Court Opinion

ID: 3097449
Source: CourtListenerOpinion
Date Created: 2015-10-16 04:44:39.323004+00
Date Added: 2024-06-11T11:43:03.557372
License: Public Domain

In The
                  Court of Appeals
    Sixth Appellate District of Texas at Texarkana
             ______________________________

                   No. 06-09-00106-CV
             ______________________________

    JEFF MOORE, D/B/A T&M PRODUCTION, Appellant

                              V.

            JET STREAM INVESTMENTS, LTD.,
      SARA P. RUDD, EXECUTRIX OF THE ESTATE OF
J.B. RUDD, AND YOUNGBLOOD PROPERTIES, L.P., Appellees

        On Appeal from the 71st Judicial District Court
                  Harrison County, Texas
                  Trial Court No. 05-1140

         Before Morriss, C.J., Carter and Moseley, JJ.
                 Opinion by Justice Moseley
                                                    OPINION

I.       FACTUAL AND PROCEDURAL BACKGROUND

         In its inception, this case involved a dispute between Jeff Moore, d/b/a T&M Production

(who had been the holder of the oil and leasehold estate of certain realty in Harrison County,

Texas) and Jet Stream Investments, LTD, et al. (the holder of the interests which had been subject

to the oil and gas lease), wherein it had been alleged that the oil and gas lease had terminated under

the terms of the lease for want of production.1 The case was instituted and tried as an action for

declaratory judgment.2 After a bench trial, the trial court awarded judgment in favor of Jet Stream,

including damages in the amount of $94,752.54, plus attorney’s fees.3 On appeal, this Court held,

1
 In Moore v. Jet Stream Investments, LTD, 261 S.W.3d 412 (Tex. App.––Texarkana 2008, pet. denied), this Court
addressed Moore’s appeal of the trial court’s judgment declaring that an oil and gas lease had terminated due to
nonproduction. Moore operated the lease, which contained a five-year primary term and continued thereafter as long
as oil or gas was produced. On August 20, 2004, after Moore failed to comply with an order from the Texas Railroad
Commission regarding posting financial assurance, the Commission ordered that he cease production. Production
did not resume until July 15, 2005. Shortly after Moore resumed production, William L. Rudd, III, acting ―[o]n
behalf of the mineral owners,‖ sent Moore a letter alleging the lease had terminated. Jet Stream Investments
thereafter brought suit seeking a declaratory judgment that the lease had terminated. After granting Jet Stream’s
motion for partial summary judgment, the case proceeded to trial on the merits, with judgment rendered in favor of Jet
Stream.
2
 We have pointed out in our recent case of Ramsey v. Grizzle, No. 06-09-00026-CV, 2010 WL 1980247 (Tex.
App.––Texarkana May 19, 2010, no pet. h.), that such a controversy (i.e., whether a leasehold estate has reverted due
to cessation of operations) is properly brought as an action in trespass to try title and not as an action for declaratory
judgment. Unlike the Ramsey case, no complaint of this nature was raised here and the issue would, therefore, be
unassigned or unpreserved error which we cannot entertain. TEX. R. APP. P. 33.1. The Texas Supreme Court has
allowed consideration of unassigned error only in cases wherein the jurisdiction of the appellate court is questionable
and in cases involving quasi-criminal matters. In re B.L.D., 113 S.W.3d 340, 350 (Tex. 2003). This case fits into
neither category and our previous opinion has become final.
3
 Of this amount, $85,521.11 represented revenue received by Moore from the termination of the lease, and $9,231.13
represented underpayment of royalty.

                                                            2
inter alia, that the trial court erred in awarding damages measured by gross revenue from oil sales,

and determined that Jet Stream’s recovery should be measured by net revenue from oil sales.4 As

a result of that determination, while affirming the finding that the lease had terminated, we

reversed the award of damages and remanded that portion of the case to the trial court for further

proceedings consistent with our opinion that Jet Stream’s recovery should be limited to damages

for good-faith trespass (i.e., the value of the minerals produced minus drilling and operating

costs).5

           We further recognized that should the recovery by Jet Stream be substantially different

when a different determination of the measure of damages is employed, this could also

substantially impact the trial court’s determination of the fairness of the attorney’s fee award. In

this regard, Moore maintained that because he obtained some relief on rehearing before this Court,

―the award of attorney’s fees for appeal should either be set aside or awarded to both Appellant and

Appellee.‖6 We recognized that under the facts of this case, even though the trial court’s award of

attorney’s fees would not be an abuse of discretion, the trial court might choose to exercise its

4
Damages measured by gross revenue from oil sales were based upon bad-faith trespass. Because we determined that
Moore’s trespass was done in good faith, damages are appropriately measured by net revenue from oil sales.
5
    Moore, 261 S.W.3d at 430.
6
 Id. at 431. Jet Stream requested and obtained attorney’s fees under the Declaratory Judgments Act. Under Section
37.009, a trial court may award reasonable and necessary attorney’s fees that are ―equitable and just.‖ TEX. CIV.
PRAC. & REM. CODE ANN. § 37.009 (Vernon 2008). When a judgment is reversed on appeal, the reversal may affect
whether the award of attorney’s fees is equitable and just. Sava Gumarska in Kemijska Industria D.D. v. Advanced
Polymer Scis., Inc., 128 S.W.3d 304, 324 (Tex. App.––Dallas 2004, no pet.).

                                                       3
discretion differently in light of our opinion. Moore, 261 S.W.3d at 432. We, therefore,

reversed that portion of the judgment awarding attorney’s fees to Jet Stream and remanded that

portion of the case to the trial court to determine whether, in light of our opinion, an award of such

fees to Jet Stream is ―equitable and just.‖ Id.

        Upon remand, the trial court conducted a trial on June 17, 2009, in which it heard evidence

related solely to the issue of damages and attorney’s fees, per this Court’s mandate dated

January 15, 2009. On July 7, 2009, the trial court wrote a letter to counsel for all litigants which

outlined its findings with respect to damages and attorney’s fees, in accord with the opinion of this

Court. Thereafter, on August 4, 2009, Moore filed a motion to reopen the presentation of

evidence, which motion was denied after hearing by the trial court. The final judgment upon

remand, issued August 21, 2009, awarded Jet Stream damages in the amount of $50,847.16,

representing the net value of the revenues produced.7 The judgment further awarded attorney’s

fees to Jet Stream in the amount of $10,000.00 for fees incurred ―in the pursuit of this cause‖

together with contingent attorney’s fees on appeal.

II.     ISSUES ON APPEAL

        On appeal, Moore raises five issues, claiming that the trial court erred in the following

respects: (1) when it denied Moore’s motion to reopen evidence to correct the market value of oil

7
 The judgment confirmed the previous award of underpaid royalty in the amount of $9,231.13, together with
post-judgment interest from and after June 12, 2007.

                                                   4
produced; (2) when it failed to include the cost of a letter of credit (which was required by the

Texas Railroad Commission (Commission) as a condition of resuming production) as a part of the

operating costs to be deducted from gross revenues; (3) in its determination of the value of

minerals produced; (4) in failing to give Moore credit on the judgment for sums previously paid to

Jet Stream and for sums held in suspense by Plains Marketing; and (5) in failing to reform the final

judgment on remand to reflect the award of attorney’s fees as set forth in the trial court’s July 7,

2007, letter to counsel. We affirm the judgment of the trial court.

           A.       The Trial Court Appropriately Exercised Its Discretion in Denying Moore’s
                    Motion to Reopen the Evidence

           Moore maintains that he discovered, subsequent to the hearing, that the total gross revenue

figure presented by Jet Stream at the hearing was incorrect. While Moore concedes that twelve

days prior to the hearing, Jet Stream produced the market value figures it relied upon at trial, he

only realized the inaccuracy of those figures when he received records from Plains Marketing8

subsequent to the hearing.

           The primary purpose of the mandated hearing was to determine damages for a good-faith

trespass—the value of the minerals minus drilling and operating costs. Id. at 430. Jet Stream

offered evidence that the total gross revenue derived from oil production during the pertinent time

period was $153,158.87. Kenneth Frazier, an expert witness called by Jet Stream, testified that

the information he employed to determine total gross revenue was obtained from the Commission.

8
    Plains Marketing purchased and marketed the oil from Moore’s producing wells.

                                                          5
Frazier explained that the total figure represented the value of the oil that was actually produced, as

opposed to the value of the oil actually sold. Said another way, ―total gross revenue‖ represents

the amount of production of oil from the well multiplied by a standard and recognized market

value for oil.9 Finally, Frazier testified that Moore did not receive the entire $153,158.87—the

value of the oil produced—because oil produced from March 2008 through September 2008

remains in storage on location.

           In his motion to reopen evidence and on appeal, Moore contends that the records from

Plains Marketing, which reflect the purchase price of the oil sold to it, contradict the figures

introduced at trial.10       Moore claims the court erred in failing to reopen the evidence to permit the

error in mineral value to be corrected.

           In a bench trial, the trial court may permit either party to offer additional evidence at any

time when it clearly appears to be necessary to the due administration of justice. TEX. R. CIV. P.

270; In re Estate of Huff, 15 S.W.3d 301, 308 (Tex. App.––Texarkana 2000, no pet.). A trial

court’s discretion to permit additional evidence ―should be exercised liberally to allow both parties

to fully present their case.‖ Ex parte Stiles, 950 S.W.2d 444, 446 (Tex. App.––Waco 1997, no

9
    The total production figures were reported by Moore to the Commission.
10
  At the hearing on Moore’s motion for new trial, Jim O’Bannon, a crude oil representative from Plains Marketing,
testified that total production for this lease, including severance taxes, is valued at $146,730.00. When severance
taxes are deducted, the mineral value is $139,962.90. These figures are based on records reflecting amounts that
Plains Marketing paid for the oil it purchased. O’Bannon does not know what was actually produced; he knows what
Plains Marketing purchased. However, Plains Marketing bought all of the production from the lease with the
exception of what might have been in the tanks at the time of the hearing.

                                                          6
writ). We review a trial court’s decision to permit additional evidence under an abuse of

discretion standard. In re J.A.H., 996 S.W.2d 933, 935 (Tex. App.––Waco 1999, no pet.). The

test for abuse of discretion is whether the court acted without reference to guiding rules and

principles. Cire v. Cummings, 134 S.W.3d 835, 838–39 (Tex. 2004). In deciding whether to

permit additional evidence, a trial court may consider (1) whether the movant showed due

diligence in obtaining the evidence; (2) whether the additional evidence is decisive; (3) whether

reopening the evidence will cause undue delay; and (4) whether reopening the evidence will cause

injustice. Huff, 15 S.W.3d at 308.

       We now apply these factors to the facts of this case to determine if the trial court acted

within its discretion in denying Moore’s motion to reopen.

               (1)     Due Diligence

       The hearing concluded June 17, 2009. On July 7, 2009, the trial court wrote a letter to

counsel advising of its ruling on the merits. Moore’s motion to reopen the evidence was filed

August 4, 2009. Moore contends that even though the motion was filed in August after trial in

June, due diligence was exercised because he was not aware of the discrepancy in the evidence on

mineral value until that time.

       At the hearing in June, Moore made no attempt to present independent evidence of the

value of the minerals which were produced or sold. Moreover, there is no contention that the

evidence Moore sought to introduce via his motion to reopen was unavailable to him at the time of

                                               7
trial. Indeed, it appears that this evidence was readily available to Moore prior to trial. Counsel

for Moore was candid in advising the court at the motion to reopen that there was access to this

evidence ―all along.‖ When asked about the availability of the records regarding mineral value,

O’Bannon (the sponsoring witness of the evidence in question) confirmed that such records were

available at the time of trial.11 Likewise, Moore does not dispute the availability of that evidence

at the time of trial.12 Given these facts, we are compelled to conclude that there has been a failure

to show diligence in attempting to produce the evidence in a timely fashion. Where the party

seeking to reopen has not shown such diligence, a trial court does not abuse its discretion by

refusing to reopen a case after evidence is closed. McNamara v. Fulks, 855 S.W.2d 782, 784

(Tex. App.––El Paso 1993, no writ).

11
     O’Bannon testified at the motion for new trial:

                      Q         [By Plaintiffs’ Counsel] Okay. And so if this trial was held in June of 2009,
            had this -- had the Defendant wanted to obtain these records, he could have obtained this record and
            presented it; is that correct?

                     A         [By O’Bannon] Yes, sir.
12
     Moore testified at the motion for new trial:

                     Q         [By Plaintiffs’ Counsel] Mr. Moore, is there one item of information that you’re
            asking now for the Court to look at in making a determination of a new trial that wasn’t available to
            you prior to our trial in June?

                     A         [By Moore] Probably not.

                                                             8
                     (2)      Decisive Evidence

            Frazier testified that the value of the production for the pertinent time period was

$153,158.87. This evidence was undisputed at trial. 13 O’Bannon testified at the hearing on

motion for new trial that the value of the minerals it purchased (as opposed to the value of the

minerals actually produced) was $146,730.22. This figure represents the value of the minerals

purchased by Plains Marketing, while the value proffered by Frazier represents the value of total

production. Moreover, there is no dispute that oil was produced, but not sold, between March and

September 2008. The uncontroverted evidence admitted at trial reflects the value of minerals

produced, but unsold, to be $6,859.50. The two sets of figures are easily reconciled, and the

difference between the two essentially has to do with a value measured by minerals sold versus the

value measured by minerals produced.14                Evidence of the value of oil actually sold is not decisive

because it does not represent the value of all of the minerals.15

13
     In fact, Moore confirmed that the figure of $153,158.87 represents the value of the minerals produced.
14
  To the extent Moore claims trial court error for failing to reopen the evidence for the purpose of showing the amount
of severance taxes paid, we note that the request to reopen was not made for that purpose. However, we recognize
that information regarding the amount of severance taxes paid was likewise available to Moore at the time of trial.
The source of Moore’s evidence is the same for both the production data and the severance taxes.
15
 In our previous opinion, the trial court was asked to determine the ―value of the minerals‖ in order to subtract the
costs of drilling and production. We did not limit the phrase ―value of the minerals‖ to include only the value of those
minerals actually sold. Moore, 261 S.W.3d at 430.

                                                            9
                    (3)      Undue Delay

            Moore contends that reopening the record would not have caused undue delay because it

was only a matter of presenting production figures into evidence. However, when one takes into

account the protracted trial and appellate history of this case, the trial court could well have

determined that further delay would be undesirable; the trial court was of the opinion that the

matter had previously been subject to perhaps excessive delay between the date this Court issued

its opinion and the hearing on remand.16

            Further, although Moore indicated that all he wanted to do if he was allowed to reopen was

introduce only a small amount of evidence, the trial court is obligated to permit both sides to fully

develop the case if a reopening is allowed. Huff, 15 S.W.3d at 308. Therefore, there might have

been a more lengthy presentation than Moore anticipated.

            When weighed against the rather lengthy history of this case, any delay occasioned by the

reopening of the evidence could easily be deemed less than desirable.

                    (4)      Injustice

            We cannot say that the admission of the evidence proffered by Moore regarding the value

of the minerals sold was necessary to the due administration of justice when one takes into account

the fact that the record reflected the existence of competent evidence of the value of the minerals,

in compliance with this Court’s directive. We further observe that had the motion to reopen been

16
     Our opinion was issued in August 2008, and the hearing on remand took place in June 2009.

                                                          10
granted, Moore would have essentially been afforded the opportunity to retry his case, after having

already been given the trial court’s letter ruling. The trial court could reasonably conclude that

Moore’s desire to offer additional evidence was related to its letter ruling. Here, the interests of

justice do not warrant a second bite at the apple.

            When each of these factors is taken into account, the fact remains that Moore did not show

diligence in attempting to produce the available evidence in a timely fashion. The interests of

justice do not warrant a reopening of the evidence. The trial court did not abuse its discretion in

denying Moore’s request to reopen the evidence. See McNamara, 855 S.W.2d at 784. We

overrule this point of error.

            B.       The Damage Award Was Supported by the Evidence

            In his second point of error, Moore contends that the $2,000.00 cost for Moore to obtain a

letter of credit should have been included as a part of the operating costs to be deducted from the

value of the minerals in order to determine damages. 17 Moore further contends that certain

additional expense items should have been included within the category of operating costs,

including (1) pumping expenses of $1,500.00 per month;18 (2) the cost of a pumper to check the

well during the time the well was nonoperational; and (3) miscellaneous expenses of $4,989.91.

Moore urges that a clear reading of the ruling of the trial court adopted all expenses Moore

17
  Moore was required by the Commission to obtain a $2,000.00 letter of credit in order to continue to operate the wells
in question.
18
     We do not address this area of damage, as Moore concedes that this expense was included in the operating costs.

                                                           11
submitted, totaling $114,552.12 and that he is entitled to a credit against the value of the minerals

in this amount. We disagree.

            Neither Moore nor Jet Stream requested findings of fact and conclusions of law, and for

reasons we will discuss later in this opinion, the trial court’s letter to counsel of July 7, 2009,

cannot be considered as such.

            In the absence of formal findings of fact and conclusions of law, the trial court’s judgment

must be affirmed if it can be upheld on any legal theory that finds support in the evidence.

Worford v. Stamper, 801 S.W.2d 108, 109 (Tex. 1990); Rosa’s Café, Inc. v. Wilkerson, 183
S.W.3d 482, 486 (Tex. App.––Eastland 2005, no pet.). The trial court’s determination that the net

value of revenues produced was $50,847.16 is supported by evidence.

            At the June hearing, the uncontroverted evidence established that the value of minerals

produced was $153,158.57. After mineral value was established, Moore introduced evidence of

claimed operating costs totaling $114,552.12.                    Those costs included pumping expenses of

$1,500.00 per month for thirty-seven months, $750.00 for one month, and $500.00 per month for

nine months,19 for total pumping expenses of $60,750.00. In addition, Moore presented evidence

of the cost of the letter of credit, as well as those expenses categorized as ―miscellaneous‖ in the

amount of $4,989.91.20

19
     The latter two items represent the cost of a pumper to check the well during the time the well was nonoperational.
20
     Miscellaneous expenses were for cell phone and postage; cell phone expenses were not allocated on a per lease basis.

                                                            12
            Frazier testified on behalf of Jet Stream that operating costs attributable to production

totaled $69,011.71.21 Of this amount, $22,200.00 represents pumping costs at a rate of $400.00

per month.22 Frazier was also of the opinion that neither the expense related to the issuance of a

letter of credit,23 nor the miscellaneous expenses offered by Moore, were chargeable expenses of

well operation.

            In a nonjury trial or hearing, the trial court is the sole judge of the witness’s credibility and

the weight to be afforded the testimony. Tate v. Commodore County Mut. Ins. Co., 767 S.W.2d
219, 224 (Tex. App.––Dallas 1989, writ denied). The trial court, as the fact-finder, has the right

to accept or reject all or any part of any witness’s testimony. Griffin Indus., Inc. v. Honorable

Thirteenth Court of Appeals, 934 S.W.2d 349, 357 (Tex. 1996). The trial court may believe one

witness and disbelieve others, and may resolve inconsistencies in any witness’s testimony. Id.

Accordingly, the court was free to base its decision upon the testimony offered by Jet Stream or by

21
  In making this calculation, Frazier utilized Moore’s expense figures with respect to the following costs: (1) electric;
(2) supplies; (3) record keeping; (4) well servicing; (5) general lease work; (6) chemicals; and (7) taxes and insurance.
22
     The difference in the parties’ evidence on pumping expenses is $38,550.00.
23
  Moore contends that because the trial court issued an oral pronouncement from the bench (at the hearing on Moore’s
motion for new trial), it intended for Moore to recover the cost of the letter of credit, he is entitled to a credit for same.
An oral pronouncement from the bench regarding a signed and filed judgment carries no weight in and of itself. The
trial court had plenary jurisdiction to modify the judgment when such pronouncement was made. See, e.g., L.M.
Healthcare, Inc. v. Childs, 929 S.W.2d 442, 443 (Tex. 1996). A motion to modify judgment, the appropriate
procedural vehicle for the relief requested, was not filed. TEX. R. CIV. P. 329b(g) (―A motion to modify, correct, or
reform a judgment . . . , if filed, shall be filed and determined within the time prescribed by this rule for a motion for
new trial and shall extend the trial court’s plenary power . . . in the same manner as a motion for new trial.‖).

                                                             13
Moore or on a combination of all of the evidence introduced at trial. Here, the trial court’s

damage figure is supported by ample evidence.24

         We further observe that in the absence of findings of fact and conclusions of law, a

determination of the precise evidence upon which the judgment is based is mere speculation.

         Because there is evidence to support the judgment rendered, we overrule this point of error.

         C.       The Trial Court Did Not Err in Determining the Value of the Minerals

         There are three mineral values at issue. The first is the value of the oil produced, which

was proven at trial to be $153,158.57. The second value is that of the minerals actually sold, this

being $146,730.00. The final value (the one proposed by Moore on appeal to be determinative) is

the value of the minerals sold, less severance taxes. This value is $139,962.90. Moore claims

the trial court erred when it found the value of the oil produced to be $153,158.87. We disagree.

         First, and as previously discussed, the evidence introduced at trial supports the value of the

oil produced as being $153,158.57. In fact, this evidence was not controverted. Moreover,

while evidence supporting Moore’s assertion of mineral value as $139,962.90 was introduced at

the hearing on motion for new trial, no such evidence was introduced at trial. Thus, the trial court

24
  For example, the trial court could have found that the value of the minerals produced—$153,158.57—minus the
operating expenses offered by Jet Stream—$69,011.71—would have entitled Jet Stream to recover $84,146.86. The
award of the court—$50,847.16—being less than that amount, is supported by the evidence. Likewise, the trial court
could have determined that the cost of the letter of credit and the miscellaneous expenses were not properly chargeable
as operating expenses, based on Frazier’s testimony. It may also have opted for inclusion of Moore’s expenses with
respect to pumping costs, in combination with a reduction of other expenses, as mentioned above. We conclude that
in each of these scenarios, the decision of the trial court with respect to the damages for good-faith trespass—the value
of the minerals produced minus drilling and operating expenses—is supported by the evidence.

                                                          14
could not have erred in failing to find the mineral value to be an indeterminate number

unsupported by the evidence.25 Moore does not claim on appeal that the trial court erred in

overruling his motion for new trial.

          Moreover, we perceive this argument to be somewhat disingenuous. Jet Stream’s trial

exhibit 3 sets forth all of the information necessary to establish the value of the oil produced. This

exhibit provides the following information:

                           Oil (BBL)                  Oil (BBL)

                        Production               Disposition              Actual Cost Ex/ Revenue from Oil
DATE                    (Source:   Texas         (Source:    Texas        ―C‖ and Avg. Sales
                        RRC Website - Ex.        RRC Website - Ex.        Annual/Monthly
                        ―A‖)                     ―A‖)                     Oil Price (Source:
                                                                          EIA Website WTI
                                                                          - Ex. ―B‖ (See Fn)
Aug.-05                         278                      176                   $62.49        $10,998.77

Sept.-05                        151                      290                    $63.00                $18,268.84

Oct.-05                         153                      143                    $59.89                 $8,563.56

Nov.-05                         152                      162                    $56.00                 $9,072.49

Dec.-05                         103                      103                    $56.77                 $5,846.80

Jan.-06                          86                       86                    $62.99                 $5,416.71

25
  Moore maintains that at trial, he did not agree that the amounts listed on Jet Stream’s exhibit three outlining mineral
values were accurate. He further contends that there was no expert testimony regarding the actual value of the oil
produced. This is incorrect. Frazier created Jet Stream’s exhibit 3, and explained in detail the basis for the numbers
included on that exhibit.

                                                          15
Mar.-06                       37                   80                 $60.69              $4,854.88

May-06                       127                   178                $68.48             $12,188.73

Jun.-06                       71                   88                 $60.28              $5,304.90

Aug.-06                       95                   99                 $70.37              $6,966.23

Sept.-06                    136                    134                $61.81              $8,282.00

Jan.-07                      59                    119                $52.32              $6,225.72

May-07                       21                    110                $60.94              $6,703.18

Oct.-07                      139                   144                $83.20             $11,980.22

Nov.-07                      120                   161                $92.87             $14,952.71

Feb.-08                        5                   116                $92.01             $10,673.62

Mar.-08                        7                    0                $105.45                $738.15

Apr.-08                      10                     0                $112.58              $1,125.80

May-08                       12                     0                $125.40              $1,504.80

Jul.-08                       9                     0                $133.37              $1,200.33

Sept.-08                     22                     0                $104.11              $2,290.42

                             Total Gross Revenue since January 2005                    $153,158.87

          The information in Jet Stream’s exhibit 3, as set forth in the referenced table, reflects gross

revenue for total oil sold (disposed of) from August 2005 through February 2008. However, from

March 2008 through September 2008, exhibit 3 reflects that fifty-three barrels of oil were

                                                    16
produced, but not sold. The value of this oil (produced, but not sold) totals—according to the

average annual/monthly oil price26—$6,859.50.

            On appeal, Moore claims the total value of the oil produced was $146,730.00.27 Moore

then claims that amounts paid for severance taxes should be deducted, to arrive at the value of the

minerals less operating expenses. Moore’s argument fails for two reasons. First, Moore’s

premise is incorrect; the evidence clearly establishes that the value of the oil produced was

$153,158.87. Moreover, there is no evidence that the value of the oil produced was $146,730.00,

as Moore contends. Moore testified that the value of oil sold through February 2008, as reflected

on Jet Stream’s exhibit 3, is correct. Further, Moore agreed that the amount of production listed

on exhibit 3 for March 8 through September 8 is correct; in fact, this is a recapitulation of what

Moore reported to the Commission. Even though he did not dispose of the oil produced from

March 8 through September 8, Moore agreed that the value of minerals produced was $153,158.87

(due to the fact that some oil remained unsold at the time of trial).

            This testimony directly contradicts Moore’s position on appeal, i.e., that the value of the

minerals produced amounts to only $146,730.22. In fact, Moore acknowledged that the value of

the oil sold is $146,730.22. O’Bannon, the sponsoring witness of the evidence offered at the

26
     The average annual/monthly oil price is not in dispute.
27
  O’Bannon testified at the hearing on motion for new trial that the ―lease net‖ is actually $139,962.90. The ―gross
value‖—or taxable value— is the lease net amount of $139,962.90, plus severance taxes in the amount of $6,767.35,
yielding a gross value of $146,730.00. Evidence regarding severance taxes was not before the trial court at the time
of trial, and therefore cannot be considered on appeal. TEX. R. APP. P. 33.1.

                                                               17
motion for new trial, acknowledged that his numbers only represented the amount of oil purchased

from Moore by Plains Marketing.28 The only evidence of the value of the oil produced was that

offered by Jet Stream and acknowledged by Moore to be correct.29

            Moore’s third appellate point cannot be sustained for the further reason that no evidence

was introduced at trial reflecting the amount of severance taxes paid on this amount. Because no

such evidence was before the trial court, such evidence cannot be considered on appeal. TEX. R.

APP. P. 33.1.

            We overrule this point of error.

28
     O’Bannon testified as follows:

                     Q        [By Plaintiffs’ Counsel] Okay. Now - - so if we wanted to know what the value
            of the production was that Plains Marketing purchased, you would agree that it’s $146,730.22?

                     A         [By O’Bannon] Yes.

                     Q        Okay. And now, if there was other amounts that had been produced but has not
            yet been sold, you wouldn’t have any records concerning those, would you?

                     A         No, sir.

                    Q          And of course, that would also have value - - if there were oil still in the tanks or if
            there was oil that wasn’t purchased by Plains, those - - you would not have any record concerning
            that.

                     A         That is correct.
29
  It is unclear whether Moore contends on appeal that the correct measure of mineral value is the value of the oil sold
versus the value of the oil produced. We conclude that the trial court correctly based its judgment on the value of the
oil produced.

                                                               18
       D.      Sums Previously Paid and Currently Held in Suspense by Plains Marketing

       At the hearing on motion for new trial, O’Bannon testified that funds were held in suspense

by Plains Marketing until further orders of the court. However, $6,106.04 of the funds which

should have remained in suspense were actually paid out to Jet Stream for production between

August 2005 and January 2007. Moore further claims the sum of $2,641.27 currently remains in

suspense for production between January 2007 and the present. Moore contends that (1) he is

entitled to receive a credit against the judgment for the payment to Jet Stream in the amount of

$6,106.04 and (2) he is entitled to receive a credit against the judgment in the amount of $2,641.27,

the amount which currently remains in suspense.

       Moore testified at the hearing on motion for new trial that Jet Stream was previously paid

$6,107.04 from production funds. With respect to the question of whether Moore is entitled to a

credit against the judgment in this amount, we note that no such evidence was before the trial court

at the time of trial. Evidence of production funds paid to Jet Stream was disclosed at the hearing

on the motion for new trial.       Additionally, the information contained on exhibit 1 (Plains

Marketing Accounting Summary) and introduced at the hearing on motion for new trial was

likewise not before the trial court at the time of the trial. The issue of whether Moore is entitled to

a credit for past production paid to Jet Stream was raised solely in connection with Moore’s motion

for new trial, the denial of which has not been appealed. Because this issue has not been

                                                  19
preserved for appeal, we may not consider it. TEX. R. APP. P. 33.1. We, therefore, overrule this

point of error.

        Moore next contends that he is entitled to receive a credit against the judgment in the

amount of $2,641.27, which currently remains in suspense.          This issue is rendered moot by the

judgment upon remand, which provides:

        IT IS FURTHER ORDERED, that any purchaser of production from the W.L.
        Rudd B Lease # 00831, upon this Judgment becoming final, is ordered to pay over
        to the Plaintiffs all amounts maintained in suspense, from said lease, to be applied
        to the Judgment.

        We, therefore, do not address this issue, as it is moot.

        E.        Modification of the Judgment to Change the Attorney’s Fee Award

        In his final point of error, Moore maintains that the judgment upon remand should be

modified to change the attorney’s fee award. We disagree.

        The judgment upon remand provides, in part:

        IT IS FURTHER ORDERED, that Plaintiffs receive their reasonable and necessary
        attorney’s fees in the amount of Ten Thousand and No/100 Dollars ($10,000.00),
        for the attorney’s fees incurred in the pursuit of this cause, together with contingent
        amounts in the event of an unsuccessful appeal by the Defendant in the amount of
        Ten Thousand and No/Dollars ($10,000.00) if this Judgment is unsuccessfully
        appealed to the Court of Appeals; an additional Ten Thousand and No/100 Dollars
        ($10,000.00) if a Petition for Review is filed with the Supreme Court of Texas and
        is unsuccessful; and an additional Ten Thousand and No/Dollars ($10,000.00) if
        the Petition for Review is granted and the Supreme Court denies relief to the
        Defendant.

                                                  20
        Moore relies on the letter ruling of the trial court of July 7, 2009, which states:

        Concerning the issue of ―equitable and just attorney fee,‖ the following fees are
        award [sic] to Plaintiff as ―equitable and just‖

        $10,000.00 as originally awarded for the Trial Level Disposition.

        The ―good faith trespass‖ finding reflected in the Appellate Opinion, however,
        raises concerns as to the ―equitable and just‖ status for awarding Attorney Fees to
        the Plaintiffs on appeal a concern that is compounded by language in Plaintiff’s
        Original and Amended Petition in the case at hand that ―. . . contingent amounts as
        attorney’s fees in the event of unsuccessful appeals by the Defendant.‖ Based on
        the concerns stated the award of Contingent Attorney Fees on Appeal to the
        Plaintiff would not be ―equitable and just.‖ Appellate Attorney Fees shall be paid
        by the incurring parties.

        The resolution of this issue depends, at least in part, upon the accurate characterization of

the trial court’s letter to counsel dated and filed on July 7, 2009. Accordingly, we will examine

this communication to determine whether it can correctly be characterized as findings of fact and

conclusions of law.30

        Findings of fact and conclusions of law need not be in any particular form so long as they

are in writing and be ―filed with the Clerk and shall be part of the record.‖ Villa Nova Resort, Inc.

v. State, 711 S.W.2d 120, 124 (Tex. App.––Corpus Christi 1986, no writ); see TEX. R. CIV. P. 297.

Thus, it is possible for findings of fact and conclusions of law to be contained in a trial court’s

letter to counsel if such a letter is filed of record. Duddlesten v. Klemm, No. 06-08-00106-CV,

30
  Moore does not explicitly claim the trial court’s letter of July 2009 amounts to formal findings of fact and
conclusions of law; however, the content of the letter is treated as controlling and, thus, we recognize an implicit
reliance upon the authority of the letter as findings of fact and conclusions of law.

                                                        21
2009 WL 635153, at *2 (Tex. App.––Texarkana Mar. 13, 2009, no pet.) (mem. op.). Here, the

letter of the trial court to both counsel was filed of record.

        There is, however, some authority to support the proposition that a trial court’s

prejudgment letter may not serve as findings of fact and conclusions of law. See Cherokee Water

Co. v. Gregg County Appraisal Dist., 801 S.W.2d 872, 877–78 (Tex. 1990). Cherokee Water

concluded that a letter written prior to rendition of judgment did not constitute findings of fact,

especially in light of the fact that formal findings of fact and conclusions of law were subsequently

filed. Cherokee Water has been distinguished in cases where a prejudgment letter expresses the

trial court’s intent for appellate courts to rely on the letter ruling as the basis for its decision, where

no other formal findings are entered. See Kendrick v. Garcia, 171 S.W.3d 698, 702 (Tex.

App.––Eastland 2005, pet. denied). We recognized this distinction in Duddlesten, 2009 WL
635153, at *2.     In Duddlesten, as in Kendrick, the trial court specifically stated the letter

expressed its findings and conclusions and did not enter further findings and conclusions, even

though request for same was made. Based on these differences with Cherokee Water, we

concluded in Duddlesten, as did the Eastland court in Kendrick, that the letter served to establish

the trial court’s findings of fact and conclusions of law. We further recognized that not every

letter written by the trial court to the attorneys will qualify as findings of fact and conclusions of

law. Id.

                                                    22
         Here, the letter ruling, though filed with the clerk, does not specifically state that it is

intended to set forth the trial court’s findings of fact and conclusions of law. In this regard, the

letter states that ―[o]utlined below are my findings as to the items referenced above.‖ Here,

however, neither party requested findings of fact and conclusions of law from the trial court. In

light of these circumstances, we cannot conclude that the trial court intended for this Court to rely

on its letter ruling for the basis of its decision. This is especially true in light of the fact that the

subsequent judgment conflicts with the trial court’s letter on the issue of attorney’s fees. 31 The

letter therefore cannot logically form the basis of the court’s decision on this issue. We recognize

that the judgment upon remand reflects the decision of the trial court.32

         We overrule this point of error.

         We affirm the judgment of the trial court.

                                                      Bailey C. Moseley
                                                      Justice

Date Submitted:            May 17, 2010
Date Decided:              June 3, 2010

31
  The variance between the court’s letter ruling and the judgment was not addressed via a motion in the trial court to
reform the judgment.
32
 We acknowledge that findings of fact and conclusions of law filed after a judgment are controlling if they conflict
with a previous judgment. Dickerson v. DeBarbieris, 964 S.W.2d 680, 684 (Tex. App.––Houston [14th Dist.] 1998,
no pet.). There is no authority to support the proposition that prejudgment findings of fact and conclusions of law are
controlling if they conflict with a subsequent judgment.

                                                         23