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105 So. 3d 274
Miss.
2012
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Background

  • Tellus owned shallow gas rights to 8,000 feet in Bilbo A Lease; TPIC owned the gas below 8,000 feet and oil rights in shallow and deep zones.
  • Tellus sued TPIC in 2004 claiming TPIC depleted shallow gas and misreported gas origin, including commingling with other wells.
  • TPIC countered that gas from A-l was from the deep zone, with no shallow gas left by 2001, and raised statute-of-limitations issues.
  • Trial yielded a jury verdict for TPIC; court entered declaratory judgment in Tellus’s favor on ownership before liability was tried.
  • The appeals addressed jury instructions, evidentiary issues, lost profits, and TPIC’s cross-appeal on declaratory judgment authority.
  • The court affirmed the jury verdict and the declaratory judgment on ownership.

Issues

Issue Plaintiff's Argument Defendant's Argument Held
Whether the jury instructions on commingling and damages were reversible. Tellus asserts error in commingling burden and damages interrogatories. TPIC contends instructions properly framed liability and damages, supporting a general verdict. No reversible error; damages issues premised on liability, which supported affirmance.
Whether unlicensed engineers could testify as experts. Tellus argues unlicensed engineers cannot testify under Mississippi law. TPIC contends Rule 702 governs; licensure does not bar admissibility. Unlicensed status does not bar admissibility; testimony admissible under Rule 702.
Whether Garza’s testimony about staining on the fish was improper surprise evidence. Tellus claims Garza exceeded scope of report. 0 Garza’s testimony related to trial issues and rebuttal evidence was permissible. No reversible error; disclosure timing and scope did not prejudice substantial rights.
Whether erroneous exclusion of witness bias evidence requires reversal. Tellus argues Lowe’s bias was probative and improperly excluded. Judge appropriately weighed admissibility; deposition mitigated risk of bias. No reversal; evidence did not affect substantial rights given deposition and context.
Whether the declaratory judgment on ownership was proper given the jury verdict. Tellus sought ownership determination as a threshold issue. Ownership and liability intertwined; court had jurisdiction and discretion to grant declaratory relief. Declaratory judgment proper; ownership determined before conversion trial under Rule 57.

Key Cases Cited

  • Am. Creosote Works v. Rose Bros., 211 Miss. 173 (Miss. 1951) (damages measure not reviewable when liability resolved in defendant's favor)
  • Barth v. Khubani, 748 So.2d 260 (Fla. 1999) (two-issue rule applicability depends on theories of liability)
  • Canadian Nat’l/Ill. Cent. R. Co. v. Hall, 953 So.2d 1084 (Miss. 2007) (evidence rulings reviewed for substantial rights; de novo on law)
  • Buskirk v. Elliott, 856 So.2d 255 (Miss. 2003) (scope of expert testimony and discovery-related issues)
  • Zoerner v. State, 725 So.2d 811 (Miss. 1998) (bias evidence probative and cross-examination context)
  • Cain v. Robinson, 523 So.2d 29 (Miss. 1988) (issues not raised by pleadings may be tried by consent)
  • Tunica County v. Hampton Co. Nat’l Sur., LLC, 27 So.3d 1128 (Miss. 2009) (declaratory judgment rulings reviewed de novo as mixed question of law and fact)
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Case Details

Case Name: Tellus Operating Group, LLC v. Texas Petroleum Investment Co.
Court Name: Mississippi Supreme Court
Date Published: Oct 4, 2012
Citations: 105 So. 3d 274; 2012 Miss. LEXIS 488; 2012 WL 4711415; Nos. 2009-CA-01040-SCT, 2009-CA-01174-SCT, 2009-CA-01041-SCT
Docket Number: Nos. 2009-CA-01040-SCT, 2009-CA-01174-SCT, 2009-CA-01041-SCT
Court Abbreviation: Miss.
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    Tellus Operating Group, LLC v. Texas Petroleum Investment Co., 105 So. 3d 274