Placid Oil Co., Matter of, No. 90-1802

• Court: United States Courts of Appeals. United States Court of Appeals (5th Circuit)
• Writing for the Court: Before THORNBERRY, JOLLY, and SMITH; JERRY E. SMITH
• Citation: 932 F.2d 394
• Parties: In the Matter of PLACID OIL COMPANY, Debtor. PROFESSIONAL GEOPHYSICS, INC., Appellant, v. PLACID OIL CO., Appellee.
• Decision Date: 31 May 1991
• Docket Number: No. 90-1802

Page 394

932 F.2d 394 20 Fed.R.Serv.3d 927 In the Matter of PLACID OIL COMPANY, Debtor.
PROFESSIONAL GEOPHYSICS, INC., Appellant,
v.
PLACID OIL CO., Appellee. No. 90-1802. United States Court of Appeals,
Fifth Circuit. May 31, 1991.

Page 395

Rufus Wallingford, Thomas C. Godbold, Houston, Tex., for appellant.

Khent H. Rowton, Wright & Rowton, Dallas, Tex., for appellee.

Appeal from the United States District Court for the Northern District of Texas.

Before THORNBERRY, JOLLY, and SMITH, Circuit Judges.

JERRY E. SMITH, Circuit Judge:

Appellant Professional Geophysics, Inc. (PGI), a producer of seismic data, filed an administrative claim in bankruptcy court against appellee/debtor Placid Oil Co. (Placid), claiming that Placid had used its data without paying for it. The bankruptcy court granted summary judgment in favor of Placid, holding that PGI's claim was barred by the statute of limitations in that if it had exercised reasonable diligence, PGI would have known, within the limitations period, that Placid was using its information. The district court affirmed, and PGI now appeals.

I.

The parties do not dispute the facts and agree that the substantive issues are governed by Texas law. PGI obtains seismic data and sells it to oil companies for use in oil and gas exploration. From 1979 through 1983, PGI organized a series of seismic-data-gathering projects, or "group shoots," in which several oil companies

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shared the cost of acquiring seismic data in exchange for exclusive access to that data. Each company that participated in a group shoot agreed not to transfer the data to outside companies.

Hunt Energy Corporation (Hunt) was one of the group shoot participants. Beginning in 1979, Hunt duplicated the PGI data and furnished a copy to Placid's geophysicists. Placid was not affiliated with Hunt and was not a group shoot participant. Placid knew that Hunt had signed a secrecy covenant.

In 1983, Hunt closed its office and moved its PGI seismic data to Placid's data room in Placid's offices in Jackson, Mississippi. On July 11, 1983, Durwood Craft, a geophysicist who worked for Placid, sent the following letter to Jerry Hardin, a geophysicist employed by PGI:

As of July 1, 1983, Hunt Energy Corporation was merged with Placid Oil Company. The Jackson office is no longer responsible for operations in North Louisiana and Southern Arkansas.

Therefore, please ship all other North Louisiana-Southern Arkansas data to:

Mr. Don Hickey

Placid Oil Company

3900 Thanksgiving Tower

Dallas, Texas 75201

After receiving the letter, PGI began to transfer its data directly to Placid in Dallas, but the letter was in error: Hunt in fact had not merged with Placid.

Placid filed for bankruptcy in August 1986. PGI states that it first discovered, in November 1986, that Placid wrongfully had obtained and used its data; it then brought its administrative claim. In 1987, Placid transferred PGI's data to another corporation, Prosper Energy Corporation. In June 1988, PGI learned of this exchange and amended its complaint to include this new fact.

After conducting hearings on PGI's administrative claim, the bankruptcy court granted Placid's motion for summary judgment. The court held that PGI knew in 1983 that Placid had its data and with reasonable diligence could have known that Placid's possession was wrongful. The court therefore held that the conversion action was barred by a two-year statute of limitations. See Tex.Civ.Prac. & Rem.Code Ann. Sec. 16.003 (Vernon 1986). The district court affirmed, noting that a reasonably prudent person with PGI's knowledge would have made an inquiry that would have revealed Placid's wrongful possession. PGI now appeals.

II.

A.

Under Fed.R.Civ.P. 56(c), summary judgment is proper if there is no genuine issue of material fact and the moving party is entitled to judgment as a matter of law. See Anderson v. Liberty Lobby, Inc., 477 U.S. 242, 250, 106 S.Ct. 2505, 2511, 91 L.Ed.2d 202 (1986). Ordinarily, we review the evidence de novo to determine whether summary judgment was appropriate, and we do not affirm a summary judgment unless "we are convinced, after an independent review of the record, that 'there is no genuine issue as to any material fact' and that the movant is 'entitled to a judgment as a matter of law.' " Brooks, Tarlton, Gilbert, Douglas & Kressler v. United States Fire Ins. Co., 832 F.2d 1358, 1364 (5th Cir.) (quoting rule 56(c), clarified, 832 F.2d 1378 (5th Cir.1987) (per curiam)). Placid, however, suggests that a more deferential clearly-erroneous standard of review is appropriate in a nonjury case and that a court appropriately may draw inferences from the evidence in a bench trial, even when considering a motion for summary judgment.

PGI argues that the bankruptcy court went beyond the scope of a summary judgment proceeding by weighing the evidence before it, and that the bankruptcy court could not have granted Placid's motion for summary judgment unless the court had found that the letter notifying PGI of the purported merger did not prevent PGI from exercising reasonable diligence. PGI thus argues that the question involving the reasonableness of its actions requires a factual determination that may not be made at

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the summary judgment stage of the proceedings.

In support of its contention, PGI directs our attention to that portion of Liberty Lobby that states that "[c]redibility determinations, the weighing of the evidence, and the drawing of legitimate inferences from the facts are jury functions, not those of a judge, whether he is ruling on a motion for summary judgment or for a directed verdict." 477 U.S. at 255, 106 S.Ct. at 2513. Placid responds that the Court could not have meant this admonition to apply in nonjury cases and directs us to decisions within our own circuit that have articulated a more lenient standard for summary judgment following bench trials.

Placid specifically refers to our opinion in Phillips Oil Co. v. OKC Corp., 812 F.2d 265, 273 n. 15 (5th Cir.), cert. denied, 484 U.S. 851, 108 S.Ct. 152, 98 L.Ed.2d 107 (1987), in which we acknowledged that we already "arguably" have created different summary judgment standards to apply in, respectively, jury and nonjury cases. We analyzed a number of opinions from this court holding that the standard for summary judgment in nonjury cases mirrors the standard for involuntary dismissal under Fed.R.Civ.P. 41(b).

Among the cases cited, 812 F.2d at 273 n. 15, is Professional Managers, Inc. v. Fawer, Brian, Hardy & Zatzkis, 799 F.2d 218 (5th Cir.1986). There we acknowledged that the Court in Liberty Lobby had equated the standard for summary judgment with the standard for directed verdict under Fed.R.Civ.P. 50(a); thus we stated that "in the same fashion, in nonjury cases [the summary judgment standard] mirrors the standards for dismissals provided by Rule 41(b)." Id. at 223. Unlike the standard for directed verdict under Rule 50(a), the standard under Rule 41(b) appears to allow a court to weigh evidence...