Harding Co. v. Sendero Res., Inc.

• Decision Date: 29 February 2012
• Docket Number: No. 06–11–00005–CV.,06–11–00005–CV.
• Citation: 365 S.W.3d 732
• Parties: HARDING COMPANY and Harding Energy Partners, LLC, Appellants, v. SENDERO RESOURCES, INC., et al., Appellees.
• Court: Texas Court of Appeals

365 S.W.3d 732

HARDING COMPANY and Harding Energy Partners, LLC, Appellants,

v.SENDERO RESOURCES, INC., et al., Appellees.

No. 06–11–00005–CV.

Court of Appeals of Texas,

Texarkana.

Submitted: Nov. 16, 2011.

Decided: Feb. 29, 2012.

Wesley C. Stripling IV, Attorney at Law, Fort Worth, James C. Scott, Gardere Wynne Sewell, LLP, Dallas, for appellants.

M. Keith Dollahite, M. Keith Dollahite, PC, Tyler, for appellees.

Before MORRISS, C.J., CARTER and MOSELEY, JJ.

OPINION

Opinion by Justice CARTER.

This opinion on rehearing is issued as a substitute for our original opinion issued January 26, 2012.

This is an appeal ¹ of a final summary judgment concerning contract and tort claims arising out of an agreement between several companies to acquire oil and gas leases. Harding Company ² contracted with Sendero Resources, Inc., to acquire oil and gas leases in a region of East Texas including parts of Nacogdoches, Angelina, San Augustine, Sabine, Jasper, and Newton Counties. Ted Walters is the president and sole shareholder of Sendero. Walters is also the president and sole shareholder of TWW Tyler, Inc., formerly Ted W. Walters & Associates, Inc.³ The last entity—Ted Walters and Associates, L.P.⁴—is a limited partnership, with Sendero as the general partner and Walters as a limited partner.

Milton A. Surles, an independent consultant geologist, contacted Ted Walters with plans for developing an area in Angelina County which the parties named the “Star Prospect.” Michael R. Boney, a landman employed by Associates, L.P., conducted research on land titles and existing wells in the area of interest. Surles prepared cross-sections of well logs, and Sendero entered into some oil and gas leases. Harding's representatives met with Walters, Surles, and Boney, and eventually Harding decided to purchase the Star Prospect.

The parties prepared and signed an agreement. Walters e-mailed a sample agreement to Harding. The sample agreement provided that Harding shall contract with “Associates, Inc.” ⁵ for landman services and pay rates “as mutually agreed.” The parties negotiated changes, and Harding put the final draft on its letterhead, signed it, and e-mailed ⁶ it to Sendero. Walters, Surles, and Boney signed the agreement. The signed agreement was returned to Harding on the letterhead of “Associates, L.P.” ⁷ Section 5 of the agreement contained a noncompete clause prohibiting Sendero, Surles, Boney, and “Walters” ⁸ from competing against Harding for oil and gas leases in the area. In 2007, Harding paid $15,000.00 to Sendero, Surles, and Boney as the “initial consideration” provided for in the agreement.

Either Associates, L.P., or TWW Tyler began researching land titles and acquiring leases for Harding.⁹ The new leases were nominally held by Sendero—at Harding's instruction to prevent competitors from discovering who was actually acquiring the leases. The leases were to be assigned to Harding once a target acreage was met. Harding argues TWW Tyler acquired sixty-eight leases covering approximately 3,346 ¹⁰ mineral acres and Associates, L.P., invoiced Harding for a lease bonus consideration of $761,797.42. The parties then agreed to expand the area of interest, and the agreement was amended to include 2,287,300 acres in Nacogdoches, Angelina, San Augustine, Sabine, Jasper, and Newton Counties. Harding obtained 142,905.539 mineral acres in the area of interest from Black Stone Mineral Company, L.P., and Sugarberry Kirby, JV. Walters alleges 146,261.6208 acres were acquired by Harding and were subject to the agreement. In total, Harding paid Associates, L.P., $2,169,850.23 for land and leasing services.

In April 2008, Harding and Walters agreed Harding could have until August 15, 2008, to make any payments due under the contract.¹¹ In July 2008, Boney informed Harding that TWW Tyler had been assisting Harding's competitors—EOG Resources, Inc., and Devon Energy, Inc.—in acquiring leases in the area of interest.¹² When confronted, Walters replied,

You made the allegation that TWWINC [Associates, Inc., TWW Tyler] violated the non-compete provision of the Star Prospect Letter Agreement. I do not remember signing that agreement on behalf of TWWINC. That agreement says Harding will hire TWWINC to take leases in areas designated by Harding. To my knowledge that is what occurred. It never occurred to me TWWINC was to be bound under the non-compete provision of the Star Prospect AMI, and there was no way I could have afforded to have all those brokers stop working over such a large area for anyone but Harding.

Harding stopped making payments under the contract. On September 17, 2008, Walters wrote a letter purporting to terminate the agreement for nonpayment. In his deposition, Walters admitted that TWW Tyler or Associates, L.P., had done work for Devon Energy, Inc., but denied that they had worked for EOG Resources, Inc. Walters admitted later in the deposition that they performed landman work for another company working for EOG Resources, Inc.

Sendero, Surles, and Boney brought suit alleging Harding failed to perform under the contract, and Harding brought suit against Sendero, TWW Tyler, Associates, L.P., and Walters alleging breach of the noncompete clause of the contract and numerous torts. The two lawsuits were consolidated in the trial court. Harding settled with Surles and Boney.¹³ Walters filed a motion for partial traditional summaryjudgment ¹⁴ and a motion for partial no-evidence summary judgment alleging Associates, Inc., TWW Tyler, Associates, L.P., and Ted W. Walters, in his personal capacity, were not parties to the written contract or its written amendment. The trial court granted both of Walters' motions and denied Harding's motion. Walters then filed a second motion for partial no-evidence summary judgment ¹⁵ alleging there was no evidence of fraudulent inducement, no evidence any party breached a fiduciary duty owed to Harding, no evidence the statute of frauds applies, and other additional grounds not relevant in this appeal. The trial court granted Walters' second motion for partial no-evidence summary judgment, awarded Sendero $965,701.14 in actual damages, plus prejudgment interest and attorney's fees, and awarded Associates, L.P., $680,245.22 in actual damages, plus prejudgment interest and attorney's fees.

Harding raises six issues on appeal. Harding argues the trial court erred in concluding TWW Tyler and Associates, L.P., were not parties to the contract and concluding Walters signed the contract only as president of Sendero. In the alternative, Harding contends TWW Tyler and Associates, L.P., breached a fiduciary duty each entity owed to Harding, which relieved Harding from any duty to perform. Harding also argues the contract between Harding and Sendero is unenforceable under the statute of frauds. Last, Harding claims the trial court erred in granting summary judgment because genuine issues of material fact exist concerning whether Walters committed fraud. Walters ¹⁶ raisesa cross-issue claiming, if this Court reverses, Harding is bound by the trial court's unchallenged findings.

We conclude the trial court correctly held that Walters signed the contract only as an officer of Sendero, but the trial court erred in granting a final summary judgment. A fact issue exists as to whether TWW Tyler and Associates, L.P., acted as agents of Harding. Harding presented some evidence TWW Tyler and Associates, L.P., breached any such fiduciary duties to Harding. We overrule Harding's argument that the contract is unenforceable under the statute of frauds; the statute of frauds does not apply to this contract. We conclude the trial court also erred in granting summary judgment based on Harding's fraudulent inducement cause of action. Last, we overrule Walters' cross-issue—Harding will not be bound by the unchallenged findings.

I. TWW Tyler and Associates, L.P., Were Not Parties to the Contract

Harding argues TWW Tyler and Associates, L.P., were parties to the contract. Walters responds that Ted W. Walters signed the contract only on behalf of Sendero and that an oral contract existed between Associates, L.P., and Harding. The agreement provides in pertinent part:

Sendero Resources, Inc. (“Sendero”), Michael R. Boney (“Boney”), and Milton A. Surles, Jr. (“Surles”) on one hand and Harding Company (“Harding”) on the other, hereto enter into this certain Letter Agreement, dated January 17, 2007 (“Agreement”)....

....

1. Harding shall contract with Ted W. Walters & Associates, Inc. (“Walters”) for the purposes of acquiring Leases....

S, B, & S and Walters will use their best efforts to acquire Leases....

....

5. S, B & S and Walters shall not compete directly or indirectly against Harding for any oil and gas rights in the Star AMI while this Agreement is in force and effect. S, B & S and Walters will assist Harding in acquiring oil and gas rights in the Star AMI without first obtaining Harding's written consent. Harding has the responsibility to determine the leasehold acreage to acquire in the Star AMI.

Walters signed the contract, which designated he was signing as the president of Sendero.

Harding argues the fact that Walters' signature reflects his corporate office is only “descriptio personae” and does not limit the capacity in which the person can be held liable. Harding cites a number of cases which have held a surety, who signed a personal guarantee of a debt of the principal only in their official capacity, is still personally liable.¹⁷ In Material Partnerships v. Ventura, the Fourteenth District held “a signature alone will not create an ambiguity in otherwise clear guaranty language in the body of an instrument” and concluded that “[i]n such case, the corporate office may be construed a descriptio personae of the signator rather than indication of the capacity in which he signs.” 102 S.W.3d at 259. These cases, though, are distinguishable from the current case. In these cases, the contract clearly...