OKC Corp. v. UPG, Inc.

• Decision Date: 22 August 1990
• Docket Number: No. 05-89-00647-CV,05-89-00647-CV
• Citation: 798 S.W.2d 300
• Parties: OKC CORP. & OKC Corp. Liquidating Trust, Appellants, v. UPG, INC., Appellee.
• Court: Texas Court of Appeals

Page 300

798 S.W.2d 300

OKC CORP. & OKC Corp. Liquidating Trust, Appellants, v. UPG, INC., Appellee.

No. 05-89-00647-CV.

Court of Appeals of Texas Dallas.

Aug. 22, 1990.

Rehearing Denied Oct. 31, 1990.

David C. Musselwhite, Laura L. Rodenburg, Lisa S. Gallerano, Dallas, for appellants.

Stephen R. Anderton, Frank G. McDonald, John R. Guittard, Dallas, for appellee.

Before McCLUNG, LAGARDE and OVARD, JJ.

OPINION ON MOTION FOR REHEARING

OVARD, Justice.

Our prior opinion dated June 20, 1990, is hereby withdrawn, and the following opinion is substituted in its place on both OKC's and UPG's motions for rehearing.

OKC Corporation and OKC Corporation Liquidating Trust (OKC) appeal from an adverse judgment, rendered after a jury trial, in favor of UPG, Inc. OKC raises forty-two points of error on appeal, partially reiterated in ten counterpoints, which address issues involving: bailiff misconduct, enforceability of contracts, sufficiency of the evidence, exclusion and admission of certain testimony and exhibits, objections to and requests for submitted questions and instructions in the charge to the jury, and the award of prejudgment interest. UPG responds and raises two cross-points of error on appeal. Finding no merit in any of OKC's points of error or UPG's cross-points, we affirm the judgment of the trial court.

OKC Corporation, succeeded by OKC Corporation Liquidating Trust, first began transactions with UPG in 1977. UPG supplied crude oil to OKC for the operation of OKC's refinery at Okmulgee, Oklahoma. The transactions were evidenced by certain written agreements, one of which is the subject of this lawsuit. Pursuant to the March 1979 document, the subject of this lawsuit, UPG delivered various quantities of crude oil, which OKC accepted, to OKC's refinery at Okmulgee, Oklahoma. These deliveries, in varying quantities, occurred on a monthly basis until OKC decided, pursuant to its liquidation process, to sell off some of its refinery-related subsidiaries and their stock and assets. Effective January 2, 1981, Basin Refining, Inc. (BRI) purchased OKC's Okmulgee refinery and its related assets. Thereafter, UPG began delivering crude oil to BRI as it had done for OKC when OKC owned and operated the Okmulgee refinery. In May of 1981, UPG delivered crude oil to BRI for which BRI did not pay. After unsuccessful attempts to collect from BRI, UPG approached OKC for payment, contending that OKC merely assigned the 1979 March document to BRI. UPG's position is that even though OKC sold its refinery and related assets to BRI, OKC still retained the right to crude oil delivery as well as the associated obligation of payment for crude oil delivered, because the March 1979 document was assigned and not sold to BRI. Thus, UPG maintains that, pursuant to the general law of assignments, OKC was secondarily liable for payment for the crude oil deliveries and since BRI was unable to pay, OKC must now pay for the crude oil delivered to BRI. It is OKC's position that when it sold its refinery and related assets, it completely divested itself from refinery operations, including any obligations for payment of crude oil pursuant to the March 1979 document. Further, OKC argues that the March 1979 document was not a contract, but merely an agreement to agree at a later date for future crude oil transactions. OKC places great emphasis on the fact that the March 1979 document fails to mention a specific quantity of crude oil that shall be delivered by UPG to BRI each month. In light of the aforementioned factual background giving rise to this suit, we now address OKC's arguments.

BAILIFF MISCONDUCT

In points of error one and two, OKC argues that certain actions by the bailiff, Donna Peden, during the jury deliberation process, constituted misconduct of such a grave nature as to warrant a reversal. Additionally, OKC contends that the trial judge, in whose court the alleged misconduct occurred, abused his discretion in not recusing himself from the bailiff misconduct hearing. Specifically, OKC directs our attention to the fact that during deliberation, a question arose concerning the meaning of "mitigation of damages" and "failure to mitigate" as employed in the charge. A note was prepared by the presiding juror and shown to the bailiff. Instead of passing the note to the judge for his decision, the bailiff told the jurors that if any of the terms used in the charge had a specific legal meaning, those words would have been defined in the charge. The bailiff then stated that for undefined words, the jurors were supposed to use the common, ordinary, and everyday meaning of the words.

In order to obtain a new trial on the basis of juror or bailiff misconduct, the complaining party must show: (1) that the misconduct occurred; (2) that it was material; and (3) that, based on the record as a whole, the misconduct probably resulted in harm to the complainant. Redinger v. Living, Inc., 689 S.W.2d 415, 419 (Tex.1985); Flores v. Dosher, 622 S.W.2d 573, 574 (Tex.1981); Baker Marine Corp. v. Weatherby Engineering Co., 710 S.W.2d 690, 691 (Tex.App.--Corpus Christi 1986, no writ); TEX.R.CIV.P. 327(a). The alleged misconduct occurred during the deliberation process, prior to any voting. Specifically, while discussing question number six concerning mitigation of damages, some confusion arose regarding the meaning of "mitigate," as used in the question. The question reads as follows:

QUESTION NO. 6

Did UPG fail to mitigate its damages, if any, resulting from Basin's failure to pay for crude oil delivered in May, 1981?

Answer "Yes" or "No."

ANSWER: No

The burden of proof for this question is on OKC.

In answering this question you are instructed that a party who has sustained damages from a breach of contract has a duty to use reasonable diligence to minimize its damages, but is not required to sacrifice a substantial right of its own. The duty to minimize damages does not arise until the injured party has notice of a breach or repudiation of the contract.

A note was prepared by the presiding juror, Linda Yohe, to show the bailiff the juror's concern regarding certain words used in the question. The note reads as follows: "We are in disagreement as to the definition of the word 'mitigate' and as to its use in the phrase 'fail to mitigate.' " Regarding the conversation and conduct between Linda Yohe, the presiding juror, and Donna Peden, the bailiff, concerning the mitigation note, the record reflects that, at the hearing on OKC's motion for new trial, Yohe testified that, "I had the note in my hands and had it opened and she [Peden] read the note." Yohe continued, "I don't recall if it [the note] was--actually passed hands, whether she actually took full possession of it. I know she read the note." Later Yohe concluded:

I still had the note in my possession, and that's why I said I don't recall if when I gave her--I feel certain that because I ended up with it, that she read it while I was holding it in my hand, I feel fairly certain, but that's still kind of fuzzy. But I ended up with the note.

Yohe later stated that Peden never refused to deliver a note from the jury to the court. Specifically, in Yohe's affidavit, contained in a supplemental transcript in the record, she swore that, "[c]oncerning the mitigation question, the bailiff did not refuse to submit the mitigation note to the judge. After the discussions described in my previous affidavit, the jurors decided it was not necessary to send the note to the Court." From the above-referenced evidence contained in our record, we determine that even if there was an actual, physical delivery of the mitigation note by Yohe to Peden, a subject on which Yohe seems ambivalent at best, Peden never refused to and was not requested to deliver the note to the court.

According to the affidavit of Yohe, the bailiff read the note and asked the jurors if they knew what the words meant. After some jurors responded affirmatively, the bailiff told the jurors to use the common meaning of the word. The bailiff continued by stating that if the word had a particular legal meaning, it would have been defined in the charge. Because it was not explicitly defined, the bailiff told the jurors to use the common meaning of the word and not to make it (the deliberation process) harder than it had to be.

At the commencement of the charge appears the following admonition:

If words are used in the questions in a sense which varies from the meaning commonly understood, you will be given in this charge the proper legal definition for such words, which you are bound to accept in place of any other definition or meaning....

We consider the words that follow question number six as more of an explanatory instruction rather than a proper legal definition, considering the language used in that instruction as well as the more explicit language used in the definition of other terms in the charge such as "preponderance of the evidence," "waiver," and "constructive knowledge." Having so characterized the explanatory instruction, we treat the bailiff's advice to the jurors as merely a paraphrasing of the admonition which appears at the beginning of the charge.

We determine, as the trial court found, that the action of the bailiff constituted misconduct, and that it was material. Our next inquiry is whether probable harm resulted to the complainant. Redinger, 689 S.W.2d at 419. To prove that probable harm resulted, the record must affirmatively reflect that the alleged misconduct most likely caused a juror to vote differently than he "would otherwise have done on one or more issues vital to the judgment." Id. at 419 (quoting Mrs. Baird's Bread Co. v. Hearn, 157 Tex. 159, 163-64, 300 S.W.2d 646, 649 (1957)). Probable harm has not occurred where "the evidence is such that ... the jury would in all probability have rendered the same verdict that was rendered here,...." Fountain v. Ferguson, 441 S.W.2d 506, 508 (Tex.1969) (quo...