Court Opinion

ID: 4075051
Source: CourtListenerOpinion
Date Created: 2016-09-30 05:40:16.303468+00
Date Added: 2024-06-11T14:32:20.394333
License: Public Domain

ACCEPTED
                                                                                           01-09-00997-CV
                                                                                FIRST COURT OF APPEALS
                                                                                        HOUSTON, TEXAS
                                                                                     12/23/2015 5:26:47 PM
                                                                                     CHRISTOPHER PRINE
                                                                                                    CLERK

                       NO. 01-09-00997-CV
______________________________________________________________
                                                                     FILED IN
                  IN THE COURT OF APPEALS        1st COURT OF APPEALS
                                                     HOUSTON, TEXAS
         FOR THE FIRST JUDICIAL DISTRICT OF TEXAS
                                                 12/23/2015 5:26:47 PM
                         AT HOUSTON              CHRISTOPHER A. PRINE
______________________________________________________________
                                                          Clerk

                         Carlton Energy Group, LLC,

                                              Appellant/Cross-Appellee,
                                       v.

  Gene E. Phillips, Individually and d/b/a Phillips Oil Interests, LLC, et al.,

                                    Appellees/Cross-Appellants.
______________________________________________________________
        ON REMAND FROM THE SUPREME COURT OF TEXAS
                   CAUSE NUMBER 12-0255

               OPPOSED MOTION FOR LEAVE TO FILE
                    SUPPLEMENTAL BRIEFING

      Appellants, Gene E. Phillips, individually and d/b/a Phillips Oil

Interests, LLC; EurEnergy Resources Corporation, f/k/a EurEnergy

Resources, LLC; Syntek West, Inc.; and CabelTel International Corporation

n/k/a New Concept Energy, Inc. herein collectively referred to herein as

“Movants” or “Phillips”), respectfully request leave to file supplemental

briefing following remand of the cause to this Court by the Texas Supreme

Court. In support of their motion, Movants show as follows:

                                      -1-
                             I.    Background
      Movants acknowledge the Court’s familiarity with the parties’

arguments and authorities as set forth in briefs filed with this Court both

before and after oral argument on February 11, 2011. Although both parties

had appealed the trial court’s judgment to this Court, only Movants sought

review in the Supreme Court of Texas. The Supreme Court accepted review

and issued a unanimous opinion on May 8, 2015. Among other holdings, the

Supreme Court held that “[n]othing in the evidence supports the jury's $66.5

million finding” or Carlton’s alternative “gas-in-the-ground” valuation of $38

million. Slip Op. at 23, 2015 WL 2148591, at *11. The Supreme Court went

on to conclude, however, that evidence of what Phillips and other investors

paid or were “willing to pay” for “the very interest at issue” was “some

evidence to support the verdict.” Slip Op. at 25; 2015 WL 2148591, at *11.

The Court thus remanded the case to this Court “for further proceedings in

accordance with this Court’s opinion.”        Mandate of Supreme Court,

December 22, 2015, at 1.

                     II.    Argument and Authorities
      A brief may be amended or supplemented whenever justice requires, on

whatever reasonable terms the court may prescribe. Tex. R. App. P. 38.7.

This motion for leave is not sought for the purpose of delay, but to allow the

                                     -2-
Movants an opportunity to address fully and completely the issues remanded

to this Court for further consideration in light of the Supreme Court’s

decision.   On this record, justice requires that supplemental briefing on

remand be permitted.

      A.     The Supreme Court contemplated supplemental briefing on
             remand.
      In remanding this case for further proceedings, the Supreme Court

stated that “Phillips is entitled to argue that the jury’s verdict was against the

great weight and preponderance of the evidence,” Slip Op. at 25, 2015 WL
2148951, at *11, and that Movants’ “argu[ment] that the evidence is factually

insufficient to support the judgment . . . may be raised on remand,” Slip Op.

at 26, 2015 WL 2148951, at *12. The Supreme Court’s pronouncement that

Movants are entitled to raise certain issues and argue them to this Court

certainly contemplates more than a cold reliance on merits briefs filed more

than five years ago. Indeed, further briefing is essential to allow the parties to

provide their arguments about the effect of the Supreme Court’s decision.

      B.     This Court may lack the constitutional authority to conduct a
             factual sufficiency review.
      Further briefing is also needed because the disposition by the Supreme

Court raises concerns about the constitutionality of a factual sufficiency re-

view by this Court. The Supreme Court rejected Carlton’s gas-in-the-ground

                                       -3-
evidence, the only theory that would support the jury’s $66.5 million verdict,

as “completely conjectural.” Slip Op. at 22, 2015 WL 2148951, at *11.

Nothing in the jury’s verdict indicated that it even considered, much less cred-

ited, the market valuation evidence which the Supreme Court held to be

“some evidence.” Thus, it is logically impossible for this Court, on this rec-

ord, to perform its constitutional obligation to “examine all the evidence in

the record to determine whether sufficient evidence supports the damage

award, remitting only if some portion is so factually insufficient or against the

great weight and preponderance of the evidence as to be manifestly unjust,”

Pope v. Moore, 711 S.W.2d 622, 624 (Tex. 1986) (emphasis added). If all the

evidence supporting the jury’s verdict as rendered is disregarded, as the Su-

preme Court has directed, the only way for this Court to devise a judgment is

to act as the “sole judges of the credibility of the witnesses and the weight to

be given their testimony.” See Tex. R. Civ. P. 226a.

      The Supreme Court has frequently reminded the bench and bar that

“[i]n conducting its factual sufficiency review an appellate court is not to sub-

stitute its judgment for that of the jury.” Barker v. Eckman, 213 S.W.3d 306,

314 (Tex. 2006). As Justice W. St. John Garwood observed long ago, “a

court of civil appeals has no power to find facts. It may only ‘unfind’ facts

which a jury or trial judge has improperly found.” W. St. John Garwood, The

                                       -4-
Question of Insufficient Evidence on Appeal, 30 TEX. L. REV. 803, 813-14

(1952). Whether this Court were to pick one of the numbers suggested by the

Supreme Court—$31,160,000, $5,193,333.33, or $60,000, Slip Op. at 25,

2015 WL 2148951, at *6—or some other number that might find support in

the record, it would be making a factual determination in the first instance,

which is beyond the Court’s authority.

        These concerns did not arise until the Supreme Court rendered its

judgment and issued its opinion, and hence this issue was not briefed by

either party in any court prior to that date.1               Although the Court ultimately

denied the motion one day before it lost constitutional jurisdiction over the

case, see TEX. CONST. art. V, § 31(d), it made no ruling on the constitutional

question. This Court must therefore, in the first instance, make its own

determination about its constitutional power to proceed. After all, this Court

retains its own independent discretion, either before or after conducting a

factual sufficiency review, to remand to the trial court for a new trial. See ERI

Consulting Eng’rs v. Swinnea, 318 S.W.3d 867, 880 (Tex. 2010).

1 Before the Supreme Court rendered its judgment, asserting any error based on an assumption that
the Court would reach the result that it did would have been premature, if not presumptuous. As
the Court explained in Bunton v. Bentley, 153 S.W.3d 50, 53 (Tex. 2004), “[a] complaint that arises
from the court of appeals’ judgment . . . may be raised either in a motion for rehearing in the court
of appeals or in a petition for review in this Court.” (citing Larsen v. FDIC/Manager Fund, 835
S.W.2d 66, 74 n.12 (Tex. 1992)). Similarly, a complaint that arises from the Supreme Court’s
judgment need not be raised before the judgment is rendered.

                                                -5-
      C.      The Parties’ Prior Briefing Does Not Fully Explicate the
              Factual Sufficiency Issues.
      Because of the large number of issues on a wide range of subjects

involved in the appeal, the parties were limited in fully explicating the factual

sufficiency of the evidence.     Both sides presented a wide array of both

liability and damages arguments, and indeed both side’s “lead” arguments

that consumed most of the briefing in this Court were ultimately rejected by

the Supreme Court.

      Given the Supreme Court’s disposition, the issues are now narrowed.

Supplemental briefing will allow the parties to fully address the issues that

remain and will assist this Court in determining a just disposition.

                                 III.    Prayer
      Wherefore, Gene E. Phillips, individually and d/b/a Phillips Oil

Interests, LLC, EurEnergy Resources Corporation, f/k/a EurEnergy

Resources, LLC, Syntek West, Inc. and CabelTel International Corporation

n/k/a New Concept Energy, Inc. respectfully request that the Court grant this

Motion for Leave to File Supplemental Briefing and order an appropriate

deadline for said briefing to be submitted and filed on such terms as the Court

may direct.

                                        -6-
      Respectfully submitted,

      BAKER BOTTS L.L.P.

      By: / s / Thomas R. Phillips
          Thomas R. Phillips
          tom.phillips@bakerbotts.com
          State Bar No. 00000102
          Evan A. Young
          evan.young@bakerbotts.com
          State Bar No. 24058192
          Benjamin A. Geslison
          ben.geslison@bakerbotts.com
          State Bar No. 24074269
          98 San Jacinto Blvd. Ste 1500
          Austin, Texas 78701
          T: (512) 322-2565
          F: (512) 322-8363

      LOCKE LORD LLP
           Mike Hatchell
           mahatchell@lockelord.com
           State Bar No. 09219000
           Charles Watson
           cwatson@lockelord.com
           State Bar No. 20967500
           600 Congress Ave. Ste 2200
           Austin, Texas 78701
           T: (512) 305-4700

Attorneys for Appellees/Cross-Appellants
Gene E. Phillips, Individually and
d/b/a Phillips Oil Interests, L.L.C., and
EurEnergy Resources Corp.

     -7-
      HOLMGREN JOHNSON
      MITCHELL MADDEN LLP
           Mitchell Madden
           mmadden@hjmmlegal.com
           State Bar No. 12789350
           Melissa Johnson
           State Bar No. 19142900
           melissa@hjmmlegal.com
           Thomas V. Murto III
           tmurto@hjmmlegal.com
           State Bar No. 14740500
           13800 Montfort Dr. Ste 160
           Dallas, Texas 75240
           T: (972) 484-7780
Attorneys for Appellees/Cross-Appellants
Gene E. Phillips, Individually and
d/b/a Phillips Oil Interests, L.L.C.

      HAWKINS PARNELL THACKSTON
      & YOUNG LLP

           Robert B. Gilbreath
           rgilbreath@hptylaw.com
           State Bar No. 07904620
           4514 Cole Ave. Ste 500
           Dallas, Texas 75205

      William V. Dorsaneo, III
      State Bar No. 06012000
      3315 Daniel Avenue
      Dallas, Texas 75202
      T: (214) 780-5114
Attorneys for Appellees/Cross-Appellants
Syntek West, Inc. and CabelTel International
Corporation

     -8-
                        CERTIFICATE OF CONFERENCE
    I certify that on December 21 and 22, I spoke by telephone to Warren Har-
ris, one of the counsel for Carlton Energy Group, LLC, and after consultation
with others he advised me that his client was opposed to this Motion.

                                        / s / Thomas R. Phillips
                                        Thomas R. Phillips

                           CERTIFICATE OF SERVICE
    I certify that a copy of this motion was served electronically on all counsel
of record listed below on December 23, 2015:

Fred Hagans                                  David M. Gunn
Kendall C. Montgomery                        BECK REDDEN & SECREST, L.L.P.
Paula Janecek Mathers                        1221 McKinney St. Ste 4500
HAGANS BURDINE MONTGOMERY &                  Houston, Texas 77010
RUSTAY, P.C.                                 Email: dgunn@beckredden.com
3200 Travis, Fourth Floor
Houston, Texas 77006                         Vincent L. Marable III
Email: FHagans@hagans-law.com                PAUL WEBB, P.C.
                                             221 North Houston Street
Roger D. Townsend                            Wharton, Texas 77488
Kevin Dubose                                 Email: trippmarable@sbcglobal.net
ALEXANDER DUBOSE & TOWNSEND,
LLP
1844 Harvard Street
Houston, Texas 77008
Email: rtownsend@adtappellate.com

Warren W. Harris
Jeffrey L. Oldham
BRACEWELL & GIULIANI LLP
711 Louisiana Street Ste 2300
Houston, Texas 77002
Email: Warren.Harris@bgllp.com

                                        / s / Thomas R. Phillips
                                        Thomas R. Phillips

                                       -9-