Moore v. Jet Stream Inv.S

• Citation: 315 S.W.3d 195
• Decision Date: 03 June 2010
• Docket Number: No. 06-09-00106-CV.,06-09-00106-CV.
• Parties: Jeff MOORE, d/b/a T & M Production, Appellant, v. JET STREAM INVESTMENTS, LTD., Sara P. Rudd, Executrix of the Estate of J.B. Rudd, and Youngblood Properties, L.P., Appellees.
• Court: Court of Appeals of Texas

315 S.W.3d 195

Jeff MOORE, d/b/a T & M Production, Appellant,

v.JET STREAM INVESTMENTS, LTD., Sara P. Rudd, Executrix of the Estate of J.B. Rudd, and Youngblood Properties, L.P., Appellees.

No. 06-09-00106-CV.

Court of Appeals of Texas, Texarkana.

Submitted May 17, 2010.

Decided June 3, 2010.

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James P. Finstrom, Jefferson, for appellant.

Dean A. Searle, Marshall, for appellees.

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

OPINION

Opinion by Justice MOSELEY.

I. FACTUAL AND PROCEDURAL BACKGROUND

In its inception, this case involved a dispute between Jeff Moore, d/b/a T & M Production (who had been the holder of the oil and leasehold estate of certain realty in Harrison County, Texas) and Jet Stream Investments, LTD, et al. (the holder of the interests which had been subject to the oil and gas lease), wherein it had been alleged that the oil and gas lease had terminated under the terms of the lease for want of production.¹ The case was instituted and tried as an action for declar- atory judgment.² After a bench trial, the trial court awarded judgment in favor of Jet Stream, including damages in the amount of $94,752.54, plus attorney's fees.³On appeal, this Court held, inter alia, that the trial court erred in awarding damages measured by gross revenue from oil sales, and determined that Jet Stream's recovery should be measured by net revenue from oil sales.⁴ As a result of that determination, while affirming the finding that the lease had terminated, we reversed the award of damages and remanded that portion of the case to the trial court for further proceedings consistent with our opinion that Jet Stream's recovery should be limited to damages for good-faith trespass (i.e., the value of the minerals produced minus drilling and operating costs).⁵

We further recognized that should the recovery by Jet Stream be substantial ly different when a different determination of the measure of damages is employed, this could also substantially impact the trial court's determination of the fairness of the attorney's fee award. In this regard, Moore maintained that because he obtained some relief on rehearing before this Court, "the award of attorney's fees for appeal should either be set aside or awarded to both Appellant and Appellee." ⁶We recognized that under the facts of this case, even though the trial court's award of attorney's fees would not be an abuse of discretion, the trial court might choose to exercise its discretion differently in light of our opinion. Moore, 261 S.W.3d at 432. We, therefore, reversed that portion of the judgment awarding attorney's fees to Jet Stream and remanded that portion of the case to the trial court to determine whether, in light of our opinion, an award of such fees to Jet Stream is "equitable and just." Id.

Upon remand, the trial court conducted a trial on June 17, 2009, in which it heard evidence related solely to the issue of damages and attorney's fees, per this Court's mandate dated January 15, 2009. On July 7, 2009, the trial court wrote a letter to counsel for all litigants which outlined its findings with respect to damages and attorney's fees, in accord with the opinion of this Court. Thereafter, on August 4, 2009, Moore filed a motion to reopen the presentation of evidence, which motion was denied after hearing by the trial court. The final judgment upon remand, issued August 21, 2009, awarded Jet Stream damages in the amount of $50,847.16, representing the net value of the revenues produced.⁷ The judgment further awarded attorney's fees to Jet Stream in the amount of $10,000.00 for fees incurred "in the pursuit of this cause" together with contingent attorney's fees on appeal.

II. ISSUES ON APPEAL

On appeal, Moore raises five issues, claiming that the trial court erred in the following respects: (1) when it denied Moore's motion to reopen evidence to correct the market value of oil produced; (2) when it failed to include the cost of a letter of credit (which was required by the Texas Railroad Commission (Commission) as a condition of resuming production) as a part of the operating costs to be deducted from gross revenues; (3) in its determination of the value of minerals produced; (4) in failing to give Moore credit on the judgment for sums previously paid to Jet Stream and for sums held in suspense by Plains Marketing; and (5) in failing to reform the final judgment on remand to reflect the award of attorney's fees as set forth in the trial court's July 7, 2007, letter to counsel. We affirm the judgment of the trial court.

A. The Trial Court Appropriately Exercised Its Discretion in Denying Moore's Motion to Reopen the Evidence

Moore maintains that he discovered, subsequent to the hearing, that the total gross revenue figure presented by Jet Stream at the hearing was incorrect. While Moore concedes that twelve days prior to the hearing, Jet Stream produced the market value figures it relied upon at trial, he only realized the inaccuracy of those figures when he received records from Plains Marketing⁸ subsequent to the hearing.

The primary purpose of the mandated hearing was to determine damages for a good-faith trespass the value of the minerals minus drilling and operating costs. Id. at 430. Jet Stream offered evidence that the total gross revenue derived from oil production during the pertinent time period was $153,158.87. Kenneth Frazier, an expert witness called by Jet Stream, testified that the information he employed to determine total gross revenue was obtained from the Commission. Frazier explained that the total figure represented the value of the oil that was actually produced, as opposed to the value of the oil actually sold. Said another way, "total gross revenue" represents the amount of production of oil from the well multiplied by a standard and recognized market value for oil.⁹ Finally, Frazier testified that Moore did not receive the entire $153,-158.87 the value of the oil produced because oil produced from March 2008 through September 2008 remains in storage on location.

In his motion to reopen evidence and on appeal, Moore contends that the records from Plains Marketing, which reflect the purchase price of the oil sold to it, contradict the figures introduced at trial.¹⁰ Moore claims the court erred in failing to reopen the evidence to permit the error in mineral value to be corrected.

In a bench trial, the trial court may permit either party to offer additional evidence at any time when it clearly appears to be necessary to the due administration of justice. Tex.R. Civ P. 270; In re Estate of Huff, 15 S.W.3d 301, 308 (Tex.App.-Texarkana 2000, no pet.). A trial court's discretion to permit additional evidence "should be exercised liberally to allow both parties to fully present their case." Ex parte Stiles, 950 S.W.2d 444, 446 (Tex.App.-Waco 1997, no writ). We review a trial court's decision to permit additional evidence under an abuse of discretion standard. In re J.A.H., 996 S.W.2d 933, 935 (Tex.App.-Waco 1999, no pet.). The test for abuse of discretion is whether the court acted without reference to guiding rules and principles. Cire v. Cummings, 134 S.W.3d 835, 838-39 (Tex. 2004). In deciding whether to permit additional evidence, a trial court may consider (1) whether the movant showed due diligence in obtaining the evidence; (2) whether the additional evidence is decisive; (3) whether reopening the evidence will cause undue delay; and (4) whether reopening the evidence will cause injustice. Huff, 15 S.W.3d at 308.

We now apply these factors to the facts of this case to determine if the trial court acted within its discretion in denying Moore's motion to reopen.

(1) Due Diligence

The hearing concluded June 17, 2009. On July 7, 2009, the trial court wrote a letter to counsel advising of its ruling on the merits. Moore's motion to reopen the evidence was filed August 4, 2009. Moore contends that even though the motion was filed in August after trial in June, due diligence was exercised because he was not aware of the discrepancy in the evidence on mineral value until that time.

At the hearing in June, Moore made no attempt to present independent evidence of the value of the minerals which were produced or sold. Moreover, there is no contention that the evidence Moore sought to introduce via his motion to reopen was unavailable to him at the time of trial. Indeed, it appears that this evidence was readily available to Moore prior to trial. Counsel for Moore was candid in advising the court at the motion to reopen that there was access to this evidence "all along." When asked about the availability of the records regarding mineral value, O'Bannon (the sponsoring witness of the evidence in question) confirmed that such records were available at the time of tri- al.¹¹ Likewise, Moore does not dispute the availability of that evidence at the time of trial.¹² Given these facts, we are compelled to conclude that there has been a failure to show diligence in attempting to produce the evidence in a timely fashion. Where the party seeking to reopen has not shown such diligence, a trial court does not abuse its discretion by refusing to reopen a case after evidence is closed. McNamara v. Fulks, 855 S.W.2d 782, 784 (Tex.App.-El Paso 1993, no writ).

(2) Decisive Evidence

Frazier testified that the value of the production for the pertinent time period was $153,158.87. This evidence was undisputed at trial.¹³ O'Bannon testified at the hearing on motion for new trial that the value of the minerals it purchased (as opposed to the value of the minerals actually produced) was $146,730.22. This figure represents the value of the minerals purchased by Plains Marketing, while the value proffered by Frazier represents the value of total production. Moreover, there is no dispute that oil was produced, but not sold, between March and September 2008. The uncontroverted evidence admitted at trial reflects the value of...