Pecos Petroleum Company and American Coastal Energy, Inc. v. Kemp McMillan and Corum Production Company--Appeal from 81st Judicial District Court of La Salle County

MEMORANDUM OPINION

No. 04-02-00187-CV
PECOS PETROLEUM COMPANY and American Coastal Energy, Inc.,
Appellants
v.
KEMP MCMILLAN and Corum Production Company,
Appellees
From the 81st Judicial District Court, La Salle County, Texas
Trial Court No. 98-08-00079-CVL
Honorable Olin B. Strauss, Judge Presiding

Opinion by: Alma L. L pez, Chief Justice

Sitting: Alma L. L pez, Chief Justice

Catherine Stone, Justice

Paul W. Green, Justice

Delivered and Filed: January 29, 2003

AFFIRMED

This is the second appeal in this litigation. Previously, we remanded the matter to the trial court on appellants' cause of action for intentional interference of prospective contract or business relations. See Pecos Petroleum Co. v. Lewis-Petro Props., Inc., No. 04-00-00394-CV, 2001 WL 651163 (Tex. App.--San Antonio June 13, 2001, no pet.) (unpublished opinion). In this second appeal, appellants Pecos Petroleum Company ("Pecos") and American Coastal Energy, Inc. ("ACE") contend that the trial court improperly granted summary judgment on the grounds that: (1) the Statute of Frauds precluded appellants' claims of intentional interference with prospective business relations as a matter of law; or alternatively, (2) there was no evidence to support certain elements of appellants' claims. Because we conclude there is no evidence to support appellants' claims for damages, we do not reach the issue of whether appellants' claims are precluded as a matter of law by the Statute of Frauds. We affirm the judgment of the trial court.

Background

The procedural history and facts surrounding this case are well known to the parties. Therefore, we address only those facts relevant to our disposition of the case. George Newton, a non-party, owned several oil and gas leases known as the "Lyssy Leases." Newton's interests were due to expire on January 31, 1996 if not extended by operations. On January 22, 1996, Newton met with Tim Roberson of Pecos and David McCarver of ACE to discuss a production agreement so as to extend his interest in the Lyssy Leases. At this meeting, the parties specifically discussed production of well no. 8. While a written agreement was not drawn up at this meeting, assignment letters to owners were drafted and permits to the Texas Railroad Commission were drafted. On Friday, January 26, 2002, a Pecos crew, led by Wade Chapman, arrived at the leases and could not gain access to well no. 8 because of a lock on the gate. The lock reflected it was owned by Corum. According to Roberson, Chapman may have stayed until early Monday, January 29, 1996 at the site. Pecos had a "work over unit" standing by, but they were not on site at the well. Appellants never gained access to the well, and Newton ultimately entered into an agreement with appellees regarding the Lyssy Leases. After entering into an agreement with Newton regarding the Lyssy Leases, Corum was able to sell its interests for $2.25 million to Lewis-Petro Properties, Inc.

It is appellants' contention that appellees tortiously interfered with appellants' prospective contract with Newton. On appeal, appellants contend substantial expense was incurred as a result of their discussions with Newton. These expenses include finding tools, suppliers, and organizing a work crew. However, the bulk of their damages claim is based on the purchase price paid to Corum for all of its oil interests, including the Lyssy Leases. Appellants specifically claim this amount as lost profits in the form of benefit of the bargain damages. By their original petition, appellants specifically made a claim for benefit of the bargain damages.

Standard of Review

Appellees filed both a traditional motion for summary judgment and no-evidence motion for summary judgment. We address the no-evidence grounds first as it is dispositive of this appeal. We apply the usual standard of review for no-evidence summary judgments, viewing the evidence in the light most favorable to the respondent against whom the summary judgment was rendered. Lette v. Baptist Health Sys., 82 S.W.3d 600, 601 (Tex. App.--San Antonio 2002, no pet); Moore v. K Mart Corp., 981 S.W.2d 266, 269 (Tex. App.--San Antonio 1998, pet. denied). Under this standard, we must determine whether appellants have raised more than a scintilla of evidence to support the elements of their claim for intentional interference with prospective business relations. See Morgan v. Anthony, 27 S.W.3d 928, 931 (Tex. 2000). Less than a scintilla of evidence exists where the evidence is so weak as to do no more than create a mere surmise or suspicion of its existence. Kindred v. Con/Chem., Inc., 650 S.W.2d 61, 63 (Tex. 1983). If the trial court's judgment does not specify the grounds relied upon for its ruling, we must affirm the judgment if any of the theories advanced are meritorious. See Dow Chem. Co. v. Francis, 46 S.W.3d 237, 242 (Tex. 2001).

Analysis

The elements of a claim for intentional interference with prospective business relations are:

(1) a reasonable probability that the parties would have entered into a contractual relationship;

(2) an "independently tortious or unlawful" act by the defendants that prevented the relationship from occurring;

(3) the defendant did such act with a conscious desire to prevent the relationship from occurring or knew that the interference was certain or substantially certain to occur as a result of his conduct; and

(4) the plaintiff suffered actual harm or damage as a result of the interference.

Allied Capital Corp. v. Cravens, 67 S.W.3d 486, 491 (Tex. App.--Corpus Christi 2002, no pet.); see also Milam v. Nat'l Ins. Crime Bureau, 989 S.W.2d 126, 131 (Tex. App.--San Antonio 1999, no pet.). Below, appellees moved on the grounds that there was no evidence to support appellants' claims for damages. In response, appellants needed to present more than a scintilla of evidence of damages. Appellees contend the evidence relied upon by appellants does not meet the standard. We agree.

On appeal, appellants refer to costs associated with actions taken by Pecos on January 26, 1997, such as time negotiating a deal and organizing and sending a work crew. However, we cannot consider these costs as damages because appellants specifically pled benefit of the bargain damages, and this evidence would support a claim for out-of-pocket expenses. See Formosa Plastics Corp. USA v. Presidio Engn'r & Contractors, Inc., 960 S.W.2d 41, 49 (Tex. 1998) (stating out-of-pocket measure only compensates for actual injuries a party sustains through parting with something and the value received). Therefore, we review the record to determine if there is more than a scintilla of evidence to support appellants' claims for benefit of the bargain damages.

Benefit of the bargain damages are computed as the difference between the value represented and the value received. See Metro. Life Ins. Co. v. Haney, 987 S.W.2d 236, 246 (Tex. App.--Houston [14th Dist.] 1999, pet. denied). Under this theory of damages, a party can recover lost profits only if they are proven with reasonable certainty based upon objective facts, figures, or data from which the amount can be ascertained. See id.; SBC Operations, Inc. v. Business Equation,Inc., 75 S.W.3d 462, 467 (Tex. App.--San Antonio 2001, pet. denied). A plaintiff will only be compensated for the profits it would have made if the bargain had been performed as promised. See Haney, 987 S.W.2d at 246. In the instant matter, there is no evidence of the value of the Lyssy Leases as represented to appellants in order to establish benefit of the bargain damages. In fact, there is no evidence to support the actual value of the Lyssy Leases. The only evidence on which appellants rely on is the $2.25 million which appellees obtained as a result of the sale of their entire interest to Lewis-Petro. There is no evidence to establish what part of this amount the Lyssy Leases comprised. Further, it would be speculation to assign a value to the Lyssy Leases, and determine lost profits, where there was no evidence as to what it would have cost appellants to acquire and develop the Lyssy Leases. See id.; see also SBC Operations, Inc., 75 S.W.3d at 467. Appellants presented less than a scintilla of evidence in support of damages. (1) Accordingly, their claim for intentional interference with business relations must fail.

Conclusion

The final judgment entered by the trial court granting appellees' motion for summary judgment did not state the grounds on which it was granted. Therefore, we must affirm the judgment if any of the theories advanced are meritorious. See Dow Chem. Co., 46 S.W.3d at 242. Because there is less than a scintilla of evidence to support appellants' claims for benefit of the bargain damages, we affirm the judgment of the trial court.

Alma L. L pez, Chief Justice

PUBLISH

1. In oral argument, appellants contended that the trial court's order to abate discovery in this matter prevented them from presenting expert evidence in support of damages. In their response to appellees' motion for summary judgment, appellants noted to the trial court that they were unable to amend their pleadings or conduct discovery. In response to the motion for summary judgment, appellants should also have filed an objection and moved for a continuance to inform the trial court that additional time for discovery regarding damages was needed. See Tex. R. Civ. P. 166a(i) (stating a party may move on no evidence grounds "after adequate time for discovery."); see, e.g., Blanche v. First Nationwide Mortg. Corp., 74 S.W.3d 444, 450-51 (Tex. App.--Dallas 2002, no pet.); Jaimes v. Fiesta Mart, Inc., 21 S.W.3d 301, 304 (Tex. App.--Houston [1st Dist.] 1999, pet. denied).