Court Opinion

ID: 38211
Source: CourtListenerOpinion
Date Created: 2010-04-25 20:04:41+00
Date Added: 2024-06-11T17:15:55.670580
License: Public Domain

United States Court of Appeals
                                                                Fifth Circuit
                                                             F I L E D
               IN THE UNITED STATES COURT OF APPEALS
                       FOR THE FIFTH CIRCUIT                   May 3, 2005

                                                         Charles R. Fulbruge III
                                                                 Clerk
                           No. 04-40832
                         Summary Calendar

CRONUS OFFSHORE, INC.,

                                    Plaintiff-Appellant,

versus

KERR-MCGEE OIL AND GAS CORPORATION; KERR-MCGEE CORPORATION;
KERR-MCGEE WORLDWIDE CORPORATION,

                                    Defendants-Appellees.

                        --------------------
           Appeal from the United States District Court
                 for the Eastern District of Texas
                      USDC No. 1:02-CV-565-MC
                        --------------------

Before WIENER, BENAVIDES, and STEWART, Circuit Judges.

PER CURIAM:*

     Cronus Offshore, Inc. (“Cronus”) appeals the district

court’s summary judgment dismissal of its contractual claims

arising from the purchase of a mineral lease on the outer

Continental Shelf.   We review the district court’s determination

de novo.   See Skotak v. Tenneco Resins, Inc., 953 F.2d 909, 912

(5th Cir. 1992); Stewart v. Murphy, 174 F.3d 530, 532-33 (5th

Cir. 1999).

     *
       Pursuant to 5TH CIR. R. 47.5, the court has determined that
this opinion should not be published and is not precedent except
under the limited circumstances set forth in 5TH CIR. R. 47.5.4.
                            No. 04-40832
                                 -2-

     We hold that the totality of the circumstances supports the

district court’s determination that the purchase agreement’s

waiver provision barred Cronus’s contractual claims arising from

the alleged failure to disclose the presence of undrillable

material in the well at issue.   See Schlumberger Tech. Corp. v.

Swanson, 959 S.W.2d 171, 181 (Tex. 1997); Prudential Ins. Co. v.

Jefferson Assocs., Ltd., 896 S.W.2d 156, 162 (Tex. 1995).     In so

holding, we reject Cronus’s contention that the parties did not

negotiate at arm’s length; Cronus, who was represented by counsel

during the purchase negotiations, was not unfamiliar with the

business of offshore well-recompletion, including the inability

to perform diagnostic testing prior to the lease purchase.      Cf.

Schlumberger, 959 S.W.2d at 175-77, 180.   Because Cronus’s

inability to inspect the well-bore was not the result of Kerr-

McGee Oil and Gas Corporation’s (“Kerr-McGee’s”) conduct, the

waiver clause also cannot be held unenforceable on that basis.

Prudential Ins. Co. v. Jefferson Assocs., Ltd., 896 S.W.2d 156,

162 (Tex. 1995).

     Additionally, Cronus’s summary judgment evidence did not

establish the existence of a genuine issue of material fact

regarding whether Kerr-McGee knew about the presence of the well-

bore obstruction for purposes of establishing fraudulent

misrepresentation.   Anderson v. Liberty Lobby, Inc., 477 U.S.
242, 256 (1986); Prudential, 896 S.W.2d at 162-63.   Finally,

Cronus’s contention that the waiver is not binding due to the
                             No. 04-40832
                                  -3-

provision’s failure to cover non-disclosures presupposes the

existence of a non-disclosure, which the summary judgment

evidence did not show to be a genuine issue for trial.

Nevertheless, insofar as the provision disclaimed Cronus’s

reliance on the representations of Kerr-McGee as to the condition

of the well, it necessarily encompassed claims of non-disclosure.

See Schlumberger, 959 S.W.2d at 181-82.

     We further hold that the district court’s determination that

Cronus failed to state a claim for breach of contract was not

erroneous.   See El Paso Natural Gas, Co. v. Minco Oil & Gas,

Inc., 8 S.W.3d 309, 313 (Tex. 1999).    The common law does not

recognize a duty between contracting parties to act in good

faith.   Id. at 312-13.   Additionally, even if it is assumed

arguendo that the instant lease purchase is governed by the

Uniform Commercial Code (UCC), the alleged breach occurred during

the formation of the contract, to which the UCC’s statutory duty

of good faith does not extend.    See id. at 313.

     AFFIRMED.