Williford Energy Co. v. Submergible Cable Services, Inc.

• Decision Date: 11 October 1994
• Docket Number: No. 07-93-0307-CV,07-93-0307-CV
• Citation: 895 S.W.2d 379
• Parties: 130 Oil & Gas Rep. 148 WILLIFORD ENERGY COMPANY, An Oklahoma Corporation, Appellant, v. SUBMERGIBLE CABLE SERVICES, INC., An Oklahoma Corporation; Reda Pump Division, TRW Energy Products Group of TRW, Inc., An Ohio Corporation, Appellees.
• Court: Texas Court of Appeals

Page 379

895 S.W.2d 379

130 Oil & Gas Rep. 148

WILLIFORD ENERGY COMPANY, An Oklahoma Corporation, Appellant, v. SUBMERGIBLE CABLE SERVICES, INC., An Oklahoma Corporation Reda Pump Division, TRW Energy Products Group of TRW, Inc., An Ohio Corporation, Appellees.

No. 07-93-0307-CV.

Court of Appeals of Texas Amarillo.

Oct. 11, 1994.

Baker & Botts, Bob E. Shannon, Austin, Holliman, Langholz, Runnels & Dorwart, Richard J. Cipolla, Jr., Tulsa, OK, for appellant.

Waters, Holt & Fields, David E. Holt, Pampa, Gibson, Ochsner & Adkins, Wayne P. Sturdivant, Kathryn R. Wray, Amarillo, for appellees.

Before REYNOLDS, C.J., and DODSON and BOYD, JJ.

BOYD, Justice.

In seven points of asserted error, appellant Williford Energy Co. (Williford) challenges the trial court's rendition of a take-nothing judgment after a bench trial. In the suit in which this judgment was rendered, Williford sought recovery against Submergible Cable Services, Inc. (Submergible) and Reda Pump Division, TRW Energy Products Group of TRW, Inc. (Reda) for an alleged breach of contract and negligence. We affirm the judgment of the trial court.

In July 1986, the Sell (Upper Morrow) Unit was created in Lipscomb and Ochiltree Counties under chapter 101 of the Texas Natural Resources Code Annotated (Vernon 1993). Williford was named as the unit operator. The unit was formed for the purpose of conducting a waterflood secondary recovery project in the Morrow formation. The Sell 9-1, the well which is at the center of this controversy, was in existence when this unit was formed.

In late 1986, Williford decided to use an artificial lifting system to raise the oil from the well. It chose to use an electric submersible pumping system (ESP) manufactured by Reda. This type of pump is designed to be lowered to a point near the bottom of the wellbore where it operates to pump petroleum to the surface. Williford provided Reda with the specifications of the Sell 9-1 well and Reda's sales representative, Fred Robbins, selected the specific components to be used.

As relevant here, the components of the ESP that Williford purchased from Reda were an electric motor, a centrifugal pump, and a three conductor electric cable armored in a steel casing. Proper installation of the ESP requires that the pump be attached to the top of the motor. In turn, the pump and motor must be attached to production tubing which is used to lower the pump and motor into the well casing and serves as a conduit for the oil being pumped by the system.

In order for the electric motor to operate the pump, the armored electric cable has to be connected to the motor. The cable must then be secured to the tubing so that it does not interfere with the lowering of the system into, or removal from, the well casing. Stainless steel bands, which encircle both the tubing and the cable, are used to secure the cable to the tubing. The bands must be drawn tight and securely crimped to serve their intended purpose.

On January 23, 1987, Williford removed a full-gauge packer, or plug, that had been placed just above perforations in the casing at a depth of 8,160 feet. The down-hole ESP equipment was installed on January 24, 1987. One of Reda's employees, Ray Browning, was present during much of the ESP's installation.

Williford purchased the steel bands to secure the cable to the tubing from appellee Submergible Cable Services, Inc. (Submergible). Williford also hired Submergible to install the bands and rented their banding guns and a hydraulic spooler (to handle the cable) in order to complete the job. Brad Ralstin, one of Submergible's employees, performed the installation. There were no problems reported in installing the ESP system.

The Reda ESP system operated properly until approximately January 15, 1988. The parties agree that the one year that the ESP system operated was within the system's expected operating life. On January 18, 1988, Williford began operations to remove the down-hole ESP equipment for repair or replacement and hired Reda, represented by Browning, and Submergible, represented by Ralstin, to assist in removing the equipment.

After removing fifteen stands of tubing, or approximately 930 feet, the cable began slipping from the tubing and, as a result, failed to come out of the casing at the same rate as the tubing. After discussing alternatives with each of the appellees' representatives, Williford attempted to resecure the cable to the tubing and proceeded to remove two more stands. At this point, however, the cable completely ceased coming out of the casing with the tubing. Williford removed an additional one and one-half stands of tubing before the tubing became stuck in the casing.

Next, Williford unsuccessfully attempted to loosen the tubing by lowering it and the pump assembly back down the well. Believing that the pump was the most likely cause of the problem, Williford cut the pump free from the tubing. This attempt to remove the remaining tubing and cable was also unsuccessful. Williford next conducted a free-point test to determine the location of the obstruction in the casing. This test revealed that there was an obstruction at approximately 2,300 feet. Williford cut the tubing just above this obstruction and removed the tubing above that point. It then began a "fishing" operation to remove the remaining cable and tubing. This operation was successful in removing all of the tubing and approximately 2,000 feet of the cable; however, the down-hole components of the ESP and the remaining cable were not recovered. As a result of the obstruction created by the remaining cable, Williford plugged the well.

Williford brought suit against Reda and Submergible for negligence and breach of contract. In its suit, Williford alleged that Submergible failed to properly install the bands securing the electrical cable to the tubing, which resulted in Williford's inability to remove the ESP system and the ultimate loss of the Sell 9-1 well. Williford also claimed that Reda was responsible for the loss of the well because, as a part of its contract with Williford for the installation of the ESP system, Reda was responsible for insuring the proper installation of all the components of the ESP system, including the bands securing the cable to the tubing. Williford argued that Reda's responsibility extended to the attachment of the bands because if the cable were not properly installed, the ESP system would not properly perform its intended functions. At the close of Williford's evidence in the bench trial, the court granted Reda's motion for judgment. Subsequently, the trial court rendered a take-nothing judgment in favor of Submergible. Hence, this appeal.

Williford's first point of error alleges that the trial court erred in granting Reda's motion for judgment because the findings of fact upon which this action was based are contrary to the great weight and preponderance of the evidence or, alternatively, are not supported by sufficient evidence.

It is well established that the trial court's findings of fact are reviewable by the same standards that are applied in reviewing the evidence supporting a jury's answers. With regard to a factual insufficiency challenge, we are required to examine the entire record to determine whether there is some probative evidence to support the finding and, if there is, we must determine whether the evidence supporting the finding is so weak or the answer so contrary to the overwhelming weight of the evidence as to be clearly wrong and manifestly unjust. Garza v. Alviar, 395 S.W.2d 821, 823 (Tex.1965); In re King's Estate, 150 Tex. 662, 244 S.W.2d 660, 661 (1951); Hydrocarbon Management, Inc. v. Tracker Exploration, Inc., 861 S.W.2d 427, 431-32 (Tex.App.--Amarillo 1993, no writ); Raw Hide Oil & Gas Inc. v. Maxus Exploration Co., 766 S.W.2d 264, 276 (Tex.App.--Amarillo 1988, writ denied).

Parenthetically, we note that several of the findings of fact Williford challenges are findings in which the trial court found that Williford "failed to prove" certain elements. Such a negative answer means that the party with the burden of proof has failed to carry that burden. Ice Bros., Inc. v. Bannowsky, 840 S.W.2d 57, 60 (Tex.App.--El Paso 1992, no writ). In such instances, the appellate challenge may be that the matter was established as a matter of law, or that the court's finding was against the great weight and preponderance of the evidence. Croucher v. Croucher, 660 S.W.2d 55, 58 (Tex.1983). In this case, the challenge being the latter, we must determine if the trial court's finding that Williford failed to establish certain elements of its cause of action was against the great weight and preponderance of the evidence.

In argument under this point, Williford specifically challenges findings of fact no. 3, in which the court found that Reda did not expressly, or impliedly, contract to supervise the installation of the stainless steel bands securing the electric cable to the production tubing on the Sell 9-1; finding no. 4, in which the court found that Reda did not expressly, or impliedly, contract to supervise the installation of the submergible ESP system in the Sell 9-1; no. 6, in which the court found Submergible properly installed the bands; no. 7, in which the court found the bands were installed by Submergible and Reda did not have a right to, or exercise, any control over Submergible; no. 8, in which the court found the bands were not negligently installed and their installation was not a proximate cause of the loss of the Sell 9-1; no. 9, in which the court found Williford failed to prove that the bands were negligently installed; no. 10, in which the court found Williford failed to prove that the installation of the bands was a proximate cause of any damage; no. 11, in which the court found Williford failed to prove that Reda or Submergible breached any duty owed to Williford; no. 12, in which the court found Williford failed to prove...