Shivers v. Texaco Exploration and Production, Inc.

• Decision Date: 17 March 1998
• Docket Number: No. 06-97-00062-CV,06-97-00062-CV
• Citation: 965 S.W.2d 727
• Parties: Linward SHIVERS, Ronald Shivers, and Jenelle Jacobs Brooks, Trustee of the Herman Jacobs Trust, Individually and on Behalf of all others similarly situated, Appellants, v. TEXACO EXPLORATION AND PRODUCTION, INC., Appellee.
• Court: Texas Court of Appeals

Page 727

965 S.W.2d 727

Linward SHIVERS, Ronald Shivers, and Jenelle Jacobs Brooks Trustee of the Herman Jacobs Trust, Individually and on Behalf of all others similarly situated, Appellants, v. TEXACO EXPLORATION AND PRODUCTION, INC., Appellee.

No. 06-97-00062-CV.

Court of Appeals of Texas Texarkana.

Submitted Feb. 12, 1998.

Decided March 17, 1998.

LeRoy LaSalle, Law Offices of LeRoy LaSalle, Carthage, for Appellants.

Scott Patrick Stolley, Thompson & Knight, P.C., Dallas, for Appellee.

Before CORNELIUS, C.J., and GRANT and ROSS, JJ.

OPINION

CORNELIUS, Chief Justice.

This is an appeal from a summary judgment rendered in favor of Texaco Exploration and Production, Inc. in a suit for damages filed against Texaco by Linward Shivers, Roland Shivers, and Jenelle Jacobs Brooks, Trustee of the Herman Jacobs Trust, individually and on behalf of all others similarly situated.

Section 29 of the Internal Revenue Code grants an income tax credit for natural gas produced from a "tight formation." 26 U.S.C.A. § 29(a),(c) (West Supp.1997). The Shivers group owns royalty interests in leases in which Texaco is the lessee. The wells on these leases produce from the Cotton Valley formation, which is classified as a tight formation. Linward Shivers was an experienced oil and gas attorney who for many years prepared his own tax returns, but he never took note of the availability of the Section 29 credit which was described in his Form 1040 instruction booklet. It was not until 1990 that he actually became aware of the Section 29 credit. His brother Roland, who had usually prepared his own tax returns as well, also learned of the Section 29 credit that year. The brothers engaged an accountant to help them claim the credit on their 1990 tax returns, and they also had the accountant file amended returns to claim the credit for 1987, 1988, and 1989. They were unable to claim the credit for any tax year before 1987 because the limitations period for amended returns is three years. See 26 U.S.C.A. § 6511(a), (b) (West Supp.1997). Similar dates applied to Jenelle Jacobs Brooks for herself and the trust.

Shivers initially sued Texaco on June 21, 1994, to recover damages for Texaco's failure to inform them of the availability of the Section 29 credit. Shivers amended their petition on January 17, 1997 to include a claim that Texaco breached the implied covenant to reasonably develop the Section 29 leases. Shivers filed a motion for partial summary judgment, which the court denied. Texaco also moved for summary judgment. It based its motion on three claims. First, it said it did not owe Shivers any duty to inform them of the availability of the Section 29 tax credit. Second, Texaco asserted that its failure to inform Shivers did not cause Shivers' alleged injuries. Third, it claimed that all of Shivers' claims were barred by the statute of limitations. Shivers filed a response to Texaco's summary judgment motion, and the trial court granted Texaco's motion without stating the reasons. Shivers argues that Texaco owed the duty, based on the law of agency or contract principles under the doctrine of implied covenants, to inform them of facts and information to enable them to compute and claim the Section 29 tax credit. Further, Shivers argues that Texaco has a statutory duty under TEX. NAT. RES.CODE ANN. § 91.502 (Vernon 1993) to disclose information to them about "other deductions or adjustments," including the tight formation classification of its wells. Shivers relies on the discovery rule to avoid the limitations bar asserted by Texaco. Finally, Shivers argues that the trial court erred in rendering summary judgment against them on their claim that Texaco breached the implied covenant of reasonable development by failing to drill additional wells before January 1, 1993.

Texaco first argues that the trial court's ruling should be upheld because (1) it raised three grounds on which the trial court could have granted the summary judgment and Shivers only replied to two of those grounds; (2) it did not owe Shivers any duty to inform them of the applicability of the Section 29 credit; (3) even if it did owe a duty, its breach of the duty was not the cause of Shivers' damages; and (4) Shivers' claims are barred by the statute of limitations.

An appellate court's review of a trial court's summary judgment ruling is de novo. Toonen v. United Servs. Auto. Ass'n, 935 S.W.2d 937, 942 (Tex.App.--San Antonio 1996, no writ). The question on appeal, as well as in the trial court, is whether the movant establishes that there is no genuine issue of material fact and that it is entitled to judgment as a matter of law. TEX.R. CIV. P. 166a(c); Lear Siegler, Inc. v. Perez, 819 S.W.2d 470, 471 (Tex.1991); Swilley v. Hughes, 488 S.W.2d 64, 67 (Tex.1972); Gibbs v. General Motors Corp., 450 S.W.2d 827, 828 (Tex.1970); Stevens v. State Farm Fire and Cas. Co., 929 S.W.2d 665, 669 (Tex.App.--Texarkana 1996, writ denied). The movant has the burden in a summary judgment proceeding, and the court must resolve against the movant all doubts as to the existence of a genuine issue of fact. Roskey v. Texas Health Facilities Comm'n, 639 S.W.2d 302, 303 (Tex.1982); Stevens v. State Farm Fire and Cas. Co., 929 S.W.2d at 669. A defendant moving for summary judgment must disprove at least one element of each theory pleaded by the plaintiff, or conclusively prove by summary judgment evidence each essential element of an affirmative defense. See Hanssen v. Our Redeemer Lutheran Church, 938 S.W.2d 85, 90 (Tex.App.--Dallas 1996, writ denied); Vest v. Gulf Ins. Co., 809 S.W.2d 531, 533 (Tex.App.$Dallas 1991, writ denied); see generally, Dean M. Swanda, Summary Judgment Practice, 46 BAYLOR L. REV. 721, 725 (1994). A plaintiff/nonmovant can thwart the defendant's summary judgment motion in three ways. First, the nonmovant may present evidence that creates a fact question on those elements of the plaintiff's case under attack by the defendant. Second, the nonmovant may produce summary judgment evidence creating a fact question on at least one element of each affirmative defense advanced by the defendant. Torres v. Western Cas. and Sur. Co., 457 S.W.2d 50, 52 (Tex.1970); Hanssen v. Our Redeemer Lutheran Church, 938 S.W.2d at 90. Third, the nonmovant may concede that the material facts are undisputed but argue that the defendant's legal position is unsound. Hanssen v. Our Redeemer Lutheran Church, 938 S.W.2d at 90; Estate of Devitt, 758 S.W.2d 601, 602 (Tex.App.--Amarillo 1988, writ denied). A summary judgment can be granted for a movant even if the movant failed to produce summary judgment evidence in support of the motion, if the motion was based on a point of law, with undisputed facts. Segrest v. Segrest, 649 S.W.2d 610, 611 (Tex.1983); DiGrazia v. Atlantic Mut. Ins. Co., 944 S.W.2d 731 (Tex.App.--Texarkana 1997, no writ).

If the movant does not meet its burden of proof, there is no burden on the nonmovant, City of Houston v. Clear Creek Basin Auth., 589 S.W.2d 671, 678 (Tex.1979), but if the movant has established a right to a summary judgment, the burden shifts to the nonmovant, Stevens v. State Farm Fire and Cas. Co., 929 S.W.2d at 669. The nonmovant must then respond to the summary judgment motion and present to the trial court summary judgment evidence raising a fact issue that would preclude summary judgment. City of Houston v. Clear Creek Basin Auth., 589 S.W.2d at 678; Stevens v. State Farm Fire and Cas. Co., 929 S.W.2d at 669.

In deciding whether a disputed material fact issue precludes summary judgment, we take as true all evidence favorable to the nonmovant. We must indulge every reasonable inference and resolve any doubt in the nonmovant's favor. Roark v. Stallworth Oil & Gas, Inc., 813 S.W.2d 492, 495 (Tex.1991); Nixon v. Mr. Property Management Co., 690 S.W.2d 546, 548-49 (Tex.1985); Stevens v. State Farm Fire and Cas. Co., 929 S.W.2d at 669. When both parties move for summary judgment, each party must carry its own burden as the movant. James v. Hitchcock Indep. Sch. Dist., 742 S.W.2d 701, 703 (Tex.App.--Houston [1st Dist.] 1987, writ denied). Additionally, each party must carry its own burden as the nonmovant in response to the other party's motion. Id. Further, when both parties file motions for summary judgment, the court may consider all of the summary judgment evidence. Rose v. Baker & Botts, 816 S.W.2d 805, 810 (Tex.App.--Houston [1st Dist.] 1991, writ denied).

Texaco first argues that Shivers waived their appeal of the summary judgment because the trial court did not specify on which of the three possible grounds it granted the judgment, and Shivers only contested two of the three grounds in their response and appellate brief. Shivers stated a general point of error ¹ and only expressly argues that Texaco had a duty to inform them of the Section 29 tax credit and that their claim is not barred by the statute of limitations. They failed to argue that Texaco's failure to inform them caused their alleged injuries.

When the trial court does not specify on what ground it granted the summary judgment, the appellant must argue that every ground in the summary judgment motion is erroneous. Star-Telegram, Inc. v. Doe, 915 S.W.2d 471, 473 (Tex.1995); Lewis v. Skippy's Mistake Bar, 944 S.W.2d 1, 3 (Tex.App.--Fort Worth 1996), rev'd on other grounds, Southland Corp. v. Lewis, 940 S.W.2d 83 (Tex.1997). The appellate court must affirm the summary judgment if any one of the movant's theories has merit. Star-Telegram, Inc. v. Doe, 915 S.W.2d at 473.

Where an appellant uses specific points of error to attack a summary judgment and fails to attack one of the possible grounds on which the judgment was granted, the summary judgment must be affirmed. Malooly Bros., Inc. v. Napier, 461 S.W.2d 119, 121 (Tex.1970); Lewis v. Skippy's Mistake Bar, 944 S.W.2d at 3; Richardson v. Johnson & Higgins of Texas, Inc., 905 S.W.2d 9, 11 (Tex.App.--Houston [1st Dist.] 1995,...