Indian Oil Company, LLC and William E. Trotter, II v. Bishop Petroleum, Inc.
406 S.W.3d 644
Tex. App.2013Background
- Trotter appeals a judgment in Bishop Petroleum Inc.'s favor on breach of contract and related claims arising from joint operating agreement workovers and abandonment.
- Trotter owned an 8.5% working interest in the Scott Paper 27-1 well, later assigned to Indian Oil Company, LLC in January 2002.
- AFEs were issued for April 2007 and July 2007 workovers; most but not all working interest owners consented, increasing Trotter's and Indian Oil's interests.
- Workover began October 1, 2007; tool got stuck, fishing operations extended for weeks; later plugging and abandonment were proposed in 2009 after production failed to resume.
- Bishop Petroleum sued for pro rata share of expenses; jury awarded damages against Trotter individually; post-trial motions followed with a take-nothing for Indian Oil.
- This court reverses the judgment against Trotter and remands for a new trial on damages, while take-nothing judgment as to Indian Oil remains undisturbed.
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Whether the July AFE could be legally performed | Trotter argues July AFE unlawful due to casing hole and public policy. | BishopPetrol argues evidence disputed; no conclusive hole at July AFE time. | Issue overruled; AFE not proven illegal as a matter of law. |
| Legal sufficiency of evidence Bishop complied with JOA | Trotter contends multiple JOA breaches exist (board reporting, daily reports, new AFE). | Bishop Petroleum argues evidence supports verdict; gaps exist but not conclusive. | Issue overruled; evidence supports verdict on compliance defense. |
| Damages against Trotter post-assignment | Trotter should be liable for post-2002 assignment obligations (including July AFE). | Eland and JOA language control; Trotter not liable for post-assignment July AFE obligations. | Issue sustained; remand for damages clarification; not liable for July AFE amounts, but liability for pre-assignment items remains. |
Key Cases Cited
- Denson v. Dallas Cnty. Credit Union, 262 S.W.3d 846 (Tex. App.—Dallas 2008) (public policy voidness if contract cannot be performed without illegal act)
- In re Kasschau, 11 S.W.3d 305 (Tex. App.—Houston [14th Dist.] 1999) (public policy voidness for illegal performance)
- Tex. A&M Univ.-Kingsville v. Lawson, 127 S.W.3d 866 (Tex. App.—Austin 2004) (public policy and contract legality considerations)
- City of Keller v. Wilson, 168 S.W.3d 802 (Tex. 2005) (standard for legal sufficiency and reviewing evidence)
- Dow Chem. Co. v. Francis, 46 S.W.3d 237 (Tex. 2001) (standards for legal sufficiency review)
- TH Invs., Inc. v. Kirby Inland Marine, L.P., 218 S.W.3d 173 (Tex. App.—Houston [14th Dist.] 2007) (evidentiary standards on sufficiency of damages)
- Eland v. Seagull Energy E&P, Inc., 207 S.W.3d 342 (Tex. 2006) (assignment does not automatically release assignor from obligations)