Edwards v. Lone Star Gas Co., a Div. of Enserch Corp.
| Decision Date | 03 January 1990 |
| Docket Number | No. C-8558,C-8558 |
| Parties | H.S. "Gus" EDWARDS et al., Petitioners, v. LONE STAR GAS COMPANY, A DIVISION OF ENSERCH CORPORATION, Respondent. |
| Court | Texas Supreme Court |
William P. Pannill, Bertrand C. Moser, Joseph W. Pueschner, Houston, Frank Douglass, Austin, for petitioners.
Clint Adams, Dallas, Alfred H. Ebert, Jr., Lawrence A. Bellatti, Richard T. Boone, Gregg C. Laswell, Houston, for respondent.
At issue is the proper price to be paid under two gas purchase contracts. H. S. "Gus" Edwards, the gas producer, sued Lone Star Gas Company, the pipeline, alleging that Lone Star had breached the contracts by failing to pay monthly price escalations as part of a redetermined contract price and by failing to reimburse Edwards for state severance taxes. The trial court granted summary judgment in favor of Edwards for damages in the amount of the monthly price escalations but denied Edwards any reimbursement for severance taxes. The court of appeals reversed the trial court's judgment and rendered a take-nothing judgment against Edwards. 769 S.W.2d 568. We reverse the judgment of the court of appeals and affirm that of the trial court.
The price redetermination provisions of each contract are identical and read, in pertinent part, as follows:
Seller may request a redetermination of the price payable hereunder by Seller giving Buyer written notice of Seller's desire for a price redetermination not less than sixty (60) days immediately preceding the end of (i) the first six (6) months after the date of first delivery and (ii) annually thereafter during the term of this Contract. It is agreed that the redetermined price per MMBtu for such gas shall be equal to the highest price per MMBtu to be paid as of the first day of the period for which the redetermined price will be effective by a bona fide intrastate pipeline company for gas produced in Railroad Commission Districts 8 and 8A in the State of Texas under the terms of a contract of at least three (3) year term in effect at the time the redetermined price is to become effective.... (emphasis added)
We conclude that this contractual provision is unambiguous, and the construction of an unambiguous contract presents a question of law for the court. Coker v. Coker, 650 S.W.2d 391, 393 (Tex.1983).
The Edwards-Lone Star contracts were executed in 1975. In 1978, Congress enacted the Natural Gas Policy Act. 15 U.S.C. §§ 3301 et seq. This Act imposed price ceilings on intrastate contracts for the sale of natural gas; however, it also authorized the Federal Energy Regulatory Commission to adjust the price ceiling each month for inflation. 15 U.S.C. §§ 3312, 3315.
After the enactment of the Natural Gas Policy Act, gas purchase contracts paying the highest price conformed to the maximum lawful price provided under the Act and included the monthly adjustments. In 1980 and each year thereafter, Edwards requested that the price be redetermined by reference to other contracts in which the price incorporated monthly adjustments. Lone Star, however, refused to include monthly adjustments as part of the redetermined price and instead paid Edwards a flat rate equal to the dollar amount that was actually paid under the referenced contracts at the time of the redetermination.
There is nothing in the contracts to require that the term "price" be construed as a flat rate or as a static number. For the "price" to be a fluctuating value is neither prohibited by nor inconsistent with the...
To continue reading
Request your trial
-
Glazer's Wholesale Distributors v. Heineken
...569 S.W.2d 480 (Tex. 1978); Edwards v. Lone Star Gas Co., 769 S.W.2d 568, 571 (Tex.App. — Amarillo 1988), rev'd on other grounds, 782 S.W.2d 840 (Tex.1990). In this case, the parties did not expressly agree in writing to submit the dispute to arbitration. The letter agreement does not menti......
-
Oliver v. Rogers
...fifth amended petition. The construction of an unambiguous contract presents a question of law for the court. Edwards v. Lone Star Gas Co., 782 S.W.2d 840, 841 (Tex.1990). A contract is construed in accordance with the plain meaning of its language, unless it definitely appears from the wri......
-
Enserch Corp. v. Rebich
...available to the parties. The parties could have selected any index or reference for their price determinant. See Edwards v. Lone Star Gas Co., 782 S.W.2d 840, 841 (Tex.1990). They selected section 102 gas prices. We are not free to excise that pricing provision. An additional rule of contr......
-
Prudential Ins. Co. of Am. v. Durante
...of a contract is a question of law for the court. Coker v. Coker, 650 S.W.2d 391, 393 (Tex.1983) ; Edwards v. Lone Star Gas Co., a Div. of Enserch Corp., 782 S.W.2d 840, 841 (Tex.1990). The general rules of contract construction govern insurance policy interpretation. Tex. Farmers Ins. Co. ......
-
CHAPTER 3 CONSTRUCTION OF INSURANCE CONTRACTS
...v. State Farm Fire & Cas. Co., 790 P.2d 581, 582 (Utah App. 1990).[15] . Edwards v. Lone Star Gas Co., a Div. of Enserch Corp., 782 S.W.2d 840, 841 (Tex. 1990); Coker v. Coker, 650 S.W.2d 391, 393 (Tex. 1983); Texas Farmers Ins. Co. v. Murphy, 996 S.W.2d 873, 879 (Tex. 1999); State Farm Lif......