Milestone Operating, Inc. v. ExxonMobil Corp.
346 S.W.3d 101
Tex. App.2011Background
- ExxonMobil sued DSTJ/Milestone for failure to notify payout under a Farmout Agreement in Jefferson County.
- DSTJ allegedly assigned its interest to Milestone; ExxonMobil claimed payout occurred and requested relief including damages and declaratory relief.
- A process server purportedly served Harlan, a DSTJ/Milestone officer, but defendants contested service; ExxonMobil conducted a default hearing after no appearance.
- The trial court entered a default judgment awarding unliquidated damages, prejudgment interest, fees, costs, and declaratory relief.
- Appellants moved for new trial; after an evidentiary hearing, the motion was denied; the court later issued a substitute opinion on rehearing.
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Whether service was proper under Rule 106 | Harlan was personally served. | Harlan was not personally served. | Service satisfied Rule 106; issue overruled. |
| Whether Craddock requires new trial despite defective service | Craddock satisfied and new trial warranted. | Craddock not satisfied due to lack of non-intentional/non-indifference evidence. | Craddock not satisfied; motion for new trial denied. |
| Whether unliquidated damages are legally sufficient | Braun affidavit supports damages; total amount due. | Braun affidavit is conclusory; lacks detail of calculations and variables. | Damages insufficient; remand for proper damages calculation. |
| Whether venue was properly in Harris County | Venue should be Jefferson County; not Harris. | Waived by partial affirmance of default judgment; venue not challenged on appeal. | Waived; venue affirmed as to the portion of judgment. |
Key Cases Cited
- Fidelity & Guar. Ins. Co. v. Drewery Constr. Co., Inc., 186 S.W.3d 571 (Tex. 2006) (Craddock standard applied to lost or misplaced service papers)
- Interconex, Inc. v. Ugarov, 224 S.W.3d 523 (Tex. App.—Houston [1st Dist.] 2007) (foundation for evaluating service breakdowns without direct testimony)
- Alford v. Cary, 203 S.W.3d 837 (Tex. 2005) (Craddock, lost papers, and conscious indifference considerations)
- Texas Commerce Bank, National Association v. New, 3 S.W.3d 515 (Tex. 1999) (affidavits detailing total amount due can support default judgment damages)
- Holt Atherton Indus. Inc. v. Heine, 835 S.W.2d 80 (Tex. 1992) (default judgment effect on admitted facts except damages)
- Craddock v. Sunshine Bus Lines, Inc., 133 S.W.2d 124 (Tex. 1939) (three-part Craddock standard for new trials after default)
- City of Keller v. Wilson, 168 S.W.3d 802 (Tex. 2005) (standards for legal sufficiency review of damages evidence)
- Walker v. Gutierrez, 111 S.W.3d 56 (Tex. 2003) (intentional or conscious indifference standard in Craddock context)