White Oak Operating Co. v. BLR Construction Companies
362 S.W.3d 725
Tex. App.2011Background
- White Oak and Stallion entered a Master Service Agreement in 2005 governing work and indemnity provisions related to wild wells.
- May 23, 2007, Stallion performed permatizing work at White Oak's Lawton #3 well in Louisiana; a leak/blowout occurred during the work.
- White Oak paid approximately $956,000 to third-party contractors for well-control, restoration, and pollution cleanup.
- White Oak claimed an oral Alleged Agreement existed on May 23, 2007 under which Stallion would pay all costs and damages from the blowout; Stallion disputed this and asserted the Master Agreement governed payment.
- Stallion sued White Oak for unpaid invoice and damages; White Oak counterclaimed for breach of the Master Agreement, a proposed oral agreement, and fraud.
- The jury (1) found White Oak breached by not paying the invoice, (2) awarded Stallion $357,193.12 (cash), and (3) found no Alleged Agreement, no failure to perform with due diligence, and no fraud.
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Formation of the Alleged Agreement | White Oak contends an oral agreement formed May 23, 2007 | Stallion argues no meeting of the minds on essential terms | Evidence supports no agreement formed |
| White Oak's breach of Master Agreement (payment of invoice) | White Oak asserts no breach due to alleged free-for-service arrangement | Master Agreement unambiguous; no obligation to pay Post-Blowout Services | Jury finding that White Oak failed to pay is legally and factually sufficient |
| Attorney’s fees recovery | If issues 1–2 sustained, fees may be improper | Fees should follow the judgment if breach proven | Overruled; issues 1–2 upheld, fees addressed by stipulation in trial |
| Fraud finding | Stallion allegedly lied about paying for costs with intent not to perform | No proven false statement or intent to defraud | Jury’s failure to find fraud supported by evidence |
| Permatizing work and wellhead damage | Stallion’s bulldozer hit the wellhead or caused the blowout; failed due diligence | Evidence shows no hit or breach; causation and due diligence lacked proof | Evidence supports lack of breach and no causation by Stallion |
Key Cases Cited
- City of Keller v. Wilson, 168 S.W.3d 802 (Tex. 2005) (legal sufficiency standard; weigh evidence with deference to fact finder)
- O'Connor v. Miller, 127 S.W.3d 249 (Tex. App.-Waco 2003) (specifically supports appellate review of factual sufficiency rules)
- Trinity Indus., Inc. v. Ashland, Inc., 53 S.W.3d 852 (Tex. App.-Austin 2001) (fraud/intent considerations in appellate review)
- Pool v. Ford Motor Co., 715 S.W.2d 629 (Tex. 1986) (reversal standard: weigh all evidence; not clearly wrong)
- GTE Mobilnet of S. Tex. v. Pascouet, 61 S.W.3d 599 (Tex. App.-Houston [14th Dist.] 2001) (credibility and weight of witness testimony; defer to trier of fact)
- Clear Lake City Water Auth. v. Friendswood Dev. Co., 256 S.W.3d 735 (Tex. App.-Houston [14th Dist.] 2008) (parol evidence rule; unobjected evidence lacks probative value)