NO. 07-11-0418-CV
IN THE COURT OF APPEALS
FOR THE SEVENTH DISTRICT OF TEXAS
AT AMARILLO
PANEL E
JULY 31, 2012
_____________________________
BOMAR OIL AND GAS, INC.,
Appellant
v.
D. MARK LOYD,
Appellee
_____________________________
FROM THE 87TH DISTRICT COURT OF FREESTONE COUNTY;
NO. 10-212B; HONORABLE DEBORAH OAKES EVANS, PRESIDING
_____________________________
Opinion
_____________________________
Before QUINN, C.J., PIRTLE, J., and BOYD, S.J.1
Though left to wonder why Bomar Oil and Gas, Inc. did not wait to execute
division orders until it received the title opinion it allegedly commissioned, we affirm.
Background
Before us, we have the next chapter in the continuing saga between Bomar Oil
and Gas, Inc. and D. Mark Loyd. Originally, Loyd sued Bomar to recover monies
related to the production of oil and gas on realty in which he owned an interest as a co-
1
John T. Boyd, Senior Justice, sitting by assignment.
tenant. While the interests of other co-tenants apparently were encompassed by a
mineral lease Bomar acquired, his was not. Furthermore, that lease pertained to the
Marie Dodge Well #1.
Upon re-developing the Marie Dodge, Bomar circulated a division order
specifying the purported ownership interests in the well’s production of the co-tenants
including Loyd and Bomar. The “After Payout Revenue Interest” recorded on the
document by Bomar and attributable to Loyd was .3055556. Loyd initially disputed that
percentage, believing he owned about a .40 interest. A lawsuit followed wherein Loyd
sought, among other things, an accounting for the mineral production from the well and
expenses related thereto. He also averred that some of the expenses assessed by
Bomar were unreasonable or excessive. Though L.B. Preston, Bomar’s designated
representative and owner, testified to hiring someone to render a title opinion and that
opinion had yet to be rendered at the time of trial, Loyd and Bomar agreed as to the
accuracy of the latter’s estimations. That is, the parties agreed before trial that the “title
dispute” (as referred to by the parties at trial) would be resolved by Loyd accepting that
he owned a .305555 interest in the land. Furthermore, that percentage was used by the
jury to calculate the damages it eventually awarded Loyd against Bomar. Thereafter,
the trial court entered judgment upon the jury’s verdict.
Bomar appealed. That resulted in the modification of the judgment, being a slight
reduction of the damages awarded, and an affirmance of the judgment as modified.
And, in so rendering its judgment, the majority opinion noted that “Loyd possesses a
.3055555 interest” in the land. Bomar Oil & Gas, Inc. v. Loyd, 10-08-00016-CV, 2009
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Tex. App. LEXIS 5505, at *32 (Tex. App.–Waco July 15, 2009, pet. denied).2 At that
point, a reasonable person could well have thought that the litigation was over. It was
not.
Several years later, Loyd executed a separate division order tendered by a
different operator (i.e., Goldston Corporation) covering the development of minerals in a
different horizon of the same realty. Furthermore, his interest in that document was
noted as approximately .20. Bomar learned of this, proclaimed that Loyd’s interest in
the Marie Dodge Well should be no more than .20, revoked its division order with him,
tendered him a new one reflecting the smaller interest, began withholding payment of
proceeds equal to the difference between the 20 and 30 percent, and demanded
repayment of the supposedly excessive monies paid him under the revoked division
order. This resulted in Loyd again suing Bomar to collect the withheld monies and to
obtain a declaration of his percentage interest in the land. The trial court granted his
motion for summary judgment, denied that of Bomar, and awarded Loyd damages. It
also found his ownership interest to be .305555. Bomar appealed, contending that the
trial court erred in granting Loyd’s summary judgment and denying its own.
Discussion
Of the several grounds for summary judgment proffered by Loyd, one
encompassed the theory of collateral estoppel. The latter prevents parties from
relitigating ultimate issues of fact previously litigated. It applies when the issue was fully
and fairly litigated, essential to the prior judgment, and identical to the issue in the
2
In explaining why it believed Loyd was entitled to prejudgment interest, the dissent
acknowledged that the issue of title was removed from the case “by Loyd's stipulation” to owning a
.3055555 percent interest. Bomar Oil & Gas, Inc. v. Loyd, 10-08-00016-CV, 2009 Tex. App. LEXIS 5505,
at *38-39 (Tex. App.–Waco July 15, 2009, pet. denied) (dissenting opinion).
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pending action. State Dep’t of Pub. Safety v. Petta, 44 S.W.3d 575, 579 (Tex. 2001).
Whether an issue has been so litigated requires consideration of whether the parties
were fully heard, whether the court supported its decision with a reasoned opinion, and
whether the decision was subject to appeal or was reviewed on appeal. Mower v.
Boyer, 811 S.W.2d 560, 562 (Tex. 1991). And, while the concept of an issue being
actually litigated denotes resolution by some factfinder, be it a judge or jury, that is not
always the case. For instance, guilty pleas dispensing with the need for an actual
criminal trial have been held to collaterally estop the individual from contesting in a later
civil suit ultimate facts encompassed within the plea. See DeLese v. Albertson’s, Inc.,
83 S.W.3d 827, 831 (Tex. App.–Texarkana 2002, no pet.) (stating that a “guilty plea, as
opposed to a conviction after trial, also collaterally estops a plaintiff from relitigating his
or her guilt because ‘a valid guilty plea serves as a full and fair litigation of the facts
necessary to establish the elements of the crime’”); Johnston v. American Med. Int’l, 36
S.W.3d 572, 576 (Tex. App.–Tyler 2000, pet. denied) (stating that a “plea of guilty, as
opposed to a conviction after trial, also collaterally estops a plaintiff from relitigating his
guilt, since ‘a valid guilty plea serves as a full and fair litigation of the facts necessary to
establish the elements of the crime’”); accord In re Briggs, 350 S.W.3d 362, 369 (Tex.
App.--Beaumont 2011, pet. denied) (holding that the trial court did not err in excluding
testimony by Briggs concerning the reasons why he plead guilty to the sexual offenses
for which he was convicted because “. . . Briggs's guilt had already been determined in
the prior criminal proceedings and could not be relitigated”). According to the panel in
Delese, collateral estoppel applied since Delese not only stipulated to the pertinent facts
during his criminal proceedings but also “. . . had an opportunity to plead not guilty, to
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call witnesses, to cross-examine witnesses, and have all of the protections afforded a
defendant in a criminal trial, including the requirement of evidence to prove his guilt
beyond a reasonable doubt [and] . . . could have fully placed the burden on the State
so the testimony against him could have been fully developed.” Delese v. Albertson’s,
Inc., 83 S.W.3d at 832. These circumstances provided him “. . . the opportunity to fully
and fairly litigate the facts in the [criminal] case,” according to the court, id., so he could
not dispute in a subsequent civil case that which he stipulated in the criminal matter.
Deeming a stipulation executed in a prior suit sufficient to give rise to collateral
estoppel seems rather logical. It constitutes not only an agreement or concession made
in a judicial proceeding by parties, but also a judicial admission. Shepherd v. Ledford,
962 S.W.2d 28, 33 (Tex. 1998) (stating that by stipulating to the existence of a common
law marriage, the parties judicially admitted that the couple were common law spouses).
When accepted by the court, the stipulation becomes conclusive as to the fact
conceded, id.; Houston Lighting & Power Co. v. City of Wharton, 101 S.W.3d 633, 641
(Tex. App.–Houston [1st Dist.] 2003, pet. denied), and serves as proof on an issue that
otherwise would be tried. Houston Lighting & Power Co. v. City of Wharton, 101
S.W.3d at 641. Consequently, “the parties are estopped from claiming to the contrary”
in a subsequent proceeding. Id.; accord Mid-Continent Group v. Goode, No. 07-09-
0181-CV, 2011 Tex. App. LEXIS 6695, at *30 (Tex. App.–Amarillo 2011, no pet.) (so
holding and citing Houston Lighting & Power Co.). Simply put, we see little reason why
litigants who agree to a fact pattern in one case and induce the factfinder to adopt that
fact pattern to resolve that case should not be estopped from questioning the very same
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facts in a later suit. Nor do we doubt that the foregoing principles should be utilized at
bar.
Bomar represented to Loyd prior to and during the 2004 litigation that he owned
a .305555 interest in the realty at issue. While Loyd thought he owned a larger
percentage, he eventually accepted Bomar’s factual representation. Indeed, Bomar’s
president described the situation at trial like this: 1) a title company had been contacted
to provide the information Bomar “would have required” to “resolve the title dispute,” 2)
from our “direct information” “we had his [Loyd’s] interest at 30.55 percent,” 3) the
information from the title company had yet to be received when Loyd sued, 4) the “title
dispute” was “resolved,” by Loyd “. . . agree[ing] to our interest because he found out
the material he needed to have,” and 5) Loyd was entitled to that percentage since that
was what Bomar stated his percentage was via prior correspondence. This exchange,
at the very least, illustrates that Bomar had the opportunity to litigate the “title dispute”
involving Loyd’s ownership interest in the property and present both witnesses and
evidence on the matter had it so wanted. Rather than that happening, the litigants
eventually decided to resolve the “title dispute” by stipulating (that is, agreeing or
conceding) to Bomar’s representation that Loyd owned a .305555 interest in the
property, manifesting that agreement by executing a division order disclosing Loyd’s
interest to be that percentage, and filing the document “with the papers as part of the
[court] record.”
That the trial court accepted the stipulation and that it was incremental to the
disposition of the 2004 litigation also is clear. The jury charge proves as much. Of the
several issues to be addressed by the jury one involved the determination of damages
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“for amounts charged against [Loyd’s] proportionate share of production which were not
necessary and reasonable costs of drilling/recompletion, producing, and marketing.” In
making the determination, the jury was instructed by the trial court that “Loyd’s pro-rata
share [was] .305555.” Logic compels us to reasonably infer that had the trial court not
accepted the concession or stipulation, it would not have instructed the jury as it did.
Furthermore, in deciding what damages to award Loyd, the jury had to know his
ownership interest in the land and use it in its calculations.3
That the appellate court acknowledged, in the majority opinion, Loyd’s interest to
be .305555 is also telling. If anything, it reveals that the revewing court, like Bomar,
Loyd, the trial court, and the jury, similarly accepted the stipulation.
Nor can anyone reasonably deny that in revoking the division order, Bomar
rejected that to which it previously stipulated. It no longer wanted to pay Loyd a share
of production equal to his .305555 ownership interest, less proportionate expenses.
And, given its own pleadings in this case, (e.g., suing to recover for unjust enrichment
and fraud due to the purported error in calculating that interest per the stipulation), it
attempted to relitigate that very same topic.
In sum, there exists no material issue of fact regarding the application of
collateral estoppel. The parties to the 2004 judgment and suit giving rise to this appeal
are the same. Furthermore, Loyd’s ownership interest in the same property served as
an ultimate fact in both proceedings. That the topic was fully and fairly litigated by
Bomar via stipulation and testimony is unquestionable, as is Bomar’s current attempt to
3
According to our Supreme Court, “unleased cotenants are generally entitled to ‘the value of the
minerals taken less the necessary and reasonable cost of producing and marketing the same’ as
opposed to a fractional royalty from production paid to the lessor.” BP America Prod. Co. v. Marshall, 342
S.W.3d 59, 71-72 (Tex. 2011). So, it would be necessary for a factfinder to know what percentage of the
land Loyd owned to determine what Bomar owed him for producing minerals from it.
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collaterally attack that determination. More importantly, Bomar, Loyd, the trial court, the
jury, and the reviewing court accepted the stipulation regarding Loyd’s ownership
interest in the property to adjudicate the 2004 litigation. So, Bomar was and is estopped
from relitigating the matter, and the trial court did not err in so concluding as a matter of
law.4
Having ruled as we do, it is unnecessary to consider whether any other ground
alleged in Loyd’s motion for summary judgment supported entry of the decree. It is
enough that the decree was warranted under at least one theory. FM Prop. Operating
Co. v. City of Austin, 22 S.W.3d 868, 872 (Tex. 2000) (holding that a summary judgment
can be affirmed on any one ground alleged in the motion). That said, we now turn to
Bomar’s other contentions on appeal.
Revocation of the Division Order
According to Bomar, it was entitled to revoke the division order pertaining to
production from the Marie Dodge Well. Whether it did or not is irrelevant to the
outcome. This is so because the factual issue of ownership previously had been
litigated, and Bomar is collaterally estopped from attacking it. More importantly, division
orders do not supplant leases or deeds. Gravenda v. Strata Energy, Inc., 705 S.W.2d
690, 691 (Tex. 1986). Given this, their existence or non-existence does not alter
whatever property or royalty interest someone may own. The document simply
provides a way for distributing proceeds from the sale of minerals. Id. So, even if the
order could have been revoked, that would not vitiate the prior stipulation that was
4
We caution against reading this opinion as purporting to dictate the ownership interests in the
property between Loyd and any strangers to this litigation. The opinion’s ramifications are restricted to
disputes between Loyd and Bomar, and the latter’s successors-in-interest, if any. Furthermore, nothing of
record suggests that anyone other than Bomar questions the extent of Loyd’s ownership interest in the
particular well operated by Bomar.
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previously relied upon by all involved and that designated Loyd’s unleased ownership
interest in the land and minerals thereunder to be .305555. The contention is overruled.
Loyd’s Purported .20488104 Interest
Bomar next argues that it “conclusively established” Loyd’s mineral interest to be
a .20488104 interest. Again, our ruling viz collateral estoppel obligates us to overrule
this issue as well. It also precluded Bomar from recovering damages from Loyd
representing the difference between the .20 interest and the .305555 interest to which it
previously stipulated.
Counterclaims
Next, Bomar argues that the trial court erred in granting summary judgment that
barred its counterclaims. This contention too is founded upon the proposition that the
2004 litigation did not resolve the issue about Loyd’s interest in the property. Because
we concluded that it did, we overrule the matter.
Interest and Attorney’s Fees
Next, Bomar contends that the trial court erred in awarding Loyd prejudgment
interest and attorney’s fees. We overrule the issues for several reasons.
First, both are founded upon the notion that there arose a “title dispute” between
the two parties when Loyd executed a division order illustrating a lesser ownership
interest in a well operated by a different operator in a different horizon. So long as that
“title dispute” existed (i.e., whether Loyd’s ownership interest in the minerals being taken
through the Marie Dodge Well #1 was .305555), neither interest nor attorney’s fees
could accrue, according to Bomar. Statute does provide that royalty payments may be
withheld without prejudment interest accruing when there exists a dispute concerning
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title that would affect the distribution of payments. TEX. NAT. RES. CODE ANN. §
91.402(b)(1) (West 2011). However, the title dispute must be “legitimate.” Headington
Oil Co., L.P. v. White, 287 S.W.3d 204, 210 (Tex. App.–Houston [14th Dist.] 2009, no
pet.). Here, the purported “title dispute” concerned Loyd’s ownership interest in the
property. It was that same “title dispute” that Bomar’s president discussed during the
2004 trial. It was that same dispute that the parties to the 2004 litigation agreed to
resolve by stipulating to Loyd having a .305555 interest. And, it was that interest used
in calculating the damages awarded and in supposedly ending the 2004 litigation.
Because Bomar was and is collaterally estopped from re-adjudicating the previously
settled “title dispute,” we reject the premise that a legitimate “title dispute” existed
between Loyd and Bomar. So the foundation underlying Bomar’s argument is defective.
Next, Bomar argues that a portion of the attorney’s fees awarded Loyd were not
reasonable and necessary. Why they were not goes unexplained. Nor did it cite
authority supporting its contention. Consequently, the matter was inadequately briefed
and, thus, waived. In re L.M.M., 247 S.W.3d 809, 812 (Tex. App.–Dallas 2008, pet.
denied) (stating that the failure to cite authority or develop an argument results in the
waiver of the issue).
Next, Bomar argues that the trial court erred in granting summary judgment
against both its unjust enrichment and fraud claims. Through the former, Bomar sought
to recover the monies paid representing the difference between the .305555 interest in
the property and supposed .20 interest. Having determined that it is estopped from
contesting Loyd’s .305555 interest, its claim of unjust enrichment is baseless, as a
matter of law.
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As for the matter of fraud, Bomar asserts that it relied upon Loyd’s representation
that he owned a .305555 interest in the land when he actually owned less. Yet, no one
disputes that Loyd originally suggested he owned more than .305555 and that Bomar
disagreed and told him he only owned .305555. And, though Bomar proffered evidence
about engaging a title company to determine who owned what interests, it did not wait
until that opinion was obtained before representing Loyd’s interest to be .305555 and so
stipulating. That there was a dispute regarding the interest in 2004, that Bomar
accused Loyd of misrepresenting his interest via pleadings filed in the 2004 litigation,
and that Bomar testified to obtaining a title company to determine everyone’s interest is
undisputed. Furthermore, it is the same purported misrepresentation regarding Loyd’s
interest that underlies the fraud allegation urged below. Given that more than four years
lapsed since the time Bomar either knew of or could have reasonably discovered the
supposed misrepresentation, the trial court did not err in concluding that the claim was
barred by limitations. See TEX. CIV. PRAC. & REM. CODE ANN. § 16.004(a)(4) (West
2002) (stating that a person must bring an action for fraud within four years of its
accrual).
In sum, all issues are overruled, and the trial court’s summary judgment favoring
Loyd is affirmed.
Brian Quinn
Chief Justice
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