R.R. Comm'n of Tex. v. Gulf Energy Exploration Corp.

• Decision Date: 29 May 2014
• Docket Number: No. 13–12–00252–CV.,13–12–00252–CV.
• Citation: 480 S.W.3d 570
• Parties: RAILROAD COMMISSION OF TEXAS, Appellant, v. GULF ENERGY EXPLORATION CORPORATION, Appellee.
• Court: Texas Court of Appeals

480 S.W.3d 570

RAILROAD COMMISSION OF TEXAS, Appellant,

v.GULF ENERGY EXPLORATION CORPORATION, Appellee.

No. 13–12–00252–CV.

Court of Appeals of Texas, Corpus Christi–Edinburg.

May 29, 2014.

Charles K. Eldred, J.R. Schneider Jr., Gaston M. Broyles Jr., for Railroad Commission of Texas.

Wanda Roberts, Kenneth R. Wynne, David E. Wynne, David Roberts, for Gulf Energy Exploration Corporation.

Before Chief Justice VALDEZ and Justices BENAVIDES and LONGORIA.

MEMORANDUM OPINION

Memorandum Opinion by Chief Justice VALDEZ.

Appellant, the Railroad Commission of Texas (the "Commission"), appeals from a jury verdict in favor of appellee, Gulf Energy Exploration Corporation ("Gulf Energy"). By three issues, the Commission contends that: (1) "[t]here was no legally binding contract on May 19 or ever"; (2) "[t]he trial court erred by instructing the jury to consider whether the [Commission's] negligence proximately caused the occurrence in question"; and (3) "the calculation of damages is wrong." We affirm.¹

I. BACKGROUND

Gulf Energy filed suit against the Commission and Superior Energy Services, L.L.C. for plugging and abandoning well 708S–5 after agreeing they would not do so. Prior to the suit, the Commission had determined that well 708S–5 had been abandoned by American Coastal Energy ("Coastal") and then ordered Coastal to plug it. Coastal filed bankruptcy. Gulf Energy, who had a lease from the Commission on the tract of land wherein the 708S–5 well was located, then agreed that it would provide a cash deposit of $400,000 to satisfy the eventual cost of plugging and abandoning the 708S–5 well, as well as other wells on the lease. Evidence was presented that the Commission agreed that if, among other things, Gulf Energy satisfied the $400,000 deposit and applied for the rescission of the Commission's plug order of the 708S–5 well, the Commission would postpone plugging it. The Commission entered into a contract with Superior to plug other wells on the same tract where the 708S–5 was located. However, no contract was entered for Superior to plug the 708S–5 well, and the evidence shows that the Commission intended to postpone plugging the 708S–5. It is undisputed that Superior wrongfully plugged the 708S–5 well due to errors in reading the map coordinates. Evidence was presented that Superior acted under direction of the Commission when it wrongfully plugged well 708S–5. The jury found that the Commission failed to comply with its agreement to postpone plugging well 708S–5 and that the Commission's negligence caused the wrongful plugging of the 708S–5 well. This appeal ensued.

II. CHARGE ERROR

By its first issue, the Commission contends that the trial court erred by submitting question one to the jury because the "question erroneously assumes that [the Commission] entered into a legally-enforceable agreement to postpone plugging the well." Question one asked, "Did the Railroad Commission fail to comply with its agreement to postpone plugging and abandoning the 708S–5?"

Without providing a legal analysis explaining why the trial court erred in submitting question one to the jury, the Commission then argues that the evidence was insufficient to support a finding that a valid and enforceable contract existed between it and Gulf.² Specifically, the Commission argues that Gulf "gave no consideration and was not bound by the 'contract.' "³ The Commission argues that "any contract would have been void and unenforceable" because the order to plug the well was not rescinded. The Commission further argues that there was a mutual mistake making the agreement void and unenforceable. Finally, the Commission argues that Gulf's and its "representatives at the May 19 meeting did not have authority to bind their employers."⁴

By its second issue, the Commission contends that question eight "should not have been submitted to the jury. Question eight states, "Did the negligence, if any, of [the Commission] proximately cause the occurrence in question?" Specifically, the Commission complains that it did not owe a duty to Gulf "other than the duty arising under the alleged contract of May 19" and a "[b]reach of duty arising only under contract cannot support a negligence claim." According to the Commission, the trial court "never identified any other duty alleged to have been breached by [the Commission], so the court should not have submitted the negligence question to the jury." In its second issue, the Commission further contends that: (1) "[t]he Legislature did not waive immunity for [Gulfs] negligent supervision claim. That claim cannot support the jury question on negligence"; (2) "[a]s a matter of law, [Gulf] had no standing to complain about the [Commission's] alleged negligent damage to well 708S–5 because at the time of the mistaken plugging, [Gulf] did not have any ownership interest in the well and was not the operator of the well"; (3) "[t]he negligence question was improper because the statutory standard of care for plugging operations under Chapter 89 of the Natural Resources Code is good faith. The standard preempts any negligence standard that may exist"; (4) the jury's answer to the complained-of question "necessarily found [the Commission] liable on a respondeat superior theory, so the question was improper" because "[t]he State is not liable in tort on a respondeat superior theory except by statute" and "[n]o statute imposes respondeat superior liability for wrongful plugging"; and (5) "[t]he trial court should have allowed evidence on Coastal's failure to have a required identification sign on the well and should have instructed the jury that Coastal was a responsible third party."

A. Standard of Review and Applicable Law

We review a trial court's decision to submit or refuse a particular instruction or question to the jury under an abuse of discretion standard. Shupe v. Lingafelter, 192 S.W.3d 577, 579 (Tex.2006). When a trial court acts in an arbitrary or unreasonable manner, or if it acts without reference to any guiding rules or principles, the trial court abuses its discretion. Moss v. Waste Mgmt. of Tex., Inc., 305 S.W.3d 76, 81 (Tex.App.-Houston [1st Dist.] 2009, pet. denied). Whether the charge submits the proper controlling issues in the case, in terms of theories of recovery or defense, is a question of law, that we review de novo. Fin. Ins. Co. v. Ragsdale, 166 S.W.3d 922, 926 (Tex.App.-El Paso 2005, no pet.).

"If an instruction might aid the jury in answering the issues presented, or if there is any support in the evidence for an instruction, the instruction is proper." La.- Pac. Corp. v. Knighten, 976 S.W.2d 674, 676 (Tex.1998) (per curiam). "An instruction is proper if it (1) assists the jury, (2) accurately states the law, and (3) finds support in the pleadings and evidence." Columbia Rio Grande Healthcare, L.P. v. Hawley, 284 S.W.3d 851, 855 (Tex.2009) ; see TEX.R. CIV. P. 277 ("In all jury cases the court shall, whenever feasible, submit the cause upon broad-form questions. The court shall submit such instructions and definitions as shall be proper to enable the jury to render a verdict."), 278 ("The court shall submit the questions, instructions and definitions in the form provided by Rule 277, which are raised by the written pleadings and the evidence."); see also Shupe, 192 S.W.3d at 579 ("When a trial court refuses to submit a requested instruction on an issue raised by the pleadings and evidence, the question on appeal is whether the request was reasonably necessary to enable the jury to render a proper verdict.").

To preserve a complaint of jury charge error for appellate review, a party must, at the risk of waiver, (1) present to the trial court a timely request, motion, or objection; (2) state the specific ground for the relief requested; and (3) obtain a ruling. TEX.R.APP. P. 33.1(a) ; In re B.L.D., 113 S.W.3d 340, 349 (Tex.2003) ("Under our procedural rules, the failure to raise a complaint at trial to a jury charge waives review of that complaint on appeal."). Requiring the preservation of error conserves judicial resources because it allows a trial court to correct an error before an appeal proceeds, and it promotes fairness among litigants. In re B.L.D., 113 S.W.3d at 350 (citing and quoting Pirtle v. Gregory, 629 S.W.2d 919, 920 (Tex.1982) (per curiam)). "A party fails to preserve error in the jury charge when that party waives, or invites, the alleged error by acquiescing to submitting a theory that the party later claims is erroneous." C.M. Asfahl Agency v. Tensor, Inc., 135 S.W.3d 768, 785 (Tex.App.-Houston [1st Dist.] 2004, no pet.) (citing 34 T. Ray Guy, The Jury Charge in Texas Civil Litigation: Texas Practice Series § 9.27 at 147 (3d ed.2003)).

B. Question One

Question one in the jury charge asked, "Did the Railroad Commission fail to comply with its agreement to postpone plugging and abandoning the 708S–5?" The Commission complains on appeal that this question "erroneously assumes that the Railroad Commission entered into a legally-enforceable agreement" with Gulf to postpone plugging the well.

1. Preservation

The Commission did not object at trial to question one on the basis it complains of on appeal. First, at the charge conference, the Commission argued as follows:

The [Commission] reserves every defense except the defense of immunity from suit without legislative permission, so if that's the reason for it then that is actually a violation of the statute that allows us to even be here. With respect to—we'd also object to the failure to have a formation question with regard to the contract for the reasons we stated on the direct[ed] verdict.

We'd also say that if there was a question then there needed to be a question to the jury if there's any facts regarding that. We would also state that it needs to also be very specific as to when the actual agreement was reached. When was there a meeting of the minds? With the way it's submitted now, it will allow a breach of contract prior to the meeting

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