El Paso Natural Gas Co. v. Minco Oil & Gas Co.

quez, when confronted a car stalled on a with try up ramp would choose to to move it COMPANY, EL PASO NATURAL GAS thereby injure down and himself. As dis- Appellant, detail, considering

cussed earlier in more status, age, Manriquez’s social and short em- ployment history employer, with his I think & Charles MINCO OIL & GAS COMPANY quite Manriquez try it would foreseeable Doornbos, F. as Trustee for Charles given car sufficient in- to move the unless Trust, Appellees. F. Doornbos Revocable Thus, my that he that. struction not do No. 07-96-0210-CV. opinion Manriquez also established employee proximately caused his Pinkerton’s Texas, Appeals Court of injuries. Amarillo.

Summary Dec. 1997. duty/proximate The crux of Pinkerton’s Rehearing Denied Jan. 1998. argument appeal cause on seems to be three- Opinion Rehearing Modified on First, Manriquez of his own voli- fold. acted April in Part help Chaney tion was and the motorist —it Second, something Chaney he had do. only provided a and was not the condition Third, unimaginable

cause in fact. it is person finding a car stalled on a reasonable

ramp try to move it. All three of would arguments

these fail. The cause fact was

Chaney’s Manriquez given order: a task warning completed

without sufficient and he Manriquez may com-

the task. That have way

pleted the task in a different than Cha-

ney not defeat the would have liked does fact, impacts contributory negli-

cause in Likewise,

gence. arguments other two solely Manriquez’s on

fail because focus Chaney’s negligent con- ignore

actions and Manriquez dangerous into a

duct that sent inju- partly Manriquez’s caused

situation and deciding jury responsible

ries. The for Manriquez get

if 100% of the blame should injuries push he

for his because decided And, contrary posi-

the car. to Pinkerton’s

tion, jury apparently did find whol- try

ly unimaginable Manriquez would car,

push the because assesséd 35% responsibility to him. (1) short, I do not I dissent because determining

believe the trial court erred proximate cause

that a was owed (2) established, the verdict of the believe supported by legally

jury Manriquez factually sufficient evidence.

Akin, Strauss, Feld, Gump, Hauer & L.L.P., Swan, Stephens, S. Shawn Michael K. P.C., Houston, Compa- El Paso Natural Gas Harrell, Paso, ny, appellant. Barbara El for Smithee, Fields, Templeton, Hayes & John Smithee, Amarillo, Hayes, appel- Joe W. lees. BOYD, C.J., QUINN

Before and and REAVIS, JJ.

QUINN, Justice. (El Paso) Company El Paso Natural Gas appeals judgment awarding from final Min- (Mineo) Company eo Oil & Gas and Charles Doombos, F. as trustee for the Charles F. (Doombos) Trust, Doombos Revocable dam- ages against points it. Through three error, questions regarding El Paso raises unconscionability, good breached faith, sufficiency By and the evidence. cross-point, Doornbos decries the trial court’s particular refusal to the life of a find past original contract was extended term. part part. in in We reverse and affirm

Background dispute take-or-pay revolves around gas purchase agreements executed (1979 Paso, Agreements) by pre- and the Doornbos, decessors of and Mineo.1 Under mid-1980’s, 1. The Doombos' claims arose from a contract dissolved in the its interests and Company (including property subject executed between Foster to the Fos- Petroleum assets contract) placed and El in 1979. Paso When Foster Petroleum Paso in trust for the ter/El amendments, foregoing In addition to the Mineo dedi- agreements, Doornbos and these contracts were exe- approximately 80 other gas which to El Paso all the natural cated parties remaining over the between the cuted properties lo- produced from their could be Agreements. These other terms of the turn, In Hemphill County, Texas. cated (referred Monthly as the to herein contracts specified mini- agreed purchase to Releases) 1) from El Paso released (80% aggregate “of maxi- quantity mum 2) monthly take-or-pay, to extend- obligation wells”) delivery capacity of the Seller’s mum opportunity and Doornbos ed Mineo if it per purchase If it same or day. failed during the spot their on the market gas sell less than the minimum bought an amount price, often at a lesser pertinent period obligated pay quantity, then El Paso was 3) option reduce its gave El Paso the between Doornbos Mineo difference take-or-pay obligation the amount annual actually taken and the minimum amount spot or to they on the market gas sold take; thus, quantity required arose obligation for the month simply ignore its take-or-pay. concept covered the contract. years Agree- the 1979 For several after time, grew with its Mineo dissatisfied executed, performed parties all ments were requested relationship with Then, expected. gas market natural Consequently, November it be ended. experience began change in mid- (the signed a letter 1988 the two entities put mildly, gas prices To fell sub- 1980’s. Letter) terminating November Termination stantially. Soon Paso realized Agreement releasing each other the 1979 acquiring required under continue all claims or causes action Agreements unprofitable the 1979 would be against each oth- have had time, and, in from Mineo and passed it obtained before El years more er.3 Several Agree- obtained, February Doornbos various amendments two ter- (referred (February to as mination Termination Let- ment. Those amendments letters ters) predecessors in his retroactively from Doornbos and Amendatory Agreements) They, like the November Termi- interest. obligation El from take-or-pay altered Letter, purported also to waive “[a]ll nation daily “aggregate 80% to 50% of the sellers’ exist past might liabilities that between producing ability” January period for the parties.” 1, 1984, 1982, through from December period 80% 60% “from after for the passed before Mineo and More time 1, 1985,”

January through the end of begun as- Doornbos learned that others had buyer granted contract term. too was the So take-or-pay against El Paso. serting claims unilaterally it right price reduce the Thus, fray joined sued the they too buyer paid gas.2 Finally, if the for decid- equal the take- company recover sums price unacceptable ed to reduce the a level or-pay obligations thought due them under Doornbos, producers to Mineo and the two Agreements. Though the unamended 1979 Agreement” numerous, the chance to end “this but had of action averred were the causes El obligations only they after all Paso were concern us for were the due three upon court awarded dam- claims which the satisfied. price would be reduced de- and two of his kin. Eventu- 2. Whether benefit Doornbos ally, governmental were from that trust. pendent upon interests disbursed the existence of a Thereafter, Partnership eventually price Cross-Timbers prohibiting paying from order Paso acquired property kin interests of Doornbos’ "good buyer's faith” determination encompassed by Af- Paso contract. Foster/El gas supply and demand environment "its market occurred, an had Doornbos obtained ter this change value to in the indicate[d] downward any assignment claims from Cross-Timbers Buyer purchased gas to from Seller.” may Paso have arisen under the which Foster/El Moreover, discretion” El Paso retained "sole against Paso them contract and combined make decision. at bar. his own to the basis of the suit with form possible which arise avoid confusion To retained, they Though were did some claims however, tangled players, we this line of from encompass those at issue. not here predecessors in simply label all of Doornbos’ as Doornbos. interest 60

ages. first encompassed theory. is breach of contract. As to is what within the allegation, this it was determined that El Those concept who codified the into section perform Paso its take-or-pay failed obli- it; nevertheless, deign did 2.302 to define gations original per gas purchase 1979 are guidance. not without Both the com However, agreements. recovery before mentary following provision and the writ claim, could be had the court had judicial ings of our provide brethren assis Amendatory Agreements, to set-aside the tance. See Sav. Loan Lockhart & Ass’n Releases, Monthly and the November and Austin, RepublicBank 195 S.W.2d February Termination Letters. It did so n.r.e.) (Tex.App. writ refd — Austin holding first all of them unconscionable. (stating accompany that while the comments Then, it all February concluded that but the ing each section of the Business and Com Termination were Letters obtained law, they are merce Code nevertheless good violation of As faith. persuasive authority leg concerning are result, pay El Paso was ordered Mineo intent). islature’s damages equal and Doombos to the amount agreed take-or-pay 1. Standard of Review under Agreement. the unamended 1979 appeal,

On true issue is not whether ques We are told that the ultimate Agreements. breached the 1979 Rath- agreement tion to whether an is uncon er, it concerns whether the other contracts 2.302, § is one of Id. at scionable law. cmts. properly and releases were voided so that 3; Express Corp. Pony & Courier v. Mor the claim pur- of breached contract could be ris, (Tex.App.—San S.W.2d to An And, paramount importance sued. writ). 1996, no our suggests nio This February whether the November and Termi- review of the is de novo. matter properly nation Letters negated. forgotten cannot be the decision Again, they released El from all claims agreement whether some is or is not uncon So, liability. binding, if remained dependent upon scionable is the existence mattered not whether of the other allegedly facts which illustrate unconsciona- Agreements were avoidable. bility. as to the existence of those facts, our is not de review novo. other Unconscionability

Point of Error One — words, record, we cannot review the divine point error, In its first of El Paso attacks own our inferences from the evidence con the trial court’s decision to avoid the release therein, same, tained in or resolve conflicts on agreements unconscionability. the basis of decide what evidence to believe and what not posits It that same were not unconscionable things, power to believe. The to do those a argue as matter of too it law. So does facts, to find lies with the trial court. “Findings the court’s of of Fact/Conclusions power, Once it has we must exercised 5-16,” Law Nos. purportedly which involved And, findings then defer to the as made. unconscionability, legally factually or long findings enjoy as the sufficient eviden- point. insufficient.4 We sustain the tiary disturbed, support, they cannot be even though may have construed evidence Controlling

A. Law Nevertheless, differently. pre this does not per findings assessing As the Texas Business and Com vent from whether the us Code, may for, unconscionability merce again, court refuse enforce made illustrate contract it pre holds unconscionable. Tex. that is a of law. Nor does it 2.302(a) (Vernon § Bus. & Com.Code Ann. deciding vent us from whether 1994). Yet, record, problem determining light arises in of in a when viewed most favor- Thus, findings mistakenly 4. The and re- conclusions referred to were we conclude that El Paso 18, transcript pp. those located in "Vol. 001090- actually and ferred them intended to allude 001095,” according par- Paso. those findings Supple- and at conclusions Second findings good ticular and conclusions deal with (filed September Transcript, pp. mental 02-12 faith, availability of "FERC 500 faitb/bad 16, 1996). credits,” unconscionability. damages, not and

61 regardless must taint the ne findings oppression and unfairness able to the court’s and of inferences, leading agreement’s potential gotiation process unconscio- to the illustrates nability, a question Pony Express Corp. for that too is of law. v. Courier formation. Morris, at 821. this is 921 S.W.2d Interestingly, at least one court has lik 1) through things such illustrated gymnastics the mental which we ened overreaching, presence deception, of partake must to the standard abused dis Arkwright-Boston practices, sharp business See, e.g., Pony Express cretion. Courier Westinghouse Electric Mut. Ins. Co. v. Morris, Corp. v. at 820. Use of Mfrs. S.W.2d 2) (5th Cir.1988), 1174, 844 F.2d Corp., helpful involving in situations latter is alternative, a viable v. the absence of Wade fact, according questions of law and mixed 3) Austin, 86, at the relative 524 S.W.2d Pony Express It court. Id. enables the acumen, education, knowledge, financial part de reviewing court reassess novo parties involved. Restatement ability of the involving the law and its of the decision (Second) § Fur cmt. d. Contracts application recognizing while the trial court’s thermore, determinative; no one indicia is authority weigh interpret the evi rather, totality circumstances must Express Pony Corp. dence. Courier v. Mor ris, accord, be it can said that some 820; assessed before be v. 921 S.W.2d at Walker prey procedural R. Packer, (Tex.1992); one fell abuse. 827 S.W.2d 839-40 (Second) Anderson, § 2- § Commercial Code see Restatement Contracts Uniform (3d ed.1982). Moreover, the situation 302:32 (stating appellate cmt. f that the court will occurred, as of time proper must assessed consider whether the standards were this, Leasing hindsight. not via Tri-Continental applied). adopt we too Given Burns, Corp. v. Law Richard W. indicative of framework which the Office of Austin, 609; reviewing at v. court must act. 710 S.W.2d Wade at 85. S.W.2d Scope Unconscionability 2. prong, As the latter that con incorporat According to who those fairness, abuse, cerning substantive chapter

ed it into two the Texas Business is oppressiveness of the contract itself con Code, unconscionability and Commerce Pony Corp. Express sidered. Courier purpose an negating advantage serves Morris, Admittedly, 921 S.W.2d at 821. gained through oppression and unfair sur prong easily for the quantified this prise. 2.302, § Tex.Bus. & Com.Code Ann. oppressiveness notions of fairness time, perceived cmt. At one as a ready grasp. may themselves elude What protecting way against the downtrodden not be an be fair one scenario overpowering. Though concept has Thus, totality of the situation other. somewhat, changed it nevertheless retains (as unfolded) situation must time the many of its historic For in characteristics. Furthermore, again be at least stance, measured. agreement it must be that the shown suggests that the con one commentator through procedural arose and tract, promises, detri with its benefits and Leasing substantive abuse. Tri-Continental ments, Burns, being on inimical to must border Corp. v. Law Richard W. Office of 604, to public policy before it can be said be (Tex.App. [1st 710 S.W.2d 609 — Houston sufficiently 2 1985, n.r.e.); oppressive. unfair or R. Dist.] writ ref'd Wade v. Aus Anderson, § tin, 79, 2- Commercial Code (Tex.Civ.App 524 85 S.W.2d Uniform . —Texar writ).5 1975, (comparing unconscionability to kana The former that 302:28 con- no means proach upon totality Incidentally, authority the of the circum- that based indicates both § present. Arkwright-Boston & prongs beneficial. Id. at 2-302:32 must be stances more Mfrs. Westinghouse Corp., We that there is an interrela- v. 844 2-302:43. admit Mut. Ins. Co. Electric 1174, (5th Austin, Cir.1988); tionship the indicia used under both F.2d 1184 Wade v. between 79, (Tex.Civ.App. prongs agree the should be and that assessment 524 S.W.2d 86 — Texarkana 1975, writ). Yet, upon totality the of the circum- no at one commentator made based least analysis way analysis, two-pronged is a two-pronged 2 the the use of the stances. discounts and, Anderson, categorizing § pertinent the factors to that 2- R. Commercial Code of Uniform extent, (3d ed.1982) suggests ap- an that is useful. 302:43 62 public of policy). suggest Corp. Co.,

cerns Mining Others v. Itmann Coal 176 W.Va. (1986) 599, 749, that it must be utterly lopsided, that (rejecting 346 S.E.2d 754 there must be subjective no or unconscionability reasonable claim of due to lack of parity exchanged.6 between the values indicating that the contract was Austin, 86; v. at Wade 524 Re- complainant); S.W.2d “forced” v. Wade (Second) 208, Austin, § statement cmt. (stating Contracts 524 S.W.2d at 86 one c; Anderson, 2 R. “knowingly” Commercial improvident who enters an con Uniform § (suggesting Code 2-302:58 complain); terms tract be cannot heard to Earman agreement Co., a Burroughs must bear reasonable v. Corp., Oil Inc. F.2d 625 involved). Cir.1980) relationship 1291, (5th to the risks one (indicating 1299 knowingly “willingly” who an enters Yet, regardless proffered grounds conduct). agreement a gross is not victim of abuse, as illustrative of substantive Again, complainant if the did what he did sufficiently gross be shocking must or to motivations, of his own those because and not Indeed, compel the courts to intercede. opponent, his then he must suffer must procedural same be said vis-a-vis result of deal. his abuse; surrounding the circumstances negotiations must shocking. Anything be Lastly, and to the extent less would be an gov invitation to excessive otherwise, argues section 2.302 of dealings. ernmental intrusion into our Our Business and Commerce limit Code does not system court cannot act mother as the hen protections per to those involved chicks, watching standing ready over its sonal, opposed commercial, transac every unpleasant ameliorate circumstance tions. The doctrine has been invoked with might which befall them. See Associated Indeed, setting. Camp in the latter success Co., v. Press Southern Arkansas Radio 84 (3rd Wentz, Soup bell 172 Co. F.2d 80 695, (1991) Ark.App. 697 S.W.2d Cir.1948), legislature case a cited (noting province it is not following in the comments section 2.302 pater with courts scrutinize all contracts unconscionability, dicative of is one ex such summarily nalistic attitude and discard them There, ample. the court struck down a con one longer because consider them no farmer, Wentz, obligated tract fair). right negotiate beneficial or One’s crop Campbells dedicate his entire if even will, bargain, exercise free choose a Campbells pay That did take for it. path, and to even make a bad deal must be commercial, deal transaction as was the Anderson, respected. admitted R. Shop, Chesapeake Art’s Flower Inc. v. § Af Commercial Code 2-302:29. Uniform Co., Telephone Potomac 186 W.Va. all, general ter responsibility to fend for (1991) (wherein a suc S.E.2d 670 merchant self still lies one’s with one’s Conse self. cessfully against invoked the doctrine a tele quently, only aspects when negative Wentz, phone company). citing it can bargaining process subsequent con legislature said that did not intend gross, totality tract are under the ipso exclude commercial transactions facto circumstances, authority is the court’s to in unconscionability. from the realm (Second) triggered. tercede Restatement position we are not in a to do that which § Contracts cmt. d. legislature has not done. See Associated Co., Similarly, imperative that it is the Press v. Arkansas Southern Radio complaining party theory prey gross (recognizing fall to those S.W.2d at 697 that the aspects of unconscionability may the deal. That the circum to application have Mallor, transactions); him stances before must be as to com some commercial such J. pel Troy Unconscionability him to execute bargain. See in Contracts Between Parity gauged by objective genetic three-legged 6. must be than bull is wor- more a characteristic instance, person thy breeding may quite willing pay For criteria. while a reasonable of be to And, may price. pay say think it ridiculous to of dol- thousands who’s the law to that the ranch- bull, three-legged lars for a upon personal a rancher who sub- er be allowed act should not to his jectively exemplified by pay price. thinks that the stamina beliefs and (conclud- past Merchants, (1986) of of such a release the effect 40 Sw.L.J. same). any take-or-pay damages corre ing without to ... so sponding [was] benefit Plaintiffs course, acknowledge

Of one-sided_ as a merchant or business claimant’s status whether of turn to We now equa overall may man be considered unconscio- to establish these were sufficient Indeed, knowledge, fi expertise, tion. nability. garnered possibly such strength nancial by to enough be warrant businessman Release Mineo prey not the conclusion that he or she did fall Abuse a. Procedural See, activity. supposedly unconscionable e.g., Mercury, Inc. v. Ford DeValk Lincoln initially note that the court said We (7th Cir.1987) Co., Motor 811 F.2d expertise, finan nothing Mineo’s business (refusing uphold of uncon- DeValk’s claim status, knowledge of the oil cial and overall scionability because of DeValk’s extensive gas Nor did it comment trade. knowledge, and experience, business use alternatives, any, viable if which were avail counsel). legal the extent that these factors went able. To Application B. to Case unconsidered, it can be said that the court totality of circum failed assess the mentioned, previously As the trial court that, doing in not required. stances portions unconscionable those held its discretion. Downer the court abused See November Termination Letter effec- Inc., Aquamarine Operators, 701 S.W.2d tively against Mineo’s claims El Paso. waived (Tex.1985), denied, 476 241-42 cert. U.S. It of: did so because (1986) 2279, 90 106 S.Ct. L.Ed.2d 721 policy El Paso’s admitted that it did arises (holding that an abuse of discretion voluntarily take-or-pay payments make principles controlling court violates when the express implied ... as its well rules). Similarly guiding from or deviates representations obligated it was of whether the indicia absent is consideration purchase minimum amounts of contractual compelled Mineo to do cited the court damages gas pay take-or-pay or to ... and analysis That too indicates what did. power advantage bargaining the overall totality less than the of the circumstances by El held Paso ... [and] and abused discretion. con required Mineo was to release all Next, supposed policy referred take-or-pay obligations tractual of El Paso procedural court as illustrative the trial gas in order be able to sell [to] prior execution of the abuse was used refusing pur ... which El was Amendatory Agreements. Whether chase. ... years Min- three later when still existence provisions February So too were the signed the Termination Letter eo November Termination Letters which waived liabilities garnered from the evidence before cannot be against given, El Paso avoided. The reasons us. however, agreements differed. Those Moreover, undisputably the record demon- set aside because subject terminating the strates “may in the [they] represent that it by Min- first broached Agreement parties” sign interests of all best He president, Hall. believed co’s Gene pur agreements and because the stated grew to sell his frustrated “prudent” early pose termi the letters [was] per- perceived he to be Paso’s with what contracts, of, part, nation the McMordie agreement. up refusal to live sistent according to El own and because at As he stated trial: records, would the McMordie contracts know, point, finally I I time You reached the approximate at the same terminate along ... I believe it was ‘88 believe whether Doombos Cross-Timbers gas hadn’t taken there that signed [El Paso] the letters or not [and] in period. They just some time patch venture sufficiently hadn’t into the oil been taking gas. him, profitable 1970’s, in to induce to so, pursue leave his accounting practice And at I point that that I realized going wasn’t oil trade any gas throughout to be able to sell full-time. his ca- so, I professional, only asked for a release. reer as a he not drafted various business instruments but knew needed, testified, The release was Hall enough attorneys to hire to draft those which any potential insulate new buyers from suit he coupled could not. These circumstances by So, El proposed Paso. he to El Paso that with his he admission that knew what the relationship it and between Mineo come concept any of waiver meant belie notion that responded by an end. El Paso drafting Hall something than an less astute busi- the November Termination Letter which in- be, suggested nessman. It as Mineo in cluded a Upon mutual release of claims. brief, extent, that Hall not know the if did document, receiving it, signed Mineo any, potential liability of El Paso’s before days, within producer had contracted signing the November Termination Letter. gas sell its company. to another It may be undisputed evidence illustrates that that El superior bargaining Paso had posi- disappointed not size, was Hall with El tion due to poeketbook, ability performance prevent Paso’s also that third-parties. Yet, but he never sales to we were attempted evidence, investigate the extent El cited to no nor did we any, find potential liability indicating objected long sign- until after that Mineo to the release provision ing in the releases. the November Termination Let- ter. Nor is indicating there Furthermore, options there existed that sought renegotiate language. that waiving least, very the claims. At the Mineo record, Under this hardly state of the it can relationship could have tried to end with- prey said that Mineo fell to El Paso’s Or, releasing out El it could have Paso. bargaining power attempt when did not upon disappointment” acted its “real with El power test that simply acquiesced or when it perform. and demanded that preferences. to El Paso’s not, If it did then could have also done Mineo Interestingly, November Letter was 1990’s, postponed that which until by the first contract drafted El Paso and all, sue. After when Paso sent the signed by pro- Mineo which contained release Letter, Termination at prec- Mineo stood Many visions. such instruments had been ipice. point, At Mineo longer could no producer executed since 1985. That delay the It had to inevitable. decide wheth- the documents the effect also had of releas- sign er to the release convert its frustra- ing or minimizing El Paso’s take-or-pay lia- company tion with the into a law suit. Con- bility was something about which Mineo was trary to contrary, Minco’s insinuations to the concerned,” despite being .“too “real dis- very a option lawsuit can be a viable when appointed” with Paso. See Resources In- finally one is the choice of faced with either Corp. Corp., vestment F.Supp. v. Enron waiving upon suing claims or them. (D.Colo.1987) (holding that multi- ple releases signed contained 32 contracts sum, failing we hold that to consider year period over an 18 would indicate a lack circumstances, totality the trial of unconscionability). court abused its discretion engaged gross procedural abuse. So

Additionally, nothing of record indicates law, conclude, too do we matter of that Mineo failed to understand the effect of the indicia trial its actions in relied court executing November Termi- Hall, enough gross alone not illustrate proce- nation Letter. president, Its awas find, sophisticated dural graduat- businessman. He had abuse. We also as matter of law, totality ed college, public from under the the circum- become certified accountant, stances, began acquiring any gross Mineo succumb to oil and did not years procedural interests at least incorpo- executing five before abuse in the November rating Moreover, Mineo in 1960’s. his Termination Letter. seen, trial not not.” can the court did

6. As Substantive Abuse strength bargaining of the relative address As to the substantive signed at time the items were parties the the abuse, same in the fact the trial court found acumen, knowledge, or their relative business purportedly to its that Mineo had release education, ability. Nor did or it financial it could to causes of action before sell other of viable presence or absence discuss the buyers. that be a Though distasteful the extent all alternatives. To business law, it was option, as matter of we hold ignored, the court did not factors these enough to release an instance render the its permissibly exercise discretion. approaching or an act substantive abuse First, public policy. the there is violation importantly, it not be said More could Indeed, releasing in nothing inimical claims. ability of or Cross-Timbers to the Doornbos every legal time a contro is done most upon the to others was conditioned gas sell Second, exchange versy is in the settled. Indeed, other document. execution either release, opportunity to gained Mineo the sell court revealed that the findings of the trial third-parties gas its to without hindrance relationship once existed be- produeer/buyer That, from El Paso. in the words of Minco’s Paso, and ended tween El Cross-Timbers president, “prudent” goal pursue. awas to before execution of approximately 14 months Third, undoubtedly Mineo the considered So, approval no the 1991 releases. unimportant at claims the time did since gas their from El to market needed poten attempt investigate to even their Similarly non-existent evi- elsewhere. Fourth, tial or extent.7 existence indicating that Doornbos or dence either discussed, previously option Mineo had the before read the releases Cross-Timbers pursue those claims rather than release them, upon anything men- signing relied totality them. the of the circum Given them, sign therein as inducement tioned which went stances unmentioned the documents, objected attempt- the signing court, we conclude the latter abused its documents, negotiate the terms of ed to discretion that Mineo was vic any way to them for compelled sign or felt tim of substantive abuse. though we have particular reason. no of record about the financial information 2. Releases— Doornbos/Cross-Timbers background Cross-Tim- educational February Termination Letters bers or evidence of their relative partners acumen, undisputably business a. Procedural Abuse college Doornbos as a educated characterizes mentioned, previously As trial court wealth, man of “considerable” learned February found that the Termination Letters trade, gas and careful his busi- oil and about procedural were the result of abuse because depicts signed. It further ness and what he 1) represented El Paso in the documents that him as someone who had sold “may parties’ inbe the best interests of all pipelines dealt with number interstate 2) pur- sign agreement,” “the stated and when to obtain his and knew how career pose early termi- [was] letters legal counsel. of, contracts,” in part, the McMordie nation 3) records, regarding of evidence “according to El Paso’s own Given dearth upon any- compulsion or reliance the McMordie contracts would terminate at company to induce execution approximate thing same time whether Doorn- said releases, general as well signed or of the 1991 bos and Cross-Timbers the letters encompassed regard, evidentiary rights This own and interests. In this encounter no potential testimony investigate on its own claims in the that Mineo would never value standing poten- despite long concern signed its releases behalf. have had known non-performance. Mineo did noth- against El had no over El Paso's tial claims Paso. The latter repre- validity liability investigate of El ing to Paso's duty to contract or confess for breached liability. potential extent its relinquish arguably or the otherwise viable defenses sentations himself, filed, potential wrong though utopian society suit in a One cannot witness before it, Rather, eyes once and then claim foul had the close his such would be nice. Mineo pursue opportunity has obligation protect to sue vanished. affirmative 66

absence of illustrating evidence lack of of viable Point Error Two—Good Faith alternatives, acumen, business financial abili- In point, its second El Paso attacks the ty, and knowledge about what was being finding that it acted bad faith vis-a-vis effect, signed and things cited amendatory execution of agreements, trial as illustrating procedural court abuse letters, monthly release and termination let- So, inconsequential. are we as a hold matter ' 1) findings wrong ters. The were because law, of that totality under the of the circum- allegedly duty good or, owed of no faith procedur- stances the gross court’s of 2) alternative, they evidentiary lacked al abuse from emanated an exercise of support. point. We overrule the abused discretion. As involving contention insufficient

b. Substantive Abuse evidence, point we El note that of actually error Next, itself does not mention it. the court that found the 1991 Nevertheless, portion a of substantial termination were letters illustrative of sub argument point expressly under two is they “one-sided,” devot- stantive abuse since were topic. Supreme ed to the is, Given this and the they effectively that “past released take- liberally Court apply briefing directive to or-pay damages any without corresponding rules, Gilbert, Anderson v. to” 897 S.W.2d benefit Doornbos or Cross-Timbers. To (Tex.1995), point 784 we must construe the the extent that Agreement long the 1979 had encompassing sufficiency expired The next since attack. producers two were problem, however, chose, type entails the of attack sell to free to whomever it can be waged; legal is it one they got said that little value in return for sufficiency factual of the releasing potential evidence. Paso of its take-or-pay guidance affords us mentioned, little since it fails to liability. previously there an applicable reference nothing standard review. wrong is inherently agree in release But, only favoring since it cites ments. Nor incorporation was the of the position and that such evidence can terminology waiver such that it could have questioning considered when the factual escaped attention or been misunderstood.8 determination, And, sufficiency of a we conclude given general procedural want of sufficiency. that its attack abuse, law, is one factual we hold as a matter of that the quid quo of a pro absence enough was not Next, point our consideration this is raise transaction from the realm a bad claim Simply put, restricted Mineo. deal unconscionability. into the trial February court did not find that the signed by Termination Letters Doornbos and c. Conclusion Cross-Timbers were obtained bad faith. sum, neither the nor November Febru- Indeed, only ground upon which relied Letters, ary Termination or their release those avoid documents was unconseionabil- provisions, were unconscionable under the And, ity. since we have found that the re- totality of the In holding circumstances. unconscionable, leases no there are they were, the trial court abused its claims left for us to address. Doornbos Finally, discretion. because each document effectively take-or-pay waived claims Duty A. of Good Faith pursued which Mineo and Doornbos herein Paso, against El correctly argues need not determine whether other release or duty good modification whether one has a to act in faith is agreement So, was unconscionable. law. So too is it correct point Paso’s first saying general duty error sustained. that no faith good Incidentally, just says, potential the trial court determined means what it all liabilities terminology purported to waive the take- were waived. to the extent that El Paso or-pay ambiguous. disagree. claims was We claims, take-or-pay owed have same would been " phrase past might ‘[a]ll liabilities that exist liability encompassed by of El terms ” parties suscepti- between are waived’ is not of the release. interpretations. ble to reasonable alternative It

67 Corp., F.Supp. parties bia Transmission to a contract. Arnold Gas exists between (S.D.Tex.1995). Co., So, El Paso is County Mut. Fire Ins. National (Tex.1987). Yet, posits that it no wrong had the rule is when S.W.2d instance, modification good act in faith vis-a-vis the one exception. For without many confidential, performance agreements at special, in a or fidu- who stands bar. ciary relationship may owe the with another See, good e.g., duty

latter a of faith. Aranda However, breaching the Business America, 210 v. North 748 S.W.2d Ins. Co. of duty good of faith does Code Commerce (Tex.1988) duty (imposing good a of faith and independent provide injured the with an upon companies in dealing fair insurance damages. cause of action for & TexBus. insureds). Or, may their statute dealing with Rather, 1.203, § the cmt. Ann. ComCode And, impose one obligation. such an vitiate the complainant wrong the to use is latter situation that concerns us here. the For in by faith. agreement tainted bad findings fact court’s of and conclusions The stance, if faith secure modifi one used bad 23, law, 1995, allude to the dated October agreement, 1.203 cation an then sections espoused concept good in faith sections way or could be invoked as a of avoid 2.103 2.103(a)(2) 1.203 of the Texas Business enforcing origi the ing modification and the former, the and Commerce Code. Under agreement. nal Id. in per- one act faith good must vis-a-vis Next, duty has been whether the of that transaction. Tex.Bus. & formance depends upon factors. For breached several 1994). (Vernon § 1.203 Ann. Com.Code instance, presence legiti or of a absence turn, 2.103(a)(2), proviso, § the latter that is pursuing for modifi mate commercial reason obligates happen those who merchants to be indicia, assuming parties are cation is one “honesty in fact” to observe act with See TexBus. merchants. & Ann. ComCode commercial of fair “reasonable standards 2.209, § 2 (stating cmt. that the “extortion of 2.103(a)(2).9 § in the Id. dealing trade.” at legitimate a commer ‘modification’ without Additionally, apply duties as a cial is ineffective violation reason performance of the contract but also faith”); S & Bronze good T & Brass agree- formation and modification of those Pic-Air, Inc., 1098, Works, 790 F.2d Inc. v. 2.209, § ments. TexJBus. & Com.Code Ann. Cir.1986) (4th (stating “[g]ood 1105 faith cmt. 2. ‘legitimate ... a commercial requires that Next, party to seek the modifica to fall within the ambit of reason’ lead Code, tion”); § v. Steel of the Business and Roth Steel Prod. Sharon 2.209 Commerce Cir.1983) (6th 134, Corp., F.2d 145-46 question the transaction in must be one in 705 parties were in goods. (stating that whether “the volving & Ann. Tex.Bus. Com.Code 2.209(a) by § modification an provision applies fact motivated to seek (stating that compensate for commercial “a within desire the modification of contract this honest determining good exigencies” in chapter”); (stating § Id. is influential at 2.102 faith).10 concerns the means “chapter” nothing than “trans Another indicia affects other by was obtained. goods”). buying selling modification actions Corp., 705 gas is Roth Prod. v. Sharon Steel oü and such transaction. Howell Steel Corp., one cannot benefit from v. Oil 860 F.2d at 146. That Crude Oil Co. Tana & Gas change by acts tantamount eco (Tex.App. Corpus 637 Christi induced S.W.2d — Id.; writ); overreaching.11 1 Corp. or J. no New Bremen v. Colum- nomic extortion Inc., Works, Pic-Air, 9. does not whether the Inc. F.2d El Paso’s brief address (4th Cir.1986). inappropriately parties held the to the stan- court Thus, we conclude that it dard of merchants. example economic extortion arises 11.An dispute regard to matter. has no with question price good the market when buyer acquire the com and the threatens falls Also, proffered 10. must commercial reason modity his unless the seller reduces elsewhere party control or cause of the one outside the Summers, price. Com 1 J. White & R. Uniform instigating T & & modification. S Brass Bronze ed.1995). (4th 6(b), § p. 44 Un- mercial Code 1 — Summers, Uniform, White R. clearly & wrong manifestly unjust, given Commercial (4th l-6(b), ed.1995). § pp. Code 43-44 Nor entire record. Id.

may one enforce a modification when its cata- Application 2. Standard lyst little more than some unfounded dispute party request- manufactured record, In considering the entire ing modification. Id. at illustrating find that the market experienced appreciable years decline several Finally, deception can also serve Agreements after were executed. Indeed, agreement. vitiate the new an as drop there is no pect good according faith legislature to the price was caused factors the con outside simple honesty. why initially That is that, say trol El Paso. Given one could concept “honesty defined in fact El legitimate Paso a had commercial conduct or transaction concerned.” Tex.Bus. endeavoring reason for to ameliorate the sit 1.201(19). So, trick, § if & Ann. Com.Code by modifying obligations uation its to take- artifice, misrepresentation by or utilized or-pay at price quantity the set forth in party obtaining a modification of con the 1979 Agreements. Weisberg the See v. tract, instance, for that misconduct later can Harman, (7th Handy 416, & 747 F.2d be the modification’s downfall. Cir.1984) (stating “precipitous that a change price in market requirement satisfies the Sufficiency B. of the Evidence faith”). good 1. Standard of Review Yet, the record contains evidence illustrat- applicable standard of review is that that El ing Paso did simply ap- more than Gas, found in Raw Hide Oil Inc. Maxus proach producers, & v. its inform them of its Co., Exploration (Tex.App.— predicament, attempt 766 S.W.2d 264 negotiate to denied). is, Rather, Amarillo writ That with modification. company the regard insufficiency, to of legal unilaterally claims the gas reduced the amount of it court examines the record for to speci- evidence took less the than 80% minimum supporting Furthermore, the determination. All Agreements. contradic fied in the 1979 tory ignored. evidence is Id. As at 276. to it so disclosing did without its intent to Min- insufficiency, decided, claims of factual we re It unilaterally, are eo. further to es- quired peruse to the entire record to see if voluntary payment gas chew for the did supporting the evidence is so or Agreements weak the not take. That the 1979 contrary overwhelming evidence so as to provision by contained a the specifying date finding clearly wrong make the pay and manifest El gas Paso had to for the it did ly unjust. However, say, Id. to the simply Needless this does not take. El Paso decided not us authority accord carte blanche to do ignore provision, again without noti- Quite Instead, whatever would care to do. fying producers. its company the- contrary. The is one opted producer standard of deference. to remain silent until a And, simply interpreta We cannot our inquiry substitute made into situation. once tion of the happened, interposed evidence for that of the fact excuses for its Rather, conduct, finder. liability, latter’s factual conclu denied and forced accepted sions must be unless negotiations found be them into resolve claim.12 And, recog- be denial/negotiation process. though less it can shown there is some practice particular nized company objected commercial trade admission Ber- tactic, that sanctions such a describing the modification procedure, objec- memo nard through could be said to have arisen unfair incorporated point tion was not into a of error. Id.; Furthermore, means. see Roth v. Steel Prod. Sharon Steel other admitted without (6th Cir.1983) (re- Corp., F.2d 145-46 objection revealed that El Paso's actions com- quiring proof party’s that "the conduct is consis- ported general guidelines espoused by with the tent effect, with reasonable commercial standards actually many Bernard. did "). dealing fair in the this, trade[]’ things described in the Given memo. merely can said that memo was redundant evidence, employee 12. A memo drafted an El Paso of admissible and that its admission was, therefore, procedure named Bernard termed this as the not error. Furthermore, producers obligated dedicate during “denial/negotia keeping the importantly, all gas all their to it. more producers process, the like Mineo were tion” enabling in,” pretense under this was done effectively El Paso “boxed another more from them. acquire itself to eventually Again, they employee admitted. product to El 100% their had dedicated But, was instead So, it to they Paso. could not others sell more, oppo- Mineo buying encountered consent, without and needless time, Indeed, within a short site. say, consenting El Paso to such sales was monthly began producers to forward potential being first from without released Though their format varied release letters. liability performing. for not This situation time, not. substance did from time to their comparable Campbell Soup to that was producer that El Paso did Each informed There, Wentz, like 172 F.2d at 83. Co. during buy gas or could not not intend to here, agreement an Wentz was bound avoiding given that month. The reasons entirely commodity which his under ded instance, For at were several. obligations and, here, Campbell, he too icated like governmental regu- times were told that it to unable to sell others save with prevented market lations the status of the reviewing Campbell’s approval. After complying. those reasons it from two circumstances, appellate court instance, refused For proved than accurate. less it agreement the unfair because was enforce no company representative admitted that ‘“carrying joke good too tantamount to prohibited taking it regulation actually from Id. far.’” This same gas any particular month. in gas the representative also conceded that So, having placed Mineo in a box which at actually paid for. could been taken and have unfair, El least one court believed to Paso be Amendatory Agreement why tendered the to the El Paso not to reason chose Another accompanying barring dis- producer. perform supposed policy In the cover letter itswas agreement, buyer represented among producers. the that it In other the crimination its words, “firmly was solving prob- gas was to the amount of it [the committed since total facing capable producers to ex- required lems so as remain to take from all its it] need, your So, forgo marketing gas.” proposed it either to Paso its chose ceeded agree retroactively taking prorated if to from or to take a gas that Mineo would Yet, price applying policy prospectively reduce to be all. this and both fraction from taken, discrimination, again proved paid gas quantity against for then El Paso to be instance, in none prospects taking gas for El in the than For Paso to be less candid. compa- monthly future enhanced.13 its release letters did the would be producers that it was ny to the while disclose change take-or-pay As to the in minimum them, buying actually taking it was from percentage, that maintained (at price) gas spot on the market reduced “soft”; is, provisions agreement was words, El In other from its own affiliates. original Agreement still could policy its using anti-discrimination percentage to reduce or invoked either in favor of it and its way in a to discriminate entirely company its relieve the to own. take-or-pay particular period. for a Howev- in the er, to the made producer’s to dedicate assurances obligation So, to regarding its dedication monthly of its to El letters gas 100% Paso remained. to “maximize effect, Mineo and the others previously helping unfair contract was fur- revenues,” El Paso production and [their] in favor of El Paso. For all ther enhanced adverse also to tell them other purposes, way found a omitted practical latter by agreeing to they would suffer potential liability prior conduct affects escape for Admittedly, produc- avoid, temporary conceivably releases. make it easier prod- tota, gain option to sell their ers would take-or-pay its future duties while potential "absolutely” quantity retroactive to assure that Apparently, cer- El Paso was not previously validity liability tain of the of the excuses it avoided. So, price asserted. it made the reductions (at spot uct price on the market a lesser most proven commercial trial standard at which But, likely). extending would be to El obtaining condoned the of deceit in use modi- option Paso the to either eliminate take- fications and releases like those won.here. or-pay obligation for month or offset the course, indicating Of there gas amount against sold its cumulative El Paso posturing believed its defenses and take-or-pay obligation. Moreover, El Paso legally justifiable. were So too is there evi- option admitted select intended to indicating dence that Mineo have bene- advantageous would be that most releases; from fitted the modifications and disadvantageous producer. most That gain all it after did the chance sell on suggests contrary a mode of conduct (at spot price) market a lesser when supposed production desire maximize the Paso could have even it that. denied and revenues of Mineo. contradictory enough this evidence is not Finally tiring prac- of El ongoing Paso’s overwhelm the court’s of bad faith. tice, Mineo asked to end the rela- contractual Consequently, point overrule two as it effect, tionship. buying El Paso was not relates Mineo. gas, Minco’s and Mineo could not sell it else- approval. where without Point Error Three whole, When viewed the record con- error, point In its argues third El Paso tains from sufficient evidence which it could findings regard court’s with to the acted, reasonably be that El inferred of damages amount Mineo recoverable regard with to each release and modification legally factually insufficient. That secured, like what call a some “dishonest sums awarded were based an compromiser” White, extortionist. J. R. average gas price “compe- no had § Summers Commercial 1- Code Uniform evidentiary support, says tent”15 El Paso. 6(b) 1) (1995). voluntarily It not to decided disagree point. We and overrule the perform obligations its contractual without 2) producers same, informing its waited Review A. Standard of until questioned its conduct was then inter- jected unwary producer the into deni- In the the standard review 3) al/negotiation process, concerning sufficiency points obtained modifica- was discussed tion of through power its duties the use of in immediately preceding point, its the we sim by dangling incorporate block and ply by sales others it herein reference. We note, promises hollow representations parties, and in front as one claiming also do the 4) producer, of the damages prove, and contrived for must additional breach contract performing certainty, reasons to avoid its modified with reasonable the amount of producer capitu- duties the eventually damages until allegedly Pipe suffered. Lakewood Texas, by asking Inc., relationship. Techniques, lated to end the Conveying Inc. v. 553, While this evidence the (Tex.App. illustrate 814 S.W.2d [1st 556 — Houston writ). 1991, gross oppression implicit in certainty, unconscionabili- Dist.] no Reasonable however, ty, posturing it is some evidence of Paso does not mean exactitude. As the producers recognized ago, par granting Supreme long into concessions Court “[a] through ty escape which less means were than honest who breaks his contract cannot And, in liability impossible fact.14 we found no of a is to state evidence because it or interpreted determining questions 14. this have Whether court would so the in assist trier of fact fact, the had it the evidence been trier of fact is regardless whether it believable. is Again, the is irrelevant. standard review one argue does not that the evidence say judge of deference. Suffice it to that the trial and, thus, incompetent; rather inadmissible faith, concluded that El Paso in bad and acted posits that rife with and therefore it it was flaws the record contains evidence which can reason- unworthy credibility As to the of credit. ably supporting be construed as that determina- evidence, reviewing the court cannot substitute tion. finder. its conclusions for those of the fact Tseo Bank, 23, (Tex. 26 v. Midland Am. 893 S.W.2d Competent evidence is which is admissi- denied). App. writ — El being ble under the rules of evidence able Nevertheless, prices indepen- prove perfect damages. were measure of some expert, Owen, dently by verified Mineo’s and Battery Corp. Southwest 131 Tex. by secure (1938) they were used him to the arithme- (emphasis 115 S.W.2d spoke average Agreement. tic of in the added). Quite contrary, the claimant $6.683, $5.258, $5.658, prices Those included only present to af- need evidence “sufficient $5.027, $5.03, According to and $4.728. determining for his ford a reasonable basis adjust- expert, each took into consideration My Apartment loss.” Vance v. Steak House heating for value and escalations ments Antonio, Inc., 480, 484 San 677 S.W.2d of (Tex.1984). (BTUs) taxes, agree- provided and ment. comparing finding regarding court’s Application

B. of Standard testimony highest prices paid with expert, that the former Minco’s we conclude The parties concede that supportable. Simply put, fig- legally equation by Agreement specified the by adopted court were three of ures damages were to be That calculated. Thus, by expert. there is six testified payable gas not “to price for the taken was support also some evidence to them. We equal average ... arithmetic of the three factually suffi- conclude highest prices (including but not limited cient, given testimony. Admittedly, El this adjustments heating escalations and for value attempted by depicting to discredit taxes) being paid recognized for by then possible flaws in the calculations and witness’ gas pipeline companies for gas of similar by proffering testimony suggesting that County, quality pressure Hemphill may not sales. prices have involved actual Thus, damages Texas.” to be derived testimony incom- this did not render the by multiplying the amount of not taken And, subject petent, just question. in that paid during periods pertinent time situation, right trial became the court’s by the average. aforementioned weight appro- assign thought it the average price by found the court and used priate. damages its calculation mcf. was $5.789 Moreover, forget we cannot that all Mineo $5.658, figure That adding was derived prove damages had to do was with reason- $5.027, (the prices highest three $6.683 certainty; not man- able that standard does court) together found then divid ad- unquestionability. date ing by the sum three. by Mineo have been less than duced prices by The three used the trial court but, the unquestionable, it nevertheless met average price just calculate the of sum, were three certainty. of In standard reasonable many expert trial. of testified to at One appearing neither the in it nor contradictions gas prices” Mineo “several dozen contradicting discovered of the other evidence record requisite enough which could fit the criteria. find- have was overwhelm court’s $8.86, Among average the three prices ings them were the mcf of that was the of $5.789 $6.86, by $6.99, $6.70, $6.62, $5.89, $5.65, prices required 1979 $6.58, highest $4.98, Agreement. $5.03, inter- Others were $3.86. And,

spersed those while between amounts. Conclusion initially they were obtained from an informa- service, verify them. tion effort was made to that Accordingly, part we reverse of Yet, doing the num- proved given damages so difficult judgment which awards Doombos years passed attorney’s ber of had since El ren- against which fees Paso and Amendatory Agreement judgment declaring was executed take der Doombos re- general pipeline companies nothing against El all other reluctance Paso.16 however, judgment give up.” spects, “to is affirmed. [the information] liability, 16. We note our decision us from El Paso from it matters not whether relieves April having Agreement cross-point. Since of the 1979 was extended to address Doombos’ life subject topic we is the have held that he failed to set aside the latter February by agreements cross-point. it released Doombos’ 1991 which 72 upon

ON MOTION to rule whether the Letter FOR REHEARING Termination was one.1 We conclude that this satisfied Doombos, individually Charles F. and as obligation finding to request on the trustee the Charles F. Doornbos Revoca- Simply put, matter. when a court states Trust, (Doornbos) ble rehearing. moved for findings its that it will not determine whether Though objections a number of were made release, is a document it is an exercise regard only with to our opinion, one needs futility require party arguing is a addressing. pertains It to whether again ask release to the court hold it a Paso) (El Company preserved Natural Gas topic presented release. had to the been argument vis-a-vis the defense release. court, clearly upon and the court commented Specifically, alleged Doornbos that because So, findings. it in its this was not a situation failed to request findings of fact and wherein no element of the men- defense went regarding conclusions law claim However, findings. tioned in the this does February 1991 Letter Termination not end matter. signed parties the two constituted a re- claims, lease or waiver of all it waived its Because the Termination Letter opportunity to appeal contend on below, was not found to be a it be release document effectuated a or release waiver. appeal came El Paso’s prove burden to on allege So too did he that the court is without release, that the document was a matter as a power to find the document a release. Co., of law. Sterner Marathon Oil 767 agree. We (Tex. 686, 1989) (to 690 S.W.2d attack the party A asserting an affirmative adverse to an issue it had (like waiver) defense release or in a trial proof, appellant burden assert had to request findings before court must justification that it had established excuse support thereof in order to avoid waiver. law). But, a matter Co., Augusta Dev. v.Co. Fish Oil Serv. Well point assigned never of error. was the Nor 538, (Tex.App.—Corpus S.W.2d topic expressly anywhere in addressed 1988, writ); Christi no Coppell First Bank v. Rather, merely argued brief. Smith, (Tex.App. S.W.2d 464-65 findings regarding the court’s unconscionabil 1987, writ); Homes, —Dallas no Pinnacle Inc. faith, ity, damages insupporta bad Co., Eng. v. R.C.L. 640 S.W.2d Offshore ble. in the Nowhere brief did El Paso con (Tex.App.--Houston [14th Dist.] court tend that the erred in to hold refusing n.r.e.). Furthermore, writ refd if the find release, February Termination Letter a ings encompass issued court do not law, proved, nor that it had as a matter asserted, element the defense then the impor that the was a letter release. More request findings failure additional relevant tantly, points cannot raise sua of error effects thereto a waiver. Id. sponte. Supreme As the Texas re Court reiterated, Here, cently our task is to consider signed Doombos numerous presented by parties.2 those issues the original documents over the life of the 1979 (Tex. 56, Walling Metcalfe, take-or-pay 863 S.W.2d 58 contract which be consid could 1993). Thus, holding in that the Termination Generally, they releases. into ered fell three original opinion, a categories. encompassed Letter was release our The first Amendatory second, Agreement, factual wrongly we raised and resolved the Monthly Releases, third, and the the Febru of whether the document was ary findings original Termination Letter. In its release. too did we make an fact So 23, 1995, fact issued on October relating despite inability matter on the our unconscionability, facts, Rodriguez the trial court held that v. Ortegon, find 616 S.W.2d catego the documents the first (Tex.Civ.App.~Corpus and second Christi Yet, writ), expressly ries were releases. refused no Paso’s failure to review seek Therein, course, always jurisdic- 1. it stated that “[t]he Court makes no we are free Of to raise ruling language as to whether such the Termi- [in questions our own. tional on operate Letter] is sufficient nation release past take-or-pay damages.” far gas. That was a now His acumen went so issue. mistake of oil and corporate by recog- to surround himself with correction. so cause him necessitates We do gas and oil and cognizant the law nizing that nowhere was the Termination officers were Additionally, individuals these Letter held to be release and that trade. him for when need- legal to so advice challenge the court’s refusal accessible failed mistake, ed, the other according to the record. On Finally, recognizing our hold it. hand, portions indicating no we reconsider find must also Paso’s we Amendatory objected to points anyone signing of error. three attempted renegotiate its Agreement or Unconscionability Point sum, signing In the record before it. terms One — merely signed the that Doornbos established one, previously addressing point This presented by El Paso. when document we held that the Termination Letter was holding a basis for trial too illustrates and that the trial court unconscionable insupportable totali- once the court’s decision abused its discretion when it found other perused. ty of the circumstances are Termi wise. We also concluded that Given nation Letter constituted a release. Releases, Monthly the numerous As to conclusion, thought we it unneces the latter due also deemed unconscionable sary the trial court’s to determine whether procedural substantive presence of Amendatory Agreement decision to hold court, According to the former abuse. Monthly Releases unconscionable consti misrepresenta exemplified several Now, an abuse of that dis tuted discretion. ability relating to El to take tions pute must be resolved. pro supposed maximize the desire to and its Furthermore, the sub revenues. ducer’s Amendatory Agreement, As to the the trial of a abuse consisted of an absence stantive court given did find unconscionable were too quid pro quo; that the Releases presence procedural and substantive Yet, as with “one-sided” in favor El Paso. procedural abuse. abuse consisted Agreements, nothing Amendatory purportedly misleading three ut- statements parties’ bargaining about the relative said by El Paso. The tered first involved education, experi about power nor Doornbos’ representation take-or-pay that the contract acumen, ence, financial business responsive” would be “more market with the anything about the strength. Nor was said modifications, second, that the Amenda- And, upon alternatives. existence viable tory Agreement ‘opportunity”’ “was an for considering matters the evidence on those Doornbos, third, and the “was astutely was an again see Doornbos obligated take-or-pay of the for 80% experienced in the businessman successful aggregate delivery capacity maximum of sell- gas. we see of oil and So too do matter er’s wells.” The substantive abuse consisted anyone neither nor else evidence that he of the absence of sufficient economic benefit El Paso’s questioned with him associated flowing to Doornbos in signing return signing approximately 80 prior to conduct agreement. nothing the trial court said Corp. Inv. v. En See Resources Releases. strength of the bargaining about the relative (D.Colo. Corp., F.Supp. ron parties signed. time the at the items were 1987) con (holding multiple releases acu- Nor did it discuss relative business year an 18 signed in 32 contracts over tained men, education, knowledge, abili- or financial uneonsciona- would indicate a lack of period ty parties presence or the or absence Indeed, bility). principals one of testified the ex- viable business alternatives. To routinely signed Monthly Releas that he crucial unad- tent that all these indicia went thought policy Doornbos had a es because he dressed, permissibly court did exer- not claims, take-or-pay favoring the release of cise discretion. duped by he was El Paso. not because Moreover, nothing contradicting we found anything nothing of that Finally, that record indicates the evidence Doornbos was Monthly educated, Re- highly financially refusing suc- to execute the simply other than a leases, Amendatory Agreement experienced in or the cessful individual the business matter, that option. was an unrealistic Had Paso producers treated both similarly. encompassed by the wells agreements Again, evidence, rather than reiterate the we (which only been the ones they simply parties Doornbos had refer the analysis to our under not) they point were original opinion. had been the two to the source of (which not) they income standing then overrule, Consequently, tato, we now El firm against, suing, El may and not point of error two.3 The trial court But, have been viable. the record does not in refusing did not err to enforce the Amen- support such a conclusion. datory Agreement Monthly and Releases So, product since were the finding like the bad faith. pertaining to the support Sufficient evidence existed Amendatory Agreement, regarding that findings against and insulate them attack Monthly Releases also constituted abused sufficent, factually despite the evidence to discretion. The trial court did not consider contrary. highly Thus, indicia relevant to the issue. we as a conclude matter of law that the indicia Damages Point Three— upon by relied the trial court were alone not Since we have determined that the enough to unconseionability. demonstrate trial court in holding did err Point Two—Good Faith Faith/Bad Amendatory Agreements Monthly and Re faith, product leases were the of bad it is now two, point Under questioned upon incumbent us to address El Paso’s third 1) the court’s impose decision to upon point of error as it related given to the award duty good to act in faith vis-a-vis explained Doornbos. As original opin our obtaining modification Amendatory of the ion, argued El Paso that the sums awarded 2) Agreement Monthly and Releases and find to both Doombos and Mineo “were based duty that the previously was We breached. upon average gas price an which had no failed to address that matter as it related to ‘competent’ evidentiary support.” As also incorrectly Doornbos because we assumed previously explained by us addressing when February that the Termination Letter consti Mineo, damages awarded to we conclud But, above, tuted a release. as illustrated ed that requisite the record did contain the assumption Therefore, wrong. we supporting evidence. Rather than reiterate now consider it. it, again parties we original refer the to our applicable law and standard of review opinion analysis and its of that evidence. So sufficiently developed original in our to do we damages given hold Doorn- opinion and need not be reiterated. Suffice enjoyed bos for El Paso’s breach contract say it to that the Texas Business and Com- legally factually support. sufficient merce Code imposed section 1.203 upon Accordingly, modify judgment our duty Paso the good to act in faith vis-a-vis 10, 1997, opinion issued herein on December performance the modification and orig- affirm judgment, deny the trial court’s contract, inal take-or-pay the Amenda- rehearing except Doombos’ motion for to the tory Agreements, Monthly and the Releases. argued improperly extent he that we deter- We further conclude that the trial court’s mined the Termination Letter constitut- findings Paso breached the en- ed a release. joyed factually evidentiary sufficient support. The evidence supporting our determination is very same supported the court’s

findings vis-a-vis Mineo Oil & Gas Company

(Mineo), since the record illustrates that El unconseionability

3. We note that unconscionably, the theories of someone acted but it alone does faith, good unconseionability. Again, as found in the Texas not establish faith/bad the latter plethora Business and Commerce Code sections 1.203 involves the consideration of a of fac- 2.302, tors, So, merely are distinct. The focus of the former bad faith. while it apparently parties support lies on both while that of that the evidence does not party latter lies unconseionability, ipso accused of bad faith. that does not war- facto Moreover, may good be that the existence of bad rant the conclusion that El Paso acted in weighed determining faith whether faith.

Case Details

Case Name: El Paso Natural Gas Co. v. Minco Oil & Gas Co.

Court Name: Court of Appeals of Texas

Date Published: Apr 8, 1998

Citation: 964 S.W.2d 54

Docket Number: 07-96-0210-CV

Court Abbreviation: Tex. App.