Republic Petroleum LLC and Republic Petroleum Partners, LP v. Dynamic Offshore Resources NS LLC and W&T Offshore Inc.
2015 Tex. App. LEXIS 9055
| Tex. App. | 2015Background
- Republic Petroleum LLC (Republic LLC) contracted with Dynamic Offshore Resources NS LLC and W&T Offshore Inc. (Platform Owners) under a Production Handling Agreement (PHA) to process gas from the Satellite Well and to perform routine maintenance and repairs.
- Republic LLC was the signatory and designated operator under the PHA and an Offshore Operating Agreement (OOA) that authorized it to act for non‑operating working interest owners.
- Republic LLC assigned its working interest in October 2008 to Republic Petroleum Partners LP (Republic LP) and others but remained the operator under the PHA; no written consent or approved assignment under the PHA was produced.
- Equipment degradation and alleged overbilling by the Platform Owners caused repair costs and downtime; Republic LLC paid invoices and sued for breach of the PHA seeking reimbursement for repair and other costs.
- A jury found breach and awarded $741,235 to Republic LLC; the trial court awarded attorney’s fees after a bench trial.
- After trial the court modified the judgment to reduce damages and fees proportionate to the Republic entities’ working interest; the First Court of Appeals reversed and remanded to reinstate the jury verdict.
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Standing to sue under the PHA | Republic had enforceable contractual rights as the signatory/operator and an assignor whose obligations and rights survived assignment absent release | Republic lacked standing because it had assigned its working interest before breaches occurred | Held: Republic had standing — PHA required platform consent to assignment, none shown; rights/obligations persisted |
| Capacity to recover full damages | Republic acted as operator and incurred costs; OOA authorized it to act for non‑operators; it paid invoices from its account | Republic lacked capacity because it no longer owned a working interest and didn’t show authority to sue for others; damages should be limited to working interest share | Held: Trial evidence supported an implied jury finding of capacity; defendants waived separate jury question; evidence legally and factually sufficient |
| Sufficiency of evidence for damages awarded | Invoices, payments, testimony that Republic paid for repairs and incurred costs caused by breaches | Defendants argued evidence showed transfers and reimbursements to Republic so award should be limited or nullified | Held: Evidence supported award for repair costs and other amounts Republic paid; jury declined loss-of-production damages consistent with PHA exclusions |
| Trial court’s modification of judgment reducing damages/fees | Republic argued modification improperly disregarded jury findings and capacity ruling | Defendants urged modification to reflect Republic’s fractional working interest | Held: Modification was error; appellate court reversed modified judgment and remanded to reinstate jury award and reconsider fees |
Key Cases Cited
- Surgitek v. Abel, 997 S.W.2d 598 (Tex. 1999) (substance of post‑trial motion controls review standard)
- Doctor v. Pardue, 186 S.W.3d 4 (Tex. App.—Houston [1st Dist.] 2005) (distinguishing post‑trial motion standards)
- City of Keller v. Wilson, 168 S.W.3d 802 (Tex. 2005) (legal‑sufficiency review standard and factfinder credibility)
- Seagull Energy E&P, Inc. v. Eland Energy, 207 S.W.3d 342 (Tex. 2006) (assignor’s obligations and rights survive assignment absent release)
- Tex. Dep’t of Transp. v. City of Sunset Valley, 146 S.W.3d 637 (Tex. 2004) (standing is a question of law reviewed de novo)
- OAIC Comm’l Assets, L.L.C. v. Stonegate Village L.P., 234 S.W.3d 726 (Tex. App.—Dallas 2007) (who may establish standing in contract actions)
- In re Brookshire Grocery Co., 250 S.W.3d 66 (Tex. 2008) (procedural distinction between motions for new trial and motions to modify judgment)
- Cain v. Bain, 709 S.W.2d 175 (Tex. 1986) (factual‑sufficiency review standard)
- Exxon Corp. v. Emerald Oil & Gas Co., L.C., 348 S.W.3d 194 (Tex. 2011) (no‑evidence standard where appellant lacked burden of proof)
- Bossier City Chrysler Dodge II, Inc. v. Rauschenberg, 201 S.W.3d 787 (Tex. App.—Waco 2006) (plaintiff’s burden to prove capacity when controverted)