511 S.W.3d 53
Tex. App.2014Background
- Sombrero Oil & Gas sued Marrs and Smith Partnership and general partner Rickey Smith for breach of an oil-and-gas lease (assigned to Sombrero by Boyd), seeking liability and damages including restitution of leasing bonuses and lost profits.
- Previously reversed on summary judgment issues in earlier related appeals; on remand Sombrero moved for partial summary judgment on liability (reserving damages for trial); Sombrero sought restitution equal to leasing bonuses paid to the Partnerships ($68,692.18).
- Summary-judgment evidence included Boyd’s affidavit, the Lease, letters from the Partnership’s counsel repudiating the Lease, and copies of deposited checks showing bonus payments accepted by the Partnership for year one.
- The trial court granted Sombrero’s partial summary judgment as to liability (restitution theory) and denied Smith’s traditional and no-evidence motions; the case proceeded to a jury trial on damages.
- The jury awarded no lost profits to Sombrero but awarded approximately $570,000 in attorney’s fees; the court entered judgment for Sombrero, and Appellants appealed.
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Whether Sombrero was entitled to partial summary judgment on breach (liability) and restitution of leasing bonuses | Sombrero argued it conclusively proved breach and direct restitutionary damages (leasing bonuses) via Boyd’s affidavit and documentary evidence | Partnership argued repudiation was not the producing cause of Boyd’s out-of-pocket expenses and that payment of bonuses alone does not create damages | Affirmed: summary judgment on liability and restitution was proper — evidence showed Partnership accepted year-one bonus and repudiated lease, so restitution flows naturally from breach |
| Whether trial court erred in denying Smith’s no-evidence motion on Sombrero’s breach claim | Sombrero: evidence raises genuine issues and restitution available even if Boyd was later reimbursed by third party | Smith: no evidence of out-of-pocket damages because Boyd was reimbursed by Rutter & Wilbanks; one-satisfaction/collateral-source bars recovery | Affirmed denial: third-party reimbursement does not bar restitution claim and one-satisfaction is an affirmative defense not a basis for a no-evidence SJ |
| Whether Sombrero had to prove presentment to recover attorney’s fees under Tex. Civ. Prac. & Rem. Code § 38.002 | Sombrero pled all conditions precedent were met, so presentment need not be proved at trial absent a specific denial | Appellants argued Sombrero failed to present its claim under Chapter 38 and disputed presentment during litigation | Affirmed award of fees: Sombrero pled conditions precedent; Appellants never specifically denied presentment in their answers, so Sombrero was not required to produce specific presentment evidence |
| Whether lost-profits damages should have been awarded | Sombrero argued lost profits (over $5M) flowed from the repudiation | Appellants argued no causal proof and lease expiration/other causes prevented drilling | Jury found no lost profits; appellate court did not disturb that factual damage determination |
Key Cases Cited
- Travelers Ins. Co. v. Joachim, 315 S.W.3d 860 (Tex. 2010) (standard of review for summary judgment)
- Goodyear Tire & Rubber Co. v. Mayes, 236 S.W.3d 754 (Tex. 2007) (no-evidence summary judgment standard)
- Mann Frankfort Stein & Lipp Advisors, Inc. v. Fielding, 289 S.W.3d 844 (Tex. 2009) (traditional summary judgment burdens and inferences)
- Valence Operating Co. v. Dorsett, 164 S.W.3d 656 (Tex. 2005) (competing summary judgments—appellate review approach)
- Quigley v. Bennett, 227 S.W.3d 51 (Tex. 2007) (restitution damages measure in contract cases)
- Arthur Andersen & Co. v. Perry Equip. Corp., 945 S.W.2d 812 (Tex. 1997) (distinguishing direct vs. consequential damages)