COURT OF APPEALS

SECOND DISTRICT OF TEXAS

FORT WORTH

NO. 02-11-00224-CV

CABELTEL INTERNATIONAL 

CORPORATION N/K/A NEW 

CONCEPT ENERGY, INC.

APPELLANT

V.

CHESAPEAKE EXPLORATION, L.L.C. 

F/K/A CHESAPEAKE EXPLORATION 

LIMITED PARTNERSHIP AND 

CHESAPEAKE OPERATING, INC.

APPELLEES

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FROM THE 342ND DISTRICT COURT OF TARRANT COUNTY

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MEMORANDUM OPINION1

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We have considered appellant CabelTel International Corporation’s motion 

for rehearing and appellees Chesapeake Exploration, L.L.C.’s and Chesapeake 

Operating, Inc.’s (collectively, Chesapeake) motion for partial rehearing, waiver 

of remanded claims, and request for affirmance of the trial court’s judgment as 

 

1See Tex. R. App. P. 47.4.
2

modified. We deny the motions but withdraw our May 17, 2012 opinion and 

substitute the following.

Appellant CabelTel appeals the trial court’s grant of summary judgment in 

favor of appellees Chesapeake. We affirm in part and reverse and remand in 

part.

Background Facts

In January 2006, Chesapeake Exploration entered into a Joint Operating 

Agreement (JOA) with KEX Energy, LLC to explore an area in White County, 

Arkansas for oil and gas. The agreement named Chesapeake the “Operator” 

and KEX Energy the “Non-Operator.” The JOA stipulated that the parties were 

responsible for costs and expenses proportionate to their interests in the drilling 

area and that the nonoperator would pay the operator within fifteen days after 

receipt of the bill from the operator for those costs. Pursuant to the JOA, 

Chesapeake drilled and completed two wells and KEX Energy began making 

payments for its share of the costs.

KEX Energy later assigned all of its rights, title, and interest in the contract 

area to CabelTel, effective May 1, 2006. In June 2006, Chesapeake stopped 

receiving payments on the wells. Chesapeake received a letter dated October 

14, 2006, from CabelTel’s Managing Director acknowledging a past due amount 

owed to Chesapeake and assuring that the matter would be addressed promptly. 

In December 2006, CabelTel had still not paid Chesapeake, so Chesapeake sent 

CabelTel notice that legal action would be taken if payments were not received 
3

by December 22, 2006. CabelTel still did not make payment, and Chesapeake 

filed suit against CabelTel, seeking in part to recover the outstanding balance of 

$556,217.28 under the JOA. Chesapeake filed for summary judgment on its 

breach of contract claim against CabelTel, which the trial court granted for 

amounts owed through December 2007.

2

 This appeal followed.

Standard of Review

We review a summary judgment de novo. Travelers Ins. Co. v. Joachim, 

315 S.W.3d 860, 862 (Tex. 2010). We consider the evidence presented in the 

light most favorable to the nonmovant, crediting evidence favorable to the 

nonmovant if reasonable jurors could and disregarding evidence contrary to the 

nonmovant unless reasonable jurors could not. Mann Frankfort Stein & Lipp 

Advisors, Inc. v. Fielding, 289 S.W.3d 844, 848 (Tex. 2009). We indulge every 

reasonable inference and resolve any doubts in the nonmovant’s favor. 20801, 

Inc. v. Parker, 249 S.W.3d 392, 399 (Tex. 2008). A plaintiff is entitled to 

summary judgment on a cause of action if it conclusively proves all essential 

elements of the claim. See Tex. R. Civ. P. 166a(a), (c); MMP, Ltd. v. Jones, 710 

S.W.2d 59, 60 (Tex. 1986).

 

2Chesapeake did not move for summary judgment on its suit on account 

claim. The parties reached a settlement as to the rest of the disputed amount 

owed.
4

Discussion

Presumption of Receipt

In its first issue, CabelTel argues that its payment obligation to 

Chesapeake was never triggered because Chesapeake failed to prove as a 

matter of law that CabelTel received the monthly Joint Interest Billing statements 

that the JOA prescribed. CabelTel does not deny that it received the billing 

statements but instead argues that Chesapeake’s evidence does not provide 

enough specificity of mailing to give rise to a rebuttable presumption of receipt.

Chesapeake’s summary judgment evidence included the JOA, an affidavit 

of Chesapeake’s Vice President and Division Controller of its Operations 

Accounting Department, Randy Goben, and the deposition testimony of 

CabelTel’s expert, Jimmy Talley. The JOA set forth the billing guidelines 

between Chesapeake and CabelTel and stipulated that Chesapeake “shall bill 

Non-Operators on or before the last day of each month for their proportionate 

share of the Joint Account for the preceding month.” Goben’s affidavit includes 

testimony that Chesapeake issued monthly billing statements to CabelTel. Talley 

testified that CabelTel gave him the Joint Interest Billing statements from 2006 

through March 2007 in order for him to prepare an accounting report.

CabelTel’s having actually provided those billing statements to a third party 

is sufficient to prove that CabelTel received the billing statements. When there is 

actual evidence of receipt as there is here, there is no need to analyze whether 

Chesapeake met its burden under the presumption framework. See Childers v. 
5

Childers, No. 14-03-01266-CV, 2004 WL 3557381, at *1 n.3 (Tex. App.—

Houston [14th Dist.] Nov. 24, 2004, no pet.) (mem. op.) (noting that the court 

“ha[d] no need” for a presumption of receipt because there was actual proof of 

receipt). Logically, CabelTel could not have provided the billing statements to 

Talley if it had not received them, and CabelTel provided no alternative 

explanation for how the statements came into its possession besides 

Chesapeake’s assertion that it mailed them to CabelTel. CabelTel’s payment 

obligations to Chesapeake were therefore triggered for the bills for which 

Chesapeake has direct evidence of receipt. Because CabelTel did not offer any 

evidence to contradict Chesapeake’s evidence, CabelTel failed to raise a fact 

issue as to whether it received the June 2006 through March 2007 bills.

In its motion for rehearing, CabelTel argues that even if the summary 

judgment evidence establishes that it received the April 2007 through December 

2007 bills, it does not establish when the bills were received. The only evidence 

of date of receipt is emails between Talley and Chesapeake dating from April 

2009 in which Talley requests supporting documentation for the bills in his 

possession. Because the JOA stipulated that CabelTel had twenty-four months 

from receipt to make written exception to the bills, it argues that a fact question 

exists that precludes summary judgment. But when CabelTel received the bills is 

irrelevant because, as explained below, Talley’s testimony is that he never made 

a written exception and claim for adjustment under the terms of the JOA. We
6

therefore overrule CabelTel’s first issue as to the bills for June 2006 through 

March 2007.

Importantly, CabelTel did not give Talley the Joint Interest Billing 

statements for any month after March 2007. Therefore, there is no direct 

evidence of receipt for or possession of the billing statements from April 2007 

through December 2007. We must therefore turn to the circumstantial evidence 

to see if it creates a presumption of receipt for those bills. A presumption of 

receipt arises when there is proof that a letter was properly addressed, stamped, 

and mailed. See McMillin v. State Farm Lloyds, 180 S.W.3d 183, 206 (Tex. 

App.—Austin 2005, pet. denied).

Chesapeake cites a number of cases in support of its argument that the 

JOA and Goben’s affidavit stating that it issued monthly billing statements to 

CabelTel “in compliance with the JOA” is sufficient to raise a presumption of 

receipt. Each of the cases Chesapeake cites bases that presumption on 

“circumstantial evidence, such as the customary mailing routine.” Cooper v. Hall, 

489 S.W.2d 409, 412–13, 415 (Tex. Civ. App.—Amarillo 1972, writ ref’d n.r.e.) 

(noting the presumption of receipt when the testimony was that the letter “was 

properly addressed, stamped, and mailed to Defendant at his correct address 

and placed in the United States mails and not returned to the Plaintiff’s attorney 

by the postal authorities”); see also Adams v. John Hancock Mut. Life Ins. Co., 

No. 93-8504, 1995 WL 103340, at *3 (5th Cir. Feb. 27, 1995) (holding that 

presumption arose from testimony that the application was “received by Armed 
7

Forces, processed in accordance with its routine practice, placed in an envelope 

as part of Armed Forces’ standard welcome package, and ultimately mailed

to . . . the address on the application”); Texaco, Inc. v. Phan, 137 S.W.3d 763, 

768 (Tex. App.—Houston [1st Dist.] 2004, no pet.) (holding that the presumption 

arose when the testimony was that the court’s computer automatically generated 

a default notice that was collected by the mailing service vendor, who placed 

correct postage on the notice and mailed it first class to the registered agent for 

service of process); Jimmy Swaggart Ministries v. City of Arlington, 718 S.W.2d 

83, 86 (Tex. App.—Fort Worth 1986, no writ) (holding that the presumption arose 

when the court clerk’s testimony described the customary mailing procedure and 

showed that she personally prepared the docket notices and properly addressed 

them).

In this case, Chesapeake provided no evidence of its mailing procedures 

other than the testimony that it complied with the JOA. That Chesapeake issued 

monthly billing statements says nothing about whether those statements were 

properly addressed to CabelTel, whether they had sufficient postage, or whether 

they were properly mailed through the postal service. See Tex. Emp. Ins. Ass’n 

v. Wermske, 162 Tex. 540, 349 S.W.2d 90, 92 (Tex. 1961) (holding that no 

presumption of receipt arose from testimony that a letter was left on a desk to be 

mailed but had not been placed in a properly addressed and stamped envelope 

when there were no “corroborating circumstances to support the inference that 

the [office mailing] custom [was] carried out”).
8

Chesapeake’s summary judgment evidence for the April to December bills 

is insufficient to create a presumption of receipt. See Sellers v. Foster, 199 

S.W.3d 385, 395 (Tex. App.—Fort Worth 2006, no pet.) (holding that no 

presumption of receipt arose when appellee presented no evidence regarding 

procedures for mailing notices). Because Chesapeake’s evidence failed to 

create a presumption of receipt as to those bills, it did not conclusively prove that 

CabelTel’s payment obligations for the April through December 2007 bills were 

triggered. Summary judgment was therefore improper as to those bills. See

MMP, Ltd., 710 S.W.2d at 60 (“To be entitled to summary judgment, the movant 

must conclusively prove all essential elements of his claim.”). We sustain 

CabelTel’s first issue as to the April 2007 through December 2007 bills.

Because we hold that summary judgment was improper on the issue of 

receipt as to the April 2007 through December 2007 bills, we do not need to 

address the remainder of CabelTel’s issues for those bills. See Tex. R. App. P. 

47.1. Because we overruled CabelTel’s first issue as to the remainder of the 

bills, we address the rest of CabelTel’s issues as to those bills below.

Timely written exception to the billing statements

In its second issue, CabelTel asserts that summary judgment was 

improper because a fact issue existed as to whether CabelTel made timely 

written exceptions to the billing statements, affecting the presumption of the 

billing statements’ accuracy. The JOA stipulates that
9

all bills and statements rendered to Non-Operators by Operator 

during any calendar year shall conclusively be presumed to be true 

and correct after twenty-four (24) months following the end of any 

such calendar year, unless within the said twenty-four (24) month 

period a Non-Operator takes written exception thereto and makes 

claim on Operator for adjustments.

In its brief, CabelTel argues that Talley made exceptions to the billing 

statements by email, affidavit, written report, and errata beginning April 20, 2009 

and that his exceptions were sufficient under the JOA. Talley stated in an 

affidavit dated June 9, 2010, that the Council of Petroleum Accountants 

Societies, Inc.’s (COPAS) “mandatory guidelines”—and specifically guideline AG19—applied to the JOA.3

 AG-19 defines “exception” as “a written audit finding 

presented to the Operator prior to or with the Audit Report, which includes all 

appropriate and available supporting detail, such as voucher references, source 

documents, and explanatory worksheets.” In his deposition, Talley also testified 

that the language in the above-quoted section of the JOA is standard industry 

 

3CabelTel argues on appeal that it never agreed to be governed by AG-19. 

Each page of the Accounting Procedure section in the Joint Operating 

Agreement bears a stamp that says “COPAS 1984 ONSHORE Recommended 

by the Council of Petroleum Accountants Societies” and a second stamp that 

simply says “COPAS.” The first page of the Accounting Procedure section also 

bears a copyright claim by COPAS. CabelTel’s own expert testified that AG-19 

applies to COPAS accounting procedure agreements. We therefore decline to 

find any genuine dispute as to whether the definitions found in AG-19 apply to 

the JOA. See Doe v. Tex. Ass’n of Sch. Bds., Inc., 283 S.W.3d 451, 458 (Tex. 

App.—Fort Worth 2009, pet. denied) (noting that words in a contract are given 

their ordinary, generally accepted meanings “unless the contract itself shows that 

the terms have been used in a technical or different sense”) (emphasis added).
10

language and that he knew what the contract required for a written exception and 

claim for adjustment.

Twice during his deposition, Talley testified that he never made a written 

exception and claim for adjustment as required by the JOA to prevent the bills 

from being deemed presumptively true.4 Because the record shows that Talley 

did not make any written exceptions or claims for adjustment, there was no fact 

issue raised by CabelTel as to whether it made a timely written exception.

In its motion for rehearing, CabelTel cites Paint Rock Operating, LLC v. 

Chisholm Exploration, Inc., 339 S.W.3d 771 (Tex. App.—Eastland 2011, no pet.), 

 

4

Talley was asked,

Q. As [the term “written exception”] is utilized in this [JOA], did 

you, on behalf of your client, ever make a written exception to 

Chesapeake and make a claim to Chesapeake for an adjustment?

A. Not on the—didn’t make any claims. And I did not give them any 

exceptions on that I finalized, but I did point out exceptions in the 

emails and asked for documents and help that they did not do.

Later he was asked,

Q. Now, as far as your work in this matter, did you ever 

make a written exception and a claim for adjustment to Chesapeake, 

as that term is contemplated under paragraph four or five of the 

JOA?

A. Not pertaining to this document, no, sir.

Q. And when you say not pertaining to this document, 

you're saying that you never made a written exception and a claim to 

Chesapeake as contemplated in Paragraph 4 and 5 of [the JOA]?

A. No, sir.
11

as authority for its contention that the AG-19 definition of exception does not 

apply to the JOA. In Paint Rock, the nonoperator (Chisholm) returned marked-up 

copies of the monthly billing statements to the operator “showing the charges that 

it refused to pay, along with a check for the undisputed charges.” Id. at 773. The 

trial court held, and the court of appeals affirmed, that Chisholm’s markings on 

the returned billing statements constituted a sufficient written exception. Id. at 

776.

However, in Paint Rock, the operator did not dispute that Chisholm made 

some sort of written exception; it argued only that the JOA required Chisholm to 

also provide an explanation for the objection. Id. The court of appeals expressly 

stated,

We do not hold that marking out charges on a JIB and returning it to 

the operator is sufficient, as a matter of law, to comply with COPAS 

Article I.4. Our holding is limited to a review of the sufficiency of the 

evidence to support the trial court’s finding of fact in this case.

Id. at 777 n.4. Thus, Paint Rock did not address the question that is before us 

now:5 whether emails and a nonaudit report constitute a written exception and 

claim for adjustment under the terms of the JOA governed by COPAS guidelines. 

Talley’s testimony was that COPAS, and specifically AG-19, governed the 

contract, and that he did not make a written exception or claim for adjustment as 

 

5Whether COPAS governed the agreement at issue in Paint Rock does not 

appear to have been raised in that case at trial or on appeal as it was in this 

case. Neither, as the cited footnote states, did Paint Rock address what was 

sufficient as a written exception under the AG-19 guideline.
12

those terms were used in the contract. We therefore overrule CabelTel’s second 

issue.

Right to Audit

In its third issue, CabelTel argues that summary judgment was improper 

because a genuine issue of fact existed as to whether Chesapeake performed its 

duties under the JOA with respect to CabelTel’s rights to audit. CabelTel asserts 

that Chesapeake “thwarted” Talley’s audit attempt. CabelTel does not assert that 

it attempted an audit except through Talley. However, Talley testified that he 

never conducted an audit, and a report from Talley to CabelTel’s President, 

Gene Bertcher, clearly states: “We were not engaged to, and did not, conduct an 

audit . . . .” Since CabelTel never attempted an audit, it cannot argue that a fact 

issue existed as to whether Chesapeake refused to allow an audit. We therefore 

overrule CabelTel’s third issue.

Accurate Billing

In its fourth issue, CabelTel asserts that a fact issue existed as to whether 

it incurred the costs reflected in Chesapeake’s invoices. As addressed in the 

second issue, the JOA stipulates that Chesapeake’s billing “shall conclusively be 

presumed to be true and correct” unless timely written exceptions and claims for 

adjustment are made. Because the evidence establishes that CabelTel never 

furnished timely written exceptions or claims for adjustment, Chesapeake’s 

invoices are presumed to be true and correct. See Winchek v. Am. Exp. Travel 

Related Servs. Co., 232 S.W.3d 197, 205 (Tex. App.—Houston [1st Dist.] 2007, 
13

no pet.) (op. on reh’g) (holding that creditor established the amount of damages 

suffered by debtor when creditor’s affiant testified that it sent monthly statements

of all debits and credits, that all payments and offsets had been applied to the 

account, and that debtor failed to pay the balance due). We therefore overrule 

CabelTel’s fourth issue.

Conclusion

Having overruled each of CabelTel’s issues as to the June 2006 through 

March 2007 bills, we affirm the trial court’s grant of summary judgment in favor of 

Chesapeake as to those bills.

6

 Having sustained CabelTel’s first issue as to the 

April 2007 through December 2007 bills, we reverse the trial court’s summary 

judgment as to those bills and remand the case for further proceedings 

consistent with this opinion.7

LEE GABRIEL

JUSTICE

PANEL: GARDNER, MEIER, and GABRIEL, JJ.

DELIVERED: July 12, 2012

 

6Chesapeake’s summary judgment evidence establishes the amount owed 

by CabelTel for those months is $540,069.81.

7On rehearing, Chesapeake states that it “waives and relinquishes its claim 

to” the remaining disputed bills. It requests that we modify our opinion to render 

judgment only in the amount established by the summary judgment evidence. 

Chesapeake does not cite to any authority demonstrating our right to do what it 

requests. We therefore deny Chesapeake’s request.