Maxvill-Glasco Drilling Co., Inc. v. Royal Oil and Gas Corp.

• Decision Date: 29 November 1990
• Docket Number: No. 13-88-585-CV,MAXVILL-GLASCO,13-88-585-CV
• Parties: DRILLING COMPANY, INC., Appellant, v. ROYAL OIL AND GAS CORPORATION, Appellee.
• Court: Texas Court of Appeals

Page 384

800 S.W.2d 384

MAXVILL-GLASCO DRILLING COMPANY, INC., Appellant, v. ROYAL OIL AND GAS CORPORATION, Appellee.

No. 13-88-585-CV.

Court of Appeals of Texas Corpus Christi.

Nov. 29, 1990.

Rehearing Overruled Dec. 28, 1990.

Dan Shapiro, Frank Shor, Michael H. Hull, Aranson & Shor, Dallas, for appellant.

Rick Rogers, Tonya B. Webber, Porter, Rogers, Dahlman, Gordon & Lee, Corpus Christi, for appellee.

Before BENAVIDES, SEERDEN and DORSEY, JJ.

OPINION

BENAVIDES, Justice.

This is an action for tortious interference with rights under an oil and gas lease. The trial court granted an instructed verdict for appellee, Royal Oil and Gas Corporation. Appellant, Maxvill-Glasco Drilling Company, Inc., raises two points of error asserting that the trial court erred in directing the verdict because there is evidence of damages and in refusing to admit testimony concerning an alleged oral addendum to the oil and gas lease. We affirm the judgment of the trial court.

Royal entered into an oil and gas lease with Mr. and Mrs. Foster covering 320 acres of land in McMullen County. The lease was for depths between 7,000 feet and 12,500 feet. At the insistence of the Fosters, Royal released the depths below 9,650 feet. The Fosters subsequently entered into an oil and gas lease with Maxvill covering 80 acres of the tract from a depth of 9,650 feet to 9,800 feet. That lease contained a provision requiring Maxvill to begin drilling a well on or before August 23, 1982. Maxvill sought and obtained a permit to drill a well from the Railroad Commission of Texas which was granted on August 4, 1982. After the Commission granted the permit, but before drilling operations began, Royal filed a protest with the Commission seeking to cancel the permit. On August 23, 1982, the same day the Foster-Maxvill lease was to expire, Royal withdrew its previously filed protest. No well was drilled and the lease expired under its own terms.

Royal subsequently re-leased those particular depths from the Fosters, and drilled a well on the same location into the same zone for which Maxvill had obtained the permit. From 1983 through the date of trial, Royal produced oil and gas from that well. Maxvill sued Royal alleging that Royal had tortiously interfered with its oil and gas lease by filing a protest with the Commission. Maxvill argues that Royal's protest prevented it from drilling its planned well within the time period their lease required. At the close of Maxvill's evidence, the trial court granted a directed verdict. Maxvill appeals from the take-nothing judgment.

By its first point of error, appellant contends the trial court erred in granting the motion because there was some evidence of lost profits. In reviewing a directed verdict, we must view the evidence in the light most favorable to the party against whom the verdict was rendered and disregard all contrary evidence and inferences. Qantel Business Syss. v. Custom Controls, 761 S.W.2d 302, 303-04 (Tex.1988); Saenz v. Starry, 774 S.W.2d 730, 731 (Tex.App.--Corpus Christi 1989, writ denied). If we determine that there is any evidence of probative value which raises a material fact issue, then the judgment must be reversed and remanded for the jury's determination of that issue. Qantel, 761 S.W.2d at 303-04; Saenz, 774 S.W.2d at 731.

Generally, the basic measure of actual damages for tortious interference with a contract is the same as the measure of damages for the breach of the contract. American Nat'l Petroleum Co. v. Transcontinental Gas Pipe Line Co., 34 Tex.Sup.J. 20, 23, 798 S.W.2d 274, 278 (October 10, 1990); Capital Title Co. v. Donaldson, 739 S.W.2d 384, 391 (Tex.App.--Houston 1987, no writ). The court attempts to put the plaintiff in the same economic position that he would have been in had there been no breach or interference with the contract. Transcontinental, 34 Tex.Sup.J. at 23, 798 S.W.2d at 278. Appellant, in its pleadings, sought to recover for "net profits" that were lost due to Royal's alleged tortious interference with an oil and gas lease. Appellant concedes that the measure of damages in this case are lost profits. When a party undertakes to prove a certain type of damage, the burden is on that party to prove certain costs that are inherent in that particular measure of damage. See, e.g., Vance v. My Apartment Steak House, 677 S.W.2d 480, 482 (Tex.1984); Xonu Intercontinental Indus. v. Stauffer Chem. Co., 587 S.W.2d 757, 759-60 (Tex.Civ.App.--Corpus Christi 1979, no writ).

To recover for lost profits, sufficient evidence must be presented to enable the jury to determine the net amount of profit with reasonable certainty. Frank B. Hall & Co. v. Beach, Inc., 733 S.W.2d 251, 258 (Tex.App.--Corpus Christi 1987, writ ref'd n.r.e.); Popkowsi v. Gramza, 671 S.W.2d 915, 918 (Tex.App.--Houston [1st Dist] 1984, no writ). While it is not necessary for lost profits to be established with certainty, evidence of lost profits must be based upon objective data from which the loss can be determined with a reasonable degree of exactness. Southwest Battery v. Owen, 131 Tex. 423, 115 S.W.2d 1097, 1099 (1938); Hall, 733 S.W.2d at 258.

In Stauffer, a farmer brought suit against a chemical company for damages to his crop. Stauffer, 587 S.W.2d at 757. The trial court directed a verdict against the farmer because there was no evidence of damages. In affirming the trial court, this Court held that the proper measure of damages for lost crops is the market value of the crop minus the cost of harvesting and marketing. Id. at 759-60; see also International Harvester Co. v. Kesey, 507 S.W.2d 195, 197 (Tex.1974). In Kesey, the Texas Supreme Court held that the measure of damages for...