About Me

My photo

Reading is difficult. As a writer, I help the reader every way I can think of. As a reader, I work hard not to miss the big things in the middle of the road.

Monday, December 31, 2012

Fourteenth Says Swapping Emails Does Not a Contract Make

In the last opinions of the 2012 term of the Fourteenth Court of Appeals in Houston, Justices Kem Thompson Frost, Charles W. Seymore, and Martha Hill Jamison, substituted opinions in the 2001 Trinity Fund v. Carrizo Oil & Gas case (No. 14-10-00604-CV, Dec. 28, 2012, no pet. h.). To make a long story short, Trinity Fund was supposed to buy into Carrizo Oil & Gas's drilling in the Barnett Shale, a truly huge natural gas formation that has been demonstrated to be under 10 Texas counties--including Fort Worth and its suburbs--and may well be under seven more. Trinity missed a payment deadline, which, under a prior agreement, was supposed to terminate that agreement, but the companies kept emailing each other. Carrizo eventually sued in Houston's 295th District Court, Trinity counter-sued. As might be expected in a multimillion dollar lawsuit by experienced oil-and-gas litigators in the energy capitol of the world, the case got complicated in a hurry. In their original opinions, the appellate justices, though, were able to agree on all but one point: why the question of whether or not the emails constituted a contract should not have been submitted to the jury. Justice Frost argued that the emails never got around to agreeing to enough to create a new agreement after the termination of the prior agreement and distinguished three cases that Carrizo cited. Justice Seymore argued that there was no evidence that the parties ever intended to finalize a new contract using only electronic means, that is, by way of the Texas Uniform Electronic Transactions Act, Tex. Bus. & Com. Code, tit.10, subtit. B, ch. 322, especially that the parties never intended by their actions to modify the rules laid out in the act itself. Justice Jamison basically agreed with Frost, but didn't want to discuss the other cases.
The justices ended up affirming in part and remanding to determine what part of an offset the trial court gave Trinity was related to income arising out of the contract that the appeals court held had never been formed in the first place, and ordering the trial court to disallow the offset to that extent.
The justices substituted the opinions after Carrizo pointed out that Carrizo shouldn't have to give up attorneys' fees awarded in a part of the trial court judgment that was in favor of Carrizo that Trinity did not appeal.
Trinity is in Chapter 11 bankruptcy.

No comments:

Post a Comment