OPINION
NORMA McGEE OGLE, JUDGE.
The appellant, Larry D. Guthrie, was convicted by a Davidson County Criminal Court Jury of delivery of less than .5 grams of cocaine, and he received a sentence of six years and one month in the Tennessee Department of Correction. On appeal, the appellant challenges the sufficiency of the evidence supporting his conviction and the trial court's denial of his request for two special jury instructions. Upon review, we affirm the judgment of the trial court.
I. Factual Background
The evidence adduced at trial revealed that Kevin C. Lambert was a recovering crack cocaine addict who worked as a confidential informant for the Metropolitan Police Department. On September 4, 2007, police wired Lambert's car for audio and video recording and gave him twenty dollars to purchase drugs. Lambert drove to Second Avenue in Nashville, where he saw the appellant standing on the street.
The appellant approached Lambert's vehicle on the front passenger side. Lambert asked the appellant for "a twenty," meaning that he wanted to purchase twenty dollars' worth of crack cocaine. The appellant told Lambert to pull his car up a "bit" then went to speak with a man who was sitting on a wall nearby. Lambert saw the man give something to the appellant, and the appellant returned to Lambert's car. The appellant handed Lambert crack cocaine, and Lambert gave the appellant the money. Lambert explained that drug dealers often use addicts to take the drugs from the dealer to the buyer, and, in return, the addict is given money or drugs.
Sergeant Charles Rutsky, Detective Ronald Cumrow, and Detective Chad Holman, monitored Lambert's purchase of crack cocaine from the appellant. The officers testified that they were unable to positively identify the man from whom the appellant obtained the crack cocaine. Tennessee Bureau of Investigation Agent Brett Trotter analyzed the substance Lambert obtained from the appellant and determined that it was .1 grams of cocaine base, a schedule II drug.
Based upon the foregoing proof, the jury found the appellant guilty of the delivery of less than .5 grams of crack cocaine. On appeal, the appellant challenges the sufficiency of the evidence and the trial court's refusal to give the jury special instructions regarding casual exchange and statutory construction.
II. Analysis A. Sufficiency of the Evidence
On appeal, a jury conviction removes the presumption of the appellant's innocence and replaces it with one of guilt, so that the appellant carries the burden of demonstrating to this court why the evidence will not support the jury's findings. See State v. Tuggle, 639 S.W.2d 913, 914 (Tenn. 1982). The appellant must establish that no reasonable trier of fact could have found the essential elements of the offense beyond a reasonable doubt. See Jackson v. Virginia, 443 U.S. 307, 319 (1979); Tenn. R. App. P. 13(e).
Accordingly, on appeal, the State is entitled to the strongest legitimate view of the evidence and all reasonable inferences which may be drawn therefrom. See State v. Williams, 657 S.W.2d 405, 410 (Tenn. 1983). In other words, questions concerning the credibility of witnesses and the weight and value to be given the evidence, as well as all factual issues raised by the evidence, are resolved by the trier of fact, and not the appellate courts. See State v. Pruett, 788 S.W.2d 559, 561 (Tenn. 1990).
The appellant argues that no reasonable jury could have found him guilty of delivery of crack cocaine beyond a reasonable doubt. He acknowledges that the evidence is sufficient to convict him of the lesser-included offense of casual exchange or facilitation of delivery
of crack cocaine.
Tennessee Code Annotated section 39-17-418(a) provides that "[i]t is an offense for a person to knowingly possess or casually exchange a controlled substance, unless the substance was obtained directly from, or pursuant to, a valid prescription or order of a practitioner while acting in the course of professional practice."
Tennessee Code Annotated section 39-11-403(a) provides that "[a] person is criminally responsible for the facilitation of a felony, if, knowing that another intends to commit a specific felony, but without the intent required for criminal responsibility under § 39-11-402(2), the person knowingly furnishes substantial assistance in the commission of the felony."
Our criminal code provides, "It is an offense for a defendant to knowingly . . . deliver a controlled substance," such as crack cocaine. Tenn. Code Ann. § 39-17-417(a)(2) and (c)(2)(A). In the instant case, Lambert, who was working as a confidential informant, told the appellant he wanted to purchase twenty dollars' worth of crack cocaine. The appellant spoke with another man who handed something to the appellant, the appellant returned to Lambert with a rock of crack cocaine, and the appellant took Lambert's money. Testing revealed that the substance Lambert obtained from the appellant was .1 grams of crack cocaine. This proof sufficiently establishes delivery of a controlled substance. We note that casual exchange generally "contemplates a spontaneous passing of a small amount of drugs, for instance, at a party. Money may or may not be involved." State v. Copeland, 983 S.W.2d 703, 708 (Tenn. Crim. App. 1998). However, the instant facts "simply do not show a `spontaneous' exchange." See State v. John Dillihunt, No. E2004-02691-CCA-R3-CD, 2005 WL 2045196, at *4 (Tenn. Crim. App. at Knoxville, Aug. 25, 2005). The jury was instructed on the lesser included offenses and acting in its purview, reviewed the evidence and found the appellant guilty of the delivery of crack cocaine. This issue is without merit.
B. Jury Instructions
The appellant contends that the trial court erred in failing to grant his request for a special jury instruction regarding casual exchange. The appellant also complains that the trial court erred in failing to grant a special jury instruction regarding "legislative intent and statutory construction," which "would have instructed the jury, in effect, that the legislature deemed that delivery of a controlled substance was [an] offense of equal culpability as sale or manufacture of the substance, and that any doubt about whether the [appellant's] actions constituted a `delivery' under the statute be resolved in his favor."
It is well-established that a defendant has a "constitutional right to a correct and complete charge of the law." State v. Teel, 793 S.W.2d 236, 249 (Tenn. 1990). Accordingly, trial courts "should give a requested instruction if it is supported by the evidence, embodies a party's theory, and is a correct statement of the law." State v. Phipps, 883 S.W.2d 138, 150 n. 20 (Tenn. Crim. App. 1994). Moreover, this court has previously stated that "[w]e must review the entire [jury] charge and only invalidate it if, when read as a whole, it fails to fairly submit the legal issues or misleads the jury as to the applicable law." State v. Forbes, 918 S.W.2d 431, 447 (Tenn. Crim. App. 1995). A charge resulting in prejudicial error is one that fails to fairly submit the legal issues to the jury or misleads the jury about the applicable law.State v. Hodges, 944 S.W.2d 346, 352 (Tenn. 1997). Trial courts need not give requested instructions if the substance of the instructions is covered in the general charge. State v. Zirkle, 910 S.W.2d 874, 892 (Tenn. Crim. App. 1995). Generally, when a jury charge is complete without the inclusion of the special instruction, a trial court does not err in refusing to give the special instruction. See State v. Story, 608 S.W.2d 599, 603 (Tenn. Crim. App. 1980).
The appellant requested the following special instruction on casual exchange, which was derived from State v. Helton, 507 S.W.2d 117 (Tenn. 1974):
You may consider whether the transaction was a casual exchange and was possessed not for the purpose of sale. If the [appellant] did casually exchange a controlled substance, then that transaction would constitute a misdemeanor. Money may or may not be involved. You are instructed that "exchange" means to part with, give, or transfer a substance in consideration of something received as an equivalent. "Casual" means without design.
The trial court refused to give the requested instruction and instead gave the following jury instruction, which largely comports with Tennessee Pattern Jury Instruction 31.05:
It may be inferred from circumstances indicating a casual exchange among individuals of a small amount of controlled substances that the controlled substances so exchanged were possessed not with the purpose of selling or otherwise dispensing them.
You are instructed that "exchange" means to part with, give, or transfer a substance in consideration of something received as an equivalent.
"Casual" means without design.
The term casual exchange may include a transaction in which money is involved.
The appellant argues that "the trial court erred in not granting his special jury instruction request that would have clarified that a casual exchange may or may not involve money." The appellant contends that "[t]he instruction as given does not convey that casual exchange could also include a transaction wherein a defendant takes temporary possession of drugs from a drug seller, then physically transfers those drugs to a buyer in exchange for a smaller amount of drugs for himself."
On appeal, the appellant concedes that the trial court did not err in refusing to advise the jury that casual exchange is a misdemeanor. See Tenn. Code Ann. § 39-17-418(c) (providing that casual exchange is a Class A misdemeanor).
The instruction as given correctly instructed the jury regarding the offense of casual exchange and is very similar to the requested instruction. The given instruction was a complete and accurate statement of the law. Therefore, the trial court did not err in denying the appellant's requested instruction. This issue is without merit.
The appellant also complains that the trial court erred in declining his request for the following special jury instruction:
When statutes address the same subject and have a common purpose, but omit something in one part but not another, then the legislature is presumed to have acted purposely. Any ambiguity or confusion of the statute should favor the [appellant].
The appellant maintains that his actions "did not rise to the level of delivery" and that the requested instruction would have effectively instructed the jury "that the legislature deemed that delivery of a controlled substance was [an] offense of equal culpability as sale or manufacture of the substance, and that any doubt about whether the [appellant's] actions constituted a `delivery' under the statute be resolved in his favor."
"The proper function of a special instruction is to supply an omission or correct a mistake made in the general charge, to present a material question not treated in the general charge, or to limit, extend, eliminate, or more accurately define a proposition already submitted to the jury." State v. Cozart, 54 S.W.3d 242, 245 (Tenn. 2001). "Denial of a special or additional instruction is error only if the trial court's jury charge does not fully and fairly state the applicable law." Id. We have examined the jury charge as a whole, and we conclude that the jury was properly instructed on the charged offense of delivery of a controlled substance and the lesser-included offenses of casual exchange and facilitation of delivery of cocaine. This issue is merely a rehashing of the appellant's argument that his actions did not merit a conviction for delivery of cocaine nor the harsh punishment accompanying such a conviction. The trial court did not err in denying the requested instructions. This issue is without merit.
III. Conclusion
Finding no error, we affirm the judgment of the trial court.
or losses sustained or liabilities incurred, except such as may result from gross negligence or willful misconduct.
Castle Tex. Prod. Ltd. P'skip v. Long Trusts, 134 S.W.3d 267, 283 n. 4 (Tex.App.-Tyler 2003, pet. denied). There, we held that this exculpatory clause was limited to claims that the operator failed to act as a reasonably prudent operator in its operations in the contract area and did not apply to a claim that it otherwise breached the JOAs.
Id. at 283. Although the exculpatory clause under which Reeder operated includes the phrase "its activities under this agreement as a reasonable prudent operator," the exculpatory clause is located within the paragraph describing "operations on the contract area" as the exculpatory clause was in
Long Trusts. See id. We see no meaningful difference between the two exculpatory clauses. The complaints made against Reeder pertain to his alleged breaches of the JOA. Therefore, we hold that the JOA's exculpatory clause does not apply to the claims addressed by Questions 8 and 18.
During the charge conference held before the court submitted the charge to the jury, the Fry Interests and Wood County objected to the gross negligence and willful misconduct instruction being submitted to the jury, contending this was a breach of contract case. The trial court overruled that objection. As we have discussed above, the standards of care provided in the exculpatory clause do not apply to what this case was all about — a breach of contract. Thus, the gross negligence and willful misconduct instruction should not have been included in the charge.
To preserve a complaint that an instruction in a charge is defective, the party who does not rely on the instruction need only object. First Valley Bank of Los Fresnos v. Martin, 144 S.W.3d 466, 475 (Tex. 2004) (Wainwright, J., concurring). An objection is sufficient to preserve error in a defective instruction. A request of substantially correct language is not required. Id. Because the trial court submitted improper instructions that were properly objected to, we measure the legal and factual sufficiency of the evidence supporting the jury's findings on Questions 8 and 18 against the elements of breach of contract, not gross negligence and willful misconduct. See St. Joseph Hosp. v. Wolff, 94 S.W.3d 513, 530 (Tex. 2002). Those elements are (1) the existence of a valid contract; (2) performance or tendered performance by the plaintiff; (3) breach of the contract by the defendant; and (4) damages sustained by the plaintiff as a result of the breach. Eckland Consultants, Inc. v. Ryder, Stilwell Inc., 176 S.W.3d 80, 86 (Tex.App.-Houston [1st Dist.] 2004, no pet.).
Obligation to Maintain Production of Units
In issues two through five, Reeder contends the evidence is legally and factually insufficient to support the jury's answer to Question 8 that he breached his duty as operator by failing to maintain production in paying quantities or other operations in the Forest Hill Field. He argues that he owes no duty to the Fry Interests to carry leases or maintain production because, although Dekrfour and Nelson classified their interest as a carried working interest, * their interest bears none of the costs of production and "in reality they are owners of an overriding royalty." He argues that an overriding royalty interest is carved out of the working interest, is non-participating, and is wholly dependent on the lessee to keep the lease alive. Accordingly, he asserts that he has no duty to keep the overriding royalty alive and where there is no duty, there can be no breach. He also argues that the failure to maintain production in paying quantities or to maintain other operations in the Forest Hill Field was due to the fact that Wade, Scherbach, and Wood County Oil would not invest more funds, rather than because of any breach on his part. He asserts that the only way for him to be responsible for allowing production to lapse is to find that he had a duty under the JOA to consume his own resources to keep the lease alive. He argues that he had no such duty and that he could not afford to contribute more of his personal funds. Thus, he claims the evidence does not support a finding that he failed to act as a reasonable prudent operator or that he acted with gross negligence or willful misconduct.
Analysis
Reeder's contention that Dekrfour and Nelson owned an overriding royalty is contrary to the language of the unit agreement and the JOA. "Working interest" is defined in the unit agreement as including a carried interest. The unit agreement specifically allows a carried working interest to be created by a JOA. The mutual agreement specifically created a carried working interest for Dekrfour in the Harris Sand Unit.
An oil and gas royalty is a share of the product or profit from real property, reserved by the grantor of a mineral lease in exchange for the lessee's right to mine or drill on the land. BLACK'S LAW DICTIONARY 1445 (9th ed. 2009). "Royalty" is commonly defined as the landowner's share of production, free of expenses of production. Heritage Res., Inc. v. NationsBank, 939 S.W.2d 118, 121-22 (Tex. 1996). The oil and gas working interest is the right to the mineral interest granted by an oil and gas lease, so called because the lessee acquires the right to work on the leased property, search, develop, and produce oil and gas, as well as the obligation to pay all costs. BLACK'S LAW DICTIONARY at 1745. A "carried interest" in an oil and gas lease is a fractional interest that is free of some or all costs of exploring, drilling, and completing the well. Id. at 885.
The royalty interest is part of the lessor's interest in an oil and gas lease. A carried working interest is part of the lessee's interest in an oil and gas lease. Reeder has cited no authority for his proposition that the carried working interest here must be treated the same as an overriding royalty interest. Because the terms of the unit agreement permit, and the mutual agreement specifically created, a carried working interest as part of the working interest in the Harris Sand Unit, Reeder cannot prevail on his argument that he owes no duty to Dekrfour and Nelson because they are actually owners of an overriding royalty interest.
The mutual agreement that was incorporated into the JOA specifically states that the operator "agrees to produce and/or conduct operations on the Harris Sand Unit sufficient to maintain the leases and the unit." The evidence shows that Reeder had no production from the Harris Sand Unit from September 2006 forward and that production had begun declining precipitously in the preceding months. Reeder presented no evidence of any actions he undertook or other operations he attempted that would maintain the leases and the unit. David Fry testified that the Fry Interests had been unable to achieve more production in the Sub-Clarksville Unit because of Reeder's refusal to allow them access to the jointly owned wellbores as required by the JOA. This is some evidence that Reeder did not maintain production in paying quantities or take the necessary actions required to maintain the leases and the unit. By his inaction, Reeder breached his duty under the explicit terms of the JOA to maintain production and/or conduct operations sufficient to maintain the leases and the unit. Thus, Reeder's challenge to the legal sufficiency of the evidence to support the jury's finding to Question No. 8 is without merit. See Cazarez, 937 S.W.2d at 450.
Reeder testified that he maintained production in the Harris Sand Unit as long as he could before he had to spend his money on other pressing business interests that he owned, which caused him to give up on maintaining production in paying quantities in the Harris Sand Unit. Contractual obligations cannot be avoided simply because the obligor's performance has become more economically burdensome than anticipated. Huffines v. Swor Sand Gravel Co., 750 S.W.2d 38, 40 (Tex.App.-Fort Worth 1988, no writ). The evidence shows Reeder failed to maintain production in paying quantities, a breach of the JOA by Reeder. Having other pressing financial matters to attend to does not excuse Reeder's failure to comply with the terms of the JOA. Further, Reeder never attempted operations in the contract area that would have required Wade or Scherbach to authorize expenditures under the JOA. In fact, in a letter dated June 9, 2006, he admitted to Wade and Scherbach that he did not have the money to fund the 45% that would have been his share of the operations. Finally, as explained above, the gross negligence and willful misconduct standards are not applicable here, and we need not address Reeder's argument regarding them. The jury's finding that Reeder breached his duty as operator by failing to maintain production in paying quantities in the Forest Hill Field is not so contrary to the overwhelming weight of the evidence as to be clearly wrong and unjust. See Dow Chem. Co., 46 S.W.3d at 242. We overrule Reeder's issues two through five.
Nothing in this opinion should be construed as requiring an operator to conduct an operation when the nonoperating leasehold working interest owners elect not to participate in, i.e., pay for, that operation.
Obligation to Offer Well No. 116 to Other Working Interests Before Abandonment
In issues seven through ten, Reeder contends the evidence is legally and factually insufficient to support the jury's answer to Question No. 18 that he breached a duty to Dekrfour, Nelson, and Wood County Oil by failing to offer Well No. 116 to them prior to plugging the well. Reeder argues that he did not elect to abandon or plug the well, but was ordered by the Railroad Commission to plug the well. He also asserts that he owed no duty to Wood County Oil because Wood County Oil did not have an interest in Well No. 116 at the time the Railroad Commission ordered it to be plugged. He also argues that, at the time the well was plugged, Wood County Oil had ownership rights in the well and there is no evidence that Reeder had any authority to offer the well back. Finally, he asserts the evidence is legally and factually insufficient to support a finding that his actions amounted to gross negligence or willful misconduct.
In 1998, Reeder became the operator of Well No. 116. From this time forward, there was controversy between Fry and Reeder as to how Well No. 116 should be produced. In 2003, the well began to leak. By its order dated October 21, 2003, the Railroad Commission ordered Reeder as the operator to plug the well. Reeder finally plugged the well on June 9 and 10, 2004.
Reeder did not contest that he was the operator of Well No. 116. Again, this authority devolved upon him by the JOA, which stated in pertinent part:
If Operator deems that a well should be abandoned, it shall notify the non-Operators of such decision and offer his interest in such well to any party willing to accept the well, together with the plugging liability. If no party requests such well, the Operator shall cause the well to be properly plugged and the lease restored and the costs there for shall be a joint expense under this Agreement.
When a well is plugged in Texas, it is considered abandoned. See 16 TEX. ADMIN. CODE § 3.5(d)(2)(C) (2009) (Tex. R.R. Comm'n); see also Ridge Oil Co. v. Guinn Invs. Inc., 148 S.W.3d 143, 147 (Tex. 2004). Therefore, by the terms of the JOA, Reeder was required to offer his interest in Well No. 116 to the nonoperators before plugging the well. The evidence shows that on June 9, 2004, Dekrfour and Nelson, collectively, had a 12.5% carried working interest in the Harris Sand Unit and that Wood County Oil had an 87.5% working interest in the Harris Sand Unit. They were nonoperators in Well No. 116. By the terms of the JOA, Reeder had the duty and authority to offer Well No. 116 to the Fry Interests, Wood County Oil, or both before plugging it, but he did not do so. The evidence is legally sufficient to support the jury's answer to Question No. 18. See Cazarez, 937 S.W.2d at 450.
Reeder contends the above provision of the JOA does not apply here because he did not "deem" that the well should be abandoned, but instead was ordered to plug the well. We disagree. The Railroad Commission initially recommended that he plug the well. At that point, he had the option of repairing the well. When he chose not to repair the well, he chose to abandon the well. His argument that he did not need to offer the well to Wood County Oil because it did not own an interest at the time of the Railroad Commission's order also fails. The JOA does not limit the offer requirement to a certain time period. The wording indicates that the offer of the well can be made at any time before the well is plugged. The assignment to Wood County Oil was signed on May 24, 2004 but was effective November 24, 2003, one month after the Railroad Commission's order to plug the well and several months before Reeder actually plugged the well. As operator, Reeder had the authority and the duty under the JOA to offer the well to nonoperators, including Wood County Oil. Finally, as explained above, we need not address Reeder's argument that the evidence is legally and factually insufficient to support a finding that his actions amounted to gross negligence or willful misconduct. The evidence is factually sufficient to support the jury's answer to Question No. 18. See Dow Chem., Co., 46 S.W.3d at 242. We overrule Reeder's issues seven through ten.
Damages
In his eleventh issue, Reeder complains that Bob Ungerecht's testimony of valuation was conclusory and speculative and therefore no evidence. In his thirteenth issue, he attacks the jury's allocation of damages between the Fry Interests and Wood County Oil as being irreconcilably ambiguous. In his fourteenth issue, Reeder contends that the evidence is not legally and factually sufficient to support the jury's verdict on damages.
Before a plaintiff can recover damages, he must prove "with reasonable certainty" the damages he suffered from the defendant's breach, including the value of "a certain quantity of oil, worth a certain amount. . . ." See Tex. Pac. Coal Oil Co. v. Barker, 117 Tex. 418, 427, 6 S.W.2d 1031, 1033 (1928). The value of mineral reserves is not a matter of common knowledge, and therefore it is the plaintiffs burden to prove damages by expert testimony. Arkoma Basin Exploration Co. v. FMF Assoc. 1990-A, Ltd., 249 S.W.3d 380, 388 (Tex. 2008). Experienced people who are acquainted with the conditions of the land in the locality of the leased premises can give an opinion as to the amount of recoverable oil in the unit. See Barker, 117 Tex. at 427, 6 S.W.2d at 1034. The plaintiffs expert should, after examining the logs and other relevant information from the field and surrounding wells, give an opinion as to the probability of obtaining production and the extent of such production on the land in question. See County Mgt., Inc. v. Butler, 650 S.W.2d 888, 890 (Tex.App.-Austin 1983, writ dism'd). Such matters as production costs, geological trends, proration, and kind and quality of the oil should also be referred to by the expert in making his opinion. Id.
The nature of the inquiry makes it practically impossible to ascertain with certainty the exact amount of the plaintiffs damage. Barker, 117 Tex. at 427, 6 S.W.2d at 1034. But damages must be established with reasonable certainty, not mathematical precision. O B Farms, Inc. v. Black, 300 S.W.3d 418, 422 (Tex.App.-Houston [14th Dist.] 2009, pet. filed). If the best available evidence affords a reasonable basis for the jury to calculate damages, then recovery cannot be denied because the exact amount of damages cannot be ascertained. Id. As a general rule, the jury has broad discretion to award damages within the range of evidence presented at trial, so long as a rational basis exists for its calculation. Khorshid, Inc. v. Christian, 257 S.W.3d 748, 760 (Tex.App.-Dallas 2008, no pet.). The jury's findings will not be disregarded merely because its reasoning in arriving at its figures may be unclear. Id.
Ungerecht, who had been a petroleum engineer for fifty-two years at the time of trial, testified that he used industry standards in preparing his testimony. He explained that he is familiar with the Harris Sand Field and had the information necessary to do a complete and thorough evaluation of the field. He testified that, because of all the drilling and the production from both the Sub-Clarksville Unit and the Harris Sand Unit, there was an abundance of information available including logs, coring samples, maps, geological formation information, production history, well tests, planimeter results, and other documents to show him the amount of recoverable reserves for each of the twelve tracts he testified about. See Butler, 650 S.W.2d at 890. He further testified that he was able to study the production costs for operations such as drilling, installing the surface equipment, and installing tanks. He also was able to determine the operating costs based on the documentation that he had studied. He discounted his evaluation for the decline rate, market value, taxes, royalties, and the carried working interests. He stated that he considered the uncertainty and risk involved in beginning production again from the unit formations. He testified about the gravity of the oil in the Harris Sand Unit compared to the lighter oil in the Sub-Clarksville Unit and how that would affect the value of the recoverable oil. See id.
Reeder characterizes Ungerecht's testimony as being speculative and conclusory. First, he states that Ungerecht based his valuation on records showing the amount of oil in place in the two units in 1996. He argues that the valuation is thus founded on speculation that the basic reservoir information remained unchanged for nearly twelve years. Ungerecht specifically testified that while the value of the reserves has changed over the years, the change was caused primarily by the price of oil. Therefore, while his earlier evaluations were the basis of his calculations, he upgraded the information as to price. The jury was entitled to infer that Ungerecht, based on his years of experience, considered whether the reservoir information had changed and determined that it had not. See City of Keller, 168 S.W.3d at 821. Further, the jury saw the production records from the intervening years showing very little depletion in the field. We disagree that Ungerecht's reliance on the 1996 information makes the testimony speculative.
Reeder challenges Ungerecht's testimony because, while there was no production at the time he testified, Ungerecht based the value of the reserves on the price of oil at the time of trial, instead of the price at the time production ceased. Ungerecht explained that he had to extrapolate production based on the recoverable oil because there were no current figures. This was a logical explanation and one that would help the jury in determining valuation.
Reeder complains that Ungerecht valued the Harris Sand Unit reserves as though the formation was in its primary recovery period when it was in a secondary recovery period. Ungerecht, on direct, testified that he based his valuations on primary production. However, during Reeder's cross examination, Ungerecht was asked hypothetical questions regarding secondary production on the Harris Sand Unit. Although Ungerecht answered these hypothetical questions, neither his testimony nor any other evidence suggests that his valuation should not be based on primary recovery. Ungerecht's testimony is not speculative or conclusory. Thus, the evidence is legally sufficient to support the damage awards.
Reeder also attacks the jury's allocation of damages between the Fry Interests and Wood County Oil. Generally, the jury awarded about one-tenth of Ungerecht's valuation to the Fry Interests for their losses in the Harris Sand formation due to Reeder's actions as operator. This amount was three times the amount awarded to Wood County Oil. Reeder contends that this makes the jury's answers irreconcilable. We disagree. Ungerecht testified that the extraction costs were very high for the oil produced out of the Harris Sand formation. This testimony was corroborated by both David Fry and Noble. The jury could therefore have rationally concluded that the carried working interests owned by Dekrfour and Nelson were three times as valuable as the working interest of Wood County Oil because of these heavy costs of production. See Christian, 257 S.W.3d at 760.
Reeder challenges the jury's award of damages to the Fry Interests for their losses in the Sub-Clarksville formation while awarding Wood County Oil zero damages for that formation. The plausible basis for this award is that the jury found the production in paying quantities in the Sub-Clarksville Unit had ceased in 2003. Wood County Oil did not acquire its working interest until 2004. As a result, the jury could rationally have determined that Wood County did not have an interest in the Sub-Clarksville Unit when production in paying quantities ceased. See id.
Based on his experience and the documentation, Ungerecht assigned specific valuations to each of the twelve tracts in the Sub-Clarksville and Harris Sand Units that he was asked to value. See Barker, 117 Tex. at 427, 6 S.W.2d at 1033. The jury's awards to the Fry Interests and Wood County Oil were much smaller than Ungerecht's valuations. A jury's verdict on damages cannot exceed the amount shown by the evidence, but a jury need not award the full amount testified to by the expert when the situation warrants a reduction. See Geo Viking, Inc. v. Tex-Lee Operating Co., 817 S.W.2d 357, 363 (Tex.App.-Texarkana 1991, writ denied). Here, the nature of the asset being valued lends itself to imprecise valuations. The reports showed a wide range of production levels for the field over the years. Ungerecht testified that many variables are not constant, including the price of oil and the costs of production and maintenance. Further, he testified that he considered "certain unknowns" such as an estimate of the availability of each oil well to produce at a certain rate and an estimate of the life of that well to produce. Additionally, Ungerecht testified that he was unable to determine productive capacity because the field was not in full production. Accordingly, the imprecision in the factors Ungerecht relied on for determining valuation of the field warranted the jury's belief that the awards should be reduced. Thus, the evidence is also factually sufficient to support the damage awards. See Dow Chem. Co., 46 S.W.3d at 242. We overrule Reeder's issues eleven, thirteen, and fourteen.
WOOD COUNTY OIL'S PLEADINGS
In his twelfth issue, Reeder contends that Wood County Oil's claim for damages is not supported by its pleadings. About a month before trial, Wood County switched sides in the case. Wood County had been aligned with Reeder against the Fry Interests but filed a cross-claim against Reeder alleging that he had caused loss of the unit leases by his actions as unit operator. About a week before trial, Wood County filed its first amended petition continuing its declaratory action on title issues but specifically nonsuiting all of its claims against the Fry Interests. The previously pleaded claim against Reeder is not mentioned in the amended petition.
Assuming Wood County inadvertently nonsuited Reeder in the live pleading by omitting any mention of its claim against Reeder, it is clear from a review of the record that the breach of contract issues between Wood County Oil and Reeder were tried by consent. Both sides presented evidence against each other on these issues and asserted differing positions on these issues at the charge conference. When both parties present evidence on an issue and the issue is developed during trial without objection, any defects in the pleadings are cured at trial, and the defects are waived. See TEX.R. CIV. P. 67; Ingram v. Deere, 288 S.W.3d 886, 893 (Tex. 2009). We hold that any defects in Wood County's amended pleading were cured when the breach of contract issues were tried by the consent of the parties. We overrule Reeder's twelfth issue.
CONFORMITY OF FINAL JUDGMENT TO JURY'S AWARDS
In his fifteenth issue, Reeder complains that the trial court's final judgment does not conform to the actual awards the jury made to the Fry Interests. We agree. The jury made the following specific monetary awards:
Dekrfour and Nelson $299,102.50 Dekrfour, Nelson and Bobby Noble $390,887.00 Dekrfour $ 9,202.00 Nelson $ 36,808.00 However, the trial court's judgment awarded damages as follows: Dekrfour $138,719.10 Nelson S561,237.00 Noble S 36,043.10 The trial court's duty, and ours, is to ascertain the intention of the jury's answers and render a judgment in conformity with them. See TEX.R. CIV. P. 301; In re Estate of Bean, 206 S.W.3d 749, 760 (Tex.App.-Texarkana 2006, pet. denied). There is a clear discrepancy between the jury's awards and the judgment. We sustain Reeder's fifteenth issue.
ATTORNEY'S FEES
In his sixteenth issue, Reeder contends that the trial court's award of attorney's fees was not authorized and was not supported by legally and factually sufficient evidence. Based on the jury's answers to Question No. 20, the trial court awarded Marcus Carroll, the attorney for the Fry Interests, $125,000.00 in attorney's fees with prejudgment interest at the rate of 6%. Carroll testified that his reasonable and necessary attorney's fees for each of the four claims asserted against Reeder totaled $115,250.00 as shown in the table below. The table also shows the amount of attorney's fees the jury awarded for each of the four claims, which totaled $125,000.00. Cause of Action Carroll's Testimony Jury's Award Failure to file P-4 under JOA $ 7,500.00 $ 7,500.00 Breach of JOA on failure to offer Well No. 116 before abandoning $ 12,500.00 $ 35,000.00 Declaratory judgment action to determine title $ 55,250.00 $ 55,000.00 Breach of JOA for loss of leases $ 40,000.00 $ 27,500.00 $115,250.00 $125,000.00 Reeder contends that attorney's fees were not recoverable on the breach of the JOA claims, that is, the failure to offer Well No. 116 to Dekrfour and Nelson before plugging it and the loss of the leases. He argues that the fees awarded were not segregated by claim and contends further that because the fees were based in part on claims for which such fees are not recoverable, the award cannot stand.
Reeder has not challenged, and therefore we do not address, the jury's award to Patricia Fry for Reeder's failure to file a P-4 with the Texas Railroad Commission or the court's declaratory judgment to determine title.
The Texas Civil Practice and Remedies Code provides that parties may recover reasonable attorney's fees if the claim is for an oral or written contract. TEX. CIV. PRAC. REM. CODE ANN. § 38.001(8) (Vernon 2008). As we have shown in issue one, the JOA was a written contract, and Reeder was bound by it. The claim asserted by Dekrfour and Nelson (for the failure to offer the well), and the claim asserted by the Fry Interests (for the loss of the leases), arose under the JOA. Further, attorney's fees are recoverable pursuant to the Declaratory Judgment Act. See TEX. CIV. PRAC. REM. CODE ANN. § 37.009 (Vernon 2008). Therefore, the Fry Interests can recover their reasonable and necessary attorney's fees for these claims, and the failure to segregate is not error.
Reeder also contends that there is insufficient evidence to support the award of $125,000.00 in attorney's fees. We agree with this contention. As the table above shows, Carroll testified that $12,500.00 was a reasonable attorney's fee for his work on Dekrfour's and Nelson's claim that Reeder breached the JOA by failing to offer Well No. 116 to them before plugging it. Despite this testimony, the jury awarded $35,000.00 in attorney's fees for that claim. The evidence is not factually sufficient to support this portion of the jury's attorney's fee award. It is an abuse of discretion for the trial court to award fees without factually sufficient supporting evidence. Bocquet v. Herring, 972 S.W.2d 19, 21 (Tex. 1998).
Carroll testified that his attorney's fees totaled $115,250.00. The jury determined that $27,500.00 was a reasonable fee for Carroll's work on the breach of the JOA by the loss of the leases, $12,500.00 less than Carroll testified to. The jury also awarded $250.00 less than Carroll testified to earning on the declaratory judgment action. The jury was entitled to award a lesser amount if it so chose. See Geo Viking, Inc., 817 S.W.2d at 363. Therefore, based on Carroll's testimony and the jury's award, the trial court should have awarded Carroll $102,500.00 in reasonable attorney's fees. The evidence is legally and factually sufficient to support an award in this amount. We sustain Reeder's sixteenth issue in part and overrule it in part.
PREJUDGMENT INTEREST
In his seventeenth issue, Reeder contends that the trial court miscalculated the prejudgment interest on awards to Dekrfour, Nelson, Noble, and Wood County Oil. He argues that the trial court erroneously used March 14, 2006, the date the Fry Interests filed their counterclaim, as the starting date for calculating all prejudgment interest. He asserts that prejudgment interest on damages awarded to the Fry Interests under Questions 9 and 10 should be calculated from the date of their amended counterclaim, July 20, 2007, which is the date the claim addressed in those questions was first pleaded. He further asserts that prejudgment interest for Wood County Oil should be calculated from January 10, 2008, when it filed its original cross-claim against Reeder. We agree that prejudgment interest on the damage awards was miscalculated. See TEX. FIN. CODE ANN. § 304.104 (Vernon 2006). Further, the prejudgment interest awards are based on the erroneous damage awards and must be recalculated due to our disposition of issue fifteen.
Reeder also contends the trial court erred by awarding prejudgment interest on the award of attorney's fees. Prejudgment interest is generally not allowed on an award of attorney's fees. See C H Nationwide, Inc. v. Thompson, 903 S.W.2d 315, 325 (Tex. 1994). We sustain Reeder's seventeenth issue.
CONCLUSION
Reeder, as operator, is bound by the 1996 joint operating agreement, and the claims asserted against him here are for breach of contract. When measured against the elements of breach of contract, the evidence is legally and factually sufficient to support the jury's findings that Reeder breached his duty as operator by failing to maintain production in paying quantities or other operations in the Forest Hill Field and by failing to offer Well No. 116 to the nonoperators before plugging the well. The evidence is also legally and factually sufficient to support the jury's damage awards. However, the trial court's judgment does not conform to the jury's damage awards. Because we have the necessary information before us, we may reform the judgment. See TEX.R.APP. P. 43.2(b); Mullins v. Mullins, 202 S.W.3d 869, 878 (Tex.App.-Dallas 2006, pet. denied). Accordingly, we modify the judgment to order the specific damage awards as found by the jury. Because the prejudgment interest on the damage awards was miscalculated, we modify the judgment to reflect the proper amounts of prejudgment interest. Because it is not appropriate in this case, we delete the award of prejudgment interest on attorney's fees.
We affirm the trial court's judgment with respect to attorney's fees in the amount of $102,500.00, conditioned on a remittitur of attorney's fees in the amount of $22,500.00. See TEX.R.APP. P. 46.3; Stukes v. Bachmeyer, 249 S.W.3d 461, 470 (Tex.App.-Eastland 2007, no pet.). If this remittitur is not filed within fifteen days from the date of this opinion, the trial court's judgment as to attorney's fees will be reversed and the cause will be remanded to the district court for a new trial. See TEX.R.APP. P. 46.3.
We affirm the trial court's judgment, as modified.