Opinion
No. 01-03-00049-CV
Opinion issued August 31, 2005.
On Appeal from the 155th District Court, Austin County, Texas, Trial Court Cause No. 98V-090.
MEMORANDUM OPINION
Appellants, Dr. Charles and Camilla Fenner, challenge a take-nothing judgment rendered against them in their suit against appellees, Samson Resources Co., Samson Properties, Inc., Samson Properties 1982 Producing Properties ("Samson"), American Trading and Production Corp., ATAPCO, Inc., TEMA Oil Gas Co. ("ATAPCO"), and Magnum Producing Operating Co. (Magnum) (collectively, the "Lessees"), for the breach of two contracts, a Plant Site Lease Agreement and an Oil and Gas Lease. A jury found that the Lessees did not fail to comply with either lease. The trial court rendered judgment on the verdict. In two issues, the Fenners contend that they established breach as a matter of law and that the jury's findings that the Lessees did not fail to comply with both leases were against the great weight and preponderance of the evidence. We affirm.
Factual and Procedural Background
The Fenners entered into an Oil and Gas Lease with Millican Oil Company ("Millican") in May 1973 to allow Millican to explore and produce oil, gas, and other hydrocarbons on 692 acres of the Fenners' property in Austin County. The Oil and Gas Lease further provided for the laying of pipelines and the building of tanks and other equipment in order to produce, treat, store, and transport the oil, gas, and other hydrocarbons. In May 1974, the Fenners and Millican entered into a Plant Site Lease Agreement, which covered approximately five acres within the 692 acres leased under the Oil and Gas Lease and allowed Millican to construct and operate a gas processing unit to gather gas from three surrounding wells. Subsequently, in 1974 or 1975, Millican installed a gas-processing unit on the five-acre tract.
In 1979, Millican assigned its entire interest in the Fenners' property pursuant to the Plant Site Lease Agreement and Oil and Gas Lease to Alamo Petroleum Company ("Alamo"), which later changed its name to Amax Petroleum Company ("Amax"). Thereafter, on November 1, 1982, Amax assigned its entire interest in the two leases to Samson, which, at that time, was named Tenax Oil and Gas Corporation. On January 1, 1987, Samson assigned its entire interest in the two leases to ATAPCO. In 1991, ATAPCO and Magnum entered into a joint cost-sharing agreement, and, on February 1, 1993, ATAPCO assigned its entire interest in the two leases to Magnum.
In December 1979, the Fenners and Alamo amended the Plant Site Lease Agreement to extend such agreement until April 30, 1994. Also in 1979, Dr. Fenner made numerous complaints to Alamo concerning the effect of the oil and gas operations on the Fenners' property. Thereafter, on December 26, 1979, the Fenners and Alamo entered into a settlement agreement, whereby Alamo paid the Fenners $125,000 and agreed to drill additional wells. In return, the Fenners agreed to release any and all claims against Alamo. During Alamo's and Amax's tenure, a large saltwater disposal pit was used at the gas processing unit on the five-acre plant site to dispose of saltwater produced from the wells. In July 1982, the Texas Railroad Commission determined that the pit violated a state environmental statute and ordered the pit to be closed, causing Amax to close the pit within a month.
In its third amended answer, dated March 20, 2002, Magnum also asserted a counterclaim against the Fenners for breaching the December 26, 1979 settlement agreement that the Fenners and Alamo had executed.
As noted, the Plant Site Lease Agreement, as amended, provided that it expired by its own terms on April 30, 1994. Although the Fenners and Magnum did not execute an extension of the Plant Site Lease Agreement at any time, Magnum remained on the property and continued its operations after April 30, 1994. Concerned about the plant site's condition, Dr. Fenner took several pictures of the plant site in May or June of 1995. Dr. Fenner also wrote a letter, dated June 8, 1995, to the president of Magnum, Avinash Ahuja, in which Dr. Fenner expressed concern about the "junk everywhere," such as "[b]arrels, equipment, [and] pipe" on the plant site. After receiving Dr. Fenner's letter, Magnum removed these materials.
In early 1997, Magnum gave the Fenners its notice of intent to cease operations and, in February 1997, began its clean up of the gas processing unit and the land. Magnum made rental payments for use of the facility through April 1997. In July 1997, in an effort to discover buried pipes and flow lines, Dr. Fenner dug trenches throughout the five-acre plant site. At Dr. Fenner's request, Magnum removed the pipe that Fenner's excavations had unearthed. Meanwhile, in July 1997, Dr. Fenner also hired Newpark, an environmental consulting firm, to conduct environmental tests on the property. A July 29, 1997 report from Newpark to Dr. Fenner indicated that there was contamination on the five-acre plant site. Although Magnum offered to remediate a portion of the plant site, the Fenners and Magnum were unable to reach an agreement as to the necessary remediation.
Thereafter, on October 30, 1998, the Fenners brought suit against ATAPCO and Magnum for nuisance, trespass, conversion, negligence, negligence per se, and breach of contract, seeking an injunction and damages. The Fenners amended their petition to add Samson as a defendant on July 28, 2000.
The charge defined the "Plant Site Lease" Agreement as "the agreement dated May 24, 1974[,] originally between Plaintiffs and Millican Oil Company and all amendments thereto."
At trial, the Fenners proceeded solely on their claims that the Lessees had breached the Plant Site Lease Agreement and the Oil and Gas Lease. After nine days of testimony and argument, the case was submitted to the jury in broad form questions. Question Number One asked the jury, "Did any of the following Defendants fail to comply with the terms of the Plant Site Lease?," to which the jury answered, "No," for all three Lessees. Question Number Two asked the jury, "Did any of the following Defendants fail to comply with the Oil and Gas Lease?," to which the jury answered, "No," for all three Lessees. Because the jury found that none of the Lessees had failed to comply with either agreement, it did not answer the damages question. On November 26, 2002, the trial court rendered judgment on the verdict, and, therefore, ordered that the Fenners take nothing in their suit against the Lessees. The Fenners filed motions for judgment notwithstanding the verdict and for a new trial, which the trial court denied.
The charge defined "Oil and Gas Lease" as "the agreement dated May 31, 1973[,] originally between Plaintiff[s] and Millican Oil Company."
In 1974, the Fenners allowed Millican to install a gathering system between the gas processing unit and surrounding wells. However, we note that, at trial, the Fenners stipulated to the fact that they are not seeking any damages for the installation of flow lines.
The Leases
The Fenners' arguments that the evidence was legally and factually insufficient to support the jury's findings that the Lessees did not fail to comply with the Plant Site Lease Agreement and the Oil and Gas Lease are contingent upon the applicability of certain lease provisions and the definitions of certain lease terms. None of the parties argue that the Plant Site Lease Agreement or the Oil and Gas Lease are ambiguous; they simply disagree over the construction and interpretation of certain terms.
The primary concern of a court in construing a written contract is to ascertain the true intent of the parties as expressed in the instrument. Nat'l Union Fire Ins. Co. v. CBI Indus., Inc., 907 S.W.2d 517, 520 (Tex. 1995). To achieve this objective, courts should examine and consider the entire writing in an effort to harmonize and give effect to all the provisions of the contract so that none will be rendered meaningless. Coker v. Coker, 650 S.W.2d 391, 393 (Tex. 1983). We presume that the parties to a contract intend every clause to have some effect. Heritage Res., Inc. v. NationsBank, 939 S.W.2d 118, 121 (Tex. 1996). When a term in a conveyance is not specifically defined, that term should be given its plain, ordinary, and generally-accepted meaning. DeWitt County Elec. Coop., Inc. v. Parks, 1 S.W.3d 96, 101 (Tex. 1999). The rules of contract interpretation require us to give the language in an agreement its plain grammatical meaning unless to do so would defeat the intent of the parties. Id. The parties' interpretations of the contract are irrelevant if the meaning of the contract is plain from its face. Sun Oil Co. (DE) v. Madeley, 626 S.W.2d 726, 732 (Tex. 1981). In applying the foregoing rules, we may not rewrite the agreement to mean something that it did not. Natural Gas Clearinghouse v. Midgard Energy Co., 113 S.W.3d 400, 407 (Tex.App.-Amarillo 2003, pet. denied).
Plant Site Lease Agreement
The Fenners contend that the Lessees breached section nine of the Plant Site Lease Agreement, which provides:
At the termination of this lease, Tenant shall have a period of three (3) months time within which to remove all of the facilities placed thereon by Tenant and to generally restore the surface of the land.The Fenners assert that the term "surface" is "not limited to the topmost layer of dirt and vegetation" and that it "necessarily covers all subsurface layers that are affected by the plant site operations conducted at the surface."
Neither the Plant Site Lease Agreement nor the court's charge to the jury defines the word "surface." Additionally, none of the parties in their briefing or at argument directed us to a citation in the record where witnesses were asked whether the word "surface" was a term that had a technical or customary meaning in the oil and gas industry. Therefore, we give the term "surface" its plain, ordinary, and generally-accepted meaning. Furthermore, because the charge included no definition of the word "surface," it is assumed that the jurors applied the plain and ordinary meaning of the word. See Northwestern Nat'l Cas. Co. v. McCoslin, 838 S.W.2d 715, 718 (Tex.App.-Waco 1992, writ denied). We also note that the word "surface" has been defined as "[t]he upper boundary or top of ground or soil, exposed to the air."
The [Compact] Oxford English Dictionary 287 (2d ed. 1993).
The Fenners also assert that the word "restore" means "to return to a former or normal state" and, at trial, argued that the lease required the Lessees to return the plant site to its "original condition." However, we note that if the parties had intended to require the Lessees to return the surface of the land to its original condition, then the parties were capable of selecting such language, as exemplified in an addendum to the Plant Site Lease Agreement that required the Lessees to restore the surface "to its original condition" after the installation of gathering lines. Section 3(a) of the addendum to the Plant Site Lease Agreement, dated October 24, 1974, provides that
Landlord hereby grants to Tenant . . . the right to install a gathering system and to connect various wells in the field to the plant site lease facility, such lines to be buried at least 30 inches below the ground along the routes approved by Landlord that would in Landlord's opinion cause the least damage to the use of the surface by Landlord in their ranching operations. Tenant agrees following the installation of any such gathering lines to restore the surface of the land to its original condition.
As noted, the court's charge did not direct the jury to specific provisions in the Oil and Gas Lease that the Lessees allegedly breached. Rather, as noted above, the court's charge to the jury submitted a broad form question regarding the Lessees' failure to comply with the Oil and Gas Lease. Furthermore, in their brief, the Fenners repeatedly rely on the "partial assignment" provision discussed below to establish that the Lessees breached the Oil and Gas Lease. However, in their reply brief, the Fenners "acknowledge that the Oil and Gas Lease presents more complicated issues, including the proper interpretation of the partial and complete assignment clauses contained in that lease."
(Emphasis added.) In contrast to the gathering-line provision, section nine imposes a duty to only " generally restore the surface of the land" upon termination of the lease and does not contain a requirement that the land be restored to its original condition.
Accordingly, we conclude that the plain and ordinary language of the complained-of provision of the Plant Site Lease Agreement required the Lessees to "generally restore" the upper boundary or top of the ground or soil of the plant site.
Oil and Gas Lease
The Fenners also contend that the Lessees breached one specific provision of section 11 of the Oil and Gas Lease, which provides that, in the event of a partial assignment, all Lessees are responsible "for all damages to surface and subsurface of the lands covered hereby." In their brief, the Fenners additionally point to two other provisions in section 11 that "specif[y] the liabilities of the parties in the event of an assignment."
On page 23 of their brief, the Fenners note that they "incorporate the evidence detailed above [in their factual sufficiency challenge] in support of their argument that liability was established as a matter of law, and there is no evidence to support the jury's findings of no breach."
Partial assignment provision
Throughout their brief, the Fenners repeatedly argue that the Lessees breached the "partial assignment" provision of the Oil and Gas Lease, contained in the first paragraph of section 11, which provides:
Notwithstanding that this lease may be assigned in whole or in part, it is understood and agreed that in the event of partial assignment hereof, both the original Lessee and such assignees shall nevertheless be jointly and severally liable to Lessor, their heirs, successors and assigns for all damages to surface and subsurface of the lands covered hereby. . . .
(Emphasis added). However, this provision expressly applies only to partial assignments. Here, the record shows that the Oil and Lease was assigned to each Lessee from its respective predecessor and that each of the assignment contracts admitted into evidence provided that such assignments were whole, not partial, assignments. Because the evidence shows that no partial assignments were made, we conclude that this provision is not applicable.
Whole assignment provision
Next, the Fenners point to the "whole assignment" provision of the second paragraph of section 11, which provides:
In the event Lessee assigns this lease wholly to others, it shall seek the prior approval of Lessor, their heirs, successors and heirs. Upon such assignment of the entire lease by Lessee herein, Lessee herein shall not be further liable for damages as enumerated herein or any other damages caused by operations hereunder after the date of such assignment.
The Fenners argue that, "since the Fenners never gave their prior approval for any assignment, this provision of the Lease never became operable."
This provision expressly relieves a lessee of liability for a breach of the Oil and Gas Lease occurring after the whole assignment of the Oil and Gas Lease to another party. The Fenners repeatedly argue that the Lessees are responsible for damages to "the surface and the subsurface" of the land as though they were "partial assignments"; they do not argue in their motion for new trial or in their briefing to this Court that their breach-of-contract theory rested upon the failure of each Lessee to obtain the Fenners' consent before wholly assigning the Oil and Gas Lease to another oil company.
Surface Damages Clause
Finally, the Fenners point to the third paragraph of section 11 of the Oil and Gas Lease, which provides that "Lessee shall be responsible to Lessor for all damages to the surface of the lands covered hereby caused by Lessee's operations hereunder, and to any loss or injury to livestock."
Here, neither the Oil and Gas Lease nor the court's charge to the jury defines the word "surface." As noted, when a term is not specifically defined, that term should be given its plain, ordinary, and generally-accepted meaning. See Parks, 1 S.W.3d at 101. Again, the word, "surface," has been defined as "[t]he upper boundary or top of ground or soil, exposed to the air." The [Compact] Oxford English Dictionary 287 (2d ed. 1993). We note that if the Fenners and the Lessees had intended to require the Lessees to be responsible for damages to both the surface and the subsurface of the land when whole assignments are made, the parties were capable of selecting such language, as exemplified in other provisions in the Oil and Gas Lease. For example, the "partial assignment" provision in the first paragraph of section 11 expressly uses the term "subsurface" as part of the damages for which each assignee of a partial assignment is liable. We have already noted, however, that the first paragraph of section 11 is not applicable because the record shows that whole assignments were made to each Lessee.
Therefore, we conclude that the plain and ordinary language of the applicable complained-of provision of the Oil and Gas Lease held the Lessees responsible for all damages to the upper boundary or top of the ground or soil.
Custom or Usage in Industry
We note that the Fenners, in their reply brief, assert that "the undisputed testimony at trial indicated that it is customary in the industry for a lessee to restore an area back to the condition it was in before a plant site was there" and that "as Magnum's representative acknowledged, it is customary that a lessee would be responsible for cleaning up any environmental problem even without a specific contractual agreement." However, it is well-settled that, in an oil and gas lease, in the absence of an express or implied provision that the lessee would restore the surface of the land, a lessee has no implied duty to make such restoration. Warren Petroleum Corp. v. Monzingo, 304 S.W.2d 362, 362-63 (Tex. 1957); see Ottis v. Haas, 569 S.W.2d 508, 514 (Tex.Civ.App.-Corpus Christi 1978, writ ref'd n.r.e.). Here, the complained-of lease provisions concern only the "surface" of the land. The pertinent language of the Plant Site Lease Agreement expressly requires that the Lessees "generally restore the surface of the land," and the relevant language of the Oil and Gas Lease holds the Lessees responsible for "damages to the surface of the lands." As noted, the applicable provisions of the Plant Site Lease Agreement and the Oil and Gas Lease focus on responsibility for damages to the surface, not the subsurface, of the land. Therefore, even though some testimony suggested that it might be customary in the industry to restore the land in some manner, the Lessees were obligated only to do what the express provisions of the leases required them to do. See Warren, 304 S.W.2d at 362-63.
Matter of Law Challenge
In their second issue, the Fenners argue that the trial court erred in denying their motion for judgment notwithstanding the verdict because they established that the Lessees breached the Plant Site Lease Agreement and the Oil and Gas Lease as a matter of law.
A trial court may grant a motion for judgment notwithstanding the verdict if a directed verdict would have been proper. See Tex. R. Civ. P. 301. We review a trial court's denial of a motion for judgment notwithstanding the verdict by the same standard as we review a legal sufficiency challenge. See Navarette v. Temple Indep. Sch. Dist., 706 S.W.2d 308, 309 (Tex. 1986). When a party challenges the legal sufficiency of an adverse finding on an issue as to which he bears the burden of proof, he must demonstrate on appeal that the evidence conclusively established all vital facts in support of the issue. Dow Chem. Co. v. Francis, 46 S.W.3d 237, 241 (Tex. 2001); Sterner v. Marathon Oil Co., 767 S.W.2d 686, 690 (Tex. 1990); City of Pasadena v. Gennedy, 125 S.W.3d 687, 692 (Tex.App.-Houston [1st Dist.] 2003, pet. denied). In reviewing such a "matter of law challenge," we must first examine the record for evidence that supports the challenged finding, ignoring the evidence to the contrary. Francis, 46 S.W.3d at 241. If no evidence exists to support the finding, we then examine the entire record to determine if the contrary proposition is established as a matter of law. Id. We will sustain the point of error only if the contrary proposition was conclusively established. Id. When presented with legal and factual sufficiency challenges, as we are in this case, we first review the legal sufficiency of the evidence. Glover v. Tex. Gen. Indem. Co., 619 S.W.2d 400, 401 (Tex. 1981); In re L.M., 104 S.W.3d 642, 647 (Tex.App.-Houston [1st Dist.] 2003, no pet.).
The Fenners argue that "there is no evidence to support the jury's findings of no breach" of the Plant Site Lease Agreement and Oil and Gas Lease because "[t]he evidence . . . that purports to support the jury's verdict amounts to no more than a scintilla of evidence when viewed in light of the appropriate standard — the language of the contract requiring restoration of the property." The Fenners note that, "[a]dmittedly, there is evidence in the record raising a fact issue as to the extent of the contamination on the Fenners' property and the steps required to remove it"; that "this dispute does not negate the fact that some additional efforts are needed to restore the property under the terms of the contractual agreements; and that "[a] dispute about the extent of a problem or what is required to fix it does [not] equal a dispute about whether the problem exists to begin with." The Fenners rely on the same evidence for both their legal and factual sufficiency challenges regarding the jury's findings as to both the Plant Site Lease Agreement and Oil and Gas Lease.
In Van Thompson's opinion, "there is contamination in the subsurface." He agreed that his remediation plan was to "scrape off the top five feet" of soil in most places, move it aside, dig down 15 more feet, and then remove about 53,000 cubic feet of the allegedly contaminated soil.
However, contrary to the Fenners' assertions, in regard to the Plant Site Lease Agreement, there is ample evidence in the record, as detailed below, that supports the jury's implied finding that the Lessees "generally restored the surface of the lands" upon termination of the Plant Site Lease Agreement. Furthermore, in regard to the Oil and Gas Lease, the same evidence supports the jury's implied finding that, as detailed below, that the Lessees were not responsible for "damages [to] the surface of the lands" during their respective operations.
Rajen Ahuja, Magnum's corporate representative, testified that Magnum took the following actions to clean up the plant site: (1) in February 1997, Magnum hauled away "hot junk pipe," which is pipe that contains "naturally occurring radioactive material"; (2) in February 1997, Magnum cleaned, unhooked, loaded, and hauled away tanks and tank batteries; (3) on March 14, 1997, Magnum sent a crane to haul away miscellaneous production equipment; (4) by March 1997, "almost all the equipment [was] gone"; (5) in April 1997, Magnum dug and cut flow lines; (6) Magnum cut off anything that was protruding above ground to below ground level; (7) around April 23, 1997, Magnum "flattened the location and piled up the gravel that Dr. Fenner wanted to be pushed up on one side, so he could use it for his purposes"; (8) all the pipe that had been on the surface of the land had been removed; (9) in April 1997, Magnum initially had Dr. Fenner's permission to leave a furnace and a salt bath on the property, but those were subsequently removed on July 2, 1997; (10) by July 2, 1997, only the two cement slabs and a metal shed that Dr. Fenner requested to remain at the plant site remained; and (11) from October 1997 through December 1997, as a courtesy to Dr. Fenner, Magnum removed pipe that Fenner had exposed during Dr. Fenner's efforts to locate buried pipe.
Ahuja further testified that he directed Bradford "Butch" Blezinger, who was employed by both Magnum and ATAPCO, to take soil samples because Dr. Fenner had expressed concern about environmental problems. Ahuja sent the samples to be analyzed by Gemini Laboratory in Corpus Christi, and, after he obtained the test results, Ahuja determined that no further remediation was necessary. He further testified that the soil samples that he received during the clean-up process showed total petroleum hydrocarbon levels below the action levels established by the Texas Railroad Commission and the Texas Natural Resources Conservation Commission ("TNRCC"), now called the Texas Commission on Environmental Quality.
Additionally, Dr. Fenner testified that the land "looked good" before he hired Newpark on July 21, 1997 to dig trenches to locate buried pipe at the plant site and to collect soil samples. After Fenner "hired a track hoe to come up and dig up some places" throughout the plant site in order locate buried pipe, Magnum later removed the pipe. Furthermore, a letter, dated July 29, 1997, from Newpark to Dr. Fenner noted that all equipment, with the exception of a pig launcher and a small metal shed, had been removed from the site. Fenner further testified that he had requested that Magnum leave a metal shed and only one concrete slab, rather than two slabs, at the plant site. Fenner admitted that the pig launcher, which he agreed had his name stamped on it, had never been operated by any of the Lessees and that it had later been removed. Fenner also testified that, in 2000, when digging trenches, Fenner discovered the barrels, trash, old signs, a newspaper dated October 1981, and cables buried beneath the surface of the land. Finally, Fenner admitted that Alamo, one of the Lessees' predecessors, had drained and cleaned the salt water pit and then covered it with dirt in 1982.
Furthermore, Blezinger testified in his deposition, which was read to the jury, that he gauged wells for Magnum and that, in 1997, when Magnum was abandoning the plant site, he helped "remove all the equipment off the site." In particular, he testified that (1) a rental company removed the compressor; (2) surface and subsurface lines connected to the compressors were removed; (3) sump tanks next to the compressors were removed from the ground; (4) liquid from the compressors was hauled away; (5) tank batteries were drained of liquid, cleaned out, and transported away by truck; (6) separators and their connecting lines were removed; (7) all trash from a trash pit was removed and hauled away; and (8) all pipes were removed from the ground, including the pipe that Dr. Fenner had uncovered while digging his own trenches. Blezinger explained that a bulldozer was used to push gravel into two piles because Dr. Fenner wanted the gravel saved for future use. Blezinger also testified that, after Dr. Fenner had dug his trenches, Blezinger noticed that the gravel had been placed on roads through the Fenners' pastures and to their house.
The testimony of the parties' experts also provided evidence that the Lessees "generally restored the surface of the land" in that no one testified that the upper boundary or top of the ground or soil on the plant site required remediation. William Van Thompson, one of the Fenners' environmental experts, testified that he did not believe that the top five feet of soil was contaminated in most places and that, therefore, the top five feet of soil required no remediation in most places. Furthermore, Brad Snow, an environmental consultant and one of the Lessees' experts, testified that all the soil samples did not exceed standards established by the TNRCC and that, therefore, no soil remediation was necessary on the plant site. Snow also noted that the concentrations of any contaminants on Fenners' land "are not high enough that it would affect a person coming into direct contact with those soils."
Deuel testified that "29B" is a closure standard for pits used in oil and gas operations in Louisiana.
Thomas Koscelny, who had worked for Samson since 1995 as an environmental supervisor, testified that there were "no indications of sustained soil or stressed vegetation" while he was visiting the site in November 2000 and that the "vegetation quality was very good." He also testified that there "were no visible remnants of the pit during his site visit" and that he did not "believe [that] any remediation is required, other than getting out there and filling in the trenches" that Fenner had dug in his trenching operations.
However, the Fenners assert that "[e]vidence of a failure to comply with the contracts . . . came from [the Lessees] themselves." Specifically, the Fenners argue that the following "admissions" demonstrated a "failure to restore the property as a matter of law": (1) at trial, Rajen Ahuja "agree[d] that [his] company, Magnum Producing, owe[d] Dr. Fenner clean up duty after abandoning the plant site" and testified that, "when we abandoned, yes, we owed [Dr. Fenner] a clean up"; (2) Avinash Ahuja, Magnum's president, in his deposition, agreed that "Magnum is responsible for cleaning up that property in some manner"; and (3) John McCreary, who had worked for ATAPCO, testified that it was his "understanding that [ATAPCO] would return [the property] to the general condition" upon termination, that ATAPCO would "[g]enerally restore the surface of the land," and that ATAPCO was "willing to be bound by the contract." The Fenners also note that Koscelny testified that, while viewing a video tape that had been admitted into evidence, the jury could see the following: (1) "some debris, some trash that was located in Mr. Fenner's barn area that was reported to be collected from old trash pits on the former lease site and there is a, an oil can that, that was in the trash pile"; (2) "some of the other trash that was found in the pit"; (3) "a piece of newspaper that [he] recovered" dated October 1981; (4) "glassware was collected"; (5) "two piles of trash and barrels [were] located in Dr. Fenner's barn," (6) "some old drums that [had] been crushed up and recovered"; and (7) "some lease signs."
The Texas Supreme Court has held that "[a] party's testimonial declarations that are contrary to his position are quasi-admissions." Mendoza v. Fid. Guar. Ins. Underwriters, Inc., 606 S.W.2d 692, 694 (Tex. 1980). A quasi-admission constitutes merely "some evidence," and the weight to be given to such an admission is decided by a trier of fact. Id. A quasi-admission will be treated as a judicial admission if it appears that (1) the declaration relied upon was made during the course of a judicial proceeding; (2) the statement is contrary to the theory of recovery or defense asserted by the person giving the testimony; (3) the statement is deliberate, clear, and unequivocal, the hypothesis of mere mistake or slip of the tongue being eliminated; (4) the giving of conclusive effect to the declaration will be consistent with the public policy upon which the rule is based; and (5) the statement is not destructive of the opposing party's theory of recovery. Id. Here, the statements made by Rajen Ahuja, Avinash Ahuja, McCreary, and Koscelny were not contrary to the theory of defense asserted by the Lessees, nor were the statements deliberate, clear, and unequivocal. Rather, the record shows that these witnesses testified only to the fact that they were aware that, as the lessees, pursuant to the contracts, that they had an obligation to restore the surface of the land to its general condition upon termination of the leases and that objects were found at the plant site.
We note that the evidence to which the Fenners cite in their brief and detail in their factual-sufficiency argument below relates only to possible damages that are not at the surface of the land. Rather, the Fenners rely on evidence that shows possible damage five feet or more beneath the surface of the land. Furthermore, the Fenners have not directed us to any evidence in the 28-volume reporter's record that shows that the upper boundary or top of the ground or soil of the Fenners' land was not generally restored by the Lessees or that the Lessees caused compensable damage to the surface of the land.
Viewing the evidence in the light most favorable to the verdict, we hold there is probative evidence sufficient to support the jury's findings that the Lessees did not fail to comply with the Plant Site Lease Agreement or the Oil and Gas Lease. We further hold that the Fenners did not conclusively establish that the Lessees breached the Plant Site Lease Agreement or the Oil and Gas Lease as a matter of law.
We overrule the Fenners' second issue.
Factual Sufficiency Challenge
In their first issue, the Fenners argue that the jury's findings that the Lessees did not fail to comply with the Plant Site Lease Agreement and the Oil and Gas Lease were against the great weight and preponderance of the evidence because the Lessees "ignored their express contractual obligations, instead focusing on irrelevant state regulations and other standards based on evaluating human health and safety risks."
When a party attacks the factual sufficiency of an adverse finding on an issue on which he has the burden of proof, he must demonstrate on appeal that the adverse finding is against the great weight and preponderance of the evidence. Francis, 46 S.W.3d at 242. In reviewing a factual sufficiency point, we consider all the evidence supporting and contradicting the finding. Plas-Tex, Inc. v. U.S. Steel Corp., 772 S.W.2d 442, 445 (Tex. 1989). We set aside the verdict only if the finding is so contrary to the overwhelming weight of the evidence as to be clearly wrong and unjust. Cain v. Bain, 709 S.W.2d 175, 176 (Tex. 1986). We note that the fact finder is the sole judge of the credibility of the witnesses and the weight to be given their testimony. Golden Eagle Archery, Inc. v. Jackson, 116 S.W.3d 757, 761 (Tex. 2003). The fact finder may believe one witness and disbelieve another and resolve inconsistencies in testimony. McGalliard v. Kuhlmann, 722 S.W.2d 694, 697 (Tex. 1986). As an appellate court, we may not substitute our judgment for that of the trier of fact and determine that we would have weighed the evidence differently or reached a different conclusion. Honda of Am. Mfg., Inc. v. Norman, 104 S.W.3d 600, 604 (Tex.App.-Houston [1st Dist.] 2003, pet. denied).
The Fenners assert that the evidence of the Lessees' "failure to restore the property" includes the following: (1) "[t]he Fenners found 51 barrels `with gunk leaking out' buried along the border of the five acre plant site"; (2) "other debris, including breaker boxes, corrugated tin, and general garbage, was found in the burial site"; (3) according to the report of Rex Meyer, who was a soil geologist and an oil and gas consultant and one of the Fenners' expert witnesses, "the soils underlying the former gas plant and associated areas have been contaminated with hydrocarbons" and were contaminated with "arsenic, barium, chromium and lead common [sic] referred to as heavy metals," all of which are associated with oil and gas operations; (4) "the `clean up' work conducted by Magnum in 1997 included a payment to a contractor to `trench and bury contaminated area inside firewall area with track hoe'"; (5) Van Thompson, one of the Fenners' experts, testified that water samples taken from two monitoring wells in 2000 and 2001 showed significantly elevated levels of benzene; (6) Dr. Fenner, who was reading from a prepared report that summarized soil-sample data, testified that "[s]oil samples indicated high levels of benzene at several different sites, together with samples of 1, 2, 4 trimethyl benzene, naphthalene, 2 methyl naphthaline, zylene and ethyl benzene, all of which exceed the standards set by the TNRCC"; and (7) Brad Snow, one the Lessees' expert witnesses, testified that he "expect[ed] that there is still some oil in the soil and in the ground water from the pit."
The Fenners also argue that the "admissions" provided above from Avinash Ahuja's deposition testimony, Rajen Ahuja's trial testimony, McCreary's trial testimony, and Koscelny's testimony, "at the very least . . . constitute a great weight and preponderance of the evidence that should have resulted in a finding of liability for breach." The Fenners assert that the Lessees' "own expert witnesses also confirm[ed] the existence of contamination on the property." Specifically, the Fenners note that, although Brad Snow, one of the Lessees' expert witnesses, "concluded that no soil remediation was required," he also "acknowledged that several of the soil samples, for example, had high concentrations of total petroleum hydrocarbons (TPH) and other hydrocarbons" and that he "agreed that there is still some contamination on the property." The Fenners also note that "Snow's conclusion was admittedly not based on the contracts; instead it was based solely on Railroad Commission rules and the Texas Risk Reduction Program adopted by the TNRCC" and that "there is absolutely nothing in either of the contracts requiring [the Lessees] to remediate the property to these health and human safety standards." The Fenners further note that Lloyd Deuel, the Lessees' second expert and a research soil chemist, "acknowledged that even he recommended some remediation at various locations on the property." The Fenners assert that Deuel "used a standard for testing soils that does not even exist in Texas" and "adopted a standard known as `29B,' which he helped implement for the State of Louisiana."
The Honorable Margaret G. Mirabal, Senior Justice, Court of Appeals, First District of Texas at Houston, sitting by assignment.
Finally, in their reply brief, the Fenners note that "the undisputed testimony at trial indicated that it is customary in the industry for a lessee to restore an area back to the condition it was in before a plant site was there," and that, "[a]s Magnum's representative acknowledged, it is customary that a lessee would be responsible for cleaning up any environmental problem even without a specific contractual agreement." The Fenners assert that Van Thomspon "clearly qualified his answer by stating that the top five feet of the soil is not contaminated `in most areas,' indicating that it is contaminated in others."
Here, there is factually sufficient evidence to support the jury's implied findings that the Lessees "generally restore[d] the surface" of the land, pursuant to the terms of the Plant Site Lease Agreement, and that the Lessees did not, under the terms of the Oil and Gas Lease, compensably damage the surface of the lands. As noted above, Rajen Ahuja testified that Magnum removed and transported away all the production equipment, cut off any object that was protruding above the ground, removed all pipe that was on the surface of the land, and removed all the buried pipe that Dr. Fenner unearthed during his trenching operations. Dr. Fenner testified that the land "looked good" before he commenced his trenching operations and that the barrels, trash, and signs were buried in the ground. Newpark's letter to Dr. Fenner indicated that all equipment, with the exception of a pig launcher, which was later removed, had been removed from the plant site. Blezinger testified that Magnum removed all the production equipment and pipes from the plant site and moved the gravel into two piles for Fenner's use. While Van Thompson testified that "there is contamination in the subsurface," he also testified that the top five feet of soil at the plant site required no remediation. Brad Snow testified that no soil remediation was necessary on the plant site. Koscelny testified that there were no visible remnants of the saltwater pit during his site visit in November 2000.
Again, we note that the fact finder is the sole judge of the credibility of the witnesses and the weight to be given their testimony, may resolve inconsistencies in the testimony of a witness, and may accept lay testimony over that of experts. Golden Eagle Archery, 116 S.W.3d at 761; McGalliard, 722 S.W.2d at 697. We may not pass upon a witness's credibility or substitute our judgment for that of the trier of fact, even if the evidence might clearly support a different result. Maritime Overseas Corp. v. Ellis, 971 S.W.2d 402, 407 (Tex. 1998) (citing Pool v. Ford Motor Co., 715 S.W.2d 629, 634 (Tex. 1986)).
Viewing all of the evidence presented in a neutral light, we cannot say that the jury's findings were so contrary to the evidence as to be clearly wrong and unjust. Thus, we hold the evidence was factually sufficient to support the jury's findings that the Lessees did not fail to comply with the Plant Site Lease Agreement or the Oil and Gas Lease.
We overrule the Fenners' first issue.
Conclusion
We affirm the judgment of the trial court.