Concise Oil & Gas Partnership v. Louisiana Intrastate Gas Corp.

UNITED STATES COURT OF APPEALS
FOR THE FIFTH CIRCUIT

_____________________

No. 91-3612
_____________________

CONCISE OIL & GAS PARTNERSHIP,
AUSTRAL OIL COMPANY, INC. and
ENERGY CONSULTANTS, INC.,

Plaintiffs-Appellants,
Cross-Appellees,

versus

LOUISIANA INTRASTATE GAS
CORPORATION,

Defendant-Appellee,
Cross-Appellant.

_________________________________________________________________

Appeals from the United States District Court for the
Eastern District of Louisiana
_________________________________________________________________
(March 18, 1993)

Before POLITZ, Chief Judge, and SMITH and BARKSDALE, Circuit
Judges.

BARKSDALE, Circuit Judge:

This appeal turns on sufficiency of the evidence challenges to

a $50-million jury verdict, concerning a long-term contract to

purchase natural gas. The verdict for the plaintiff-sellers was

based on fraud during one period of the contract and breach of

contract during another; but the district court set aside the fraud

portion. Both sides appeal, raising almost countless issues. We

AFFIRM, except with respect to the prejudgment interest

calculation, and REMAND for that limited purpose.
 I. FACTS AND PROCEDURAL HISTORY

Concise Oil & Gas Partnership, Austral Oil Company,

Incorporated, and Energy Consultants, Inc. (EnCon; all three

collectively referred to as Sellers) are producers of natural gas

from the Montegut Field (the Field) in Terrebonne Parish,

Louisiana. They own 62 1/2% of the gas produced from that field;

the remainder is owned by Goldking Production Company (now DeNovo

Oil & Gas, Inc.; hereinafter Goldking). In November 1977,

Louisiana Intrastate Gas Corporation (LIG) contracted for a 20-year

term to purchase the Sellers' share of the gas produced in the

Field (Contract 495).1 Goldking was designated the Sellers'

Representative "for all purposes" under the contract. And,

Goldking had its own contract to sell its gas from several fields,

including from the Field, to LIG (Contract 493), which contained

provisions similar to those in Contract 495.

Item 3 of the contract governs price.2 Item 3(a) establishes

a base price, and provides for annual increases, if the price is

not otherwise redetermined. Item 3(b) gives the Sellers the right

to have the price redetermined under certain conditions, while 3(c)

states the method. Item 3(d) gives LIG the right to have the price

redetermined if economic conditions indicate a significant downward

change in the value of gas to LIG, but provides that the

redetermined price "shall not be less than such prices then being

1
The original Contract 495 sellers were EnCon, GS Oil & Gas
Co., and Cenard Oil & Gas Co. Concise acquired Cenard's interest
in 1988; Austral, GS's in 1985.
2
Item 3 is reproduced in the Appendix.

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paid by [LIG] to ... producers [in Terrebonne and contiguous

parishes -- St. Mary, LaFourche, and Assumption] for similar gas

...." Item 3(e) states that if any state or federal law makes "all

or any portion of Item 3(c)" illegal or inoperative, the parties

will meet and mutually determine a price for each anniversary date,

and provides for termination by either party if they are unable to

agree. And, Item 3(f) provides that if "any state or federal law,

rule or regulation establish[es] a ceiling price for the gas sold

under this Contract, then in such event, Seller shall receive the

maximum price allowed by such law, rule or regulation".

The contract contains a "take-or-pay" provision: LIG must

either purchase 80% of the gas produced in the Field each day, or

pay for any deficiency. And, LIG must take not less than 60% of

that 80% each month.

Production began in May 1978; that November, the Natural Gas

Policy Act of 1978 was enacted.3 Accordingly, that December,

Goldking (the Sellers' representative) informed LIG that it

interpreted Item 3(f) to require a price increase. After

evaluating the request, LIG agreed in August 1979 that the Sellers

were entitled to receive the price established under § 102 of the

NGPA. But, LIG pointed out that the NGPA imposes an obligation to

refund if it is later determined that the price paid exceeds the

"maximum lawful ceiling price". LIG paid the § 102 price from

January 1979 until March 1983.

3
See Pennzoil Co. v. Federal Energy Regulatory Comm'n, 645 F.2d
360, 367 (5th Cir. 1981), cert. denied, 454 U.S. 1142 (1982).

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 Effective March 1983, LIG sought a price reduction, based on

the "substantial reduction in market demand due to a downturn in

the United States economy"; and the Sellers agreed. Accordingly,

from March 1983 through November 1987, the prices were governed by

letter agreements.

In December 1987, the Sellers discovered that LIG was paying

higher prices to other producers in Terrebonne and contiguous

parishes than it was paying them. Therefore, they requested a

price redetermination pursuant to Items 3(b) and (c); but LIG

refused to furnish information regarding the prices it was paying

those other producers. After 1987, and throughout this litigation,

LIG continued to purchase the Sellers' gas, remitting payment

through Goldking.

Austral, one of the Sellers, filed suit against LIG in Texas

state court in December 1988; and Concise, another of the Sellers,

filed this action in federal court in Louisiana in January 1990.

Shortly after EnCon, the remaining Seller, intervened in 1990 in

the Texas proceeding, the federal court compelled the joinder of

Austral and EnCon in this action.

The Sellers claimed, inter alia, that LIG breached the

contract by failing to pay the contract price after March 1983; and

that, in addition, LIG fraudulently obtained the consent of the

Sellers and their representative, Goldking, to reduced prices from

March 1983 through November 1987. They sought the difference

between the price paid and the contract price, with interest; a

declaratory judgment as to the validity of the contract; and

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specific performance. LIG counterclaimed for overpayment from 1979

through 1984.

At the trial in early 1991 (evidence presented in six days),

the jury, through interrogatories, found against LIG on its

counterclaim; and found that it both defrauded the Sellers from

late March 1983 through November 1987 (approximately $26 million)4,

and breached the contract from December 1987 through trial

(approximately $23 million). The district judge expressed concern

about the verdict when it was returned.

On post-trial motions, the district court denied the Sellers'

requests for declaratory judgment and specific performance, and

granted only part of the requested prejudgment interest. LIG moved

for judgment notwithstanding the verdict, a new trial, or a

remittitur. For the fraud award (March 1983 - November 1987), the

district court granted JNOV, but conditionally granted a new trial.

It denied JNOV for breach of contract (December 1987 - date of

trial).

II. ISSUES

As noted, although many claims, facts, documents, lengthy time

periods, extremely large damage claims, and complex and technical

data, legal terms, and terms of art were in issue, the evidence was

presented in six days, due in large part to the timely and

consistent rulings by the district judge, many sua sponte. Here,

the parties raise almost every issue imaginable, many of which are

4
For this period, as discussed infra in Part II.E.2., the court
did not submit a breach of contract claim.

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without merit and do not require discussion. The significant

issues are addressed below.

As also noted, sufficiency of the evidence challenges are at

the heart of this case. Our JNOV review is governed by the well-

known standard from Boeing Co. v. Shipman, 411 F.2d 365 (5th Cir.

1969) (en banc):

On motions for directed verdict and for
judgment notwithstanding the verdict the Court
should consider all of the evidence -- not just
that evidence which supports the non-mover's case
-- but in the light and with all reasonable
inferences most favorable to the party opposed to
the motion. If the facts and inferences point so
strongly and overwhelmingly in favor of one party
that the Court believes that reasonable men could
not arrive at a contrary verdict, granting of the
motions is proper. On the other hand, if there is
substantial evidence opposed to the motions, that
is, evidence of such quality and weight that
reasonable and fair-minded men in the exercise of
impartial judgment might reach different
conclusions, the motions should be denied, and the
case submitted to the jury.... A mere scintilla of
evidence is insufficient to present a question for
the jury.... However, it is the function of the
jury as the traditional finder of the facts, and
not the Court, to weigh conflicting evidence and
inferences, and determine the credibility of
witnesses.

Id. at 374-75.

A. Fraud

Consistent with the JNOV, our review of the record reveals

only a mere scintilla of evidence of fraud. We need address only

one of the requisite elements for fraud, defined in Louisiana as

... a misrepresentation or a suppression of the
truth made with the intention either to obtain an
unjust advantage for one party or to cause a loss
or inconvenience to the other. Fraud may also
result from silence or inaction.

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La. Civ. Code art. 1953 (West 1987). Accordingly, the jury was

instructed that fraud is the (1) intentional misrepresentation or

suppression of material facts made by one party to another, (2)

with knowledge of their falsity, (3) with the intent to induce the

other party to rely on the misrepresentation and act on it, (4)

reliance on the false information, and (5) injury as a result of

that reliance. The Sellers had the burden of proving each element

by a preponderance of the evidence, La. Civ. Code art. 1957;

insufficient evidence for any element sustains the JNOV.

As stated, an essential element of the fraud claim was proof

that LIG intentionally misrepresented or concealed material facts.

The district court held that such proof was lacking, because the

Sellers were more interested in "takes" than prices. We agree.

The contract required LIG to either take or pay for a certain

amount of the gas produced daily from the Field, and to take part

of that daily requirement on a monthly basis. In the months

leading up to LIG's first request for a price concession in March

1983 -- the start of the period for which fraud is charged -- the

takes had been decreasing. At one point, the Sellers' wells were

shut-in for about 45 days, because LIG told Goldking that it could

not take the gas.

In fact, there was a shortage of takes during 1980-1984, and

considerable evidence that the Sellers were concerned about

maintaining them. Ripple (LIG) testified that LIG had a shortage

of takes for contract years 1980 through 1984, and that increased

takes in later years were intended to make up for prior deficient

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takes. Corcoran (LIG) testified that he told Goldking that, if it

did not accept LIG's price, LIG would reduce takes under the

contract. And, Johnson (LIG) testified that Goldking agreed to

reduce the price in return for increased takes. In a written

summary of a January 1985 meeting with the Sellers, Speyrer

(Goldking) stated that "the consensus was not concerned with price,

however, but with takes". And, he admitted that a higher price

might not be as economically advantageous as having more gas

purchased at a lower price. It was his understanding that, without

some price adjustment, LIG would reduce takes considerably. On the

other hand, however, he testified that LIG offered only one price

-- there was no option to instead have reduced takes at a higher

price. Mealy (Goldking) testified that Goldking did not expect to

be able to move significant volumes of gas if it did not reduce the

price, and that producers had to "take what they could get".

Carter (Goldking) testified that the producers wanted to assure

that takes would be maintained at the level provided for in the

contract, but that LIG was unwilling to bargain on price.

According to Carter, the lowered price was dictated by LIG, and

Johnson (LIG) did not say that contractually-required takes could

be maintained without the demanded price concession. But, Cantrell

(EnCon) testified that the Sellers were interested in both takes

and price, and conceded that they agreed to reduce the price in

order to move the gas.

We are most mindful of a court's properly circumscribed role

in reviewing a jury verdict. This notwithstanding, based upon our

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review of the record, as discussed in part above, the evidence

supports only one conclusion: the Sellers agreed to reduce the

price in order to keep the gas flowing. Therefore, LIG's alleged

misrepresentation that the Sellers were receiving its "best" price,

and its failure to disclose its payment of higher prices to other

producers in the contract area are not material. The Sellers could

have insisted that LIG honor the contractually-required levels of

takes at a higher price but, instead, they preferred to sell more

of their gas at reduced prices. Because reasonable jurors could

not have found that LIG misrepresented or concealed material facts,

we affirm the JNOV for fraud.5

B. Contract

1. Termination

The district court denied JNOV for breach of contract for the

period December 1987 through trial. LIG contends that the breach

claims should not have been submitted to the jury, asserting that

the contract terminated at the end of November 1987, when the

parties failed to mutually agree on a price after expiration of the

last pricing agreement.

LIG maintains that whether an enforceable contract existed is

a question of law; and it is well-settled, of course, that

interpretation of an unambiguous contract is indeed an issue for

the court. E.g., Rutgers, State University v. Martin Woodlands Gas

5
Therefore, it is not necessary to consider the other elements
of fraud; LIG's contentions that rescission was not available, the
fraud claims had prescribed, and Concise lacked standing; or the
conditional grant of a new trial on the fraud claims.

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Co., 974 F.2d 659, 661 (5th Cir. 1992). But, it is equally well-

settled that whether the parties' conduct constitutes a breach

"presents a pure question of fact that the trier of fact alone may

decide". Turrill v. Life Ins. Co. of North America, 753 F.2d 1322,

1326 (5th Cir. 1985). LIG's termination contention is premised on

its claim that a January 31, 1985, letter agreement referring to

Item 3(e) applied to the contract and the subsequent price

redeterminations. The applicability of the letter agreement was a

question of fact properly submitted to the jury.

The Sellers' gas was deregulated effective January 1, 1985,

pursuant to the Natural Gas Policy Act. NGPA § 313(a), 15 U.S.C.

§ 3373(a), provides that "[n]o price paid in any first sale of

high-cost natural gas ... may be taken into account in applying any

indefinite price escalator clause ... with respect to any first

sale of any natural gas other than high-cost natural gas". "High-

cost natural gas" is defined as gas qualifying under NGPA § 107, 15

U.S.C. § 3317.

The parties agree that Item 3(c) is an "indefinite price

escalator clause", as defined in NGPA § 105(b)(3)(B), 15 U.S.C. §

3315(b)(3)(B). That item provides for calculating a new price

basically by "taking the average ... of the three (3) highest

prices per MMBtu for gas" being paid to other producers for similar

gas in the four-parish area. Item 3(e) provides that "[i]f any

state or federal law, rule or regulation makes all or any portion

of Item 3(c) ... illegal or inoperative, then in such event the

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parties shall meet and mutually agree and determine the price for

each respective anniversary date".

By the January 1985 letter (the 1/31/85 letter agreement), LIG

stated to Goldking that NGPA § 313(a) made Item 3(c) inoperative,

because the Item's formula includes the use of NGPA § 107 high-cost

prices. Based on its interpretation of the effect of NGPA §

313(a), LIG proposed that the parties mutually agree to a proposed

price for 1985, and redetermine it by mutual agreement "prior to

the commencement of the next, and each succeeding, contract year".

Within a month, Goldking executed and returned the 1/31/85 letter

agreement. But, although Goldking agreed to accept the price for

the remainder of 1985, it stated that it did "not wish to set a

precedent of agreeing to a price for a full year term", and

preferred "price redeterminations for terms shorter than one year".

According to LIG, the 1/31/85 letter reflects the parties'

agreement that Item 3(e) would apply to post-1984 redeterminations.

LIG maintains that, because the parties failed to mutually agree on

a price after the last redetermination expired in November 1987, as

required by Item 3(e), there was no contract for it to breach.

The Sellers counter that the 1/31/85 letter agreement applies

only to Contract 493 (Goldking's separate contract with LIG), and

not to theirs (Contract 495). In addition, concerning Item 3(e),

they contend that NGPA § 313(a) did not render Item 3(c) illegal or

inoperative, but merely prohibited the use of prices paid by other

producers for high-cost/§ 107 gas in redetermining price. See

Pennzoil, 645 F.2d at 377-78 ("Congress was ... aware of the use of

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... indefinite price escalators in intrastate contracts, [and] it

expressly limited the operation of price escalator clauses in four

instances, thereby allowing escalator clauses to otherwise operate

according to their terms"). Thus, according to the Sellers, they

never agreed to operate under Item 3(e); therefore, the contract

did not expire in late 1987 due to the parties' failure to agree on

a price. (They maintain that, instead, the redeterminations were

pursuant to Item 3(d), as discussed infra in Part II.E.2.)

The 1/31/85 letter agreement refers only to Contract 493,

between LIG and Goldking. It does not reference Contract 495, the

contract in issue. Mealy (Goldking) testified that, for that

reason, the Sellers were not given copies. Likewise, Goldking's

cover letter returning the executed 1/31/85 letter agreement

references only Contract 493.

LIG attempted to prove -- and continues to assert -- that,

despite the 1/31/85 letter referencing only Contract 493, it

nevertheless applied to Contract 495. LIG points out that,

according to Speyrer's (Goldking) testimony, several pricing

agreements which did not expressly reference Contract 495 were

nevertheless intended and understood by the parties to apply to it.

LIG further asserts that the parties' intent to operate under Item

3(e) is evidenced by their 21 price agreements, subsequent to the

1/31/85 letter, each of which established a mutually agreed price

for a specific term, and required further mutual agreement to cover

future periods.

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 The contract states that it "shall be in full force and effect

for a term of twenty (20) years from initial delivery of gas

hereunder", which occurred on May 23, 1978. In March 1988, LIG

proposed that it be cancelled, effective December 31, 1987, and

replaced with a new contract, but the Sellers refused.6 Speyrer

(Goldking) testified that Goldking did not receive a termination

notice from LIG and that, to his knowledge, Contract 495 had not

terminated or expired. Cantrell (EnCon) testified that no one at

LIG had ever discussed with him the notion that the contract might

have terminated, and that he had never received anything in writing

from LIG indicating that it had. Moreover, LIG was still

purchasing the Sellers' gas from the Field at the time of trial.

Munro, LIG's corporate representative, testified that it is LIG's

policy to purchase gas from producers only if there is a contract

on file. He further testified that LIG had not written to the

Sellers regarding its position that Contract 495 had terminated.

Although Munro testified in his deposition that Contract 495 was

still viable, he testified at trial that gas was not being

purchased pursuant to that contract.

Ripple testified that when he left LIG's gas supply department

in March 1989, Contract 495 had not been terminated. He testified

further, however, that the gas was not being purchased pursuant to

Contract 495. According to Ripple, there was no price in effect

under Contract 495 when the last letter agreement expired in 1987.

6
Goldking entered into a new contract with LIG effective
January 1, 1988; thereafter, Contract 493 was inoperative.

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 Implicit in the jury's breach of contract verdict is a

rejection of LIG's contentions that the 1/31/85 letter applied to

Contract 495, that the price agreements after that date were

governed by Item 3(e), and that the contract terminated in 1987.

(The district court's denial of LIG's motion for JNOV, new trial,

or remittitur on this verdict obviously reflects that it, too,

rejected these contentions.)7 The evidence sufficiently supports

these findings.8

2. Declaratory Judgment/Specific Performance

As noted, the Sellers requested a declaratory judgment

(enforceability of contract and price to be paid) and specific

performance. The district court denied both, stating that the

7
LIG contends that Rutgers, State University v. Martin
Woodlands Gas Co., 974 F.2d 659 (5th Cir. 1992), supports its
position that the contract terminated. We disagree. The natural
gas sales contract involved there provided that it would "continue
in effect for five years ... and continue thereafter until canceled
on thirty days prior written notice". Id. at 660. It specified a
fixed price for the initial year, but provided that future prices
were to be established by mutual agreement of the parties. Id.
But, it did not contain either a "mechanism by which price after
the first year [could] be determined ... [or] language establishing
... a base or floor price to be used in the event the parties are
unable to agree on another price". Id. at 661. Accordingly, the
contract terminated at the end of the first year, when the parties
failed to agree on a new price. Id. at 662.

Contract 495 is easily distinguished from that in Rutgers.
Item 3(a) contains a base price, and Items 3(b) and (c) furnish a
mechanism by which a price can be determined. Thus, unlike the
Rutgers contract, Contract 495 "contains sufficient definitiveness
to establish a price (and thus a contract)". Id. at 661.
8
The Sellers contend that the district court abused its
discretion by refusing to admit into evidence a "Confidential
Offering Memorandum" developed by LIG's parent company in
connection with its offer to sell LIG. Because they offered it
only for the purpose of rebutting LIG's termination contention, it
is not necessary to address this issue.

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Sellers had not met their burden of proof, and that "the remedies

seem a generous extension, rather than inevitable implementation,

of the jury's findings".

The Sellers contend that the requested relief should have been

granted, because the court has a constitutional obligation to adopt

a view of the case consistent with the jury's findings. According

to them, declaratory relief would have settled, through one action,

the controversy arising out of this contract, obviating the

necessity of another over claimed continuing breaches.9

We review the denial of declaratory relief for abuse of

discretion. Sandefer Oil & Gas, Inc. v. Duhon, 871 F.2d 526, 528

(5th Cir. 1989).

The two principal criteria guiding the policy in
favor of rendering declaratory judgments are (1)
when the judgment will serve a useful purpose in
clarifying and settling the legal relations in
issue, and (2) when it will terminate and afford
relief from the uncertainty, insecurity, and
controversy giving rise to the proceeding.

10A C. Wright, A. Miller & M. Kane, Federal Practice & Procedure,

§ 2759 at 647-48 (quoting Borchard, Declaratory Judgments 299 (2d

ed. 1941)).

Specific performance is a "substantive right" under Louisiana

law, and "is the preferred remedy for breach of contract". J.

9
LIG does not contest the availability of specific performance
or declaratory relief, but maintains instead that the district
court's denial of those remedies constitutes a ruling on the merits
that there is no contract -- a ruling which would preclude any
future actions for breach. We reject this contention. Obviously,
if the district court had accepted LIG's contract termination
contention, it would not have upheld the verdict for breach
subsequent to then.

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Weingarten, Inc. v. Northgate Mall, Inc., 404 So. 2d 896, 897, 899

(La. 1981). However, it "may be withheld by the court when

specific relief is impossible, when the inconvenience or cost of

performance is greatly disproportionate to the damages caused, when

the obligee has no real interest in receiving performance, or when

the latter would have a substantial negative effect on the

interests of third parties". Id. at 897. We review the district

court's interpretation of state law de novo. Salve Regina College

v. Russell, ___ U.S. ___, 111 S. Ct. 1217, 1221 (1991).

As discussed, although LIG has continuously purchased the gas

subsequent to November 1987, it persists in claiming that the

contract terminated then. This continued insistence forms the

basis for the Sellers' contention that they are entitled to

declaratory relief. We conclude that such relief would not serve

the requisite useful purpose, because the jury's verdict and our

affirmance of the denial of JNOV on breach conclusively refute

LIG's termination contention. Accordingly, the district court did

not abuse its discretion in denying declaratory relief.

Nor did the Sellers meet their burden for specific

performance. The contract has a 20-year term and is scheduled to

terminate in May 1998. This litigation concerned breaches that

occurred through the date of trial; and the Sellers were fully

compensated, by damages, for them. They failed to establish their

entitlement to a remedy for breaches that have not yet occurred.10

10
See 4 Corbin on Contracts § 956 (contracts requiring
continuing performance for a specified period are capable of a
series of partial breaches) and § 954 (injured party may reasonably

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 C. Prejudgment Interest

Article IX-A(a) of the contract provides that, "[i]f the

correct amount is not paid within 10 days of the due date, interest

on any unpaid amount shall accrue at the rate set as the prime rate

by the First City National Bank in Houston, Texas, per annum...."

The Sellers sought this prejudgment interest, calculated (prime

rate) from the date each payment should have been made until the

date of the verdict; but the district court granted only "legal"

interest from the date of judicial demand until paid. The Sellers

contend that the court erred in failing to award pre-judgment

interest (1) for the period between the due date and judicial

demand, and (2) at the correct rate.

In a diversity case, prejudgment interest is governed by state

law. Smith v. Industrial Constructors, Inc., 783 F.2d 1249, 1250

(5th Cir. 1986). And in Louisiana, "[w]hen the object of the

performance is a sum of money, damages for delay in performance are

measured by the interest on that sum from the time it is due, at

the rate agreed by the parties...." La. Civ. Code Ann. art. 2000.

expect performance of remainder of contract, and thus has option of
treating non-performance as "partial" breach only, and getting
judgment therefor without barring a later action for subsequent
breaches) (1951 & Supp. 1992).

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 1. Starting Date

The Sellers rely on Mini Togs Products, Inc. v. Wallace, 513

So. 2d 867 (La. App. 2d Cir.), writ denied, 515 So. 2d 447, 451

(La. 1987), and City of New Orleans v. United Gas Pipe Line Co.,

517 So. 2d 145 (La. App. 4th Cir. 1987), cert. denied, 488 U.S. 917

(1988). In Mini Togs, the court examined the Louisiana Supreme

Court's decision in Alexander v. Burroughs Corp., 359 So. 2d 607

(La. 1978), and read it "as holding that a claim arising out of a

contract, whether liquidated or not, bears legal interest from

judicial demand or from such earlier date when the claim became

ascertainable and due". Id. at 873.

In using the term "ascertainable" the court
did not mean that the precise amount of the claim
need be liquidated or established without dispute
in order for legal interest to commence in a
contract claim. In the Alexander case the amount
of recovery was in dispute throughout with the
amount awarded by the district court being changed
by the court of appeal and then again by the
supreme court. What was meant was that a debt or
claim for the payment of money or damages under a
contract is ascertainable and becomes due on the
date an active violation occurred or the obligor
was put in default, which can be earlier but never
later than judicial demand, and legal interest runs
from that date.

Id. In City of New Orleans, the court pointed out that "[a] debt

may be due before its amount is ascertained". 517 So. 2d at 164.

However, it stated that "[t]he degree of difficulty of ascertaining

ascertainable damages is not an obstacle to interest's running from

their due date". Id.

LIG relies on Trans-Global Alloy Ltd. v. First Nat'l Bank of

Jefferson Parish, 583 So. 2d 443, 457-59 (La. 1991), in which the

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Louisiana Supreme Court rejected the contention that interest

should be awarded from a breach two and one-half years before suit

was filed. Id. at 459. It distinguished other cases allowing

prejudgment interest from the date of breach on the basis that, in

those cases, "the amounts owed were both due and easily

ascertainable on the dates from which interest was awarded". Id.

In contrast, Trans-Global was a "highly complicated ... [case], in

which three courts have had difficulty in determining whether there

was a breach meriting compensation, and what the consequential

damages of that breach should be". Id. Because the damages were

not ascertainable at breach, the court held that prejudgment

interest ran only from judicial demand. Id. LIG asserts that

here, the debt, if due, was not ascertainable, because the Sellers

presented several different damage scenarios to the jury.

The question is a close one. The damages were not

ascertainable at breach. The price LIG would have paid was not

established until the jury reached its verdict, calculating damages

based on Items 3(b) and (c), as opposed to 3(a), 3(d) or 3(f). We

conclude that prejudgment interest should run only from judicial

demand. Accordingly, the district court did not err in refusing to

award pre-judicial demand interest.

2. Rate

LIG does not contest the Sellers' contentions that the

contract interest rate should apply. A schedule of that rate was

introduced at trial. In addition, with its motion for entry of

judgment, Concise provided calculations based on that rate.

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 Pursuant to La. Civ. Code art. 2000, the Sellers were entitled

to prejudgment interest at the contract rate. Therefore, the

district court erred in using the legal rate. Accordingly, we

remand to recalculate prejudgment interest.

D. LIG's Counterclaim

Item 3(f) provides that, if any state or federal law, rule, or

regulation establishes a ceiling price for gas sold under the

contract, the Sellers "shall receive the maximum price allowed by

such law, rule or regulation". As noted, after the Natural Gas

Policy Act was enacted in late 1978, Goldking claimed that,

pursuant to Item 3(f), the Sellers were entitled to receive the

maximum price. As also noted, after considering the matter for

several months, LIG agreed.

LIG counterclaimed for overcharges against EnCon for 1979

through 1984; against Concise, June 1982 through 1984.11 It

contends that its counterclaim presents a pure question of law:

whether the price exceeded the maximum allowed under NGPA §

105(b)(1). It asserts that the district court erred in submitting

the issue to the jury over its objection, with erroneous

instructions which did not include the applicable NGPA section, and

that Item 3(f) is insufficient, as a matter of law, to entitle the

Sellers to an increase.

NGPA § 105(b)(1) provides that the maximum lawful price for

gas such as that from the Field is the lower of the price under the

11
As to the refund, LIG took a nonsuit with prejudice against
Austral.

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then existing contract or the maximum lawful price for NGPA § 102

gas. Energy Reserves Group, Inc. v. Kansas Power & Light Co., 459

U.S. 400, 406 (1983). Because the price under Contract 495 was

lower than the § 102 price on the date of the enactment of the

NGPA, LIG contends that "the actual price [Sellers were] receiving

[on November 8, 1978] became the maximum lawful price [they] could

receive." Piney Woods Country Life School v. Shell Oil Co., 905

F.2d 840, 851 (5th Cir. 1990).

In its Order No. 23, the FERC stated, with respect to clauses

such as Item 3(f), that "the parties may interpret such clauses

(consistent with their terms) as providing contractual authority to

escalate to applicable Natural Gas Policy Act statutory prices."

Fed. Energy Reg. Comm'n Rep. (CCH) ¶ 30,040 at p. 30,317 (4-5-79).

In discussing Order No. 23, our court stated in Pennzoil that area

rate clauses, such as Item 3(f)

are certainly ambiguous as applied to the
collection of currently available [NGPA] ceiling
rates for natural gas. A contract should be
interpreted in light of the changed circumstances
to accomplish what the parties intended.

645 F.2d at 383, 388.

We reject LIG's contention that its counterclaim should not

have been presented to the jury. Under FERC Order No. 23 and

Pennzoil, whether Item 3(f) authorized price escalation was

dependent on the parties' intent. In August 1979, after

considering (for nearly eight months) the Sellers' request for

escalation under Item 3(f), LIG agreed that they were entitled to

receive NGPA § 102 prices. Although LIG reminded the Sellers then

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that the NGPA imposes an obligation to refund if it is eventually

determined that the price paid exceeds the "maximum lawful ceiling

price", it paid the § 102 prices until March 1983, and made no

refund claim until 1990, during this litigation. Considering this

evidence of LIG's belated change in its interpretation of Item

3(f), the jury reasonably could have concluded that the parties

interpreted Item 3(f) to authorize escalation to the NGPA § 102

price.

E. Jury Instructions/Interrogatories

1. LIG

LIG claims numerous errors in jury instructions and

interrogatories. Most relate to the fraud claims; our affirmance

of that JNOV obviates addressing them. With regard to breach, LIG

maintains that it is entitled to a new trial, because the court did

not instruct the jury on its affirmative defenses of estoppel,

acquiescence, and waiver. It also contends that the court erred in

instructing the jury that it could interpret unambiguous

agreements, and could utilize equity in doing so. LIG maintains

that the interrogatories were insufficient, because they did not

include separate interrogatories for each of its affirmative

defenses and as to each of the Sellers.

Needless to say, the district court has "broad discretion in

formulating the jury charge". Bradshaw v. Freightliner Corp., 937

F.2d 197, 200 (5th Cir. 1991).

On appeal, the charge must be considered as a
whole, and so long as the jury is not misled,
prejudiced, or confused, and the charge is
comprehensive and fundamentally accurate, it will

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 be deemed adequate and not reversible error. We
review jury instructions with deference and will
only reverse judgment when the charge as a whole
leaves us with substantial and ineradicable doubt
whether the jury has been properly guided in its
deliberations.

Id. (citations and quotations omitted). In instructing the jury,

district judges may "select their own words and ... charge in their

own styles". Harrison v. Otis Elevator Co., 935 F.2d 714, 717 (5th

Cir. 1991). "No harmful error is committed if the charge viewed as

a whole correctly instructs the jury on the law, even though a

portion is technically imperfect". Id. "[M]ere differences in

form or emphasis in jury instructions do not constitute reversible

error". Bommarito v. Penrod Drilling Corp., 929 F.2d 186, 190 (5th

Cir. 1991).

The standard of review for special interrogatories is

summarized in Barton's Disposal Service, Inc. v. Tiger Corp., 886

F.2d 1430 (5th Cir. 1989). We inquire

(i) whether, when read as a whole and in
conjunction with the general charge the
interrogatories adequately presented the contested
issues to the jury; (ii) whether the submission of
the issues to the jury was "fair"; and (iii)
whether the "ultimate questions of fact" were
clearly submitted to the jury.

Id. at 1435 (footnotes and citations omitted).

LIG's requested instruction on equitable estoppel was

irrelevant to the breach claims for the period after November 1987.

That instruction refers to the Sellers' knowledge of LIG's payment

of higher prices to other producers during the period covered by

the fraud claims (pre-December 1987). Even if it can be construed

to cover the period after November 1987, the Sellers' ability to

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discover the prices LIG was paying others is irrelevant to whether

LIG breached the contract by refusing to furnish that information

pursuant to Items 3(b) and (c).

The district court did not err in refusing the requested

instructions on acquiescence and waiver, because LIG did not

introduce evidence that the Sellers either acquiesced in LIG's

refusal to comply with their repeated requests after November 1987

for price redetermination in accordance with Items 3(b) and (c), or

waived any of their contractual rights during that period.

Even if the district court erroneously instructed the jury on

contract interpretation, it is not reversible error. As reflected

in the interrogatory, in reaching its verdict on the Sellers'

breach of contract claims, the jury did not engage in contract

interpretation. In any event, LIG's requested instructions

included language similar to that about which it now complains.

It was not necessary to present separate interrogatories for

each affirmative defense and as to each of the Sellers. We

conclude that the instructions, when read in conjunction with the

interrogatories, adequately presented the contested issues to the

jury. In sum, we find no reversible error.

2. Sellers

As noted, the Sellers relied on two theories of recovery for

the period March 1983 through November 1987: fraud and breach.

The district court submitted an interrogatory only on fraud.12

12
The Sellers requested one for breach, and objected to it being
refused. Although LIG asserted in its briefs that the Sellers
failed to preserve this issue for review, it conceded at oral

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Having affirmed the JNOV on fraud, we must consider the Sellers'

claim of reversible error because a breach interrogatory was not

submitted.

We conclude that the error, if any, in refusing to submit it

was harmless. As stated in Part II.A.2., supra, in the letter

agreements between March 1983 and November 1987, the Sellers agreed

to accept reduced prices in exchange for increased takes. The

Sellers maintain that LIG's payment of higher prices to other

producers during that period establishes a prima facie case of

breach. We disagree. Their contention is correct only if the

special price agreements were under Item 3(d) (the economic-out

provision); if they were valid modifications of the contract for

limited periods, it is incorrect. Our review of the record reveals

insufficient evidence to support the former.

As LIG correctly notes, between March 1983 and November 1987,

Item 3(d) was never mentioned in connection with any price

discussion, nor in any document. Corcoran (LIG) testified that his

goal was to reduce the price to market-clearing levels, and that

Item 3(d) did not furnish a mechanism for that. Although LIG's

requests for price concessions were based on market conditions, and

Ripple, LIG's gas supply representative from March 1987 through

March 1989, referred to the prices reflected in the letter

agreements as "the LIG economic-out price", Mealy (Goldking)

testified that he never tried to fit the agreements into any

argument that they were entitled to the interrogatory if the grant
of a conditional new trial were affirmed.

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particular part of Item 3. Carter (Goldking) testified that,

although he did not recall specifically discussing Item 3(d) with

LIG, he "understood" that LIG was exercising its rights under that

provision. And, Cantrell (EnCon) likewise testified that he

"believed" that LIG was operating under Item 3(d). He testified,

however, that the Sellers could agree with LIG to change the price

for a limited period of time, and when that time expired, the price

would be governed by the contract. Likewise, Johnson (LIG)

testified that the Sellers had a right to terminate the letter

agreements, "which meant it would go back under the original terms

of the contract". This evidence is insufficient to establish that

LIG invoked Item 3(d).13 Because the letter agreements were valid

and governed the price from March 1983 through November 1987, the

district court did not reversibly err in refusing to submit a

breach interrogatory for that period.

F. Damages

Launching numerous attacks against the bases for the Sellers'

expert's opinion, LIG contends that they failed to introduce

competent evidence to justify any contract damage award. We

briefly discuss a few of these contentions and reject the

remainder.

In reviewing a jury award, we are actually, of
course, reviewing the district court's denial of a
motion for a new trial or remittitur. Because the
district court has a wide range for discretion in
acting on such motions, our standard of review is
not simply right or wrong but abuse of discretion.

13
We also note that, in the interrogatory, the jury awarded
damages for fraud based on Items 3(b) and (c), not (d).

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Sam's Style Shop v. Cosmos Broadcasting Corp., 694 F.2d 998, 1006

(5th Cir. 1982). "[T]here is no such abuse of discretion unless

there is a complete absence of evidence to support the verdict".

Id.

The jury awarded damages based on the difference between

prices LIG paid to the Sellers from December 1987 through trial

(February 1991), and prices calculated pursuant to Items 3(b) and

(c) for that period. The damages were based on the testimony of

the Sellers' expert, John Brickhill. Item 3(c) provides that the

redetermined price shall be the average of the three highest prices

for gas of similar quality and pressure being paid by pipeline

companies to producers in Terrebonne and contiguous parishes under

contracts with terms of one year or longer.

LIG asserts that, to establish a price under Item 3(c), the

Sellers were required to prove actual prices being paid on May 23

(Contract 495 production anniversary date) of each of the three

years in question under contracts for gas that met the Item 3(c)

requirements. This contention is based on a strained reading of

that item. It does not require the use of prices being paid on May

23. Brickhill's testimony was based on prices actually paid near

the time of the effective date of the redetermination, and his

opinion was subjected to intense cross-examination on this point.

He testified that the prices he used in his calculations were not

suspended or subject to refund. In addition, the contracts

Brickhill used were for a term in excess of one year. LIG's

remaining contentions regarding the pressure, quality, and volume

- 27 -
of gas were also the subject of vigorous cross-examination, and go

to the weight, rather than admissibility, of that evidence.

LIG also attacks Brickhill's reliance on purchased gas

adjustment ("PGA") filings in reaching his opinion. PGAs are

periodic filings by interstate gas pipelines which show the

quantity of gas delivered to the pipeline over a period of time,

the cost of gas incurred by the pipeline for that period, and cost

and quantity projections for future periods. LIG contends that

Brickhill's testimony and the PGAs were purely speculative and

incompetent evidence for purposes of calculating damages under Item

3(c). It further contends that the PGAs were not admissible

through the testimony of the Sellers' expert under Fed. R. Evid.

703, because they were not of a type reasonably relied upon by

other experts in that particular field. According to LIG,

Brickhill's mathematical method of dividing the volume of gas

reported in a PGA into the total costs reported for that period

does not provide the price the interstate pipeline paid to the

various producers, and amounts to a guess.

LIG does not challenge Brickhill's qualifications to express

an opinion, Fed. R. Evid. 702, but contends that the facts he

relied upon are not of the same type as are relied upon by other

experts in the field, Fed. R. Evid. 703, and that he did not use a

well-founded methodology in reaching his conclusions. See

Christophersen v. Allied Signal Corp., 939 F.2d 1106, 1111 (5th

Cir. 1991) (en banc), cert. denied, ___ U.S. ___, 112 S. Ct. 1280

(1992). We disagree. In Christophersen, we stated that, "[a]s a

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general rule, questions relating to the bases and sources of an

expert's opinion affect the weight to be assigned that opinion

rather than its admissibility and should be left for the jury's

consideration". Id. at 1109. This applies here. LIG's challenges

were appropriate for resolution by the jury.

After careful consideration of LIG's numerous contentions, we

conclude that there was competent, admissible evidence to support

the damages.

III. CONCLUSION

We have reviewed all of the almost countless issues raised by

the several parties; those not specifically addressed have been

found to be without merit. The judgment of the district court is

AFFIRMED, except with respect to the prejudgment interest award.

The case is REMANDED for the limited purpose of recalculating it.

AFFIRMED in part; REVERSED and REMANDED in part.

- 29 -
 APPENDIX

3. Price:

(a) For all gas delivered to Buyer at any

point of delivery, Buyer agrees to pay Seller two

dollars and five cents ($2.05) per MMBtu during the

period from initial delivery of gas under this

agreement until the first anniversary thereof.

This price, if not redetermined as provided for

hereunder, shall escalate five cents (5.0¢) per

MMBtu on the first anniversary of first delivery of

gas and each anniversary thereafter.

(b) Seller has the option to cause the

price to be paid by Buyer for Seller's gas

delivered to be redetermined for the period

beginning with the first anniversary of initial

delivery of gas under this contract and additional

such options annually thereafter during the term of

this Contract. Such redetermined price shall

become effective on the first day of the period for

which it is determined and continue in effect until

replaced by a subsequent price redetermination or

escalate in the amount as provided in Item 3(a)

above. Any request for a redetermination of prices

shall be given in writing by Seller to Buyer not

later than thirty (30) days nor more than one

hundred twenty (120) days prior to the beginning of

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the period for which a price redetermination is

requested. Should such request not be given within

such time, Seller's said option shall be deemed to

have been waived by Seller for that redetermination

date only.

(c) The redetermined price shall be the

highest price of the following:

The price computed by taking the average

(rounded off to the nearest one-hundreth of a

cent) of the three (3) highest prices per

MMBtu for gas being paid by pipeline companies

to producers (including prices being paid by

Buyer and including prices being received by

Seller from other pipeline purchasers) under

contracts covering the purchase of gas in

Terrebonne Parish, and those parishes

contiguous thereto, whose original terms are

one (1) year or longer and which gas is of a

pressure and quality similar to that available

hereunder on the first (1st) day of the period

for which a redetermination is being made;

provided, however, any price being paid by an

interstate company will not be used under this

item to the extent that such price is

suspended or subject to refund at the time of

any such price redetermination hereunder. For

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 purposes of this contract, a pipeline company

is defined as any company whose principal

business is purchasing gas from producers in

the field and transporting such gas through

their pipeline facilities for resale.

(d) Notwithstanding, the foregoing

provisions of this Item 3, if from time to time and

at any time Buyer determines that economic

conditions indicate a significant and evident

downward change in the value to Buyer of gas

purchased hereunder, Buyer is given the option to

cause the price to be paid by Buyer for Seller's

gas to be renegotiated for any price

redetermination period above described; provided,

however, that Buyer shall not have such right so

long as Buyer is paying producers (located in

Terrebonne Parish and parishes contiguous thereto

for the purchase of gas similar to that being

purchased hereunder) a price equal to or above the

price being paid to Seller hereunder, and if

renegotiated, such renegotiated price shall not be

less than such prices then being paid by Buyer to

such producers for similar gas in said geographical

area. Any request for a renegotiation of prices

shall be given in writing by Buyer to Seller not

less than thirty (30) days, nor more than one

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hundred twenty (120) days, prior to the beginning

of the period for which a price renegotiation is

requested hereunder. Buyer and Seller agree to

negotiate in good faith on a renegotiated price

which will reflect the economic conditions or

burden on Buyer in effect relating to gas purchases

as of the first (1st) day of the period for which a

price renegotiation is being made. Such

renegotiated price shall become effective on the

first day of the period for which it is determined;

provided, however, Seller may elect to terminate

this Contract instead of selling gas to Buyer

hereunder at such renegotiated price by giving

ninety (90) days prior written notice thereof to

Buyer anytime after the date such renegotiated

price is determined; provided, however, deliveries

continue at the last effective price on a day-to-

day basis at Seller's option for a maximum of 60

days while Seller locates another market for said

gas. If the renegotiated price is equal to that

provided for above and in 3(c) above, then in such

event, Seller shall not have the right to cancel

this contract.

(e) If any state or federal law, rule or

regulation makes all or any portion of Item 3(c)

above illegal or inoperative, then in such event

- 33 -
the parties shall meet and mutually agree and

determine the price for each respective anniversary

date. Should the parties be unable to agree on

such price within a sixty (60) day period from the

effective date of such new price, then either party

may terminate this Contract by giving the other

party ninety (90) days prior written notice.

(f) Should any state or federal law, rule

and regulation establish a ceiling price for the

gas sold under this Contract, then in such event,

Seller shall receive the maximum price allowed by

such law, rule or regulation. It shall be the

responsibility of Seller to notify Buyer of any

such law, rule or regulation permitting a price

higher than that being paid hereunder, and such new

established price shall become effective on the

effective date of such Federal law, rule or

regulation, if Seller notifies Buyer within thirty

(30) days after such effective date. If notice is

not received by Buyer within (30) days of such

effective date, then the price shall become

effective upon receipt of Seller's notice by Buyer.

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