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Order filed July 12, 2007
In The
Eleventh Court of Appeals
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No. 11-06-00018-CV
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GARY BOLEN, INDIVIDUALLY, AND PHARAOH
OIL & GAS, INC., Appellants
V.
IMPERIAL PETROLEUM, INC., Appellee
On Appeal from the 385th District Court
Midland County, Texas
Trial Court Cause No. CV 45060
O R D E R
Our former opinion and judgment dated April 19, 2007, are withdrawn, and our opinion and judgment dated July 12, 2007, are substituted therefor. The motion for rehearing filed by Gary Bolen, individually, and Pharaoh Oil & Gas, Inc. is overruled.
JIM R. WRIGHT
CHIEF JUSTICE
July 12, 2007
Panel consists of: Wright, C.J.,
McCall, J., and Strange, J.
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Opinion filed July 12, 2007
In The
Eleventh Court of Appeals
____________
No. 11-06-00018-CV
__________
GARY BOLEN, INDIVIDUALLY, AND PHARAOH
OIL & GAS, INC., Appellants
V.
IMPERIAL PETROLEUM, INC., Appellee
On Appeal from the 385th District Court
Midland County, Texas
Trial Court Cause No. CV 45060
M E M O R A N D U M O P I N I O N
Imperial Petroleum, Inc. sued Gary Bolen, individually, and Pharaoh Oil & Gas, Inc. for injunctive relief as well as for damages in connection with alleged interference with saltwater disposal. The trial court granted a temporary injunction. Subsequently, in a bench trial on the merits, the trial court granted permanent injunctive relief in favor of Imperial against Bolen and Pharaoh. The trial court also awarded Imperial actual damages in the amount of $155,878.41, in addition to attorney=s fees of $9,744. We affirm the judgment of the trial court.
In January 2000, Hillside Oil & Gas, LLC, purchased a lease in Pecos County known as the University BX from Geronimo Holding Corporation. Pharaoh also operated an oil and gas unit in the area known as the Taylor-Link Unit. Pharaoh had previously owned the University BX lease. Geronimo purchased the lease from Pharaoh. It appears from the record that, when Geronimo sold the lease to Hillside, Hillside borrowed $300,000 and that that money was paid to Bolen and Pharaoh. Five days after Hillside bought the University BX, Hillside, Bolen, and Pharaoh entered into a letter agreement by which Hillside was given the right to dispose of saltwater, for free, from the University BX into a saltwater disposal well on the Taylor-Link property. Bolen and Pharaoh also granted Hillside a pipeline right-of-way to accommodate the saltwater disposal system.
In March 2003, Hillside assigned its interest in the University BX to Imperial. Bolen=s daughter owned an eight percent overriding royalty interest in the University BX lease. In the summer and fall of 2004, Bolen began discussions with Imperial regarding buying the University BX. Imperial did not want to sell the lease. Imperial alleges that all went well under the saltwater letter agreement until September or October 2004 when Bolen and Pharaoh interrupted the saltwater disposal process by shutting in the pipeline going to the disposal well.
Imperial sued Bolen and Pharaoh for a temporary injunction, a permanent injunction, and damages accruing during the time that the saltwater disposal system was not operating. Bolen and Pharaoh did not appear for the temporary injunction hearing, and the trial court issued a temporary injunction. Later, the day before a contempt motion was to be heard in relation to the temporary injunction, Bolen and Pharaoh=s lawyer sent a memo to Imperial=s lawyer stating that the disposal system was immediately restored to its prior working condition when appellants were served with the temporary injunction.
There are no challenges to the findings of the trial court that Bolen and Pharaoh halted the flow of saltwater from the University BX to the Taylor-Link.
In their first two points of error, Bolen and Pharaoh complain that the permanent injunctive relief is not in accordance with the terms of Tex. R. Civ. P. 683 and that the evidence is not sufficient to reasonably specify and describe the act sought to be restrained. Specifically, they argue that the injunction makes reference to another document B the letter agreement B and therefore violates Rule 683.
In its judgment, the trial court granted a permanent injunction against Bolen and Pharaoh. Subsequently, in response to allegations contained in a motion for new trial filed by Bolen and Pharaoh, the trial court amended its permanent injunction. In its final form, the injunction is as follows:
IT IS FURTHER ORDERED that a permanent injunction issue and the Clerk of this Court is ordered to issue a permanent injunction to Gary Bolen and Pharaoh Oil & Gas, Inc. permanently enjoining the Defendants from interfering with or taking any action to halt or disrupt Imperial Petroleum, Inc.=s right to transport and/or dispose of saltwater from the subject University BX Lease into Pharaoh Oil & Gas, Inc.=s saltwater disposal well on the Taylor-Link lease located in Pecos County, Texas, in accordance with the terms of the parties= original agreement dated January 25, 2000.
Bolen and Pharaoh direct one of their arguments, both in their original brief and in their motion for rehearing, at the reference in the injunction to the parties= agreement and maintain that Rule 683 has been violated. There are three classifications of injunctions: (1) a restraining order that has been defined as an interlocutory order made a part of a motion for a preliminary injunction, by which a party is restrained pending a hearing on the motion for a preliminary injunction; (2) an order that is effective until the final hearing, unless dissolved by an interlocutory order; and (3) a perpetual injunction that can be dissolved only in a final decree or judgment. Rule 683 applies to the first two classifications, but it does not apply to the latter one. Appellant=s claims that the permanent injunction does not comply with Rule 683 are without merit. Rule 683 does not apply to permanent injunctions. Qaddura v. Indo-European Foods, Inc., 141 S.W.3d 882, 892 (Tex. App.CDallas 2004, pet. denied); Shields v. State, 27 S.W.3d 267, 274 (Tex. App.CAustin 2000, no pet.); Carrell v. Richie, 697 S.W.2d 43, 46 (Tex. App.CAustin 1985, writ ref=d n.r.e.); Spinuzzi v. Town of Corinth, 665 S.W.2d 530, 534 (Tex. App.CFort Worth 1983, no writ); Tex. Liquor Control Bd. v. Bacon, 443 S.W.2d 312, 317 (Tex. Civ. App.CAustin 1969), rev=d on other grounds, 456 S.W.2d 891 (Tex. 1970); Alexander Schroeder Lumber Co. v. Corona, 288 S.W.2d 829 (Tex. Civ. App.CGalveston 1956, writ ref=d n.r.e.).[1]
Even though Rule 683 does not apply to the permanent injunction in this case, Tex. R. Civ. P. 301 requires that a final judgment be definite, clear, and precise. We believe that case law continues to be as the Texas Supreme Court declared in San Antonio Bar Ass=n v. Guardian Abstract & Title Co., 291 S.W.2d 697, 702 (Tex. 1956):
[A]n injunction decree must be as definite, clear and precise as possible and when practicable it should inform the defendant of the acts he is restrained from doing, without calling on him for inferences or conclusions about which persons might well differ and without leaving anything for further hearing. . . .But obviously the injunction must be in broad enough terms to prevent repetition of the evil sought to be stopped, whether the repetition be in form identical to that employed prior to the injunction or (what is far more likely) in somewhat different form calculated to circumvent the injunction as written. And obviously, too, the decree cannot prejudge new situations, which were not before the court in the first instance, whether prejudging them as nonviolations or violations of its general terms. Nor should it be greatly concerned with rights of the defendants that are asserted largely in the abstract. Otherwise it would probably take longer to write the decree than it would to try the case, and the injunction might well become unintelligible and self‑destructive.
Bolen and Pharaoh argue that the injunction calls upon them to draw their Aown inferences and conclusions as to the precise nature of the activity enjoined.@ They also challenge Athe sufficiency of evidence submitted at trial to identify with reasonable certainty the property subject to the injunction.@ The judgment granting the permanent injunction in this case tells Bolen and Pharaoh not to interfere with transportation and disposition of saltwater from the University BX to the Asaltwater disposal well@ on the Taylor-Link lease.
Bolen and Pharaoh maintain on appeal that there are some 20 disposal wells on the Taylor-Link lease and that they are left to determine to which well the trial court is referring. Raymond Zamora Jr. worked for appellants supervising pumpers. He testified that he knew which well was used for the disposal of saltwater from the University BX. More importantly, here follow excerpts from Bolen=s trial testimony:
[PLAINTIFF=S COUNSEL] Q: You=ve got a file in your office that has utility bills in it, right?
A: But we have the University BX hooked up to one injection well, and the only utility bill that it has to dispose of that water is their utility bill, not my utility bill.
. . . .
[DEFENSE COUNSEL] Q: [F]irst of all, do you know what well the saltwater disposal well is?
A: Yes, I do.
The evidence, including Bolen=s own testimony, shows that appellants knew to which well the court referred. In their original motion for new trial, appellants had complained that the injunction entered by the trial court covered Aone or more wells.@ In response to appellants= complaint, the trial court amended the permanent injunction to provide for a single well rather than multiple wells, a well that was known to appellants to be the well into which appellee was disposing saltwater. All parties to this suit know exactly which well is involved. This injunction is definite, clear, and precise and informs appellants what they are enjoined from doing. They are not called upon to make inferences or conclusions about which persons might differ; there is nothing left for further hearing. The injunction specifically enjoins appellants from stopping the flow of saltwater from the University BX to the disposal well identified specifically by Bolen.
The result is not affected by the trial court=s referral to Athe parties= original agreement dated January 25, 2000.@ See, e.g., Rugen v. Interactive Bus. Sys., Inc., 864 S.W.2d 548 (Tex. App.C Dallas 1993, no writ). Rugen involved a suit for a temporary injunction. Rule 683 did apply in that suit. Nevertheless, we find the case instructive on the issue of reference to other documents. The court had temporarily enjoined Rugen from contacting Interactive=s customers as shown on two trial exhibits. On appeal, the court noted that Rugen had seen the exhibits and had personal knowledge of their contents. The court said, AAn injunction referring to sealed exhibits is in compliance with Rule 683 provided the activity sought to be enjoined is described in reasonable detail.@ Rugen, 864 S.W.2d at 553.
Even though the strict requirements of Rule 683 applied in Rugen, unlike the case before us, the court noted that the purpose of the rule was to require that those against whom injunctions were issued were informed of the acts from which they were enjoined. Id. at 552; see also Maloy v. City of Lewisville, 848 S.W.2d 380, 385 (Tex. App.CFort Worth 1993, no writ) (In a case involving a temporary injunction, reference was made presumably to a city ordinance. The court held that any reference to the city ordinance merely gave further notice as to the conduct that the trial court had enjoined. The reference was not necessary to give the parties notice of the prohibited conduct.).
Even if Rule 683 did apply in this case, the injunction advises appellants of the prohibited acts. The judgment granting the permanent injunction in this case tells Bolen and Pharaoh not to interfere with transportation and disposition of saltwater from the University BX to the Asaltwater disposal well@ on the Taylor-Link lease. We hold that the judgment is definite, clear, and precise and informs appellants of the acts enjoined, without calling on them for inferences or conclusions about which persons might well differ and without leaving anything for further hearing. Points one and two are overruled.
In their third point, appellants claim that the Atrial court erred in awarding damages to [a]ppellee based upon lost profits because insufficient evidence was submitted at trial to calculate the amount of all inherent costs associated with the generation of profits.@ In their fourth point of error, appellants maintain that the trial court erred in its damage award because Ainsufficient evidence was submitted at trial to support a finding of [a]ppellee=s capability to produce and sell oil and gas at a profit.@ Appellee claims that appellants have waived these issues on appeal because they either did not object at the trial court level or they offered different objections to the trial court than are being offered on appeal.
On appeal, appellants style points of error three and four as sufficiency of the evidence points. However, their argument actually goes to the methodology used. The record is replete with testimony upon which the trial court could have based its judgment upon the methodology actually presented by appellee. Appellants= complaint is that there is no evidence to support issues that were not presented to the trial court. There was no objection before trial or at the time that the evidence was offered to appellee=s failure to include those issues in the damage construct. We agree with appellants that they may object to no-evidence points for the first time on appeal in a bench trial. Coastal Transp. Co. v. Crown Cent. Petroleum Corp., 136 S.W.3d 227, 233 (Tex. 2004).
Appellants= arguments in this appeal, however, regardless of what they might be called, are directed at the methodology used for the damage model presented, without objection, to the trial court. We are not holding that the damage model presented was correct. However, that was the model presented, and there was no objection to it before trial or at the time that it was presented. This is not a case where arguments are being made that testimony regarding damages was conclusory or speculative. Those objections can be made as sufficiency points for the first time on appeal because such evidence is in effect no evidence. Id. at 232. The complaints here amount to a challenge to the underlying methodology (the failure of the damage model to include certain elements). That is a determination to be made first by the trial court Aand [is] not an analysis that should be undertaken for the first time on appeal.@ Id. at 233; see also Maritime Overseas Corp. v. Ellis, 971 S.W.2d 402 (Tex. 1998). Points three and four are overruled.
In their ASummary of the Argument,@ appellants state that their sixth argument is based upon the statute of frauds. We have been unable to find a sixth point of error in appellants= brief. In any event, the statute of frauds is an affirmative defense and was not pleaded. Under Tex. R. Civ. P. 94, if not specifically pleaded, the statute of frauds is waived. Bracton Corp. v. Evans Constr. Co., 784 S.W.2d 708, 710 (Tex. App.CHouston [14th Dist.] 1990, no writ). Affirmative defenses are waived if the defendant files only a general denial, and unless tried by consent, the failure to plead a matter of affirmative defense will preclude a defendant from asserting it. Id. Here, appellants filed only a general denial. The rule of trial by consent is limited to those instances where the parties clearly tried an unpleaded issue by consent. White v. Sullins, 917 S.W.2d 158, 160 (Tex. App.CBeaumont 1996, writ denied); see Tex. R. Civ. P. 67. As the trial court in this case correctly noted, appellee objected each time that the unpleaded affirmative defenses were raised. These issues were not tried by consent. To raise these matters for the first time on appeal is to raise them too late. We hold that the same principles apply to appellants= claim in their fifth point of error regarding mitigation of damages. That affirmative defense was not pleaded, and it was not an issue that was tried by consent as is apparent from appellee=s objections and the trial court=s ruling upon those objections. Any claim of error regarding the statute of frauds is overruled. The fifth point of error is also overruled.
The judgment of the trial court is affirmed.
JIM R. WRIGHT
CHIEF JUSTICE
July 12, 2007
Panel consists of: Wright, C.J.,
McCall, J., and Strange, J.
[1]Appellants cite us to Computek Computer & Office Supplies, Inc. v. Walton, 156 S.W.3d 217, 220 (Tex. App.CDallas 2005, no pet.). We decline to follow Computek and, instead, follow the decision and reasoning in Qaddura v. Indo-European Foods, Inc., 141 S.W.2d 882 (Tex. App.CDallas 2004, pet. denied). Appellants acknowledge that the case law cited by this court in our original opinion holds that the portion of Rule 683 that requires that the trial court set forth in the order the reasons for its issuance does not apply to permanent injunctions. Appellants, however, cite us to Vaughn v. Drennon, 202 S.W.3d 308 (Tex. App.CTyler 2006, no pet.), for the proposition that the portion of Rule 683 that provides for specificity of the order granting an injunction does apply to permanent injunctions. Vaughn is distinguishable in that, there, the order in question was a temporary injunctionBan injunction to which Rule 683 clearly applies.