Colorado Interstate Gas Co. v. MAPCO, Inc.

• Decision Date: 31 July 1978
• Docket Number: No. 8904,8904
• Citation: 570 S.W.2d 164
• Parties: COLORADO INTERSTATE GAS COMPANY, Appellant, v. MAPCO, INC., Appellee.
• Court: Texas Court of Appeals

Page 164

570 S.W.2d 164

COLORADO INTERSTATE GAS COMPANY, Appellant, v. MAPCO, INC., Appellee.

No. 8904.

Court of Civil Appeals of Texas, Amarillo.

July 31, 1978.

Gibson, Ochsner, Adkins, Harlan & Hankins, Ira L. Edwards, Jr., Amarillo, for appellant.

Holliman, Langholz, Runnels & Dorwart, Thomas M. Davidson, Tulsa, Okl., Lemon, Close, Atkinson, Shearer & McCutcheon, Perryton, Lovell, Lyle, Renfer, Minkley & Moore, Jim R. Duvall, Dumas, for appellee.

REYNOLDS, Justice.

Defendant Colorado Interstate Gas Company appeals from an order overruling its plea of privilege. Plaintiff MAPCO, Inc., has failed to clearly establish an exception to the defendant's right to be sued in the county of its pleaded domicile. Reversed and rendered.

MAPCO, Inc., instituted this suit in Moore County against Coastal States Gas Corporation, Colorado Interstate Gas Company and CIG Exploration, Inc., gatherers of natural gas into their Moore County pipelines from whence they transport it to Fritch Plant, MAPCO's gas processing plant located in Hutchinson County. By its suit, MAPCO seeks a declaratory judgment determining that it has the right, under a series of natural gas processing agreements and over defendants' nonconcurrence, to undertake a project to rebuild its Fritch Plant to extract all hydrocarbon constituents not affecting the contractual BTU content of the natural gas for delivery.

Colorado Interstate Gas Company, a Delaware corporation doing business in Texas, interposed its plea of privilege, pleading that its principal place of business in Texas is in Potter County, the county to which the cause should be transferred. MAPCO controverted, asserting that venue is proper in Moore County under subdivisions 10, 14, 23, 24, 27 and 29a of Article 1995, the general venue statute. ¹

Prior to a hearing on the venue matter, MAPCO moved for, and the trial court ordered, the nonprejudicial dismissal of Coastal States Gas Corporation and CIG Exploration, Inc., as defendants. After the venue evidence was heard, the trial court overruled Colorado Interstate Gas Company's plea of privilege. This appeal ensued.

Because the venue order is unaccompanied by findings of fact and conclusions of law, it must be affirmed if it is supported by evidence sufficient to sustain venue under any invoked subdivision of the venue statute. National Farmers Organization v. Ramsey, 500 S.W.2d 192, 193 (Tex.Civ.App. Amarillo 1973, no writ). Yet, if the plaintiff relies upon a specified exception of the venue statute to overcome the defendant's plea of privilege, the plaintiff must allege and prove the venue facts stated in the particular exception applicable or appropriate to the character of the action alleged in plaintiff's petition. Compton v. Elliott, 126 Tex. 232, 88 S.W.2d 91, 93-95 (1935). Such venue facts must be both clearly pleaded and proved by a preponderance of the evidence, and all doubts must be resolved in favor of the general venue rule, Goodrich v. Superior Oil Co., 150 Tex. 159, 237 S.W.2d 969, 972 (1951), for venue may not be sustained by implication. Burtis v. Butler Bros., 148 Tex. 543, 226 S.W.2d 825, 828 (1950).

In appealing, Colorado Interstate Gas Company (CIG) has undertaken to demonstrate that none of the specified exceptions invoked by MAPCO is a basis for overcoming CIG's privilege to defend the suit in Potter County. Within its response MAPCO makes no appellate contention that, and has not briefed the questions whether, subdivisions 10, 24 and 29a will sustain venue in Moore County. Accordingly, CIG's unchallenged demonstrations that these exceptions have no application are accepted as correctly stating the facts representing inapplicability. Rule 419, Texas Rules of Civil Procedure; Milam v. Langford, 533 S.W.2d 857, 859 (Tex.Civ.App. Amarillo 1976, no writ). Beyond that, although MAPCO had an absolute burden to plead the venue facts necessary to activate the statutory exceptions relied upon, Pena v. Sling,135 Tex. 200, 140 S.W.2d 441, 448, 128 A.L.R. 1223 (1940), there is no pleaded contention that MAPCO is seeking recovery of personal property located in Moore County so as to bring its suit within subdivision 10. First State Bank of Childress, Texas v. Fields, 551 S.W.2d 476, 479 (Tex.Civ.App. Amarillo 1977, writ dism'd). Similarly, while MAPCO's burden to prove its right to venue in the county of suit is as complete and absolute as is its burden to plead the same, Pena v. Sling, supra, at 448, we have not been directed to any proof in the record that CIG is a common carrier within the sense of subdivision 24. Likewise, subdivision 29a which, by its own terms, applies only if there is more than one defendant was rendered inoperative by the dismissal of all defendants except CIG before the venue hearing. Accord, Zurich Insurance Company v. Wiegers, 527 S.W.2d 511, 514 (Tex.Civ.App. Austin 1975, no writ).

CIG disputes MAPCO's claim to venue in Moore County pursuant to that portion of subdivision 14 which mandates that a suit for the recovery of land must be brought in the county where the land or a part thereof lies. The venue facts which must be established in this regard are that (1) the suit is, as disclosed by the petition, of a type specified in this subdivision, and (2) the land or a part thereof is, as shown by proof independent of the pleadings, located in the county of suit. Piazza v. Phillips, 153 Tex. 115, 264 S.W.2d 428 (1954). The nature of the suit is determined from the facts alleged in plaintiff's petition, the rights asserted and the relief sought, Renwar Oil Corporation v. Lancaster, 154 Tex. 311, 276 S.W.2d 774, 775 (1955), and the real character of the lawsuit governs the venue. Warren v. Denison, 531 S.W.2d 215, 218 (Tex.Civ.App. Amarillo 1975, no writ).

It is not disputed that the natural gas containing the hydrocarbon constituents at issue is produced from land lying partly in Moore County. So, resort to MAPCO's pleadings determines if the type or real character of the action brings it within the ambit of subdivision 14.

MAPCO's pleadings contain these allegations: CIG is obligated by an October 15, 1931 contract to deliver natural gas underlying certain lands, including lands situated in Moore County. MAPCO has succeeded to a December 26, 1951 deed grant of

All hydrocarbons having a boiling point as high and higher than Ethane, including without limitation, all Ethane . . . contained in the natural gas in place . . . less, however, only such hydrocarbon constituents required in good faith . . . to be delivered . . . pursuant to a contract dated October 15, 1931, as amended . . .

under the same lands. The deed obligated CIG to process the natural gas to remove, and pay to MAPCO eighty-five per cent of the profits from the sale of, the hydrocarbon constituents. On March 7, 1963, MAPCO and CIG entered into two agreements by virtue of which CIG would close its processing plant, MAPCO would build its own plant to extract its hydrocarbon constituents from the natural gas and would pay CIG twenty per cent of the revenues from the sale of the hydrocarbon constituents, and MAPCO's extraction shall not reduce the heating value of the residue gas below a specified BTU content. MAPCO constructed and placed its plant in operation.

Further alleged is that thereafter on August 31, 1967, MAPCO and CIG executed another agreement to clarify the rights and obligations of MAPCO to process the gas. By this agreement, MAPCO is granted the right to extract all hydrocarbon constituents in the natural gas, provided that (1) the heating value of the residue gas shall not be reduced below the specified minimum BTU contents, (2) the residue returned to CIG shall be of pipeline quality, and (3) MAPCO shall extract no more helium than is necessary in extracting hydrocarbons to reach the minimum BTU contents specified. In accordance with the latest agreement, MAPCO constructed a new processing unit at its Fritch Plant located in Hutchinson County. CIG produces the natural gas, gathers it into its Moore County pipelines and transports some of it to the Fritch Plant for processing. MAPCO processes the natural gas without extracting the ethane from it, and delivers the residue gas to CIG.

MAPCO then alleges that it has proposed to undertake a project to rebuild its Fritch Plant at a cost of $20,000,000 to extract all hydrocarbon constituents, including ethane, and to still deliver the residue gas to CIG at the specified minimum BTU contents. CIG has taken the position that MAPCO has no right to undertake the project; in the meantime, MAPCO claims, its hydrocarbon constituents are being lost to it.

MAPCO prays for a judgment declaring that it has the right to undertake the project and for recovery, in a supplemental proceeding, of damages for the value of its hydrocarbon constituents lost during the delay caused by CIG in completing the project.

The ultimate or dominate purpose of the suit, and not how the cause of action is described, determines whether a suit falls within the purview of subdivision 14. Texaco, Inc. v. Gideon, 366 S.W.2d 628, 631 (Tex.Civ.App. Austin 1963, no writ). Although MAPCO has pleaded its title to the hydrocarbon constituents contained in the natural gas in place, which is realty, Stephens County v. Mid-Kansas Oil & Gas Co., 113 Tex. 160, 254 S.W. 290, 292 (1923), MAPCO does not seek a declaration of that title. MAPCO's petition, in the nature and form of a declaratory judgment action, does not contain either the customary form of allegations or a prayer for the recovery of land within the meaning of subdivision 14, and the damages sought are not for injury to the realty itself. Instead, as manifested by its pleadings, MAPCO primarily seeks a declaration that its proposed extraction project in Hutchinson County is sanctioned by the 1967 clarification agreement for processing the natural gas. At that stage in the process, the natural gas containing the hydrocarbon inerts which MAPCO...