Court Opinion

ID: 2867059
Source: CourtListenerOpinion
Date Created: 2015-09-06 01:45:00.422179+00
Date Added: 2024-06-11T11:34:52.796400
License: Public Domain

TEXAS COURT OF APPEALS, THIRD DISTRICT, AT AUSTIN

                                           NO. 03-02-00334-CV

                             Ezell Green and Ida Mae Green, Appellants

                                                      v.

                    Gemini Exploration Company and Robert Edsel, Appellees

         FROM THE DISTRICT COURT OF TRAVIS COUNTY, 201ST JUDICIAL DISTRICT
             NO. 96-12740, HONORABLE F. SCOTT McCOWN, JUDGE PRESIDING

                               MEMORANDUM OPINION

                 This dispute concerns an oil and gas lease between appellants Ezell and Ida Mae Green and

appellees Gemini Exploration Company and Robert M. Edsel, the president and owner of Gemini. After

the lease expired, the Greens brought suit against Gemini, the leaseholder, and Edsel for not drilling a well or

pooling their property. The Greens alleged fraud, discrimination, and breach of various implied covenants.

Pursuant to motions for partial summary judgment filed by appellees, all except one of the Greens= claims

were dismissed. A take-nothing jury verdict was rendered against the Greens on the sole remaining claim.

In ten issues, the Greens appeal the adverse judgment of the district court. We will affirm in all respects.
                                             BACKGROUND

                 The Greens own a sixty-acre tract of land in Lee County, in the Giddings (Austin Chalk 3)

Field. In the early 1990s, Gemini approached the Greens to offer terms for an oil and gas lease. The

Greens rejected Gemini=s initial offer, and further negotiations failed. However, Gemini successfully leased

nearby tracts of land, created two units, and commenced drilling two wells: the Keng and Islet units.

Production from the Keng well did not cover the costs of completion, drilling, and operation. The Islet well

performed better but did not produce a profit. The Greens eventually approached Gemini through its agent,

Mike Gaffney, about leasing their property. Gemini initially declined, but sometime in 1992 Gemini

reconsidered and signed a three-year lease with the Greens on October 30, 1992.1 This lease was a

standard three-year, primary-term lease that was Apaid up,@ thus providing for an upfront payment to the

Greens of $6000. Gemini never drilled a well on the Greens= property and never pooled it with any other

acreage. Gemini unsuccessfully attempted to persuade Union Pacific Resources Company (AUPRC@) to

include the Greens= lease in a unit UPRC formed nearby. The lease expired at the end of October 1995.

                 The Greens filed suit in Travis County on October 21, 1996, against Gemini and Edsel for

breach of the duties to protect the lease from drainage, to reasonably develop the lease, to administer and

manage the lease, and to seek favorable administrative action, for fraud, and for illegal discrimination. Edsel

filed a motion for partial summary judgment in July 1997 (AEdsel=s motion@), seeking dismissal from the

        1
         At that time, the Keng well had been drilled and completed, and the Islet well had been drilled
and was within one day of completion.

                                                      2
case. The Greens responded to his motion and at the same time moved for an extension of time to

supplement their response on the basis that they were unable to depose Edsel because he was out of the

country. The district court granted Edsel=s motion without discussion, stating only that Athere is no genuine

issue as to a material fact regarding Edsel=s personal liability.@

                 In September 1999, Gemini filed a motion for partial summary judgment on both traditional

and no-evidence grounds (Asecond motion for partial summary judgment@), to which the Greens responded.

In its order, the court outlined the procedural history of the case and without discussion granted summary

judgment on four issues: claims of fraud, illegal discrimination, breach of implied covenant to reasonably

develop the lease, and breach of duty of good faith and fair dealing. The court refused to dismiss the

Greens= claims of breach of implied covenant to protect from drainage and breach of implied covenant to

reasonably administer the lease. In January 2001, Gemini filed another motion for partial summary judgment

(Athird motion for partial summary judgment@) to dismiss the Greens= two remaining causes of action. The

Greens filed a cross motion for partial summary judgment and argued that the district court was precluded

from reconsidering whether to dismiss the Greens= remaining causes of action because it had not dismissed

them in the second partial summary judgment order. The Greens later filed a response to Gemini=s motion

and, in support of their cross motion, submitted the expert opinion affidavit of James Smith, a petroleum

engineer and former field operations director for the Texas Railroad Commission. After hearing arguments,

the court dismissed the Greens= claim of breach of implied covenant to reasonably administer the lease. It

also denied all of the Greens= motions.

                                                       3
                 On January 28, 2002, trial commenced on the Greens= claim against Gemini for its alleged

breach of implied covenant to protect from drainage. At trial, the Greens offered Smith=s expert testimony.

The district court allowed Smith to testify as to whether there was substantial drainage from the Greens=

land, whether a protection well could have been drilled on the Greens= property, and whether Gemini would

have had a reasonable expectation of profit had it done so. However, the court did not allow Smith to

testify as to whether Gemini should have released the Greens= lease, about any possible compensatory

royalties or about any possibility of pooling the Greens= lease with either the Keng or Islet units. The Greens

also offered the testimony of Don Williams, an oil and gas operator, who had considered leasing the Greens=

land. The district court limited Williams=s testimony to his decision not to lease the property and would not

permit him to testify about the issue of drainage because the Greens had not certified him as an expert during

discovery.

                 In its defense, Gemini offered the testimony of three expert witnesses: Edsel, who testified

as to oil and gas production in the Giddings (Austin Chalk 3) Field; Duane Wagner, a petroleum geologist

who testified to drainage in the Giddings (Austin Chalk 3) Field upon review of Amud logs@2 of the Keng and

Iselt units; and Don Carver, an oil and gas operator in the Giddings (Austin Chalk 3) Field and a petroleum

engineer, who testified about the mechanics of drilling horizontal wells like those in the Keng and Islet units

        2
          AMud logs@ refer to the records an on-site geologist or petroleum engineer keeps at an oil and gas
well. They include information about drilling rate, fluorescence of samples, fractures, gas, flares, and
pressure readings. An expert reviewing Amud logs@ can draw conclusions about the presence and quantities
of oil and gas in a well as well as rates of flow and drainage.

                                                      4
and about drainage resulting from those wells. The district court denied the Greens= motions to exclude

Gemini=s witnesses and denied their requests to conduct a voir dire of those witnesses.

                 The district court submitted the factual questions to the jury on February 1, and the jury

rendered a verdict in favor of Gemini. The Greens filed a motion for a new trial based on allegations of jury

misconduct due to outside influence on the jury deliberations. Their motion was overruled by operation of

law. This appeal followed.

                                                DISCUSSION

                 On appeal, the Greens= first four issues challenge the district court=s partial summary

judgments. In their fifth, sixth, and seventh issues, the Greens challenge evidentiary rulings by the district

court concerning both their expert witnesses and those offered by Gemini. In their eighth and ninth issues,

the Greens make various complaints about the jury charge. In their tenth issue, the Greens argue that the

district court should have reversed the jury verdict because of improper outside influences brought into the

jury room. We will first address the summary judgment issues and will then discuss the trial issues.

Standards for Reviewing Summary Judgments

                 The standards for reviewing traditional summary judgments are well established: (1) the

movant for summary judgment has the burden of showing that no genuine issue of material fact exists and

that it is entitled to judgment as a matter of law; (2) in deciding whether there is a disputed material fact issue

precluding summary judgment, evidence favorable to the nonmovant will be taken as true; and (3) every

reasonable inference must be indulged in favor of the nonmovant and any doubts resolved in its favor. Tex.

                                                        5
R. Civ. P. 166 (a)(c); Nixon v. Mr. Prop. Mgmt. Co., 690 S.W.2d 546, 548-49 (Tex. 1985). The

function of summary judgment is not to deprive litigants of the right to trial by jury, but to eliminate patently

unmeritorious claims and defenses. Swilley v. Hughes, 488 S.W.2d 64, 68 (Tex. 1972). The summary

judgment is affirmable on appeal if any ground asserted in the motion for summary judgment is a valid

ground for rendering summary judgment. Cincinnati Life Ins. Co. v. Cates, 927 S.W.2d 623, 626 (Tex.

1996). Thus, a party moving for summary judgment must conclusively prove all elements of its

cause of action or defense as a matter of law. Tex. R. Civ. P. 166(a)(c); Rhone-Poulenc, Inc. v.

Steel, 997 S.W.2d 217, 233 (Tex. 1999); Walker v. Harris, 924 S.W.2d 375, 377 (Tex. 1996).

                 A no-evidence summary judgment is properly granted if the nonmovant fails to bring forth

more than a scintilla of probative evidence to raise a genuine issue of material fact as to an essential element

of the nonmovant=s claim on which the nonmovant would have the burden of proof at trial. See Tex. R. Civ.

P. 166a(i); Merrell Dow Pharms., Inc. v. Havner, 953 S.W.2d 706, 711 (Tex. 1997). Thus, Aa no-

evidence summary judgment is essentially a pretrial directed verdict, and we apply the same legal sufficiency

standard in reviewing a no-evidence summary judgment as we apply in reviewing a directed verdict.@

Jackson v. Fiesta Mart, 979 S.W.2d 68, 70 (Tex. App.CAustin 1998, no pet.) (citing Moore v. K Mart

Corp., 981 S.W.2d 266, 269 (Tex. App.CSan Antonio 1998, pet. denied)). The task of the appellate

court is to determine whether the plaintiff has produced any evidence of probative force to raise fact issues

on the material questions presented. The appellate court must consider all of the evidence in the light most

favorable to the party against whom the no-evidence summary judgment was rendered, every reasonable

                                                       6
inference must be indulged in favor of the nonmovant, and any doubts resolved in its favor. Qantel Bus.

Sys., Inc. v. Custom Controls Co., 761 S.W.2d 302, 303-04 (Tex. 1988).

The Second Partial Summary Judgment

                We will begin with the Greens= third and fourth issues, whereby they urge us to reverse the

district court=s grant of the second motion for partial summary judgment.

                In their third issue, the Greens contend that the district court erred in dismissing their cause

of action Abased on the breach of the duty of good faith and fair dealing which was implied from the lease

agreement.@ Specifically, the Greens complain of Gemini=s failure to pool their property with other

surrounding properties. The supreme court has expressly rejected the inclusion of a general implied

covenant of good faith and fair dealing in Texas contracts. English v. Fischer, 660 S.W.2d 521, 522

(Tex. 1983). Although such a duty may exist in a fiduciary relationship, the court has not enumerated a duty

of good faith and fair dealing when examining the duties implied in oil and gas leases. See Amoco Prod.

Co. v. Alexander, 622 S.W.2d 563, 567 (Tex. 1983). To the contrary, Texas courts have

specifically held that unless the lease document itself creates in law a trust, or unless a

relationship of trust and confidence necessarily results from the lessor-lessee relationship, the

standard of conduct of the lessee cannot be appropriately categorized as fiduciary and thus cannot

give rise to a duty of good faith and fair dealing. See Manges v. Guerra, 673 S.W.2d 180, 183-84

(Tex. 1984); Hurd Enters. Ltd. v. Bruni, 828 S.W.2d 101, 108 (Tex. App.CSan Antonio 1992, writ

denied). Because the Greens have presented no evidence to suggest the existence of a fiduciary relationship

between themselves and Gemini, we agree with Gemini that, as a matter of law, it owed no general

                                                      7
duty of good faith and fair dealing to the Greens as a result of the parties= oil and gas lease.

Applying the appropriate standard of review for a traditional summary judgment, we conclude that

no fact issue exists. Cates, 927 S.W.2d at 626; Nixon, 690 S.W.2d at 548-49. Thus, we uphold the

district court=s grant of summary judgment and overrule the Greens = third issue.

               The Greens contend in their fourth issue that the district court erred in dismissing

their cause of action for fraud because they believe that Gemini made false representations of

material fact in obtaining the lease from them. To establish fraud, there must be a showing that:

(1) a false material representation was made; (2) at the time the representation was made, the

speaker either knew the representation was false or recklessly made it as a positive assertion

despite having no knowledge of the truth; (3) the speaker intended that the other party would rely

on the representation; and (5) the other party relied on the representation and suffered harm as a

result. Johnson & Higgins of Tex., Inc. v. Kenneco Energy, Inc., 962 S.W.2d 507, 524 (Tex.

1998). A promise to perform an act in the future amounts to fraud if the promise is made with the

intention to deceive the other party and with no intention of performing the promised act.

Spoljaric v. Percival Tours, Inc., 708 S.W.2d 432, 434 (Tex. 1986). Because each of the elements

of fraud are necessary to sustain a cause of action, if Gemini can sustain a claim for Ano

evidence@ summary judgment on any of the elements, we will uphold the district court=s judgment.

See Johnson & Higgins, 962 S.W.2d at 524.

               At the time of the district court=s order, the only evidence in the record regarding

fraud consisted of testimony concerning the Greens = conversation with Gaffney in which Gaffney

                                                8
allegedly stated that Gemini would either drill on their property or pool them with the Islet well.

This conversation occurred three weeks after they signed the lease. The record shows that

before signing the lease, the Greens discussed only the price terms with Gemini. They do not

allege fraud on the basis that Gemini made false representations about the price of the lease.

Additionally, the Greens testified by deposition that no promises or representations were made to

them about drilling or pooling before or while they signed the lease. Thus, we agree with Gemini

that no evide nce was produced that the Greens relied upon a false statement by Gemini when

agreeing to sign the lease. A conversation that occurs three weeks after a lease is signed simply

cannot sustain the Greens = claim that Gemini made false representations to induce the Greens to

agree to the lease. We therefore uphold the district court=s partial summary judgment dismissing

the claim of fraud and overrule the Greens = fourth issue.

The First Partial Summary Judgment

                In their first issue, the Greens argue that the district court erred in dismissing Edsel because

the district court failed to grant their motion for extension of time to supplement response and because fact

issues had been raised as to whether Edsel=s role in Gemini allowed them to pierce the corporate veil. The

Greens present their complaint about the district court=s failure to grant them an extension as a prelude to

their argument that issues of fact had been raised to maintain an individual claim against Edsel. But the

Greens provide no legal authority for reviewing the district court=s denial of their motion for extension of

                                                      9
time.3 Bare assertions of error, without citations to authority, waive error. Tex. R. App. P. 38.1(h);

Trenholm v. Radcliff, 646 S.W.2d 924, 937 (Tex. 1983); Schindler Elevator Corp. v. Anderson, 78

S.W.3d 392, 409 (Tex. App.CHouston [14th Dist.] 2001, pet. filed); see also Fredonia State Bank v.

General Am. Life Ins. Co., 881 S.W.2d 279, 284 (Tex. 1994) (appellate court has discretion to

waive issues due to inadequate briefing). To the extent that the Greens assert this complaint as an issue,

it has been waived. We will thus review the record as it stands in our consideration of whether the district

court properly dismissed Edsel.

                  The Greens claim that Edsel is the alter ego of Gemini and thus should be liable for the

actions of the corporation in defrauding them Ain obtaining the execution of their lease agreement@ and Ain

misrepresenting material facts concerning the production of the Iselt and Keng wells.@ Their entire claim

hinges on Edsel=s status as shareholder and owner of Gemini. 4 In essence, the Greens urge a theory of

Apiercing the corporate veil@ in order to impose liability on Edsel as an individual. In response, Gemini

argues that to prevail on this point the Greens must have evidence of actual fraud and that the Greens lack

        3
          The Greens do not cite the Texas Rules of Civil Procedure, local rules or case law to indicate
what procedural error the district court may have committed. They also report in their brief that the district
court denied their request when granting the first motion for partial summary judgment. The record,
however, does not reflect a ruling on their motion.
        4
            The Greens do not claim that Edsel was personally involved with their lease.

                                                     10
such evidence. Because the district court's order does not specify the ground or grounds relied on for its

ruling, we will affirm the summary judgment if any of the theories Gemini advanced to the district court are

meritorious. See Carr v. Brasher, 776 S.W.2d 567, 569 (Tex. 1989).

                Because this case involves an oil and gas lease, we approach the question of piercing the

corporate veil under the standards for contractual claims. See Tex. Bus. Corp. Act. Ann. art. 2.21A (West

Supp. 2003). As a result, the Greens not only must prove alter ego status, but also must show that Edsel

caused Gemini to perpetrate an actual fraud in obtaining the lease for the direct, personal benefit of Edsel.

See Menetti v. Chavers, 974 S.W.2d 168, 173-74 (Tex. App.CSan Antonio 1998, no pet.).5 In this

case, the Greens only assert that fraud occurred but offered no evidence in support of their claim. Simple

assertions cannot defeat a no-evidence motion for summary judgment. Because we have already found that

the Greens= cause of action for fraud against Gemini was properly dismissed, we need not further determine

whether there existed evidence of fraud for purposes of the Greens= piercing theory.6 We conclude that the

district court correctly granted summary judgment in favor of Edsel and thus overrule the Greens= first issue.

        5
           The briefing in this case reflects confusion in this area of the law. While Gemini seems to argue a
common-law definition of fraud, the Greens vaguely argue what amounts to a constructive fraud standard.
See Menetti v. Chavers, 974 S.W.2d 168, 173 (Tex. App.CSan Antonio 1998, no pet.). The
constructive fraud standard was important in the cases cited by the Greens. However, the legislature
amended the statute in 1993 and now requires a showing of actual fraud. Tex. Bus. Corp. Act Ann. art.
2.21A (West Supp. 2003); Menetti, 974 S.W.2d at 174. Even though the parties formed this lease
before 1993, the legislature provided that the amendment applied to obligations entered into before, on or
after the effective date of the amendment. See Act of May 2, 1993, 73d Leg., R.S., ch. 215, ' 2.26, sec.
2.21A, 1993 Tex. Gen. Laws 418, 459-60.
        6
          We note that the district court granted summary judgment for Gemini on the fraud cause of action
in 2000, two and a half years after the court granted summary judgment in favor of Edsel. Certainly, the
Greens had ample opportunity to discover evidence of fraud in that period of time. Because we decide that

                                                     11
The Third Partial Summary Judgment

                 In their second issue, the Greens contend that the court=s order on the second motion for

summary judgment precluded the court from considering Gemini=s third motion for summary judgment. In

essence, the Greens claim that the district court erred by hearing a motion for partial summary judgment on

issues for which it had previously denied a similar motion. They also argue that, even if the district court was

not precluded from considering Gemini=s third motion, the district court erred in dismissing the Greens= claim

for breach of implied covenant to reasonably administer the lease.

                 We must begin by considering whether the district court=s order on the second motion for

summary judgment was entitled to collateral-estoppel effect. Collateral estoppel precludes the relitigationof

identical issues of fact or law that were actually litigated and essential to a judgment in a prior suit. Van

Dyke v. Boswell, O=Toole, Davis & Pickering, 697 S.W.2d 381, 384 (Tex. 1985). Therefore, to

address this question, we must consider three factors: (1) whether the parties were fully heard, (2) whether

the court supported its decision with a reasoned opinion, and (3) whether the decision was subject to

appeal or was in fact reviewed on appeal. Mower v. Boyer, 811 S.W.2d 560, 562 (Tex. 1991).

                 Regardless of the first two factors, here an analysis of the district court=s order under the

third factor reveals that its summary judgment in this case was interlocutory. An order of summary judgment

is interlocutory if it is not final and appealable. Martinez v. Humble Sand & Gravel, Inc., 875 S.W.2d

there was no evidence of fraud in 2000, we will not further discuss the question of whether there was
evidence of fraud in 1997 when the district court considered the claim against Edsel.

                                                      12
311, 312 (Tex. 1994). To be final and appealable, a judgment or order must dispose of all parties and all

issues. Id. Partial summary judgments are interlocutory and are not presumed to be final and appealable.

Id. (citing Mafrige v. Ross, 866 S.W.2d 590, 591 (Tex. 1993)). As a result, a trial court has the authority

to change or modify a partial summary judgment order until the judgment becomes final. See Rush v.

Barrios, 56 S.W.3d 88, 98 (Tex. App.CHouston [14th Dist.] 2001, pet. denied). The second partial

summary judgment order was clearly interlocutory. Because it granted summary judgment on four issues in

the case but denied it for two, it did not dispose of all parties and issues. As a result, it was not final and

appealable. We agree with Gemini that the district court had the authority to modify the summary judgment

order in this case.

                 We now turn to whether either Gemini or the Greens were entitled to summary

judgment on the issue of breach of a duty to manage and administer the lease. When both sides

move for summary judgment, as the parties did in this case, and the district court grants one motion but

denies the other, the reviewing court should review both sides= summary judgment evidence, determine all

questions presented, and render the judgment the district court should have rendered. Holy Cross Church

of God in Christ v. Wolf, 44 S.W.3d 562, 566 (Tex. 2001).

                 The Greens base their claim of a breach of a duty to manage and administer the lease on

two grounds. First, they argue that Gemini had a duty to pool their lease with the leases of surrounding

properties.7 Generally, the duty to pool derives from the duty to protect the leasehold from drainage rather

        7
        APooling@ occurs when a lessee exercises its contractual pooling authority to combine tracts from
two or more leases into a single unit around an existing well. See Southeastern Pipe Line Co. v.
Tichacek, 997 S.W.2d 166, 170 (Tex. 1999) (citing London v. Merriman, 756 S.W.2d 736, 739 n.1

                                                      13
than from the duty to manage and administer the lease. See Southeastern Pipe Line Co. v. Tichacek, 997

S.W.2d 166, 170 (Tex. 1999); 1 Ernest E. Smith & Jacqueline Lang Weaver, Texas Law of Oil and Gas

'' 5.3, .4 (1998). Although both parties argued extensively as to whether there existed a duty to pool in

this case, neither party specifically cited authority that the duty to pool should be considered derivative of

the duty to manage and administer the lease. Furthermore, because the district court denied both motions

for summary judgment on the drainage claim and allowed it to go to trial, we need not consider the duty to

pool in the context of the duty to manage and administer the lease.8

                 Next, the Greens claim Gemini failed to seek favorable administrative action, though they do

not specify in their pleading what administrative action Gemini should have attempted. At the very least, the

duty to seek administrative relief describes a duty of the lessee to seek regulatory permits and to seek

exceptions to administrative rules regulating oil and gas production. See Amoco, 622 S.W.2d at 570. The

standard of care in testing performance of the duty to seek administrative relief is that of a reasonably

prudent operator under similar facts and circumstances, and a lack of probability of success may excuse a

reasonably prudent operator from making these attempts. Id. Normally, a jury should determine if a

(Tex. App.CCorpus Christi 1988, writ denied). Pooling is a common protective measure employed to
satisfy the duty to protect the leasehold from drainage. Id. The primary legal consequence of pooling is that
production and operation anywhere on the pooled unit are treated as if they have taken place on each tract
within the unit. Id. (citing Southland Royalty Co. v. Humble Oil & Ref. Co., 249 S.W.2d 914, 916 (Tex.
1952). Thus, there can no longer be drainage of the individual leases by a unit well, only drainage of the unit
by wells located outside the unit. Id. (citing Southland, 249 S.W.2d at 916).
        8
          In addition, the lease expressly renunciated an obligation to pool. Therefore, even if a duty to
pool could derive in this case from a duty to manage and administer the lease, we would still have to find
that no implied duty to pool existed in this lease. See Yzaguirre v. KCS Resources, Inc., 53 S.W.3d 368,
373 (Tex. 2001).

                                                     14
reasonably prudent operator would have sought administrative relief. Id. However, in Amoco, the plaintiffs

specifically pleaded that the defendant drilling company should have applied for spacing exceptions to

Railroad Commission drilling regulations. Id. at 569. Thus, Amoco indicates that an essential element to a

claim of breach of a duty to seek administrative relief is a pleading of the type of relief a prudent operator

would have considered before putting the question before the jury. Id.

                 Here, the Greens do not specify what administrative relief Gemini could have sought. As

Gemini points out, it Adid not breach any duty to the Greens because it never needed an exception to any

rules or regulations of the Texas Railroad Commission or any other administrative agency, and the Greens

never claimed that Gemini needed an exception.@9 Thus, the Greens fail to allege an essential element of the

duty. Because the Greens offer no other grounds for a cause of action under the duty to manage and

administer the lease, we overrule their second issue.

The Greens= Expert Witnesses

                 The Greens argue in their fifth issue that the district court improperly limited the testimony of

their expert, Smith. The Greens assert that the district court should have allowed Smith to testify as to a

requirement to pool, a requirement to provide compensatory royalties, and a requirement to release the

lease. The admission or exclusion of evidence is committed to the trial court=s sound discretion. See City

of Brownsville v. Alvarado, 897 S.W.2d 750, 753 (Tex. 1995). This determination will not be

        9
             In fact, Smith, the Greens= own expert, stated that Railroad Commission field rules allowed
flexibility in the creation of units. Gemini, according to Smith, did not need to seek any administrative relief
to include the Greens= lease in either the Keng or Iselt units, the remedy the Greens would have been
seeking.

                                                       15
overturned absent a clear abuse of discretion. National Liab. & Fire Ins. Co. v. Allen, 15 S.W.3d 525,

527-28 (Tex. 2000); Alvarado, 897 S.W.2d at 753; Waldrep v. Texas Employers Ins. Ass=n, 21

S.W.3d 692, 703 (Tex. App.CAustin 2000, pet. denied). A trial court abuses its discretion when it

acts in an unreasonable and arbitrary manner, or when it acts without reference to any guiding

rules or principles. Beaumont Bank, N.A. v. Buller, 806 S.W.2d 223, 226 (Tex. 1991); Waldrep, 21

S.W.3d at 703.

                When the Greens offered Smith as an expert, the court determined that he was

certified as an expert only for his knowledge in the field of petroleum engineering, not for

knowledge of the law or Railroad Commission regulations. The court then examined him to

determine the content of his testimony in each of these areas and he ard arguments from both

parties. In examining the case law, the court decided that a requirement to pool, a requirement to

provide compensatory royalties, and a requirement to release the lease were legal not factual

questions.10 The district court primarily relied on Amoco to conclude that only two factual issues

existed for a petroleum engineer expert witness: (1) whether substantial drainage occurred and,

(2) if so, whether a reasonably prudent operator could have drilled an offset well with a

        10
            First, the district court determined that Texas law does not provide for compensatory royalties,
as a duty to provide compensatory duties would stand opposite to the reasonably prudent operator
standard. Amoco Prod. Co. v. Alexander, 622 S.W.2d 563, 572 (Tex. 1983). Second, the district court
considered the question of pooling and heard from Smith that he would only testify about amending the
existing units to include the Greens= lease in another unit. The court concluded that testimony about pooling
would concern only legal questions. Id. Finally, the court concluded that releasing the lease was a legal
matter concerning the lease itself and not a factual question within Smith=s realm of expertise as a petroleum
engineer.

                                                     16
reasonable expectation of profit. 622 S.W.2d at 568. Therefore, it excluded Smith=s testimony as

to other matters. We find the district court=s reading of Amoco to be reasonable. In reviewing

the record, then, we find that the district court did not act in an unreasonable or arbitrary manner,

and we thus overrule the Greens = fifth issue.

                 The Greens argue in their sixth issue that the district court erred when it excluded the

testimony of Williams concerning drainage because it improperly characterized Williams, an oil and gas

operator, as a lay witness rather than an expert witness. A court can properly restrict the testimony of a

witness to factual matters if the witness is not designated as an expert during discovery. Tex. R. Civ. P.

194.2; Vingcard A.S. v. Merrimac Hospitality Sys., Inc., 59 S.W.3d 847, 856 (Tex. App.CFort Worth

2001, pet. denied). Here, the Greens sought to have Williams testify that he had considered leasing the

Greens= property after the expiration of Gemini=s lease but ultimately did not lease the property because of

determinations he had made concerning possible drainage of the property. The district court limited his

testimony to his decision not to lease the property and excluded his opinion testimony as to possible

drainage because the Greens had not offered him as an expert witness during discovery. We hold that the

court=s ruling concerning Williams was within its discretion, and therefore overrule the Greens= sixth issue.11

Gemini=s Expert Witnesses

        11
            The Greens raise in their sixth issue two additional points. First, they argue that the district court
erred in permitting Gemini=s experts to testify about certain documents not produced during discovery.
Because they raise this complaint again in their seventh issue, we will not address it here. Second, they state
that the district court erred in Alimiting the testimony of James Edsel,@ the brother of Robert Edsel and a
former Gemini employee. Because the Greens do not further discuss this point in their brief, it is waived and
we will not consider it.

                                                       17
                    In their seventh issue, the Greens argue that the district court improperly failed to disqualify

the three expert witnesses offered by Gemini: Edsel, Carver, and Wagner. In the alternative, they argue

that the district court should have limited the experts= testimony, should have limited the documents upon

which the experts could rely, or should have permitted the Greens to conduct a voir dire of the experts

under rule 705(b) of the Texas Rules of Evidence.

                    First, the Greens argue that the district court should have disqualified Gemini=s experts

because their professional relationships with Gemini misled the jury.12 See Tex. R. Evid. 403. We disagree.

The court heard testimony regarding the qualifications of each of the experts outside of the presence of the

jury. Edsel testified from his experience as a drilling operator in the Giddings (Austin Chalk 3) Field.

Wagner is a petroleum geologist who worked professionally examining wells on site, also in the Giddings

(Austin Chalk 3) Field. Carver is a petroleum engineer with experience in drilling horizontal wells. Each of

these witnesses testified about his former or current relationship with Gemini. Each testified within his areas

of expertise. The Greens had full opportunity to cross-examine each of the witnesses in front of the jury and

to elicit testimony concerning their relationships with Gemini. We hold that the district court did not abuse

its discretion by allowing Gemini=s expert witnesses to testify.

                    Next, the Greens claim that the district court should have limited the testimony of each of the

witnesses. However, the Greens do not cite to passages of testimony that were improper or argue why

          12
               Edsel is the president and owner of Gemini. Carver and Wagner are both former employees of
Gemini.

                                                         18
those sections of testimony may have been improper. We consider this argument inadequately briefed and

thus waived. See Tex. R. App. P. 38.1(h).

                  Third, the Greens argue that the district court should have limited the documents upon which

the experts relied. In support of this argument, the Greens refer to the use of a report of reserve estimates

and drainage calculations for the Keng and Iselt wells prepared and used by Carver. The Greens

established on the record that Carver had not submitted the report to them prior to his

appearance in court, but the Greens did not object to him referencing the report during his

testimony. To preserve a complaint for appellate review, a party must present to the trial court a

timely request, motion, or objection, state the specific grounds therefore, and obtain a ruling.

Tex. R. App. P. 33.1(a)(1)(A); Holland v. Wal-Mart Stores, Inc., 1 S.W.3d 91, 94 (Tex. 1999).

Therefore, we find that the Greens did not preserve this complaint.

                  Lastly, the Greens argue that the court improperly denied them the opportunity to

conduct a voir dire of Gemini=s expert witnesses. See Tex. R. Evid. 705(b).13 For us to reverse

        13
           We note here that the language of the rule is permissive and not mandatory in a civil context. The
rule provides:

             Prior to the expert giving the expert's opinion or disclosing the underlying
             facts or data, a party against whom the opinion is offered upon request . . . in
             a civil case may . . . be permitted to conduct a voir dire examination directed
             to the underlying facts or data upon which the opinion is based.

Tex. R. Evid. 705(b) (emphasis added). The case law is unclear as to standards of review for rule 705(b)
rulings in a civil context, and none of the cases cited by either party in their briefs addresses this rule.
Because we ultimately find that the Greens do not show in what way the court=s denial of their request
affected their case, we do not reach this problem.

                                                      19
the trial court on this point, we must find an error that probably caused the rendition of an

improper judgment. Tex. R. App. P. 44.1(a)(1). The Greens do not argue in their briefs which

statements they wo uld have sought to exclude from the jury had they had the opportunity to

conduct a voir dire. They also do not argue how any error we may find here affected the judgment

in their case. As a result, we have no basis upon which to review the district court=s decision. We

overrule the Greens = seventh issue.

Jury Charge

                In their eighth issue, the Greens attack the first question submitted to the jury in the charge

of the court. The question appeared as follows:

        Question No. 1

               After October 30, 1992, did Gemini breach its duty to protect the Greens= lease
        from drainage?

                Gemini breached its duty to protect the Greens= lease from drainage only if (1) the
        drainage from the Greens= lease was substantial and (2) a reasonably prudent operator
        would have acted to prevent the drainage.

                A reasonably prudent operator would have acted to prevent the drainage only if the
        value of the oil and gas reasonably expected to be recovered by drilling a well on the
        Greens= property would have equaled the reasonably expected costs of drilling and
        producing and marketing the oil and gas plus a reasonably expected profit to the operator.

First, the Greens argue that the form of the question was improper because it posed a question of law by

asking the jury to determine if there was a breach of the duty to protect from drainage. The Greens cite

Emmord=s, Inc. v. Obermiller for the proposition that the use of the word Abreach@ in a jury charge

                                                     20
necessarily renders the charge improper for asking a question of law. 526 S.W.2d 562, 566 (Tex. Civ.

App.CCorpus Christi 1975, writ ref=d n.r.e.). In response, Gemini argues that under the broad-form

submission preference of Texas courts, the charge correctly outlined a question of fact for the jury.

                 A trial court has discretion to submit issues broadly to the jury. Tex. R. Civ. P. 277. In

addition, the Texas Supreme Court urges trial courts to take advantage of this discretion and to submit the

controlling issues in a case in broad form so as to simplify a jury=s chore. See Harris County v. Smith, 96

S.W.3d 230, 235-37 (Tex. 2002) (reaffirming supreme court=s Afundamental commitment@ to broad-form

submission); Island Recreational Dev. Corp. v. Republic of Tex. Sav. Ass=n, 710 S.W.2d 551, 555

(Tex. 1986). The trial court may give such information and definitions which are proper. Tex. R. Civ. P.

273. The trial court may also use legal terms in broad form submissions to identify the single issue that the

jury needs to determine. See Keech v. Kroger Corp., 845 S.W.2d 262, 266 (Tex. 1992) (approving

submission of general negligence question to jury when accompanied by appropriate instructions); Cabot

Corp. v. Brown, 754 S.W.2d 104, 108 (Tex. 1987) (approving submission of broad legal issue that

includes combination of elements when broad issue is controlling question).

                 Here, the single factual issue that existed was whether there was a breach of a duty, not a

legal question of the existence of a duty. The district court carefully submitted with this factual issue the

elements that the jury would need to examine to make that determination: the two factual elements which

would determine the answer to that question and a definition of Areasonably prudent operator.@ Our

examination of the charge leads us to conclude that the district court constructed a question which outlined

the relevant factual issues in broad form and offered relevant definitions to aid the jury in its determination.

                                                      21
We refuse to find that the word Abreach,@ taken out of the context of the charge as a whole, would defeat

the validity of the charge. See Keech, 845 S.W.2d at 266; Cabot Corp., 754 S.W.2d at 108. As a result,

we agree with Gemini that the question was appropriate in form.

                Next, the Greens argue that the jury question was flawed in its definition of Areasonably

prudent operator.@ The Greens assert that the district court erred in two ways: in failing to include pooling

as an alternate means of measuring the duty and in including the element of profit as an element for the

plaintiffs to prove. We disagree. An action on a lessee=s duty to protect the leasehold from drainage

requires proof (1) of substantial drainage of the lessor=s land and (2) that a reasonably prudent operator

would have acted to prevent that substantial drainage. Amoco, 622 S.W.2d at 568. No duty exists unless

the value of oil or gas that can be recovered equals the cost of administrative expenses, drilling or re-

working and equipping a protection well, producing and marketing the oil or gas, and yields a reasonable

expectation of profit to the lessee. Id. Then, if a duty does exist, a lessee may employ various methods to

satisfy its duty to protect the leasehold from drainage, depending on the circumstances. Id. One of these

methods may be to exercise its contractual pooling authority and combine tracts from two or more leases

into a single unit around an existing well. Tichacek, 997 S.W.2d at 170. However, if no duty exists, there

can be no breach and therefore no duty to pool can arise. The cost of drilling a well stands as one factor

among many that a reasonably prudent operator would consider when confronted with the financial question

of what to do with a particular lease. The question of pooling arises only after a fact-finder has considered

the cost factor and determined that a duty exists. A failure to pool is not itself a factor in determining the

existence of a duty to protect the leasehold from drainage.

                                                     22
                 The jury charge in this case mirrors the language of Amoco. 622 S.W.2d at 568. It

establishes that the cost of drilling a well is an important factor in determining a violation of the reasonably

prudent operator standard. Id. Thus, it accurately reflects the legal standards of the duty to protect the

lease from drainage. As a result, it would be inappropriate for the jury to consider pooling before or in

conjunction with the question of whether there has been a breach of the duty to protect the leasehold from

drainage. Because the jury found that no duty was breached, the question of a duty to pool need not arise.

                 Finally, the Greens argue two further flaws in the jury charge: (1) that it failed to state the

question of whether substantial drainage occurred, and (2) that it incorporated by reference an inferential

rebuttal issue in violation of rule 277 of the Texas Rules of Civil Procedure. To preserve error, parties must

make all objections to the jury charge before the charge is read to the jury; all objections not so presented

are waived. See Tex. R. Civ. P. 272; Tex. R. App. P. 33.1(a). An objecting party must point out distinctly

the objectionable matter and the grounds of the objection. See Tex. R. Civ. P. 274. For an objection to be

valid, the party must make the court aware of the complaint, timely and plainly, and obtain a ruling. See

State Dep=t of Highways & Pub. Transp. v. Payne, 838 S.W.2d 235, 241 (Tex. 1992). At trial, the

Greens did not object to the jury charge on either of these grounds. Thus, they have not preserved their

objection to the jury charge on the basis of substantial drainage or the presence of an inferential rebuttal

issue and we do not consider either of these arguments. We overrule their eighth issue.

                 In their ninth issue, the Greens argue that the district court erred in failing to submit their

proposed charge to the jury. However, the Greens cite no legal authorities as a basis for their complaint.

                                                      23
They offer no legal analysis of the points. Under these circumstances, we conclude that they have failed to

adequately brief these errors. Tex. R. App. P. 38.1(h). Thus, we overrule their ninth issue.

Outside Influence

                 In their tenth issue, the Greens argue that jury misconduct arose because of outside

influences on the jury. Gemini responds that the evidence of outside influence only includes a comment one

of the jurors made after the jury had agreed on a verdict and so does not amount to evidence of outside

influence. We agree with Gemini.

                 If a party shows that misconduct by the jury occurred, that the misconduct was material and

that, based on the whole record, it probably resulted in harm, that party can obtain a new trial. Tex. R. Civ.

P. 327(a); Golden Eagle Archery, Inc. v. Jackson, 24 S.W.3d 362, 372 (Tex. 2000). The rule allows

jurors to testify about outside influences on their deliberations. Tex. R. Civ. P. 327(b). An Aoutside

influence@ emanates from sources other than the jurors themselves and so does not include opinions or

experiences that individual jurors may offer while participating in deliberations. Golden Eagle Archery, 24

S.W.3d at 370. ADeliberations@ means the formal jury deliberationsCthe stage in trial after the court has

charged the jury but before it has returned a verdict. Tex. R. Civ. P. 287, 327; Golden Eagle Archery, 24

S.W.3d at 371.

                 The Greens offer evidence of jury misconduct in the form of question-and-answer affidavits

submitted by three of the jurors. Specifically, they point to the answers to one question that they posed to

jury members after trial:

                                                     24
       After the vote was taken did you hear another juror say that he had his land leased and all
       your rights had to be expressly written in the lease?
Two jurors answered in the affirmative.14 The Greens argue that the juror=s comment amounted to jury

misconduct.15 Whatever statement was made or opinion offered during the jury deliberations, the evidence

reflects that it came from one of the jurors. As a result, it cannot be described as an Aoutside influence.@

Golden Eagle Archery, 24 S.W.3d at 370. Because the Greens present no other evidence of jury

misconduct, we overrule their tenth issue.

                                             CONCLUSION

                For the reasons set forth above, we overrule the Greens= issues on appeal. We affirm the

judgments of the district court.

                                                 W. Kenneth Law, Chief Justice

Before Chief Justice Law, Justices B. A. Smith and Puryear

        14
           The record contains the affidavits of three jurors. One juror answered Ayes@ and added that
another juror Asaid he had one year options in his leases so that if a company had not drilled in a year he
could always get out of the lease.@ Another juror answered Ayes.@ The third answered Ano.@
        15
           The Greens intend to argue either that one juror had opinions that influenced the deliberations
and the source of those opinions was revealed after deliberations or that the statement itself was made
during deliberations. Because both possibilities result in an analysis of an alleged influence during
deliberations, the rule 327(b) approach applies.

                                                    25
Affirmed

Filed: May 1, 2003

                     26