Lead Opinion
SUBSTITUTE OPINION
Two oil and gas companies, an operator and a non-operator, signed an agreement setting forth the terms and conditions of the non-operator’s participation in certain wells being drilled or to be drilled on some of the operator’s Barnett Shale drilling prospects. After that agreement terminated automatically, the two companies exchanged a series of emails. The jury found that the companies agreed in writing
I. Factual and PROCEDURAL Background
Appellee/plaintiff Carrizo Oil & Gas, Inc. had various leases in the Barnett Shale and was either drilling or planning to drill wells to keep certain of these leases from expiring. Appellant/defendant 2001 Trinity Fund, LLC was. interested in participating in certain of Carrizo’s Barnett Shale drilling prospects. Carrizo and Trinity entered into the “Barnett Shale Participation Agreement” on October 10, 2007 (hereinafter “Participation Agreement”). In pertinent part, the Participation Agreement provides as follows:
• Subject to the provisions of the Participation Agreement, Trinity has the potential to earn a portion of Carrizo’s leasehold rights and interest in and to various leases described in the Participation Agreement, (article 1.5).
• Carrizo will drill and Trinity will commit to participate in nineteen wells specified in article 2.2 of the Participation Agreement (“Commitment Wells”) before the expiration date of the relevant leases, so as to prevent the expiration of the leases, (article 2.1).
• Carrizo will provide the drilling rig for the two Commitment Wells on the Blair-Pickering Prospect. For the remaining wells, “Trinity shall provide the drilling rig with specifications approved in advance by Carrizo’s Chief Operations Officer.” “Carrizo reserves the right to utilize its own drilling rig for any wells drilled hereunder in the event that the drilling rig provided by Trinity does not meet with Carrizo’s approval.” (article 2.3).
• All Commitment Wells drilled under the Participation Agreement will be on the cost basis specified in the Participation Agreement, in which a certain cost percentage is allocated to Trinity as to each prospect area in which the Commitment Wells are to be drilled, (article 2.8(a)).
• “[Pjayment by Trinity for its respective share of drilling and casing costs for [the] first well on the Blair-Pickering Prospect shall be received by Car-rizo on or before October 19, 2007, or this Agreement shall automatically terminate.” (article 2.8(b)).
• “If Trinity has complied with all requirements, conditions and obligations of this Agreement, then Trinity shall earn the following right, title and interest in the Leases with respect to each Earning Well in a Prospect Area: [interests specified].” (article 3.1(c)).
• Within thirty days after Trinity has earned its respective working interest*446 in the leases attributable to a Commitment Well, Carrizo shall prepare, execute, and deliver to Trinity an assignment of that interest, (article 3.2).
• “Time is of the essence under this Agreement. Thus, all time limits shall be strictly construed and enforced.” (article 7.3).
• “If Trinity has not complied with each and all of the provisions of this Agreement, then (i) Carrizo shall be relieved of its obligations to make the assignments) specified herein and (ii) Trinity shall have no further rights to earn additional rights hereunder or to undertake additional operations hereunder.” (article 7.3).
• Trinity’s failure to pay Carrizo Trinity’s respective share of drilling and casing costs for the first well on the Blair-Pickering Prospect on or before October 19, 2007, is a failure to comply with the Participation Agreement causing automatic termination of the agreement, but such a failure is not an active and material breach of the Participation Agreement, (article 9.5).
• “This instrument contains the final and entire agreement of [Carrizo and Trinity] with respect to the matters covered by this Agreement and supersedes all prior communications and agreements (written, oral or otherwise) in this regard.” (article 9.11).
Trinity did not pay its respective share of the drilling and casing costs for the first well on the Blair-Pickering Prospect on or before October 19, 2007. Thus, under article 2.8(b), the Participation Agreement automatically terminated at the end of the day on October 19, 2007. Evidence at trial indicated that one of the reasons Trinity gave for not making this payment related to article 2.3 of the Participation Agreement. There was evidence that Trinity expected, under this article, to provide the rig for drilling of all the Commitment Wells to be drilled, except for the two Commitment Wells on the Blair-Pickering Prospect. But Trinity learned that Carri-zo preferred to use its rigs to drill all of the Commitment Wells and that Carrizo planned to not approve any Trinity rig and to invoke its right under article 2.3 of the Participation Agreement to use Carrizo drilling rigs.
Between October 31, 2007, and January 2, 2008, David Friedman, on behalf of Car-rizo, and Rob Arrowood, on behalf of Trinity, exchanged a series of emails that, according to Carrizo, constituted a written agreement by Carrizo and Trinity to continue under the terms of the Participation Agreement without a termination date associated with the non-payment of costs for the first well on the Blair-Pickering Prospect and with a new provision under which Trinity would receive a 1% rebate (hereinafter “Alleged Agreement”). Carrizo alleges that Trinity breached this Alleged Agreement by not paying Carrizo any amount for the costs of any of the Commitment Wells.
Carrizo and Trinity have entered into contracts regarding various matters other than the subject matter of the Participation Agreement. Carrizo and Trinity entered into a participation agreement regarding various oil and gas leases in Den-ton County, Texas (“Denton County Agreement”). On January 21, 2008, Arro-wood sent a letter to Carrizo in a purported attempt to resolve various disputes that had developed between Trinity and Carri-zo. These disputes were not resolved, and one week later Carrizo filed suit in the trial court below. Eventually, Carrizo asserted claims against Trinity for breach of contract, quantum meruit, and promissory estoppel. Carrizo also asserted breach-of-contract and declaratory-judgment claims against Trinity based upon the Denton
The trial court denied various summary-judgment motions, including Trinity’s motion for summary judgment as to Carrizo’s breach-of-contract and quantum-meruit claims relating to the subject matter of the Participation Agreement. The case proceeded to trial before a jury. The jury found that (1) Carrizo and Trinity agreed to the Alleged Agreement and that this agreement was in writing and signed; (2) Trinity failed to comply with the Alleged Agreement; (3) $10,894,000 would fairly and reasonably compensate Carrizo for its damages resulting from this failure to comply; (4) Carrizo rendered valuable services or furnished materials for Trinity, who knowingly accepted and used these services and materials, and Trinity should have known that Carrizo expected to be paid for the work; (5) the reasonable value of these services and goods was $10,894,000; (6) Carrizo substantially relied to its detriment on Trinity’s promise concerning the Barnett Shale Drilling Program and this reliance was foreseeable by Trinity; and (7) $10,894,000 would fairly and reasonably compensate Carrizo for its damages resulting from its reliance on Trinity’s promise. The jury also made findings regarding Trinity’s claims relating to the Denton County Agreement and regarding each party’s reasonable and necessary attorney’s fees.
Trinity asked the trial court to disregard the jury’s findings as to Carrizo’s claims against Trinity for money damages. Nonetheless, the trial court rendered judgment on the jury’s verdict. The trial court concluded that Trinity was indebted to Carrizo in the amount of $12,070,549 ($10,-894,000 plus prejudgment interest). The trial court rendered declaratory relief regarding the Denton County Agreement consistent with the jury’s findings. Based upon the jury’s findings, the trial court also determined that Carrizo is indebted to Trinity in the amount of $404,159.92 under the Denton County Agreement. The trial court further concluded that Trinity was indebted to Carrizo in the amount of Car-rizo’s reasonable and necessary fees as found by the jury and that Carrizo was indebted to Trinity in the amount of Trinity’s reasonable and necessary fees as found by the jury. After offsetting these amounts and taking into account an offset that Carrizo had made against certain obligations to Trinity, the trial court rendered a judgment in Carrizo’s favor for the net amount. In its judgment, the trial court did not determine that Trinity owned any interest in the leases covered by the Participation Agreement; however, the court did state that “Carrizo’s obligation to pay Trinity any revenue derived from the Wells drilled under the terms of the [Participation Agreement] ... is controlled by the terms of the [Participation Agreement].” The language used in the final judgment shows that the trial court rendered judgment based upon the jury’s findings regarding the breach-of-contract claim rather than the quantum-meruit claim or the promissory-estoppel claim.
II. Issues PRESENTED
Trinity has appealed the trial court’s judgment; Carrizo has not appealed. Trinity presents the following issues:
(1) The trial court erred in denying Trinity’s summary-judgment motions regarding Carrizo’s breach-of-contract claim.
*448 (2) The trial court should not have submitted the breach-of-contract claim to the jury.
(3) The evidence is legally insufficient, or in the alternative factually insufficient, to support the jury’s verdict on Carrizo’s breach-of-contract claim.
(4) The trial court erred in denying Trinity’s summary-judgment motions regarding Carrizo’s quantum-meruit claim.2
(5) The trial court should not have submitted the quantum-meruit claim to the jury.
(6) The evidence is legally insufficient, or in the alternative factually insufficient, to support the jury’s verdict on Carrizo’s quantum-meruit claim.
(7) The trial court should not have submitted Carrizo’s promissory-estop-pel claim to the jury.
(8) The evidence is legally insufficient, or in the alternative factually insufficient, to support the jury’s verdict on Carrizo’s promissory-estoppel claim.
(9) In the alternative, the damages awarded to Carrizo on its promissory-estoppel claim should be reduced.
(10)The evidence does not support the trial court’s award of attorney’s fees to Carrizo.
III. Standard of Review
On appeal, Trinity challenges the legal sufficiency of the evidence supporting various jury findings. When reviewing the legal sufficiency of the evidence, we consider the evidence in the light most favorable to the challenged finding and indulge every reasonable inference that would support it. City of Keller v. Wilson,
IV. Analysis
A. Is the evidence legally sufficient to support the jury’s finding that Car-rizo and Trinity entered into the Alleged Agreement?
Under its second issue, Trinity asserts that the trial court erred in submitting Question 1 to the jury over Trinity’s objection that the evidence was legally insufficient to support the submission of this question to the jury. Under its third issue, Trinity asserts that the evidence is legally insufficient to support the jury’s finding in response to Question 1 that Car-rizo and Trinity entered into the Alleged Agreement. Thus, in both issues Trinity challenges the legal sufficiency of the evidence to support an affirmative answer in response to Question 1. In this question, the trial court asked the jury whether Carrizo and Trinity “agree[d] to continue with the [Participation Agreement] without a termination date associated with the nonpayment of costs for the first well on the Blair-Pickering prospect and with a 1% rebate payable to Trinity.” The trial court also instructed the jury that an agreement concerning the transfer of an interest in minerals must be in writing and signed. Because the Participation Agreement, with the modifications stated in Question 1, is
In its live petition, Carrizo pleaded that the Participation Agreement terminated when Trinity did not pay its respective share of the drilling and casing costs for the first well on the Blair-Pickering Prospect on or before October 19, 2007. Trinity agrees with this proposition, and it is correct under the unambiguous language of the Participation Agreement and the uncontroverted evidence that Trinity did not make this payment. The jury was not asked to determine whether Trinity failed to comply with the Participation Agreement; rather, the jury was asked whether Trinity failed to comply with the Alleged Agreement. In response to Question 1, the jury found that Carrizo and Trinity agreed to the terms of the Alleged Agreement. To create an enforceable contract, there must be (1) an offer, (2) acceptance in strict compliance with the terms of the offer, (3) a meeting of the minds, (4) each party’s consent to the terms, and (5) execution and delivery of the contract with the intent that it be mutual and binding. See Parker Drilling Co. v. Romfor Supply Co.,
The only possible basis for the jury’s finding that the parties entered into the Alleged Agreement is a series of emails exchanged by Friedman and Arrowood between October 31, 2007, and January 2, 2008. These emails will now be discussed in chronological order.
On October 31, 2007, Friedman sent an email to Arrowood (1) stating that Brad Fisher of Carrizo was uncomfortable with using a Trinity rig to drill any wells, (2) indicating that Carrizo was unwilling to use any of Trinity’s drilling rigs, and (3) stating that Carrizo realized that the use of Trinity’s rigs represented a part of the
On November 2, 2007, Arrowood emailed Friedman saying, “I accept in principle but need to have this interest flow directly back to me.” Arrowood stated that he had agreements with his investors and that he was not planning on including them in the compensation received from the use of Trinity’s rigs. Arrowood stated that “[t]he compensation on the rigs was going directly to me.” Arrowood asked Friedman if he could figure out a way to have the additional compensation go directly to him. On the same day, Friedman responded that “[w]hat we can do is send a 1% rebate for each well directly to you.” Friedman stated that, “[i]f you are in agreement in principle, then I’m assuming we can work out the mechanics.” Friedman told Arrowood that Carrizo needed to know that day whether Trinity planned to pay Carrizo and exactly when it planned to pay. Arrowood responded that day with the following two sentences: “That will work. I will try to call before the day is over and give you an exact time.”
Three days later, on November 5, 2007, Friedman emailed Arrowood asking him to provide a final answer on that day as to whether and when Trinity planned to pay Carrizo. Friedman stated that “[a]fter today it will be out of my hands.” Arrowood responded: “Yes, has been my final answer. I will give you the final date asap. I am waiting on a couple more executed documents and will proceed with all payments.” Friedman responded, “[w]e need a definitive payment date now.” Friedman also stated that Carrizo needed to receive a wire transfer by the next day “in order to keep this agreement alive.” Friedman reiterated that after that day, it would be “out of his hands.” Arrowood responded that “[i]t was just [November 2, 2007,] that we agreed to a supplement to this agreement that you changed last minute [sic].” Arrowood stated that if Carrizo wanted Trinity to submit the funds, then Carrizo had to wait until Trinity had all of the executed documents between Trinity and its investors. Arrowood asked for certain exhibits that he said he needed to attach to Trinity’s agreement with its investors.
Friedman responded the next day on November 6, 2007, angrily accusing Trinity of having had no intention to pay Carrizo all along and complaining that Trinity was always blaming its problems on Carrizo. The next email in evidence is dated one month later on December 7, 2007, from Arrowood to Friedman. In this short email Arrowood claims that his “funding is finally in.” Nonetheless, no payment was forthcoming from Trinity to Carrizo.
On December 12, 2007, counsel retained by Carrizo sent a letter to Trinity demanding payment of the Trinity’s respective share of the drilling and casing costs for the first well on the Blair-Pickering Prospect under the Participation Agreement. In this letter, counsel for Carrizo demanded that Trinity pay these costs and other sums by December 20, 2007. Carrizo stated that if Trinity did not pay its respective share of the drilling and casing costs for the Blair-Pickering wells by that date, Carrizo intended to exercise all rights and remedies available to it, including filing suit against Trinity to recover the amounts
On December 14, 2007, Arrowood sent an email to Friedman stating that his attorney would have “the agreement” ready by December 18 and that once the agreement was executed, Arrowood would “forward funds.” On December 18, 2007, Arrowood sent Friedman a draft of a document amending the Participation Agreement, asking Friedman to review the document and advise if he wanted to make any changes. The next day, Friedman responded that Carrizo was analyzing Trinity’s proposed agreement and noted that the compensation specified in the proposed agreement was “different from the compensation we agreed to with you on 11/2/07.” The evidence indicates that, sometime between December 19, 2007, and December 30, 2007, Carrizo sent Trinity a draft of a document amending the Participation Agreement. This document was lost and is not in our record. On December 80, 2007, Carrizo sent Trinity a different draft of a “First Amendment to Barnett Shale Participation Agreement” and asked Trinity to disregard the previous draft. Carrizo asked that, by January 4, 2008, Trinity (1) execute the proposed amendment to the Participation Agreement, (2) wire to Carrizo the amount corresponding to Trinity’s respective share of the drilling and casing costs for the Blair-Pickering wells, and (8) make secure arrangements for payment of Trinity’s share of all other costs for the other Commitment Wells. Three days later, Carrizo forwarded a copy of the “First Amendment to Barnett Shale Participation Agreement” that was signed by Carrizo. Trinity never executed this document, nor did it ever pay Carrizo any amount for the costs of any of the Commitment Wells.
Under the unambiguous language used by Friedman and Arrowood in this series of emails, there was no mutual understanding and assent by Carrizo and Trinity to a written agreement to continue with the Participation Agreement without a termination date associated with Trinity’s failure to pay the costs for the first well on the Blair-Pickering Prospect on or before October 19, 2007. Under a single sentence in article 2.8(b) of the Participation Agreement, the parties agreed that Trinity’s payment of its respective share of drilling and casing costs for the first well on the Blair-Pickering Prospect would be received by Carrizo on or before October 19, 2007, and if payment was not received by this date, then the Participation Agreement would automatically terminate. Because this payment was not received, the Participation Agreement terminated at the end of the day on October 19, 2007. Significantly, by not paying these costs by October 19, 2007, Trinity failed to comply with a provision of the Participation Agreement. Therefore, under the unambiguous language of article 7.3 of the agreement, Carrizo was relieved of its obligations to assign Trinity any interest in the Commitment Wells, and Trinity had no further ability to earn additional rights in any lease with respect to a Commitment Well or to undertake additional operations under the Participation Agreement. Because Trinity had not earned or obtained any interest in any lease related to any Commitment Well on or before October 20, 2007, Trinity’s failure to pay the costs under article 2.8(b) meant that, under the terms of the Participation Agreement, Trinity had no such interest and was not entitled to receive such an interest in the future. On the other hand, because the Participation Agreement had terminated, no further obligation to pay costs could
If, after October 19, 2007, the parties were to agree to continue forward under the terms of the Participation Agreement without the automatic termination due to Trinity’s failure to timely pay the costs under article 2.8(b) and without any change to articles 3.1(c) and 7.3, then Trinity would be obligating itself to pay millions of dollars in costs, but would have no ability to earn or receive any interest in any lease relating to the Commitment Wells. Continuing forward with the Participation Agreement without a termination date raises various issues, such as: (1) whether the due date for Trinity’s cost payment regarding the Blair-Pickering Prospect would be on October 19, 2007, and therefore be considered as past due, (2) if the payment would still be considered past due, whether articles 3.1(c) and 7.3 should be changed so that Trinity would still have a potential ability to earn and receive an interest in the leases related to the Commitment Wells, and (3) whether the due date for Trinity’s cost payment regarding the Blair-Pickering Prospect would be changed to a future date so that the payment might be made timely by Trinity. None of these issues are addressed in writing in the series of emails between Friedman and Arrowood.
In Friedman’s October 31, 2007 email, he proposes a change to the allocation of costs under the Participation Agreement, and then unambiguously states that all other terms of the Participation Agreement would remain the same. Under the unambiguous terms of this proposal, the termination date in article 2.8(b) would not be removed, nor would articles 3.1(c) and 7.3 be changed so that Trinity would still have a potential ability to earn and receive an interest in the leases related to the Commitment Wells. In response, Arro-wood says that he accepts in principle, but needs to materially change the nature of the potential new compensation. Thus, Arrowood shows that agreement in principle does not mean that the parties have reached agreement on all material terms.
Friedman then responds with a change in the potential new compensation to Trinity. Friedman does not reiterate the full terms of his proposal. Presuming that he is proposing the same terms as before except with the change to the method of potential compensation, then under the unambiguous terms of this proposal, the termination date in article 2.8(b) would not be removed, nor would articles 3.1(c) and 7.3 be changed. Friedman says, “[i]f you are in agreement in principle, then I’m assuming we can work out the mechanics.” Both under the plain meaning of “agreement in principle” and as already shown by Arro-wood in a prior email, an agreement in principle is not an agreement as to all material terms. Indeed, Friedman specifically says that, even with an agreement in principle, “the mechanics” still need to be “work[ed] out.” In response to this proposal, Arrowood said, “[tjhat will work.” Presuming that Arrowood was saying that he agreed in principle with Friedman, the statements in these emails do not constitute a written agreement to continue with the Participation Agreement without a termination date associated with Trinity’s failure to pay the costs under article 2.8(b). In addition, even if Arrowood were deemed to have accepted Friedman’s prior offer, as discussed above, that offer unambiguously stated that all other terms of the Participation Agreement would remain the same, which would mean that article 2.8(b) was not changed.
On November 5, 2007, Friedman again asked Trinity if and when it would pay its share of the costs relating to the Blair-Pickering Prospect. Friedman did not
After Trinity continued not to pay any costs, counsel for Carrizo sent a demand letter to Trinity based upon the Participation Agreement and not based upon any Alleged Agreement entered into by email. Shortly thereafter, Trinity sent a draft of written amendment to Carrizo that did not have the same terms as those discussed by email. In response, Carrizo sent a draft of a “First Amendment to Barnett Shale Participation Agreement.” That draft does not refer to the parties having agreed to a prior amendment to the Participation Agreement, and it is drafted as if it is the first amendment to the Participation Agreement. The terms of that amendment are different from the terms of Trinity’s proposed draft and also contain terms not stated in the series of emails.
Carrizo asserts that whether the parties agreed to the Alleged Agreement is a fact issue for the jury’s determination. But the negotiations, alleged offers, and alleged acceptances in the case under review are in writing and the language of these writings is unambiguous. In this situation, whether the parties agreed to the Alleged Agreement is a question of law. See Antonini v. Harris Cnty. Appraisal Dist.,
Carrizo also relies upon Preston Farm and Ranch Supply, Inc. v. Bio-Zyme Enterprises. See
Carrizo cites Adams v. Abbott. See
Accordingly, Trinity’s second issue and the part of the third issue in which Trinity challenges the legal sufficiency of the evidence supporting the jury’s finding in re
B. Is the evidence legally sufficient to support the jury’s quantum-meruit finding?
Under its fifth and sixth issues, Trinity asserts that the evidence is legally insufficient to support the jury’s quantum-meruit finding in response to Question 4. The trial court did not render judgment based upon Carrizo’s quantum-meruit claim. If, on original submission, the parties brief issues relating to the plaintiff’s election of alternative theories of recovery under the Boyce Iron Works case, this court may address these issues on original submission. See Boyce Iron Works, Inc. v. Sw. Bell Tel. Co.,
In response to Question 4, the jury found that (1) Carrizo rendered valuable services or furnished materials for Trinity, who knowingly accepted and used these services and materials, and (2) Trinity should have known that Carrizo expected to be paid for the work. At the charge conference, no party objected to the form of Question 4; therefore, we measure the sufficiency of the evidence using the language of this question and the instructions associated with it, even if they do not correctly state the law. See Osterberg,
Under this question and under Texas law, to recover in quantum meruit, Carrizo must show that it rendered valuable services or furnished materials for Trinity; it is not enough to show that Carrizo rendered valuable services or furnished materials that benefitted Trinity. See Truly v. Austin,
Carrizo points to the following language in the trial court’s judgment: “Carrizo’s obligation to pay Trinity any revenue derived from the Wells drilled under the terms of the [Participation Agreement] ... is controlled by the terms of the [Participation Agreement].” Carrizo argues that, based upon this language, “Trinity now owns an interest in all the drilled wells.” For the reasons stated above, under the unambiguous language of the Participation Agreement, Trinity owns no such interest, and in its judgment the trial court states that Trinity has whatever interest it is entitled to under the Participation Agreement.
In sum, drilling the Commitment Wells directly benefited the interests of Carrizo, and Trinity had no interest in these prospects or leases that would be benefitted by the drilling of these wells. Considering the evidence in the light most favorable to the challenged finding, indulging every reasonable inference that would support it, crediting favorable evidence if reasonable jurors could, and disregarding contrary evidence unless reasonable jurors could not, we conclude that the trial evidence would not enable reasonable and fair-minded people to find in response to Question 4 that Carrizo rendered valuable services or furnished materials for Trinity, who knowingly accepted and used these services and materials. See City of Keller,
Under its seventh and eighth issues, Trinity asserts that the evidence is legally insufficient to support the jury’s promissory-estoppel finding in response to Question 6. The trial court did not render judgment based upon Carrizo’s promissory-estoppel claim. But because the parties have briefed issues relating to the Carrizo’s Boyce Iron Works election under this alternative theory of recovery, this court may address these issues on original submission. See Boyce Iron Works, Inc.,
In response to Question 6, the jury found that Carrizo substantially relied to its detriment on Trinity’s promise concerning the Barnett Shale Drilling Program and this reliance was foreseeable by Trinity. At the charge conference, no party objected to the form of Question 6; therefore, we measure the sufficiency of the evidence using the language of this question and the instructions associated with it, even if they do not correctly state the law. See Osterberg,
To recover under a promissory-estoppel theory, Carrizo must show a promise by Trinity concerning the Barnett Shale Drilling Program. As potential promises by Trinity, Carrizo points to two statements by Arrowood prior to the execution of the Participation Agreement: (1) ‘Tes, we are in.” and (2) “As I told you before, I intend on being involved in the drilling program.” In the Participation Agreement, Carrizo and Trinity agreed that “[t]his instrument contains the final and entire agreement of [Carrizo and Trinity] with respect to the matters covered by this Agreement and supersedes all prior communications and agreements (written, oral or otherwise) in this regard.” Evidence of these two alleged promises is incompetent as a matter of law to show a promise under the parol evidence rule and the integration clause of the Participation Agreement.
After the Participation Agreement terminated, as discussed above, Arrowood sent emails to Friedman stating “[t]hat will work” and “[y]es, has been my final answer.” We conclude that either alone or together these statements are too vague and indefinite to constitute a promise that would support a finding of promissory es-toppel.
Considering the evidence in the light most favorable to the challenged finding, indulging every reasonable inference that would support it, crediting favorable evidence if reasonable jurors could, and disregarding contrary evidence unless reasonable jurors could not, we conclude that the trial evidence would not enable reasonable and fair-minded people to find in response to Question 6 that Carrizo substantially relied to its detriment on Trinity’s promise concerning the Barnett Shale Drilling Program and this reliance was foreseeable by Trinity. See City of Keller,
D. Is the evidence insufficient to support the trial court’s award of attorney’s fees in favor of Carrizo?
In its tenth issue, Trinity asserts that the evidence does not support the award of attorney’s fees to Carrizo relating to the Participation Agreement claims. But, in its judgment, the trial court made a general award of attorney’s fees to Carri-zo, without limiting the fees to the Participation Agreement claims and without specifying the statutory basis for the award. In its live pleading, Carrizo sought declaratory relief regarding various matters relating to the Denton County Agreement and cited the Texas Declaratory Judgments Act generally. But Carrizo did not specifically cite Texas Civil Practice and Remedies Code section 37.009. See Tex. Civ. Prac. & Rem.Code Ann. § 37.009 (West 2012) (stating that “[i]n any proceeding under this chapter, the court may award costs and reasonable and necessary attorney’s fees as are equitable and just”).
In its final judgment, the trial court rendered various declarations relating to the Denton County Agreement. To show that the trial court erred in awarding attorney’s fees to Carrizo, Trinity must show that this award was improper under Texas Civil Practice and Remedies Code section 87.009. See Tex. Civ. Prac. & Rem.Code Ann. § 87.009; Gottfried,
Trinity’s main appellate argument regarding this attorney’s fees award is that (1) Carrizo was not entitled to recover attorney’s fees as to all of its claims; (2) Carrizo was required to segregate its attorney’s fees so that there was evidence of reasonable and necessary fees only as to the claim for which Carrizo was entitled to recover attorney’s fees; and (3) the evidence is insufficient to support the attorney’s fees award because there was no evidence of reasonable and necessary fees as to the claim for which Carrizo was entitled to recover attorney’s fees. But, in Question 14, the trial court asked the jury to find reasonable fees for the necessary services of Carrizo’s attorneys, without limiting the fees to any claim and without requiring segregation of attorney’s fees. No party objected to this question at the charge conference. Because Trinity did not object to the lack of any requirement in the jury charge that the attorney’s fee be segregated, Trinity waived this complaint.
Trinity also argues that this court must reverse the trial court’s award of fees to Carrizo if this court reverses the trial court’s judgment as to Carrizo’s breach-of-contract, quantum-meruit, and promissory-estoppel claims. We disagree. In its final judgment, the trial court made various declarations relating to the Denton County Agreement that Trinity has not challenged on appeal (“Denton County Declarations”). As discussed above, to show that the trial court erred in awarding attorney’s fees to Carrizo, Trinity must establish that this award was improper under Texas Civil Practice and Remedies Code section 37.009. But, on appeal, Trinity has not
On rehearing, Trinity asserts that it won at trial regarding the Denton County issues. But Trinity has not asserted that the award was improper under Texas Civil Practice and Remedies Code section 37.009. It is not apparent from the face of the Denton County Declarations which of them favor Trinity and which favor Carri-zo. It appears that one or more of the declarations in the trial court’s judgment are in favor of Carrizo. In any event, the award of attorney’s fees in a declaratory-judgment action is within the trial court’s discretion and is not dependent upon a finding that a party substantially prevailed. See Barshop v. Medina,
Concluding that the arguments asserted by Trinity under its tenth issue lack merit, we overrule that issue.
E. What is the appropriate judgment in this appeal?
The evidence is legally insufficient to support at least one of the essential elements of Carrizo’s breaeh-of-contract, quantum-meruit, and promissory-estoppel claims (“Carrizo’s Claims”). Therefore, the trial court erred in rendering judgment that Trinity is indebted in to Carrizo in any amount based upon Carrizo’s Claims, and rendition of such a judgment is not appropriate in response to Carrizo’s conditional Boyce Iron Works elections. In this situation, a proper appellate judgment ordinarily would be one in which this court modifies the part of the trial court’s judgment dealing with Carrizo’s Claims to delete all monetary awards in Carrizo’s favor and to render the judgment the trial court should have rendered, and then affirms the judgment as modified. Or, a proper appellate judgment also might be one in which this court reverses the trial court’s judgment in part and renders the judgment the trial court should have rendered.
Before rendering a money judgment in favor of Carrizo, the trial court gave Trinity credit for an offset in the amount of $816,210.64 that Carrizo had applied to various amounts owed by Carrizo to Trinity. Under the language of the trial court’s judgment, it appears that some of this offset amount may be attributable to “the sale of production attributable to an undivided two percent (2%) of 8/8ths of seventy percent (70%) overriding royalty interest (to the extent of Trinity’s ownership interest in a respective unit) on a well by well basis through the point of first sale of oil and gas in and to the Leases and Lands in the Barnett Shale Drilling Program, from the end of trial to the present.” To the extent that the offset amount is based on the sale of production that is or would be
V. Conclusion
Under the applicable standard of review, the trial evidence is legally insufficient to support the jury’s findings in response to Questions 1, 4, and 6. The trial court erred in rendering judgment that Trinity is indebted in any amount to Carrizo based upon Carrizo’s Claims. Rendition of such a judgment is not appropriate in response to Carrizo’s conditional Boyce Iron Works elections. Ordinarily, this court either would affirm the trial court’s judgment as modified or would reverse the trial court’s judgment in part and render the judgment the trial court should have rendered. But, based upon the form of the trial court’s judgment, this court is not able to effectively render judgment or affirm the trial court’s judgment as modified.
We affirm the part of the trial court’s judgment in which the trial court makes the Denton County Declarations, which Trinity has not challenged on appeal. As described in more detail in our judgment, we sever and reverse the remainder of the trial court’s judgment, and remand this part of the judgment to the trial court for the limited purpose of (1) further proceedings necessary to determine the amount, if any, of the $816,210.64 offset in the trial court’s 2010 judgment that is not based on the sale of production that is or would be attributable to an interest in a well referenced in article 2.2 of the Participation Agreement and (2) rendition of a new, final judgment in accordance with the instructions contained in this court’s judgment on appeal.
SEYMORE and JAMISON, JJ„ concurring.
Notes
. To the extent that we change the analysis and judgment regarding the attorney’s fees awarded to Carrizo Oil & Gas, Inc. and to the extent that we affirm part of the trial court’s judgment, we grant Carrizo’s motion for rehearing, though we do not agree with all of Carrizo’s arguments in support of this relief; otherwise, we deny the rehearing motion. We withdraw the opinion issued in this case on October 16, 2012, and issue this opinion in its place. This substitute opinion is the unanimous opinion of the court as to sections IV.B., IV.C., IV.D., and IV.E (addressing issues pertaining to the quantum-meruit claim, the promissory-estoppel claim, attorney’s fees, and the appropriate appellate judgment). It is a plurality opinion as to section IV.A., with two justices concurring in the judgment only as to this part.
. Trinity numbers its issues separately for each claim. For ease of reference, we have numbered the issues from first to tenth in the order in which Trinity lists them in its brief.
. The trial court also instructed the jury regarding the Uniform Electronic Transactions Act. See Tex. Bus. & Com.Code Ann. § 322.001, et seq. (West 2012). The jury impliedly found that the parties agreed to enter into the Alleged Agreement by electronic means and that Arrowood and Friedman executed or adopted a symbol associated with their respective emails with the intent to sign the emails. Trinity has challenged the legal sufficiency of these findings, but it is unnecessary to address these challenges in this opinion.
. In his substitute concurring opinion, Justice Seymore cites two cases involving issues as to whether the trial court properly submitted the interpretation of a written contract to the jury. See Daewoo Shipbuilding & Marine Engineering, Co. v. Ikanco Inc.,
. It is not necessary to address Trinity's argument that the evidence is legally insufficient to support the jury’s finding that the parties agreed to enter into the Alleged Agreement by electronic means and that Arrowood and Friedman executed or adopted a symbol associated with their respective emails with the intent to sign the email. See Tex. Bus. & Com.Code Ann. §§ 322.002, 322.007 (West 2012) (provisions of the Uniform Electronic Transactions Act parts of which were submitted to the jury in Question 1). In addition, it is unnecessary to address Trinity’s argument that the statute of frauds bars enforcement of the Alleged Agreement as a matter of law.
. In its first and fourth issues, Trinity challenges on appeal the trial court’s denial of its summary-judgment motions regarding Carri-zo's breach-of-contract and quantum-meruit claims. When a trial court’s denial of a motion for summary judgment is followed by a trial on the merits, an appellate court cannot review the trial court's denial of summary judgment. See Ackermann v. Vordenbaum,
. In arguing to the contrary, Carrizo cites to Italian Cowboy Partners, Ltd. v. Prudential Ins. Co. of America. See
. Even if, notwithstanding the parol evidence rule and the integration clause of the Participation Agreement, we could consider the two statements made before the parties signed the Participation Agreement, we would conclude that these two statements were too vague and indefinite to constitute a promise that would support a finding of promissory estoppel.
. Question 15 likewise asked the jury to find a reasonable fee for the necessary services of Trinity's attorneys, without limiting the fees to any claim and without requiring segregation. The trial court awarded to Trinity the fees found by the jury in response to this question.
. Trinity does not assert that the evidence is insufficient to support the jury’s answer to Question 14, which did not require segregation of attorney’s fees.
. Trinity asserts that this court cannot affirm the attorney’s fees award in favor of Carrizo based upon the part of the judgment regarding the Denton County Agreement because Carrizo did not make this argument in its appellee's brief on original submission. Even if Carrizo failed to make this argument on original submission, Carrizo, as appellee, was not required to make this argument. Rather, Trinity was required on original submission to show the impropriety of the attorney’s fees award under Texas Civil Practice and Remedies Code section 37.009.
Concurrence Opinion
concurring.
I join sections IV.B., IV.C. IV.D., and IV.E. of Justice Frost’s Substitute Opinion (addressing issues pertaining to the quantum-meruit claim, the promissory-estoppel claim, attorney’s fees, and the appropriate appellate judgment). I write separately because I disagree with section IVA. of Justice Frost’s Substitute Opinion (the “plurality”) pertaining to appellant’s second issue. Specifically, I would hold, as a matter of law, the parties did not intend to continue the Barnett Shale Participation Agreement (“BSPA”) by using electronic communications, as prescribed under the Texas Uniform Electronic Transactions Act (“UETA”). Accordingly, the trial court should not have submitted Jury Question No. 1 because the various contractual documents unambiguously establish that the parties did not agree to continue the BSPA.
Appellant’s trial counsel objected to submission of Question No. 1 “in its total on the fact that the evidence demonstrates that an agreement was not reached post termination of the [BSPA].” Accordingly, appellant preserved for appeal whether, as a matter of law, the parties agreed to continue with the BSPA. In considering appellant’s contention that no enforceable contract was formed, our first task must be to determine whether the transactional or contracting language used by the parties is ambiguous. Lenape Res. Corp. v. Tenn. Gas Pipeline Co.,
The plurality acknowledges that “the negotiations, alleged offers, and alleged acceptances in the case under review are in writing and the language of these writings is unambiguous.” I agree. The plurality concludes: “whether the parties agreed to the Alleged Agreement is a question of law.” I agree. Because the contract language in question is unambiguous, the focus should be on two questions of law which were erroneously submitted to the jury
The plurality assumes that the parties agreed to amend terms and conditions of the BSPA through email communications. In describing an email sent by appellee’s representative, the plurality opines that “under the unambiguous language of this proposal, the termination date in section 2.8(b) would not be removed.... ” The plurality avoids the pivotal question of law— did the parties agree to be bound by their negotiations in electronic communications? I disagree with this approach. For reasons outlined below, I would hold, as a matter of law, that the parties did not
There is no patent or latent ambiguity
After determining there is no patent or latent ambiguity in relevant provisions of the BSPA, this court should focus on whether there is patent or latent ambiguity in relevant email communications. Ap-pellee argues that the question of whether the parties agreed to conduct a transaction by electronic means is a fact issue which was properly submitted to the jury with appropriate instructions regarding application of the UETA, and appellant did not object to those instructions. Appellee also contends the jury’s affirmative answer to Question No. 1 must be upheld because appellant waived any objection to that portion of the charge. See Osterberg v. Peca,
Whether the parties agree to conduct a transaction by electronic means is determined from the context and surrounding circumstances, including the parties’ conduct. See Tex. Bus. & Com.Code Ann. § 322.005(b) (West 2009). Because the parties signed an agreement reflecting their mutual intent not to be bound by an amendment to the BSPA unless the amendment is in writing and signed by both parties,
Appellee argues that the parties mutually agreed to amend the BSPA through electronic communications because the established rules of contract formation have been expanded by the UETA. See id. § 322.001 et seq. (West 2009 & Supp. 2012). However, the UETA does not supplant common law principles that govern formation of contracts.
Admittedly, the plain meaning of words in the email communications reflect contract negotiations. However, as required under the BSPA, the parties also attempted to amend the BSPA by drafting and forwarding written instruments to be signed by both parties. The following chronology is instructive: (1) on December 14, 2007, appellant’s representative sent an email to appellee’s representative stating that his attorney would have “the agreement” ready by December 18, 2007; (2) on December 18, 2007, appellant’s representative sent appellee a draft amendment to the BSPA, asking appellee’s representative to review and edit; (3) appellee’s representative responded that appellant’s proposed agreement was under consideration and noted that the compensation specified was different from the amount previously specified by the parties; (4) sometime between December 19, 2007 and December 30, 2007, appellee sent appellant a draft amendment to the BSPA; apparently, this document was lost or is not in the appellate record; (5) on December 30, 2007, appellee sent appellant a different draft of a “First Amendment to Barnett Shale Participation Agreement” and requested that appellant disregard the previous draft; (6) subsequently, appellee’s representative demanded that appellant’s representative sign the proposed amendment to the BSPA by January 4, 2008; (7) thereafter, appellee forwarded a copy of the “First Amendment to Barnett Shale Participation Agreement,” signed by appellee’s representative; (8) appellant’s representative never signed or returned the proposed amendment.
In sum, the following undisputed evidence establishes, as a matter of law, that the parties did not agree to amend the BSPA and continue business by waiving automatic and mandatory termination provisions: (1) the parties entered into a written agreement (BSPA) that involved exploration and production of mineral interest; (2) under the BSPA, the parties agreed that no amendments would be effective without a wilting, signed by the parties; (3) subsequently, the parties engaged in email negotiations regarding an amendment to the BSPA; (4) in their email communications, the parties did not express any agreement to waive provisions pertaining to amendments to the BSPA or agree that they would be contractually bound by verbiage in electronic communications; (5) pursuant to requirements expressed in the BSPA, the parties
This undisputed evidence, combined with the fact that the parties previously agreed any modifications would be in writing, conclusively establishes appellant’s assertion that the parties did not waive the requirement of a signed writing to amend the BSPA. There is no language in any of the emails raising a fact issue regarding whether the parties waived the requirement of a signed writing or agreed that electronic communications were sufficient to bind the parties to a new contract or amend the BSPA. The chosen verbiage and multiple efforts to obtain signatures on a written or printed amendment negate any implication or inference that the parties agreed to be bound by their emails.
Notwithstanding application of the UETA to these facts, the parties plainly did not agree to amend and continue the BSPA without condition-precedent language in section 2.8(b) terminating the contract for failure to timely remit sums due on October 19, 2007. We are cognizant of the fact that most individuals send and receive multiple emails every day. Consequently, courts should be hesitant to imply or infer an agreement to transact business or negotiate contracts electronically merely because emails were exchanged. See Cunningham v. Zurich Am. Ins. Co.,
I would hold, as a matter of law that there was no “meeting of the minds” to use electronic communications to amend the BSPA and, thus, no agreement to amend or continue to BSPA. Komet,
. Appellate courts should be reticent to disturb jury verdicts unless required by law. See, e.g., McWhorter v. Humphreys,
. The jury impliedly found that the parties agreed to continue and amend the BSPA by electronic means. Additionally, relative to the UETA the jury impliedly found that the parties executed or adopted a symbol associated with their respective emails with the intent to sign the emails.
.The plurality does not address appellant’s argument that the evidence is legally insufficient to support the jury's finding that the parties agreed to amend the BSPA by electronic communications.
. The plurality does not explain the difference between patent and latent ambiguity. DeClaris Assocs. v. McCoy Workplace Solutions, L.P.,
. Additionally, the parties seem to acknowledge that the BSPA involves conveyance of mineral interest, and all such agreements must be in writing. See Vela v. Pennzoil Producing Co.,
. I acknowledge that under the UETA a record may not be denied its legal effect solely because it is in electronic form, and, if a law requires a record to be in writing, an electronic record satisfies the law. See Tex. Bus. & Com.Code Ann. § 322.007(a)-(d). However, the essential inquiry is whether parties agreed to amend the BSPA through electronic communications. See id. § 322.005(b); see also id. § 322.007, comment 2.a. (West 2009) ("The requirements of [the general Texas statute of frauds] may now be met electronically where the parties have agreed to conduct the
. Whether an electronic record or signature has legal consequences is determined by this chapter and other substantive and applicable law. See Tex. Bus. & Com.Code Ann. §§ 322.003(d) (West Supp.2012); 322.005(e).
. See also Tex. Bus. & Com. Code Ann. § 322.005 comment 2. ("While [UETA] removes barriers to the use of electronic records and electronic signatures, it does not confer an automatic right on one party to conduct a transaction by electronic means. In consensual transactions, e.g., agreements, both parties must agree to conduct the transaction by electronic means.”).
. This holding is confined to the facts of this case. There may be other fact patterns in which a jury issue arises regarding intent of the parties to be bound by emails, without specific language reflecting mutual assent to be bound.
Concurrence Opinion
concurring.
I agree with the disposition of all issues in Justice Frost’s Opinion and with the
In its second and third issues, Trinity contends, respectively, that the trial erred in submitting the breach-of-contract cause of action to the jury and that the evidence is legally insufficient to support the jury’s findings. The heart of Trinity’s challenge goes to whether a new agreement was formed after the Participation Agreement terminated under its own terms. Whether a meeting of the minds occurred in a particular case, and thus a contract was formed, is usually a matter for the jury. Foreca, S.A. v. GRD Dev. Co.,
Although the exchange of emails between David Friedman, on behalf of Carri-zo, and Rob Arrowood, on behalf of Trinity, exhibited a desire by each side to reach an agreement, at no place in the emails do Friedman and Arrowood agree as to when Trinity would have to make its payment for the first well. This term was deemed so important to the original Participation Agreement that the whole agreement automatically terminated when Trinity failed to make the payment by the deadline. It also appears that the date of the first payment was still of paramount importance to Carrizo, in the negotiations for the new or amended agreement, as Friedman repeatedly pressed Arrowood for a date by which Trinity would make that payment. “We need a definitive payment date now,” Friedman declared near the end of the email exchanges. Instead of providing that date, Arrowood consistently explained why he couldn’t give a precise date, stating he had to wait for the execution of documents with investors among other things.
I do not believe that any additional analysis needed to be undertaken and do not join the additional analysis on this issue contained within Judge Frost’s opinion. Accordingly, I respectfully concur.
. All three justices agree as to the judgment in this case. The opinion authored by Justice Frost is the unanimous opinion of the court as to section IV. B. (addressing issues pertaining to the quantum meruit claim), section IV.C. (addressing issues pertaining to the promissory estoppel claim), section IV. D. (addressing attorney's fees), and section IV.E. (addressing the appropriate appellate judgment). Judge Frost’s analysis of the breach-of-contract issues, however, is entitled to no greater weight than that contained in the two concurring opinions on these issues. I do not join Justice Seymore’s concurring opinion because I do not believe it is necessary to address the issues on which he focuses in order to dispose of this case.