review Capitan's first three points of error under the law applicable to cross-motions for summary judgment.
When both parties to a lawsuit file motions for summary judgment, and one is granted and the other denied, this Court may determine the propriety of the denial as well as the propriety of the grant. Lupo v. Equity Collection Service, 808 S.W.2d 122, 125 (Tex.App.--Houston [1st Dist.] 1991, no writ). If we find reversible error in the denial of the losing party's summary judgment, the proper course is to reverse and render judgment in favor of Appellant. Jones v. Strauss, 745 S.W.2d 898, 900 (Tex.1988). The trial court's decision on summary judgment receives no particular deference from this Court; we determine de novo whether a party's right to prevail is established as a matter of law. Elam v. Yale Clinic, 783 S.W.2d 638, 641 (Tex.App.--Houston [14th Dist.] 1989, no writ). Where, as here, the cross-summary judgments deal solely with interpreting the unambiguous terms of a contract, construction is a matter of law for the court. Coker v. Coker, 650 S.W.2d 391, 393 (Tex.1983).
The non-competition agreement Jackson undertook upon the sale of AIWI reads, in relevant part, as follows:
In consideration of the monies hereinafter stipulated to be paid to Jackson by GPWC, Jackson agrees not to compete with AIWI, GPWC, TCC or any company in which TCC has control or with which AIWI, GPWC or TCC is affiliated in respect to the water sales business for oil field waterflooding purposes in Andrews County, Texas and Lea County, New Mexico ("Related Company " herein) for a period of ten (10) years from Closing Date. GPWC agrees to pay Jackson on the 1st day of each month following Closing Date, a sum of money equal to the sum of the following parts....
. . . . .
(2) 5% of AIWI's, GPWC's, TCC's or any Related Company's, their successors or assigns, prior month's actual gross billings from sales to any oilfield waterflood units in Andrews County, Texas or Lea County, New Mexico under contracts consummated after Closing Date.... [Emphasis added].
Generally, a party assuming contractual liability is liable to the same extent as the party from whom it assumed the contract. Schultz v....
To continue reading
Request your trial
-
Medtronic Ave. v. Advanced Cardiovascular Sys.
..."An assignment is intended to change only who performs an obligation, not the obligation to be performed." Capitan Enter., Inc. v. Jackson, 903 S.W.2d 772, 776 (Tex. Ct. App. 1994)." 'An assignee obtains only the right, title and interest of his assignor at the time of his assignment, and n......
-
Sharp v. Caterpillar, Inc.
...the district court's determination that Caterpillar was entitled to judgment as a matter of law. Capitan Enters., Inc. v. Jackson, 903 S.W.2d 772, 775 (Tex.App.--El Paso 1994, writ denied). (i) Statutory The Comptroller argues that the district court erred because the Tax Code does not perm......
-
Auto-Chlor System of Minnesota v. Johnsondiversey
...be true: Plaintiffs' rights are neither enlarged nor diminished as to DiverseyLever and Auto-C. See, e.g., Capitan Enters., Inc. v. Jackson, 903 S.W.2d 772, 776 (Tex.App.1994). Said another way, if DiverseyLever and Auto-C stand in the shoes of ACS, Plaintiffs must remain in their own shoes......
-
State v. Am. Tobacco Co.
...the simple expedient of assigning them." Id. Texas law follows this rule, as must this Court. See Capitan Enters., Inc. v. Jackson , 903 S.W.2d 772, 776 (Tex. App.—El Paso 1994, writ denied).iv. "In the Manner Expressly Provided For Herein" The Texas Settlement also provides that it shall b......