Carlton Energy Group, LLC v. Gene E. Phillips, Individually and D/B/A Phillips Oil Interest, LLC
369 S.W.3d 433
| Tex. App. | 2012Background
- Bulgaria/CBM concession allowed CBM to explore natural gas with minimum work obligations.
- Carlton funded $8 million across three tranches for a 48% Bulgaria Project interest under a CBM/Carlton agreement, with first tranche enabling a 7.5% stake.
- Carlton later amended with CBM to obtain 5.4% upon funding $900,000 of tranche one, with exclusive relationship to fund the second tranche.
- Carlton entered into a Carlton/Phillips agreement Aug. 23, 2004 for Phillips to obtain a 10% interest, including a 30-day review period; Carlton asserts agreement formed but Phillips later withdrew Dec. 3, 2004.
- Carlton alleged that Phillips, and EurEnergy (and affiliates), interfered with CBM/Carlton, sought to supplant Carlton, and formed EurEnergy to replace Carlton in Bulgaria Project; CBM later terminated Bulgaria concession.
- Following trial, the jury awarded Carlton $66.5M in actual damages for breach and interference, the trial court remitted to $31.16M, Carlton accepted remittitur, and the court later entered judgment for changes including duties regarding alter egos and exemplary damages.
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Sufficiency of damages evidence for remittitur | Carlton argues $66.5M supported; remittitur to $31.16M unjust. | Phillips/EurEnergy contend damages evidence unreliable/insufficient. | Appeal holds evidence legally/factually sufficient; remittitur improper; reinstates $66.5M. |
| Alter ego findings for Syntek and CabelTel | Evidence shows unity of interest; alter egos liable. | Trial court correctly set aside alter ego verdict for Syntek/CabelTel (and N.O.V. on verdict). | Evidence supports alter ego findings against CabelTel and Syntek; N.O.V. reversed as to those findings. |
| Alter ego finding for EurEnergy (vs Phillips) | EurEnergy liable as alter ego of Phillips under Nevada framing. | No error; trial court properly submitted alter ego issue. | Court approves jury's alter ego finding against EurEnergy; rejects reversal. |
| Joint/Sev liability for exemplary damages | Phillips should be jointly/severally liable for EurEnergy’s exemplary damages. | Texas law requires unanimous liability finding for exemplary damages; no joint/separate liability here. | Court holds no joint/several liability for exemplary damages due to non-unanimous alter-ego finding on the record. |
| Admission of evidence about Phillips-related entities | Evidence was prejudicial; warrant remittitur or new trial. | Lack of limiting instruction; evidence not dispositive. | An abuse of discretion not shown; no remand required; evidence deemed not reversible error. |
Key Cases Cited
- City of Keller v. Wilson, 168 S.W.3d 802 (Tex. 2005) (no-fact-evidence standard; check sufficiency with inferences allowed)
- Cain v. Bain, 709 S.W.2d 175 (Tex. 1986) (remittitur review requires weak evidence; cannot substitute court judgment)
- Mar Overseas Corp. v. Ellis, 971 S.W.2d 402 (Tex. 1998) (remittitur standards; weigh all evidence before altering award)
- Humble Oil & Refining Co. v. Kishi, 276 S.W.2d 190 (Tex. 1925) (market value as measure where appropriate (loss of asset))
- Whirlpool Corp. v. Camacho, 298 S.W.3d 631 (Tex. 2009) (test of expert evidence; reasonableness of scientific proof)
- BMW of N. Am., Inc. v. Gore, 517 U.S. 559 (U.S. 1996) (guideposts for determining punitive/exemplary damages due process)