Morriss v. Enron Oil & Gas Co.

• Decision Date: 14 May 1997
• Docket Number: No. 04-95-00915-CV,04-95-00915-CV
• Citation: 948 S.W.2d 858
• Parties: William L. MORRISS, Individually and as Trustee for the Thomas A. Morriss Trust, Appellant, v. ENRON OIL & GAS COMPANY, Appellee.
• Court: Texas Court of Appeals

Page 858

948 S.W.2d 858

William L. MORRISS, Individually and as Trustee for the Thomas A. Morriss Trust, Appellant, v. ENRON OIL & GAS COMPANY, Appellee.

No. 04-95-00915-CV.

Court of Appeals of Texas San Antonio.

May 14, 1997.

Lloyd A. Muennink, Austin, for Appellant.

Cary V. Sorensen, Kriste K. Sullivan, Stanley B. Broussard, Christopher W. Barnes, Britt K. Davis, Enron Litigation Unit, Houston, J. Jeffers Spencer, Enron Oil & Gas Company, Senior Counsel, Houston, for Appellee.

Before HARDBERGER, C.J., and GREEN and ANTONIO G. CANTU, ¹ JJ.

OPINION

ANTONIO G. CANTU, Justice (Assigned).

William L. Morriss, individually and as trustee for the Thomas A. Morriss Trust [Morriss], brought suit against Enron Oil & Gas Company [Enron] alleging causes of action for negligence, gross negligence, fraud, and conversion as a result of Enron's failure to make royalty payments to the proper party. The trial court granted Enron's Motion for Summary Judgment on the grounds that Morriss had failed to file his lawsuit before the applicable statute of limitations barred his claims.

We affirm.

Procedural History of the Case

Morriss filed suit against Enron on December 22, 1993 alleging, in his Original Petition, that Enron had negligently made royalty payments contrary to the provisions in a division order which required that payments be made to him, individually and as trustee, and to Thomas A. Morriss, Jr., individually and as trustee, and not to "Morriss Brothers."

The petition then listed numerous allegations of alleged gross negligence said to have caused monetary damages exceeding $60,000. Morriss claimed the alleged mispayments occurred between June 10, 1987 and November 11, 1988.

Enron answered on January 27, 1994 with a general denial and the affirmative defense of limitations. Two weeks later, on February 11, 1994, Enron filed its Motion for Summary Judgment based on the four year statute of limitations. TEX. CIV. PRAC. & REM.CODE ANN. § 16.004 (Vernon 1986). ² The motion denominated Morriss's cause of action as an action for breach of contract and sought summary judgment on the pleadings alone. The motion was, therefore, not supported by any summary judgment evidence or affidavits. See Alice Roofing & Sheet Metal Works v. Halleman, 775 S.W.2d 869, 870 (Tex.App.--San Antonio 1989, no writ).

Enron's Motion for Summary Judgment was set for hearing on March 29, 1994. On March 22, 1994, Morriss filed his First Amended Original Petition, and once again alleged various instances of alleged negligence and gross negligence. Morriss also alleged a violation of a duty, arising from Enron's status as lessee/assignee under the division order, to exercise ordinary care in the payment of royalties. Moreover, Morriss asserted a cause of action for conversion, said to arise from the underlying allegations of mispayment. Morriss further asserted a demand and refusal date of September 10, 1992. ³ The damages alleged to have been sustained by virtue of the conversion were the same amount, in excess of $60,000. The amended petition also alleged fraud and prayed for exemplary damages. Contemporaneous with the filing of his First Amended Original Petition, Morriss filed his response to Enron's Motion for Summary Judgment. In his response, Morriss pointed out that his causes of action were couched in terms of negligence, gross negligence, and conversion, and not in contract. Moreover, Morriss asserted the discovery rule as an impediment to Enron's limitations defense.

On March 29, 1994, Enron filed its objections to Morriss's amended petition with an accompanying motion to strike Morriss's First Amended Original Petition, alleging that the amended petition was filed six days before the scheduled hearing on the motion for summary judgment without first obtaining leave of court, as required by Rule 63 of the Texas Rules of Civil Procedure. ⁴ Enron further complained of the new causes of action being alleged in the amended petition. At a hearing conducted on the same day, the trial court overruled Enron's motion to strike and granted Morriss leave to amend his petition. No order setting Enron's Motion for Summary Judgment is apparent from the record; nevertheless, on April 25, 1994, the trial court granted a partial summary judgment, to wit:

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It is therefore ordered that summary judgment be and it is hereby granted in favor of the Defendant Enron Oil & Gas Company that William L. Morriss, Individually and as Trustee, take nothing on any claim that Enron Oil & Gas Company has breached any contractual obligation under any lease, division order, or transfer order by failing to pay royalty on production of oil or natural gas to William L. Morriss either individually or as Trustee, for any period of production prior to December 22, 1989, being four years before this suit was filed, because all such contractual claims are barred by the four year statute of limitations.

This judgment is partial in that the claims of the Plaintiff William L. Morriss, individually and as Trustee which allege an entitlement to damages against Defendant Enron Oil & Gas Company based on theories of negligence, gross negligence, conversion, and fraud are not ruled upon but shall be addressed and resolved in the due course of this proceeding.

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Enron subsequently filed its Motion for Final Summary Judgment on October 26, 1994. Enron alleged that all of the remaining claims sounded in contract only and were, likewise, barred by the statue of limitations, even if they were to be considered torts, because "Morriss knew or should have known, in the exercise of reasonable diligence of the only event giving rise to his tort claims long before suit was filed in December 1993."

The summary judgment evidence attached to Enron's Motion for Final Summary Judgment consists of the following items:

(1) A letter from William L. Morriss and Thomas A. Morriss dated March 28, 1984 to Houston Natural Gas Oil Company, c/o Ted Bedford requesting that direct deposits be made to the First State Bank of Uvalde, Morriss Brothers Special Account # 72-10-800, on the following payee numbers:

Thomas A. Morriss--Payee # 4792, # 4784 and # 4782

William L. Morriss--Payee # 4791, # 4783 and # 4781;

(2) Cancelled endorsed checks payable to the First State Bank of Uvalde, Account Morriss Brothers # 72-10-800, dated 6-10-87, 7-10-87, 8-10-87, 9-10-87, 11-11-87, 12-14-87, 1-12-88, 2-12-88, and 3-11-88;

(3) A letter dated February 20, 1987 from Thomas A. Morriss to Enron Oil and Gas Company requesting that Enron mail his checks directly to him at the following address:

Morriss Brothers

Post Office Box 1490

Uvalde, Texas 78802-1490;

(4) Cancelled endorsed checks payable to Morriss Brothers dated 4-12-88, 5-12-88, 6-11-88, 7-11-88, 8-12-88, 9-12-88, 10-12-88, and 11-11-88;

(5) A memo dated September 10, 1992 from William L. Morriss to Robert McCommon regarding the royalty income due to William L. Morriss individually and as trustee for the period from March 26, 1987 through an unspecified date represented by a sale to American Exploration, Inc. of all wells in which Morriss had an interest;

(6) Copies of documents recorded in the Deed of Trust records of Sutton County, Texas, including a release of lien dated June 3, 1991 executed by the Resolution Trust Corporation acknowledging the discharge of certain debts and obligations of Thomas A. Morriss, Jr. and W.L. Morriss; and

(7) The unsigned and unexecuted affidavit of William L. Morriss regarding royalty payments allegedly mispaid, which contained the following statement:

I always believed until August, 1991, that all payments of royalty were being mailed to and applied to an outstanding loan balance at San Antonio Savings and Loan Association, Loan No. 21940.

On or about September 10, 1992, I notified the Defendant that they had been sending my royalty checks to an improper account. At that time I demanded that the Defendant return said royalty payments to me. The Defendant refused to return said royalty payments to me.

Enron's Motion for Final Summary Judgment was set for disposition on November 22, 1994. Morriss, however, filed his Motion for Continuance on November 14, 1994 complaining of lack of meaningful discovery. Additionally, he sought to disqualify counsel for Enron by a motion filed the same day. He also filed his response to Enron's Motion for Final Summary Judgment, with a brief in support.

The response consisted primarily of complaints regarding Morriss's inability to conduct discovery and alleged unfairness in being subjected to summary judgment absent meaningful discovery. The response further incorporated certain responses by Enron to propounded Requests for Admission with general complaints and objections to individual items in Enron's exhibits attached to its Motion for Final Summary Judgment. Correspondence between counsel for both parties detailing problems in obtaining discovery was also attached to Morriss's response, together with Morriss's affidavit asserting the following:

* * * * * *

6. I always believed, until August, 1991, that all payments of my royalties were being mailed to and applied to an outstanding loan balance at San Antonio Savings and Loan Association, Loan No. 21940.

7. In August, 1991, I suspected that something was wrong with payment of my royalties by American Exploration Company when they sent me two division orders.

8. At that time I began to investigate the payment of my royalties by American Exploration Company.

9. I wrote a letter to Enron Oil & Gas Company on September 10, 1992 asking them to research my royalty payments after I suspected that maybe Enron Oil & Gas Company had also been mispaying my royalties. (See my letter dated September 10, 1992 to Mr. Robert McCommon of Enron Oil & Gas Company attached to this affidavit, which is a true and correct copy of the original letter).

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All of Morriss's motions were scheduled to be heard on November 22,...