Cactus Well Service, Inc. v. Energico Production, Inc. ( 2015 )

COURT OF APPEALS
SECOND DISTRICT OF TEXAS
FORT WORTH
NO. 02-13-00186-CV
CACTUS WELL SERVICE, INC. APPELLANT AND APPELLEE
V.
ENERGICO PRODUCTION, INC. APPELLEE AND APPELLANT
----------
FROM THE 43RD DISTRICT COURT OF PARKER COUNTY
TRIAL COURT NO. CV07-2700
----------
SUPPLEMENTAL MEMORANDUM OPINION 1 ON REHEARING
----------
On November 20, 2014, we reversed the trial court’s judgment, rendered a
take-nothing judgment on appellee Energico Production, Inc.’s claims, and
rendered a judgment in favor of appellant Cactus Well Service, Inc. on its breach-
of-contract counterclaim. Energico has filed a motion for rehearing. We deny the
motion but issue this supplemental opinion to address Energico’s argument that
1
See Tex. R. App. P. 47.4.
we erred to render a take-nothing judgment because Energico obtained favorable
jury findings on other theories of recovery. 2 See Tex. R. App. P. 49.3. We do
not withdraw our prior opinion and judgment. See, e.g., Anderton v. Cawley, 378
S.W.3d 38, 64 (Tex. App.—Dallas 2012, no pet.) (supp. op. on reh’g).
We will not restate the applicable facts other than to emphasize that
Energico submitted three theories of recovery to the jury—negligence, negligent
misrepresentation, and breach of contract—and elected to recover under its
negligent-misrepresentation claim. Energico now argues that the reversal of
Energico’s recovery for negligent misrepresentation should result in rendition of
judgment in favor of Energico on its breach-of-contract or negligence claim as
found by the jury. This is an argument Energico may raise for the first time on
rehearing. See, e.g., Beal Bank, S.S.B. v. Schleider, 124 S.W.3d 640, 650 (Tex.
App.—Houston [14th Dist.] 2003, pet. denied) (op. on reh’g). Indeed, Cactus
does not argue that Energico may not raise this argument for the first time on
rehearing.
The jury found that Cactus was negligent and breached its contract with
Energico as well as finding that Cactus made negligent misrepresentations to
Energico. In the damages questions regarding Energico’s breach-of-contract
and negligence claims, the jury found that the “reasonable cash market value of
2
We do not address Energico’s argument that we erred by concluding that
the independent-injury rule barred Energico’s negligent-misrepresentation claim.
Our November 20, 2014 memorandum opinion sufficiently addressed this issue.
2
the Well immediately before the incident” was “$0.00.” The jury also found that
the “cost of drilling a replacement Well to the point of the incident, less salvage
value of the Well” was $1,080,000. The applicable measure of damages for the
destruction of an oil well that can be reproduced is the lower of (1) the
reasonable cash market value of the well immediately before the incident or (2)
the cost of reproducing the well with a new well equipped like the old well, less
any salvage value of the old well. See Basic Energy Serv., Inc. v. D-S-B Props.,
Inc., 367 S.W.3d 254, 262 (Tex. App.—Tyler 2011, no pet.) (op. on reh’g); see
also Gilbert Wheeler, Inc. v. Enbridge Pipelines (E. Tex.), L.P., 57 Tex. Sup. Ct.
J. 1465, 2014 WL 4252273, at *3–4 (Aug. 29, 2014) (stating measure of
damages in tort or contract for permanently damaged property where restoration
is not possible is the difference in value immediately before injury and its value
immediately after, i.e., “the loss in fair market value of the property as a whole”);
Dresser Indus., Inc. v. Page Petroleum, Inc., 853 S.W.2d 505, 512 (Tex. 1993)
(holding plaintiff could recover cost of expenditure to save well and cost of new
well when well could not be saved but recognizing damages could not exceed
fair market value of well prior to damage). See generally 55A Tex. Jur. 3d Oil
and Gas § 602 (2011) (explaining where “well is destroyed by a drilling
contractor’s lack of care,” recoverable damages are “the difference between its
market value immediately before its destruction and the market value of the
salvage remaining after deducting the expense of salvaging, provided this
expense does not exceed the value of the salvage”) Because the jury found that
3
the value of the well immediately before the incident was zero—a finding
Energico did not attack in the trial court and does not attack on appeal with any
specificity other than to argue that the “better policy” would be to “disregard” the
finding—it could not recover damages under its claims for breach of contract or
negligence. Additionally, for the reasons Energico’s negligent-misrepresentation
recovery was barred by the independent-injury rule, its negligence recovery was
likewise barred.
/s/ Lee Gabriel
LEE GABRIEL
JUSTICE
PANEL: MCCOY, MEIER, and GABRIEL, JJ. 3
DELIVERED: January 22, 2015
3
Justice McCoy was a member of the original panel but has retired in the
interim. The two remaining justices ruled on this motion. See Tex. R. App. P.
49.3(b).
4