637 S.W.3d 893
Tex. App.2021Background
- KMPC owns ≈97% of the SACROC working interest and operates CO2 tertiary recovery projects in the Scurry County oil field; production and recovery projections were central to valuation.
- For 2019 the Scurry County Appraisal District valued the working interest at roughly $701.4 million; KMPC protested to the ARB and appealed to district court.
- The trial court set expert-designation and discovery deadlines; both sides designated valuation experts who used the income approach and disagreed about which reserves/future projects to include under Tex. Tax Code § 23.175.
- The trial court excluded KMPC’s primary and rebuttal experts on the ground they misapplied § 23.175, allowed multiple late supplements from the Appraisal District’s experts, and denied KMPC leave to file its supplemental expert report.
- KMPC’s lead counsel, for health reasons, could not appear in person during COVID-19; the court permitted remote participation but persistent technical failures hampered his role; the court denied KMPC’s motions to continue and later granted the Appraisal District a directed verdict after KMPC rested.
- The court of appeals reversed and remanded, sustaining KMPC’s continuance claim and rejecting KMPC’s supplementation and admissibility complaints on the record and preservation grounds.
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Trial court allowed Appraisal Dist. to supplement experts multiple times but denied KMPC’s request to supplement | Trial ct treated parties disparately; Appraisal Dist’s late supplements were permitted while KMPC’s single supplemental report was denied, prejudicing KMPC | Appraisal Dist supplements complied with rules and the court’s construction of § 23.175; KMPC’s supplements did not clearly conform to the court’s rulings | Resolved against KMPC: no shown disparate treatment; court could not say KMPC’s supplement complied with trial court’s § 23.175 ruling, so refusal to allow KMPC’s supplement was not an abuse of discretion |
| Exclusion of KMPC experts under Rule 702 and § 23.175 | KMPC: its experts were qualified; disputes over reserves, decline rates, and future investment were factual and for the jury (weight), not grounds for exclusion (admissibility) | Appraisal Dist: KMPC experts misapplied § 23.175 and were therefore unreliable and inadmissible | Resolved against KMPC: KMPC failed to preserve the weight-versus-admissibility argument at trial; trial court excluded KMPC experts based on its legal view of § 23.175 and did not abuse discretion as preserved claims show |
| Denial of continuance when lead counsel (physician-advised) could not appear and remote participation was plagued by technical failures | KMPC: denial violated its right to counsel of choice and due process; remote technical failures prevented effective assistance and warranted continuance | Appraisal Dist: KMPC could have replaced counsel and the problems were KMPC’s fault; court had discretion and followed OCA guidance to proceed | Sustained for KMPC: court abused its discretion by refusing continuance given persistent, prejudicial technical failures and deprivation of counsel of choice; reversal and remand ordered |
Key Cases Cited
- Enbridge Pipelines (E. Tex.) L.P. v. Avinger Timber, LLC, 386 S.W.3d 256 (Tex. 2012) (trial-court gatekeeping on expert appraisal testimony and reliability)
- E.I. du Pont de Nemours & Co. v. Robinson, 923 S.W.2d 549 (Tex. 1995) (expert testimony must be reliable and relevant)
- Mack Trucks, Inc. v. Tamez, 206 S.W.3d 572 (Tex. 2006) (examine methodology and foundations for expert opinions)
- Gharda USA, Inc. v. Control Sols., Inc., 464 S.W.3d 338 (Tex. 2015) (analytical gap doctrine for expert reliability)
- Gammill v. Jack Williams Chevrolet, Inc., 972 S.W.2d 713 (Tex. 1998) (cross-examination addresses shaky evidence; gatekeeping does not supplant adversarial testing)
- Joe v. Two Thirty Nine Joint Venture, 145 S.W.3d 150 (Tex. 2004) (abuse-of-discretion standard for continuance rulings)
- Villegas v. Carter, 711 S.W.2d 624 (Tex. 1986) (motion-for-continuance affidavit rule and presumption against continuance when affidavit absent)