Affirmed and Opinion Filed June 29, 2018 

S 

In The 

Court of Appeals 

Fifth District of Texas at Dallas 

No. 05-17-00262-CV 

RALPH RATHER AND ENEXCO, INC., Appellants 

V. 

AAA WELL SERVICE, LLC, Appellee 

On Appeal from the 192nd Judicial District Court 

Dallas County, Texas 

Trial Court Cause No. DC-15-02337 

MEMORANDUM OPINION 

Before Chief Justice Wright, Justice Bridges, and Justice Evans

Opinion by Justice Bridges 

Ralph Rather and Enexco, Inc. appeal the trial court’s judgment, following a jury trial, 

awarding AAA Well Service, LLC $34,464.64 on its breach of contract claim against Enexco and 

its piercing the corporate veil/alter ego claim against Rather individually. In four issues, Rather 

and Enexco argue the evidence is legally and factually insufficient to show they committed “actual 

fraud” and that “they did it primarily for Rather’s direct personal benefit.” We affirm the trial 

court’s judgment. 

Rather is the president and fifty percent owner of Enexco, an oil and gas operating company 

that previously operated wells in various parts of Texas. By the time of trial, Enexco had “pretty 

much shut down.” Rather was also president and fifty percent owner of N&R Resources, Inc., a 

company that maintained working interests in a number of wells operated by other companies, 
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including some wells operated by Enexco. AAA provides workover rigs to already-drilled oil and 

gas wells and repairs the wells. 

In 2010, N&R obtained 100% of the working interest on a lease in Hardeman County, 

Texas. N&R assigned seventy-five percent of the working interest to other non-operating working 

interest owners and retained twenty-five percent. N&R hired Enexco to operate the “Fowler Well” 

on the lease because N&R was not licensed to operate wells in Texas, but Enexco was a licensed 

operator. Enexco received overhead costs for serving as operator and assuming monetary risks 

associated with the well. Overhead costs included “taking care of all the accounting functions, all 

the regulatory functions” and “an overhead amount on a monthly basis after production was 

established.” Rather testified that, because he was president and fifty-percent owner of both N&R 

and Enexco, it was to his benefit to hire an operator at the cheapest price possible. With respect 

to the Fowler Well, Enexco agreed to operate the well for only its overhead costs with no additional 

profit. 

Rather testified that Enexco hired him individually to serve as a consultant in connection 

with the Fowler Well. AAA’s counsel asked if Rather was paid $68,000 as a consultant on the 

Fowler Well. Rather denied being paid $68,000 and said he was paid “I think $3500.” AAA’s 

counsel showed Rather an October 11, 2013 settlement statement from Enexco used to show 

working interest owners the amounts they owed for their proportionate shares of ownership in the 

well. The statement showed a payment to Rather of $3000, which Rather did not deny receiving. 

However, Rather denied receiving payments of $27,601.35 and $20,115.61 that were listed on the 

statement. Rather testified he was not aware there were other settlement statements showing 

amounts charged by Enexco for Rather’s invoices. 

In December 2013, Rather contacted AAA, and Enexco thereafter contracted with AAA to 

provide a rig and crew to work the Fowler Well. Although AAA performed the work, Rather and 
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Enexco never paid. In February 2015, AAA sued Enexco and Rather asserting, among other 

things, a breach of contract claim against Enexco and a piercing the corporate veil/alter ego claim 

against Rather individually. In November 2016, the case was tried before a jury. AAA’s 

operations manager, Deecye Bedell, testified AAA performed work on the Fowler Well in August 

and September 2013. Bedell had “a lot of discussions” with Rather about paying AAA before 

contracting with Enexco in December 2013, and Rather stated he “could and would pay AAA for 

its services.” Bedell relied on Rather’s statement in deciding to send a rig and crew to perform the 

services on the Fowler Well in December 2013, and AAA performed the work. Jin Chua, manager 

of AAA’s accounting, testified an invoice for $34,464.64 was mailed to Enexco on January 22, 

2014, but the invoice was never paid. 

Rather testified that, “shortly before” AAA worked on the Fowler Well, Rather personally 

guaranteed payment to AAA by another company for which Enexco was doing a contract operating 

job. Rather testified he first received AAA’s invoice in this case when he was served with AAA’s 

lawsuit in February 2015. Rather testified that, in 2010, Enexco had “a well that had a significant 

cost overrun,” and a number of investors left Rather “holding the bag.” In 2011 and 2012, Enexco 

“had some outstanding debts and liabilities.” As of November 2013, Rather testified “we had 

some problems because of the cost overrun and I was trying to remedy that by paying – I paid a 

lot of it out of my pocket.” Rather testified he and his father “levered some of our assets with 

Enexco to pay the bills.” Rather confirmed that Platinum Pipe Rentals made a claim for an unpaid 

amount of $21,535.59 as of October 15, 2013 and ultimately obtained a default judgment in that 

amount for work performed on the Fowler Well. Rather testified another vendor, Weatherford, 

had a balance due for work performed in August 2013. On April 28, 2014, Weatherford notified 

Rather that his account with Weatherford was closed because of a total past due balance of 

$11,366.31. 
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Rather testified that his brother Michael was not an employee of Enexco, but “on occasion 

he would be an independent contractor.” Rather testified Michael charged $3065.27 to Enexco in 

connection with the Fowler Well. AAA’s counsel referred Rather to a file he and Enexco produced 

showing invoices and receipts for charges billed to Enexco by Michael. The invoices showed 

Michael charged for, among other things, hotels, mileage on his personal vehicle, gasoline for his 

personal vehicle, $577.36 for tires for his personal vehicle, $207.99 for a tuneup of his personal 

vehicle, cigarettes, $219.73 for work boots, and a “double hot caramel sundae” from Braum’s. 

Rather testified Enexco kept the invoices in Michael’s “file of reimbursements,” but Rather had 

“no idea” whether the invoices were actually paid to Michael. Rather testified that his son and 

Michael’s son also worked on the Fowler Well, and they worked together on the same day to paint 

a “tank battery” and both charged for “those same services.” AAA’s counsel asked whether, if 

Enexco had “not been paying tens of thousands of dollars to [Rather], Michael Rather your brother, 

your nephew and your son,” Enexco would have had enough money to pay AAA. Rather replied 

that “there was money there to pay AAA,” but he “never received an invoice until two years later.” 

Rather denied that Enexco knew by December 2013 “that its financial difficulties had put them in 

a position it was going to be winding down,” and “rather than give up what assets it had to pay 

third-party creditors,” Enexco “funneled that money out” to Rather, his brother, his nephew, and 

his son. 

The jury found that AAA and Enexco agreed that AAA would perform work at the Fowler 

Well in exchange for payment, Enexco failed to comply with the agreement, $34,464.64 would 

fairly compensate AAA for its damages, and Rather was responsible for the conduct of Enexco. 

The trial court entered final judgment in that amount, plus interest and attorney’s fees, against 

Enexco and Rather individually. This appeal followed. 
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In their first and second issues, Rather and Enexco argue the evidence is legally and 

factually insufficient to show they committed “actual fraud.” In their third and fourth issues, they 

argue the evidence is legally and factually insufficient to show that, if they did commit actual 

fraud, they did it primarily for Rather’s direct personal benefit. Because of the interrelated nature 

of these arguments, we address them together. 

When reviewing the legal sufficiency of the evidence, we consider all the evidence in the 

light most favorable to the prevailing party, indulging every reasonable inference in that party’s 

favor. See Solar Soccer Club v. Prince of Peace Lutheran Church of Carrollton, Tex., 234 S.W.3d 

814, 820 (Tex. App.—Dallas 2007, no pet.). We must credit the favorable evidence if reasonable 

jurors could and disregard the contrary evidence unless reasonable jurors could not. City of Keller 

v. Wilson, 168 S.W.3d 802, 807, 827 (Tex. 2005). A “no evidence” point will be sustained if there 

is no more than a scintilla of evidence to support the finding. Gen. Motors Corp. v. Sanchez, 997 

S.W.2d 584, 588 (Tex. 1999). If the evidence furnishes some reasonable basis for differing 

conclusions by reasonable minds about a vital fact's existence, more than a scintilla of evidence 

exists. Burroughs Wellcome Co. v. Crye, 907 S.W.2d 497, 499 (Tex. 1995); Kindred v. Con/Chem, 

Inc., 650 S.W.2d 61, 63 (Tex. 1983). 

When considering a factual sufficiency challenge to a jury’s verdict, courts of appeals must 

consider and weigh all of the evidence, not just that evidence which supports the verdict. Maritime 

Overseas Corp. v. Ellis, 971 S.W.2d 402, 406–07 (Tex. 1998). A court of appeals can set aside 

the verdict only if it is so contrary to the overwhelming weight of the evidence that the verdict is 

clearly wrong and unjust. Id. at 407; see also Cain v. Bain, 709 S.W.2d 175, 176 (Tex. 1986) (per 

curiam); Solar Soccer, 234 S.W.3d at 820. In conducting our review of both the legal and factual 

sufficiency of the evidence, we are mindful that the jury, as fact-finder, was the sole judge of the 

credibility of the witnesses and the weight to be given their testimony. Keller, 168 S.W.3d at 819. 
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Accordingly, the court of appeals may not pass upon the witnesses’ credibility or substitute its 

judgment for that of the jury, even if the evidence would clearly support a different result. 

Maritime Overseas, 971 S.W.2d at 407. 

 The trial court’s charge measures the sufficiency of the evidence when, as here, the 

opposing party fails to object to the charge. See Osterberg v. Peca, 12 S.W.3d 31, 55 (Tex. 2000). 

Question number four of the court’s charge, which asked if Ralph Rather was responsible for the 

conduct of Enexco, provided the following instructions: 

Ralph Rather is “responsible” for the conduct of Enexco, Inc. if Ralph Rather used 

Enexco, Inc. for the purpose of perpetrating and did perpetrate an actual fraud on 

AAA Well Service, LLC primarily for the direct personal benefit of Ralph Rather. 

OR 

Ralph Rather is “responsible” for the conduct of Enexco, Inc. if Ralph Rather used 

Enexco, Inc. as a means of evading an existing legal obligation for the purpose of 

perpetrating and did perpetrate an actual fraud on AAA Well Service, LLC 

primarily for the direct personal benefit of Ralph Rather. 

For purposes of this charge, “actual fraud” occurred if either:

1.(a) Enexco, Inc. concealed or failed to disclose a material fact within the 

knowledge of Enexco, Inc.; (b) Enexco, Inc. knew that AAA Well Service, LLC 

was ignorant of the fact and did not have an equal opportunity to discover the truth; 

(c) Enexco, Inc. intended to induce AAA Well Service, LLC to take some action 

by failing to disclose the fact; and (d) AAA Well Service, LLC suffered injury as a 

result of acting without knowledge of the undisclosed fact. 

OR 

2. (a) Enexco, Inc. made a material misrepresentation; (b) the misrepresentation 

was made with knowledge of its falsity or made recklessly without any knowledge 

of the truth and as a positive assertion; (c) the misrepresentation was made with the 

intention that it should be acted on by AAA Well Service, LLC; and (d) AAA Well 

Service, LLC relied on the misrepresentation and thereby suffered injury. 

“Misrepresentation” means (a) false statement of fact or (b) a promise of future 

performance made with an intent, at the time the promise was made, not to perform 

as promised. 

The jury answered this question “Yes.” 
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 The record shows that, by November 2013, Rather had financial troubles “because of the 

cost overrun,” and Rather was paying “a lot of it out of [his] pocket.” One vendor, Platinum Pipe 

Rentals, made a claim for an unpaid amount of $21,535.59 as of October 15, 2013 and ultimately 

obtained a default judgment in that amount for work performed on the Fowler Well. Rather 

testified another vendor, Weatherford, had a balance due for work performed in August 2013, and 

Weatherford closed Rather’s account in April 2014 because of a total past due balance of 

$11,366.31. In this context, when Rather approached AAA to perform work on the Fowler Well, 

Bedell had “a lot of discussions” with Rather about paying AAA before contracting with Enexco 

in December 2013, but Rather stated he “could and would pay AAA for its services.” Bedell relied 

on Rather’s statement in deciding to send a rig and crew to perform the services on the Fowler 

Well in December 2013, and AAA performed the work. 

Throughout this same time period in late 2013, Rather, president and fifty-percent owner 

of both N&R and Enexco, was using Enexco to operate the Fowler Well on a lease owned by 

N&R. Instead of operating at a profit to Enexco, Rather operated the Fowler Well in such a way 

that Enexco only received operating costs, and Rather was paid at least $50,000 as a “consultant.” 

Rather’s brother, nephew, and son also received payments for expenses associated with the Fowler 

Well and other, non-work-related expenses. The jury was free to disbelieve Rather’s testimony 

that “there was money there to pay AAA” but he “never received an invoice until two years later.” 

Chua testified AAA billed Enexco for its work on January 22, 2014. The record is clear that 

Enexco never paid AAA for its work. We conclude that the evidence is legally and factually 

sufficient to show that Rather and Enexco committed actual fraud and that they did it primarily for 

Rather’s direct personal benefit. See City of Keller, 168 S.W.3d at 827; Maritime Overseas, 971 

S.W.2d at 406-07. We overrule Rather and Enexco’s first, second, third, and fourth issues. 

 
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We affirm the trial court’s judgment. 

170262F.P05 

 

/David L. Bridges/ 

DAVID L. BRIDGES 

JUSTICE 
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S 

Court of Appeals 

Fifth District of Texas at Dallas 

JUDGMENT 

RALPH RATHER AND ENEXCO, INC., 

Appellants 

No. 05-17-00262-CV V. 

AAA WELL SERVICE, LLC, Appellee 

 On Appeal from the 192nd Judicial District 

Court, Dallas County, Texas 

Trial Court Cause No. DC-15-02337. 

Opinion delivered by Justice Bridges. Chief 

Justice Wright and Justice Evans 

participating. 

 In accordance with this Court’s opinion of this date, the judgment of the trial court is 

AFFIRMED. 

 It is ORDERED that appellee AAA WELL SERVICE, LLC recover its costs of this 

appeal from appellant RALPH RATHER AND ENEXCO, INC. 

Judgment entered June 29, 2018.