Driver Pipeline Co. v. Mustang Pipeline Co.

Decision Date20 December 2001
Docket Number6,060000053CV
PartiesDRIVER PIPELINE COMPANY, INC., Appellant v. MUSTANG PIPELINE COMPANY, INC., AppelleeCourt of Appeals of Texas, Texarkana
CourtTexas Court of Appeals

On Appeal from the 124th Judicial District Court Gregg County, Texas Trial Court No. 97-617-B

Before Cornelius, C.J., Grant and Ross, JJ.

OPINION

Opinion by Justice Grant

This is an appeal by Driver Pipeline Company, Inc. (Driver) and Mustang Pipeline Company, Inc. (Mustang) from a judgment in a lawsuit for breach of contract. Seaboard Surety Company, the insurer that provided a performance bond for Driver, has also appealed.

Mustang wanted to build a gas pipeline from Longview to Diboll to Mount Belview (near Houston), a 200-mile stretch of pipeline. Mustang divided the work into the north spread and the south spread, each 100 miles long. After going through a bidding process, Mustang hired Driver to dig the trenches and lay the pipe for the north 100 miles of pipeline. Because Mustang wanted to finish the pipeline by a specific deadline, it prepared a contract stating that the prices were based on eleven hours per day and seven days a week to meet a fourteen-week schedule (ninety-eight construction days), and specifying that the final completion of the pipeline within that time was of "great importance to the Company."1

And then the rains came. At the end of fifty-eight days, Driver had finished only fifteen miles of the pipeline and had laid off some of its crews and suspended operations. Driver proposed that Mustang give it additional time and money to finish the project. Driver took the position that rain delayed its work and that all parties understood that his bid was based on no weather delays. The owner of the company, James Driver, testified by deposition that his bid took into account a fifteen percent contingency for rain days. At trial, however, Driver testified that this was a "best-time" contract with no rain days included and that he relied on a clause allowing (but not requiring) Mustang to give them extra time in the event of weather delays. There is evidence that the builder of the south portion of the line sought and received a thirty-day extension on its construction.

The contract does contain provisions explaining how the crews and welds were to be protected when working in the rain, which suggests that they expected Driver to work through at least some inclement weather rather than shutting down. Also, Driver was several days late in starting work and could have started earlier. The reasons are disputed.

When the rains came, there was testimony that Driver kept part of its crews working, but refused to move any operations to drier areas of the line to continue work. Driver offered testimony that such a move would have been a useless act because the entire length of the proposed pipeline was soaked. The evidence also shows that the rain in that time period of 1997 was above average, but within the five-year range for the area.

After several meetings, at which Driver's representatives and owner demanded more time and money because the pipeline could not be finished under the conditions of the contract, Mustang declared a breach.

Mustang had already been testing the waters with other construction companies, and after declaring a breach, it hired one of the original bidders, Sunland Construction. Mustang requested that Sunland finish as close to the original schedule as possible. Sunland hired a second crew, moved in, worked through the mud, and completed the remaining eighty-five miles of pipeline within eleven weeks.

Mustang sued Driver for breach of contract, seeking costs to complete the project, lost profits, and attorney's fees. Driver countersued for wrongful termination, seeking damages for termination, lost profits, and attorney's fees.

Mustang sought damages of $4,065,286 because it cost that much more than the original contract price with Driver to complete the pipeline.2

The Verdict

At the conclusion of an eight-day trial, the jury made the following findings:

Driver failed to comply with the contract;

Mustang was not justified in terminating its contract with Driver;

$2,104,601 would compensate Mustang for damages caused by Driver's failure to comply with the contract; and

$2,515,958 would compensate Driver for damages caused by Mustang's unjustified failure to comply with the contract.3

The Trial Court's Judgment Notwithstanding the Verdict

The trial court found that the verdict was for Driver and that there was "no evidence of probative force to sustain the jury's finding with respect to question No. 3" [the damages question for Mustang]. The court then rendered judgment in favor of Driver and Seaboard Surety against Mustang. The court awarded Driver actual damages of $3,146,728.33, plus attorney's fees, appellate attorney's fees, and ten-percent interest on the judgment.

Driver's Appeal

Driver filed the first Notice of Appeal and is labeled as the appellant. Driver contends that the trial court erred by not granting its motion to impose a statutory mineral lien in support of its victory in the trial court.

This issue has not been adequately preserved for review. When brought to the trial court's attention, the trial court stated that it would not grant the motion at that time, but that it would be willing to consider it later if Driver so desired. No further mention of the motion was made, and the trial court never denied the request. In such a situation, we cannot conclude that the trial court committed error.

Further, the stated purpose for the relief was to enforce the judgment. Since that time, Mustang has filed a supersedeas bond that is sufficient to cover the entirety of the judgment against it. Even if the court had denied the lien, and even if that were error, any right to recover on the judgment is now protected by the bond, and imposition of such a lien at this point would be duplicitous and improper. Driver is not entitled to have its right to recover on the judgment protected twice.

The Appeal by Mustang

Cross-Appellant Mustang raises five issues in which it contends that the trial court erred by disregarding the jury's answer to its damage issue; that because the jury found that Driver was in breach, the court erred by refusing to disregard the jury's answer finding that it had wrongfully terminated Driver; and that there was legally and factually insufficient evidence to support the finding of wrongful termination. If we find in Mustang's favor on these points, we would then reach its further contentions that attorney's fees were improperly assessed and that the court should also have entered judgment against Seaboard Surety.

Judgment Notwithstanding the Verdict-Standard of Review

We will affirm a judgment notwithstanding the verdict (j.n.o.v.) if there is no evidence to support an issue, or conversely, if the evidence establishes an issue as a matter of law. Exxon Corp. v. Quinen, 726 S.W.2d 17, 19 (Tex. 1987). "No evidence" exists, and a j.n.o.v. should be rendered, when the record discloses one of the following: (1) a complete absence of evidence of a vital fact; (2) the court is barred by rules of law or evidence from giving weight to the only evidence offered to prove a vital fact; (3) the evidence offered to prove a vital fact is no more than a scintilla of evidence; or (4) the evidence establishes conclusively the opposite of a vital fact. Juliette Fowler Homes, Inc. v. Welch Assocs., Inc., 793 S.W.2d 660, 666 n.9 (Tex. 1990). To determine whether there is any evidence, we must review the record in the light most favorable to the verdict, considering only the evidence and inferences that support the verdict and rejecting the evidence and inferences contrary to the verdict. Mancorp, Inc. v. Culpepper, 802 S.W.2d 226, 227 (Tex. 1990). When there is more than a scintilla of competent evidence to support the jury's findings, the j.n.o.v. should be reversed. See id. at 228. If we decide that the j.n.o.v. was erroneous, we must reverse and render judgment in harmony with the verdict, unless the appellee has presented a cross-point sufficient to vitiate the jury's verdict. Cain v. Pruett, 938 S.W.2d 152, 160 (Tex. App.-Dallas 1996, no writ).

The Damages Issue

Mustang first contends that the j.n.o.v. was improperly granted because the court erred in deciding that there was no evidence to support the amount of the damage award.4 Mustang then argues that "Driver has waived this issue" because it did not object to evidence from Mustang's witnesses.5

The contention of error and this argument do not mesh. The issue of whether the evidence presented to the jury is legally sufficient is not dependent on whether Driver timely objected to testimony-it is dependent on whether that testimony supports the verdict.

The issue is whether there was some evidence of damages to support the jury's verdict. There is substantial evidence of the amount that it cost Mustang to complete the pipeline. The jury charge contained language limiting any recovery to "[t]he reasonable and necessary costs incurred by Mustang Pipeline Company to complete the pipeline less the amount agreed to between Mustang . . . and . . . Driver . . . to construct the pipeline." The position taken by Driver and accepted by the trial court is that this evidence was legally insufficient because there was no evidence before the jury to show that the amount that was admittedly paid was "reasonable and necessary" to complete the work.

Mustang directs this court to substantial evidence about the extent of damages. It does not direct this court to any evidence from any source to suggest that the actual expenditures that it made were reasonable or necessary-merely that those were the amounts expended in completing the pipeline. Mustang argues correctly that it is not necessary for the witnesses to repeat the magic words "reasonable and necessary" in order to provide evidence that...

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