Court Opinion

ID: 9675012
Source: CourtListenerOpinion
Date Created: 2023-08-24 04:39:19.266656+00
Date Added: 2024-06-11T18:16:30.822635
License: Public Domain

OPINION ON MOTION FOR REHEARING
On rehearing, The Long Trusts complain that their real cause of action was not addressed in our original opinion because their complaint was not about the contract amendments between B & A and Lone Star, but rather was about the contract amendment between B & A and ARCO.
There were three jury issues submitted on damages.16 Jury Question 3 asked the jury the amount of damages on a broader basis than the other two special issues, that being ARCO’s failure to account at the best price available in the area for this type of production. Because of the jury’s finding on alter ego, The Long Trusts are entitled to have this transaction looked at both on the basis of treating B & A as a separate entity from ARCO and as one and the same entity as ARCO. As we discussed in our initial opinion, The Long Trusts had no vested interest in the contracts made by ARCO committing gas to long-term sales to third party entities, because The Long Trusts did not commit its gas to ARCO. Thus, if B & A is treated as a third party entity, no liability would result from the amendments of the contracts between ARCO and B & A.
We must next look at the transactions on the basis that B & A was functioning as the alter ego of ARCO. The initial agreements were pass-through contracts under which ARCO was selling its gas to B & A at the same price that B & A was receiving from Lone Star, with B & A also receiving a fee for transporting the gas. When B & A is viewed not as a separate entity but merely as an extension of ARCO, then the relevant price was the price that Lone Star paid for the gas. If the amendments to this contract had continued the contract as a pass-through contract, then The Long Trusts would not have been entitled to any damages because, in essence, ARCO was the seller to Lone Star. The amended contract, however, allowed B & A to make a profit, which we have concluded amounted to ARCO making a profit to which it was not entitled under the terms of its operating agreements with The Long Trusts. For this unauthorized profit, we have upheld the damage award.
We overrule the motion for rehearing.

. Jury Question 6 inquired of damages caused by ARCO in failing to account for the best price obtainable under the amended contract between B & A and Lone Star. It was on the basis of the jury’s answer to this question that the court upheld the judgment of the trial court. Jury Question 8 asked about damages on the basis of ARCO’s failure to account in regard to the amended contract between ARCO and B & A.