Court Opinion

ID: 3092958
Source: CourtListenerOpinion
Date Created: 2015-10-16 04:12:42.890586+00
Date Added: 2024-06-11T11:18:58.689206
License: Public Domain

Opinion filed April 14, 2011

                                              In The

   Eleventh Court of Appeals
                                           __________

                                      No. 11-09-00339-CV
                                          __________

             FINIS DEAN SMITH AND DEBBY SMITH, Appellants

                                                V.

                          BASA RESOURCES, INC., Appellee

                               On Appeal from the 90th District Court

                                      Stephens County, Texas

                                   Trial Court Cause No. 29,590

                               MEMORANDUM OPINION

       Finis Dean Smith and Debby Smith brought suit against BASA Resources, Inc. for
damages to their real property caused by a leak in a buried flowline and by BASA’s remedial
acts. The Smiths asserted causes of action for negligence, gross negligence, negligence per se,
statutory relief for the violation of a railroad commission rule, nuisance, trespass, and breach of
contract. Based upon the jury’s answers to the issues submitted, the trial court entered a take-
nothing judgment against the Smiths. We affirm.
                                              Issues
       The Smiths present seven issues for review. In the first issue, they argue that, as a matter
of law, the evidence established that BASA was negligent in failing to prevent the escape and
leakage of oil and saltwater from its pipeline. In the second issue, they assert that the jury’s
failure to find BASA negligent was against the great weight and preponderance of the evidence.
The Smiths argue in their third and fourth issues that they proved, as a matter of law, that BASA
committed a trespass by permitting oil and saltwater to damage the Smiths’ property and that the
jury’s failure to find trespass was against the great weight and preponderance of the evidence. In
their fifth and sixth issues, the Smiths contend that the evidence is legally and factually
insufficient to show that BASA was acting as a reasonably prudent operator when it violated a
Texas Railroad Commission rule. In the final issue, the Smiths complain of a jury argument
made by BASA’s counsel.         Additionally, BASA has briefed a cross-point presenting an
alternative ground upon which to affirm the trial court’s judgment: that the cost of cleanup is not
economically feasible as a matter of law. We do not reach the merits of the cross-point as it is
not necessary to the disposition of this appeal. TEX. R. APP. P. 47.1.
                                            Negligence
       In their first four issues, the Smiths assert legal and factual sufficiency challenges to the
evidence in support of jury findings upon which the Smiths had the burden of proof. We will
apply the following well-recognized standards in addressing the first four issues. When a party
attacks the legal sufficiency of an adverse finding on an issue on which it has the burden of
proof, it must demonstrate that the evidence establishes, as a matter of law, all vital facts in
support of that issue. Dow Chem. Co. v. Francis, 46 S.W.3d 237, 241 (Tex. 2001). We must
first examine the record for probative evidence that supports the jury’s finding, while ignoring all
evidence to the contrary unless reasonable jurors could not. Id.; see City of Keller v. Wilson, 168
S.W.3d 802, 827 (Tex. 2005). If there is no evidence to support the jury’s answer, then we must
examine the entire record to see if the contrary proposition is established as a matter of law.
Dow Chem., 46 S.W.3d at 241. The issue should be sustained only if the contrary proposition is
conclusively established. Id. When a party attacks the factual sufficiency of an adverse finding
on an issue on which it has the burden of proof, it must demonstrate that the adverse finding is
against the great weight and preponderance of the evidence. Id. at 242. We must consider and
weigh all of the evidence, and we can set aside the verdict only if the evidence is so weak or the

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finding is so against the great weight and preponderance of the evidence that it is clearly wrong
and unjust. Id.; Cain v. Bain, 709 S.W.2d 175, 176 (Tex. 1986).
       In the first and second issues, the Smiths’ sufficiency challenges relate to the jury’s
failure to find that BASA’s negligence, if any, proximately caused any damages. The Smiths
argue that BASA was negligent in failing to prevent the escape and leakage of oil and saltwater
from the flowline. In order to recover on a negligence claim, a party must show three essential
elements: (1) a legal duty owed by one person to another, (2) a breach of that duty, and (3)
damages proximately resulting from such breach. El Chico Corp. v. Poole, 732 S.W.2d 306, 311
(Tex. 1987); Stukes v. Bachmeyer, 249 S.W.3d 461, 468 (Tex. App.—Eastland 2007, pet.
denied). BASA owed a duty to the Smiths as owner of the surface estate not to negligently
injure such estate. See Gen. Crude Oil Co. v. Aiken, 344 S.W.2d 668, 669 (Tex. 1961).
       The record reflects that Mr. Smith owns the surface estate of a rugged, 515.5-acre ranch
and a small portion of the minerals. The ranch has been subject to a mineral lease since 1916,
and BASA is the successor in interest to the original lessee. The ranch is located in the
Eliasville-Caddo Unit. In the ECU, there are forty-one producing wells and forty-four injection
wells. Four of the producing wells and three of the injection wells are located on the ranch, as
well as approximately three miles of flowline. BASA has owned and operated the ECU since
August 2003.
       On June 13, 2007, BASA pumper, Jerry Don Bryant, discovered a leak coming from a
buried production flowline. Bryant immediately turned off the power to the well and turned off
the valve to the flowline. He then notified his foreman, and they both worked diligently to
attempt to keep the oil and saltwater from running further down the creek and entering the Clear
Fork of the Brazos River at the boundary of the ranch. On the same day that the leak was
discovered, BASA hired Melvin Holland to bulldoze an emergency access road near part of the
creek so that vacuum trucks could get to the area to vacuum up the oil and saltwater. BASA
instructed the dozer operator not to knock down any big oak trees and to do as little damage as
possible to the ranch.
       On June 19, 2007, the railroad commission inspected the area and cited BASA for
polluting an area of the creek that the commission measured as 10 feet wide and 1,603 feet long.
Subsequent inspections were conducted by the railroad commission, and no pollution was found.
The railroad commission closed its case on this leak in December 2007. BASA performed other

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remedial actions, such as reseeding the area. At the Smiths’ request, BASA also put gravel on
the road to prevent erosion, placed large boulders at the entrance to the creek area, and hauled off
the brush and trees that had been pushed. The Smiths sought $204,500 to replace the oak trees
either pushed by the dozer or killed by the oil with like-sized trees, $100,863 to further remediate
the surface, and at least $125,000 in attorney’s fees.
       The cause of the leak was not disputed. The leak was caused by a rusted bolt on a buried
coupling – a ―Victaulic poly huggie‖ – that had been used to join two pieces of the poly flowline.
The bolt had been coated with Roskote, a substance used to keep metal from rusting. The
flowline was buried approximately three feet underneath the surface. BASA employees testified
about numerous operational safeguards that it utilized to prevent leaks and spills, including
pressure monitors, various alarm systems, coated lines, and automatic shut-down devices.
       The Smiths’ argument that BASA ―breached its duty of ordinary care‖ by failing ―to
properly maintain the 162 flowline‖ and ―avoid the flowline’s leak‖ is not supported by the
record. There was probative evidence that BASA properly maintained its flowlines, that an
operator exercising ordinary care would not dig up buried flowlines just to inspect them, that
BASA had instituted numerous operational safeguards, that the leak was caused by a rusted bolt
on a huggie, and that such huggies were customarily used to join poly flowlines. We hold that
there is probative evidence from which the jury could have found that BASA did not act
negligently, that the Smiths did not conclusively prove BASA’s negligence, and that the jury’s
finding is not against the great weight and preponderance of the evidence. The first and second
issues are overruled.
                                              Trespass
       In their third and fourth issues, the Smiths’ sufficiency challenges relate to the jury’s
failure to find that BASA committed a trespass against the Smiths. The Smiths contend that
BASA committed a trespass by permitting oil and saltwater to damage their property. Trespass
to real property occurs when a person enters or permits something to enter another’s land without
consent. Stukes, 249 S.W.3d at 465. To recover trespass damages, a plaintiff must prove (1) that
it owns or has a lawful right to possess real property; (2) that the defendant physically,
intentionally and voluntarily entered the land; and (3) that the defendant’s trespass caused
damage. Id. BASA was the successor in interest to the mineral lease covering the ranch. BASA
held the dominant mineral estate, to which the surface estate was servient. The mineral lease

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explicitly gave BASA the ―full and exclusive authority to enter upon said premises and to dig,
drill, operate . . . and to construct on said premises and to remove therefrom at pleasure, pumping
plants, tracks, tanks, pipe lines and other things necessary in the operation of this lease, avoiding
as far as practicable damage to fences and growing crops.‖           The mineral lease authorizes
BASA’s activities on the ranch and precludes the Smiths’ trespass claims. Stephenson v. Vastar
Res., Inc., 89 S.W.3d 790, 795 (Tex. App.—Corpus Christi 2002, pet. denied). Furthermore, the
evidence did not show that BASA intentionally or voluntarily permitted the oil and saltwater to
leak onto the land. We hold that there is probative evidence from which the jury could have
found that BASA did not trespass, that the Smiths did not conclusively prove that a trespass
occurred, and that the jury’s finding is not against the great weight and preponderance of the
evidence. The Smiths’ third and fourth issues are overruled.
                                  Reasonably Prudent Operator
       In their fifth and sixth issues, the Smiths contend that the evidence is legally and factually
insufficient to show that BASA was acting as a reasonably prudent operator when it violated a
railroad commission rule. The jury found that BASA violated ―Railroad Commission of Texas
Statewide Rule 8,‖ which provides that no person conducting oil and gas activities may cause or
allow pollution of surface or subsurface water. A person ―may sue for and recover damages‖ for
such violation, ―[p]rovided, however, that . . . it shall be a defense that the lease owner or
operator was acting as a reasonably prudent operator would act under the same or similar facts
and circumstances.‖ TEX. NAT. RES. CODE ANN. § 85.321 (Vernon 2011). The jury found that
the violation in this case occurred while BASA was acting as a reasonably prudent operator
would act under the same or similar facts and circumstances.
       BASA had the burden of proof on its defensive question regarding whether it was acting
as a reasonably prudent operator. Therefore, in order to address the Smiths’ legal sufficiency/no-
evidence challenge, we must consider only the evidence and inferences that tend to support the
finding, disregarding any evidence or inferences to the contrary. Sw. Key Program, Inc. v. Gil-
Perez, 81 S.W.3d 269, 274 (Tex. 2002); Garza v. Alviar, 395 S.W.2d 821, 823 (Tex. 1965); see
Merrell Dow Pharms., Inc. v. Havner, 953 S.W.2d 706, 711 (Tex. 1997). We may sustain a no-
evidence challenge only if one of the following circumstances exists: (1) the record discloses a
complete absence of evidence of a vital fact, (2) the court is barred by rules of law or of evidence
from giving weight to the only evidence offered to prove a vital fact, (3) the only evidence

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offered to prove a vital fact is no more than a mere scintilla, or (4) the evidence conclusively
establishes the opposite of the vital fact. Merrell Dow, 953 S.W.2d at 711. We must examine
the record for probative evidence that supports the jury’s finding, while giving credit to all
favorable evidence that reasonable jurors could believe and ignoring all evidence to the contrary
unless reasonable jurors could not. City of Keller, 168 S.W.3d at 807, 827, 830. In order to
address the factual sufficiency challenge to the reasonably-prudent-operator finding, we must
consider and weigh all of the evidence and should set aside the verdict only if the evidence is so
weak or the finding is so against the great weight and preponderance of the evidence that it is
clearly wrong and unjust. Pool v. Ford Motor Co., 715 S.W.2d 629 (Tex. 1986).
       The Smiths assert first that BASA failed to present any evidence that it had acted as a
reasonably prudent operator and second that BASA ―essentially‖ conceded liability in its
opening statement and in the testimony of BASA’s president. During his opening statement,
BASA’s attorney stated:
              There’s really not any dispute in this case as to whether or not Mr. and
       Mrs. Smith are entitled to be compensated for the damages that have occurred,
       damages that have occurred to the trees. The question before you and the
       question that you’re going to be asked to decide is, okay, what is reasonable.

BASA’s attorney also stated that the evidence would show that BASA’s actions with respect to
the leak were reasonable. He also indicated that the monetary damages requested by the Smiths
were not reasonable under the circumstances. BASA’s president subsequently testified during
examination by the Smiths’ attorney as follows:
               Q. And is it fair to say that as president of BASA that you believe the
       Smiths should be compensated for the grass and trees that were killed and the
       trees that were uprooted and destroyed related to the spill?

               A. Well, that’s why we’re here today. We couldn’t agree, so we’re here.

               Q. But you agree on the concept that they should be compensated?

               A. Yes, sir.

               Q. The amount is what the dispute is about?

               A. That’s correct.

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The Smiths do not cite any authority to support their contention. And, we cannot hold that either
the opening statement of BASA’s attorney or the testimony of BASA’s president in which he
agreed with the concept that the Smiths should be compensated constitutes a concession of
liability. Furthermore, there was a substantial amount of probative evidence from which the jury
could have found that BASA acted as a reasonably prudent operator would have acted under the
same circumstances. As noted above, there was probative evidence that BASA’s equipment was
adequate, that BASA properly maintained its flowlines, that an operator exercising ordinary care
would not dig up buried flowlines just to inspect them, that BASA had instituted a number of
operational safeguards, that the leak was caused by a rusted bolt on a huggie, and that such
huggies were customarily used to join poly flowlines. There was also probative evidence that
BASA acted reasonably in the steps it undertook to clean and remediate the leak. The evidence
regarding BASA acting as a reasonably prudent operator was not so weak and the finding was
not so against the great weight and preponderance of the evidence as to be clearly wrong and
unjust. The Smiths’ fifth and sixth issues are overruled.
                                             Jury Argument
       In their final issue, the Smiths argue that incurable harm resulted when, during closing
argument, BASA’s counsel cautioned the jurors about the effect their verdict would have on their
community. The record shows that BASA’s counsel began closing arguments as follows:
               It’s no longer morning, so I’ll tell you we really appreciate your service,
       everyone here does. Not just the Smiths but you have oil and gas people all over
       our community. We live in an oil field community, so your verdict is a lot more
       important than just to one person in this case. It’s a case that’s going to decide a
       lot. It’s going to decide what is reasonable, what do we have operators doing.
       When we have a spill, do we clean it up? Yes.

At that point, the Smiths objected, and the trial court sustained the objection. However, the
Smiths did not request an instruction to disregard. Consequently, they assert on appeal, as they
did in their motion for new trial, that the error was incurable. See TEX. R. CIV. P. 324(b)(5). We
disagree.
       Incurable jury argument is rare because retraction of the argument or instruction from the
court can typically cure any probable harm. Phillips v. Bramlett, 288 S.W.3d 876, 883 (Tex.
2009). The party claiming incurable harm must persuade the court that, based on the record as a
whole, the offensive argument was so extreme that a juror of ordinary intelligence could have

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been persuaded by that argument to agree to a verdict contrary to that which he would have
otherwise agreed. Id. Incurable jury argument ―is that which strikes at the very core of the
judicial process.‖ Id.; see Living Ctrs. of Tex., Inc. v. Peñalver, 256 S.W.3d 678, 681 (Tex.
2008) (such as appeals to racial prejudice, unsupported and extreme personal attacks on parties
and witnesses, or an unsupported accusation of witness manipulation). In Phillips, the court
concluded that counsel’s plea for that jury to send a message to the doctors in the community,
unlike prior juries in the community, did not constitute incurable jury argument. Id. at 882-83.
Similarly, we hold that the argument made by BASA’s counsel was not such that the harm
therefrom could not be eliminated by counsel’s retraction or by an instruction from the court.
Because the argument was not incurable, the Smiths’ seventh issue is overruled.
       The judgment of the trial court is affirmed.

                                                           JIM R. WRIGHT
                                                           CHIEF JUSTICE

April 14, 2011
Panel consists of: Wright, C.J.,
McCall, J., and Strange, J.

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