Opinion ID: 567908
Heading Depth: 2
Heading Rank: 2

Heading: Pennzoil's Failure to Flare the Well

Text: 50 In order to successfully invoke the doctrine of avoidable consequences to limit a plaintiff's recovery, the defendant must show both 1) that the plaintiff has acted unreasonably after the injury has occurred, and 2) that the plaintiff's unreasonable actions aggravated his damage. Tennessee Valley Sand & Gravel, 598 F.2d at 933. The district court concluded that Offshore Express and United Gas had shown both of these elements. Nonetheless, in the face of this finding, Pennzoil contends that Offshore Express and United Gas did not carry their burden of proving that Pennzoil's failure to flare the well caused the loss of the well. 51 Initially, there is some dispute as to the proper standard of review of the district court's determination that Pennzoil's conduct aggravated its damages. The district court recorded its determination that Pennzoil's conduct aggravated its damages as a Conclusion of Law rather than a Finding of Fact. 9 Pennzoil contends that because of the label the district court's determination was a legal one and therefore is reviewable de novo. Pennzoil places undue weight on this label: it is clear that in making out a defense of failure to mitigate, it must be shown as a factual matter that the plaintiff's conduct was unreasonable and aggravated its damages, and the trial court's finding to that effect here, however labeled, should be treated as such. 52 Reviewing only for clear error, then, the district court's determination must be upheld. 10 There was substantial evidence before the court indicating that Pennzoil knew that the well was flow critical or rate sensitive and that the longer the well was shut in the greater was the possibility that the well would be lost. Nonetheless Pennzoil refused for three weeks to flare the well, even though Pennzoil had the necessary equipment on hand and could have accomplished the procedure safely and legally. While environmental regulations generally prohibit flaring of wells, the district court noted that exceptions are often granted in emergencies and that an exception would likely have been granted to Pennzoil. Moreover, even if an exception would not have been granted, the district court could properly have concluded that Pennzoil was negligent in failing even to request permission to flare its well. 53 In sum, Pennzoil's arguments that it should have been allowed to recover the full value of the lost well are not well taken. The district court properly found that Pennzoil could have done more to avoid the loss of the well, and under the doctrine of avoidable consequences, Pennzoil may not recover for losses of its own making.