Gary Bolen, Individually, and Pharaoh Oil & Gas, Inc. v. Imperial Petroleum, Inc. ( 2007 )

Opinion filed April 19, 2007

The court on this day, July 12, 2007, has withdrawn this opinion and judgment dated April 19, 2007, and substituted the opinion and judgment dated July 12, 2007.

Opinion filed April 19, 2007

                                                                        In The

    Eleventh Court of Appeals

                                                                 ____________

                                                          No. 11-06-00018-CV

                                                    __________

                      GARY BOLEN, INDIVIDUALLY, AND PHARAOH

                                      OIL & GAS, INC., Appellants

                                                             V.

                             IMPERIAL PETROLEUM, INC., Appellee

                                         On Appeal from the 385th District Court

                                                         Midland County, Texas

                                                Trial Court Cause No. CV 45060

                                              M E M O R A N D U M   O P I N I O N

Imperial Petroleum, Inc. sued Gary Bolen, individually, and Pharaoh Oil & Gas, Inc. for injunctive relief as well as for damages in connection with alleged interference with saltwater disposal.  The trial court granted a temporary injunction.  Subsequently, in a bench trial on the merits, the trial court granted permanent injunctive relief in favor of Imperial against Bolen and Pharaoh. The trial court also awarded Imperial actual damages in the amount of $155,878.41, in addition to attorney=s fees of $9,744.  We affirm the judgment of the trial court.

In January 2000, Hillside Oil & Gas, LLC, purchased a lease in Pecos County known as the University BX from Geronimo Holding Corporation.  Pharaoh also operated an oil and gas unit in the area known as the Taylor-Link Unit. Pharaoh had previously owned the University BX lease.  Geronimo purchased the lease from Pharaoh.  It appears from the record that, when Geronimo sold the lease to Hillside, Hillside borrowed $300,000 and that that money was paid to Bolen and Pharaoh.  Five days after Hillside bought the University BX, Hillside, Bolen, and Pharaoh entered into a letter agreement by which Hillside was given the right to dispose of saltwater, for free, from the University BX into a saltwater disposal well on the Taylor- Link property.  Bolen and Pharaoh also granted Hillside a pipeline right-of-way to accommodate the saltwater disposal system.

In March 2003, Hillside assigned its interest in the University BX to Imperial.  Bolen=s daughter owned an eight percent overriding royalty interest in the University BX lease.  In the summer and fall of 2004, Bolen began discussions with Imperial regarding buying the University BX.  Imperial did not want to sell the lease.  Imperial alleges that all went well under the saltwater letter agreement until September or October 2004 when Bolen and Pharaoh interrupted the saltwater disposal process by shutting in the pipeline going to the disposal well.

Imperial sued Bolen and Pharaoh for a temporary injunction, a permanent injunction, and damages accruing during the time that the saltwater disposal system was shut off. Bolen and Pharaoh did not appear for the temporary injunction hearing, and the trial court issued a temporary injunction.  Later, the day before a contempt motion was to be heard in relation to the temporary injunction, Bolen and Pharaoh=s lawyer sent a memo to Imperial=s lawyer stating that the disposal system was immediately restored to its prior working condition when appellants were served with the temporary injunction.

There are no challenges to the findings of the trial court that Bolen and Pharaoh halted the flow of saltwater from the University BX to the Taylor-Link.

In their first two points of error, Bolen and Pharaoh complain that the permanent injunctive relief is not in accordance with the terms of Tex. R. Civ. P. 683 and that the evidence is not sufficient to reasonably specify and describe the act sought to be restrained. Specifically, they argue that the injunction makes reference to another document B the letter agreement B and therefore violates Rule 683.

In its judgment, the trial court granted a permanent injunction against Bolen and Pharaoh. Subsequently, in response to allegations contained in a motion for new trial filed by Bolen and Pharaoh, the trial court amended its permanent injunction.  In its final form, the injunction is as follows:

IT IS FURTHER ORDERED that a permanent injunction issue and the Clerk of this Court is ordered to issue a permanent injunction to Gary Bolen and Pharaoh Oil & Gas, Inc. permanently enjoining the Defendants from interfering with or taking any action to halt or disrupt Imperial Petroleum, Inc.=s right to transport and/or dispose of saltwater from the subject University BX Lease into Pharaoh Oil & Gas, Inc.=s saltwater disposal well on the Taylor-Link lease located in Pecos County, Texas, in accordance with the terms of the parties= original agreement dated January 25, 2000.

Bolen and Pharaoh direct one of their arguments at the reference in the injunction to the parties= agreement and maintain that Rule 683 has been violated.  Rule 683 does not apply to permanent injunctions.  Qaddura v. Indo-European Foods, Inc., 141 S.W.3d 882, 892 (Tex. App.CDallas 2004, pet. denied); Shields v. State, 27 S.W.3d 267, 274 (Tex. App.CAustin 2000, no pet.); Carrell v. Richie, 697 S.W.2d 43, 46 (Tex. App.CAustin 1985, writ ref=d n.r.e.); Spinuzzi v. Town of Corinth, 665 S.W.2d 530, 534 (Tex. App.CFort Worth 1983, no writ); Tex. Liquor Control Bd. v. Bacon, 443 S.W.2d 312, 317 (Tex. Civ. App.CAustin 1969), rev=d on other grounds, 456 S.W.2d 891 (Tex. 1970); Alexander Schroeder Lumber Co. v. Corona, 288 S.W.2d 829 (Tex. Civ. App.C Galveston 1956, writ ref=d n.r.e.).

Bolen and Pharaoh also argue that the injunction calls upon them to draw their Aown inferences and conclusions as to the precise nature of the activity enjoined.@ They also challenge Athe sufficiency of evidence submitted at trial to identify with reasonable certainty the property subject to the injunction.@  Tex. R. Civ. P. 301 requires that a final judgment be definite, clear, and precise.  The judgment granting the permanent injunction in this case tells Bolen and Pharaoh not to interfere with transportation and disposition of saltwater from the University BX to the Asaltwater disposal well@ on the Taylor-Link lease.

Bolen and Pharaoh argue on appeal that there are some 20 disposal wells on the Taylor-Link lease and that they are left to determine which well the trial court is talking about.  Raymond Zamora  Jr. worked for appellants supervising pumpers.  He testified that he knew which well was used for the disposal of saltwater from the University BX.  More importantly, here follow excerpts from Bolen=s trial testimony:

[PLAINTIFF=S COUNSEL] Q:  You=ve got a file in your office that has utility bills in it, right?

A: But we have the University BX hooked up to one injection well, and the only utility bill that it has to dispose of that water is their utility bill, not my utility bill.

. . . .

[DEFENSE COUNSEL] Q: [F]irst of all, do you know what well the saltwater disposal well is?

A: Yes, I do.

The evidence, including Bolen=s own testimony, shows that appellants knew to which well the court referred. In their original motion for new trial, appellants had complained that the injunction entered by the trial court covered Aone or more wells.@  In response to appellants= complaint, the trial court amended the permanent injunction to provide for a single well rather than multiple wells, a well known to appellants to be the well into which appellee was disposing saltwater.  The judgment is definite, clear, and precise.  Appellants know what is required of them under the injunction, and their first two points of error are overruled.

In their third point, appellants claim that the Atrial court erred in awarding damages to [a]ppellee based upon lost profits because insufficient evidence was submitted at trial to calculate the amount of all inherent costs associated with the generation of profits.@  In their fourth point of error, appellants maintain that the trial court erred in its damage award because Ainsufficient evidence was submitted at trial to support a finding of [a]ppellee=s capability to produce and sell oil and gas at a profit.@  Appellee claims that appellants have waived these issues on appeal because they either did not object at the trial court level or they offered different objections to the trial court than are being offered on appeal.

During the trial, appellee offered testimony in support of its claim for damages.  This testimony was summarized in its Exhibit 14. There was no objection to the testimony, and when the exhibit was offered, appellants= attorney responded, ANo objection.@  The trial court then admitted the exhibit.  Appellants voiced no objections regarding damages until they filed their second amended motion for new trial.  In their second amended motion for new trial, appellants alleged that the court Acommitted error as a matter of law in awarding damages to Plaintiff for the value of alleged lost production of oil and gas.@  They also claimed that the court applied an incorrect measure of damages because there was no evidence that the oil and gas that was not produced while the saltwater disposal system was shut off was permanently gone.  They do not claim that the trial court abused its discretion by applying an incorrect measure of damages.  In this connection, appellants refer to Findings of Fact Nos. 12 and 13 and to Conclusion of Law No. 7.  Findings of Fact Nos. 12 and 13 deal with mitigation of damages and the total damage award.  Conclusion of Law No. 7 addresses the amount of actual damages and attorney=s fees.  The trial court denied the motion for new trial insofar as it related to damages.

Appellants have waived the complaints in these points for several reasons.  They did not object at any time that the trial court abused its discretion by applying an incorrect measure of damages.  Appellants did not object during the trial about damage-related issues and testimony.   In fact, they told the trial court that they had no objections.  They made their first complaint regarding damages in their second amended motion for new trial.  Tex. R. App. P. 33.1 requires that the record show that the complaint made on appeal was timely presented to the trial court.  A complaint about the measure of damages that does not come until a second amended motion for new trial is not timely.   See Watson v. Michael Haskins Photography, Inc., No. 10-05-00010-CV, 2005 WL 3148074 (Tex. App.CWaco, Nov. 23, 2005) (mem. op.); Miles v. Ford Motor Co., 922 S.W.2d 572, 591 (Tex. App.CTexarkana 1996), reversed in part on other grounds, 967 S.W.2d 377 (Tex. 1998); Stewart v. Breese, 367 S.W.2d 72 (Tex. Civ. App.CDallas 1963, writ dism=d w.o.j.).

Furthermore, appellants have failed to cite any standard by which we are to review the complaints that they raise in points three and four.  Additionally, in an appeal from a nonjury trial, appellants= brief  must contain complaints directed at specific findings and conclusions.  A general complaint about the court=s judgment will not preserve the point.  Serrano v. Union Planters Bank,  N.A., 162 S.W.3d 576, 580 (Tex. App.CEl Paso 2004, pet. denied).  Appellants have not challenged any specific findings of fact and conclusions of law in their brief on appeal.  Further, in their fourth point of error, appellants cite us to no authority.  See Tex. R. App. P. 38.1(h).  Additionally, the complaints that appellants make in their fourth point of error were never presented to the trial court. See Rule 33.1.

For all of these reasons, appellants have waived their complaints on appeal as set forth in points three and four, and they are overruled.

Even if appellants had not waived the complaints made in points three and four for the reasons stated, we would not sustain them.  Appellants argue that the evidence regarding some of the elements of damage is insufficient to support the findings.  We note that appellants do not specify in either point of error whether they are arguing legal or factual insufficiency.  However, in their prayer, appellants speak to both rendition and remand. We can assume, then, that the argument is directed at both legal and factual sufficiency, although no reference is made in appellants= brief to a standard by which we are to review these points.

The evidence is reviewed in a bench trial by the same standards as in a jury trial.  IKB Indus. v. Pro-Line Corp., 938 S.W.2d 440, 445 (Tex. 1997). When we review the legal sufficiency of the evidence, we do so in the light most favorable to the verdict, and we disregard all contrary evidence that could have been disbelieved by a reasonable fact-finder.  Ysleta Indep. Sch. Dist. v. Monarrez, 177 S.W.3d 915 (Tex. 2005).  Appellants did not have the burden of proof on the issue of damages. When the party not having the burden on an issue complains about the legal sufficiency of the evidence to support a finding, the challenge is one of Ano evidence@ to support the finding.  Serrano, 162 S.W.3d at 579.  There was no objection to the testimony regarding damages. When evidence on damages is admitted without objection, it provides some evidence of damages.  Chapman v. Coker Equip. Sales, Inc., No. 07-04-00333-CV, 2006 WL 212091 (Tex. App.CAmarillo, Jan. 26, 2006) (mem. op.).  The unobjected-to testimony was some evidence of appellee=s damages.  Appellants= claim that there was no evidence to support damages is overruled.

If appellants= claims are lodged against the factual sufficiency of the evidence, then we must review the point and set aside the judgment only if it is so contrary to the overwhelming weight of the evidence as to be clearly wrong and unjust.  Cain v. Bain, 709 S.W.2d 175, 176 (Tex. 1986). Here, the judgment is not contrary to the overwhelming weight of the evidence because there was no other evidence regarding damages.

In their ASummary of the Argument,@ appellants say that their sixth argument is based upon the statute of frauds.  We have been unable to find a sixth point of error in appellants= brief.  In any event, the statute of frauds is an affirmative defense and was not pleaded.  Under Tex. R. Civ. P.  94, if not specifically pleaded, the statute of frauds is waived.  Bracton Corp. v. Evans Constr. Co., 784 S.W.2d 708, 710 (Tex. App.CHouston [14th Dist.] 1990, no writ).  Affirmative defenses are waived if the defendant files only a general denial, and unless tried by consent, the failure to plead a matter of affirmative defense will preclude a defendant from asserting it.  Id.  Here, appellants filed only a general denial.  The rule of trial by consent is limited to those instances where the parties clearly tried an unpleaded issue by consent.  White v. Sullins, 917 S.W.2d 158, 160 (Tex. App.C  Beaumont 1996, writ denied); see Tex. R. Civ. P. 67.  As the trial court in this case correctly noted, appellee objected each time that the unpleaded affirmative defenses were raised.  These issues were not tried by consent.  To raise these matters for the first time on appeal is to raise them too late. We hold that the same principles apply to appellants= claim in their fifth point of error regarding mitigation of damages.  That affirmative defense was not pleaded, and it was not an issue that was tried by consent as is apparent from appellee=s objections and the trial court=s ruling upon those objections.  Any claim of error regarding the statute of frauds is overruled.  The fifth point of error is also overruled.

The judgment of the trial court is affirmed.

JIM R. WRIGHT

April 19, 2007                                                                          CHIEF JUSTICE

Panel consists of:  Wright, C.J.,

McCall, J., and Strange, J.