JIM SHARP, Justice.
Cotton Valley Compression, L.L.C. ("Cotton Valley") brought a breach-of-contract action against Reliant Energy Services, Inc. ("Reliant") based on theories of actual and apparent agency by a third-party, Westfield Oil & Gas, Inc. ("Westfield").
Both parties appealed—Reliant on issues of apparent authority and its affirmative defense of quasi-estoppel; Cotton Valley on the trial court's judgment notwithstanding the verdict on an issue of actual authority. We determine whether (1) there was legally- and factually-sufficient evidence to support the issue of apparent authority, (2) whether there was legally-sufficient evidence to support the jury's verdict on the issue of actual authority and whether the subsequent judgment notwithstanding the verdict should be reversed, (3) whether Reliant proved its affirmative defense of quasi-estoppel as a matter of law, (4) whether Reliant preserved complaints regarding the admission of certain evidence, and (5) whether the trial court erred in not granting Reliant a new trial in the interest of justice.
We affirm.
Ernie Gouge founded and was sole owner and president of the Houston-based Westfield Oil and Gas
In 1995, Westfield signed a base contract with Reliant
Because Westfield and Reliant often made verbal agreements, the written contract between them did not fully explain their relationship. Further, Westfield— with Reliant's knowledge—routinely used Reliant's name as Westfield's "calling card" to find producers, a practice Reliant later directed Westfield to stop.
Cotton Valley was a cooperative comprised of several local northeastern Oklahoma independent natural-gas producers that joined together to build a gas-compression station
Prior to the sending of the March 1999 purchase agreement, one of Gouge's associates, Ben Campbell, called Brown at Cotton Valley and told her that Westfield was seeking natural gas in the Oklahoma/Texas area "for [Reliant]." Cotton Valley was later contacted by Gouge, who told Eakin and Brown that he was gathering gas for Reliant and could offer Cotton Valley a "bonus" or premium over the market price. He explained that Reliant would take possession of the gas at Cotton Valley's receipt points
Cotton Valley signed a purchase agreement with Westfield on March 31, 1999 for the sale of gas from April 1 through April 30, 1999, with Cotton Valley listed as seller and Westfield as the buyer. Gouge signed for Westfield and Eakin signed for Cotton Valley. The agreement made no specific reference to Reliant, but Cotton Valley believed Reliant was involved because Reliant was taking possession of the gas at the pick-up points and making payment through the escrow account. The agreement recited that "Westfield's purchaser" would "pay direct" to the escrow account.
According to Gouge, the agreement was intended to be an "evergreen" contract, automatically renewing each month unless one party cancelled by giving 30 days notice, but the March 31, 1999 purchase agreement contained no such language. There was no other written contract between Westfield and Cotton Valley and none for the July 2001 gas at issue. There was no written or verbal agreement between Cotton Valley and Reliant, and Reliant never made any representations to Cotton Valley, either verbally or in writing, that suggested that Westfield was acting on Reliant's behalf. Nevertheless, Cotton Valley felt that Reliant's actions over the period of the arrangement confirmed that Westfield and Reliant were working together to acquire Cotton Valley's gas for Reliant.
In selling gas, Cotton Valley would establish a gas-trader relationship, reaching an agreement with the gas trader as to price, volume, and location for "pick up." This person was the one with whom the sale was made and was the first major contact between a buyer and Cotton Valley. In the transactions regarding the sale of natural gas at issue, Cotton Valley dealt with Westfield as the gas trader. Cotton Valley's second point of contact was with a scheduler; without a scheduler, an entity could not purchase Cotton Valley's gas. In this case, Cotton Valley always dealt directly with Reliant's schedulers, usually Lee Ann Brubaker. The final point of contact was with the accounting department in order to send the invoice and to collaborate regarding payment; Cotton Valley dealt with both Westfield's and Reliant's accounting departments, calling Reliant's accounting department occasionally to make inquiries about payment when payments were not timely made.
The actual transfer of gas took place through the process of nominations to the Williams pipeline. According to Gouge, each month Brown would fax Gouge a sheet showing the volumes that Cotton Valley would have available and Gouge would use those totals to make a verbal nomination to David Dunnavant
Cotton Valley sent its actual nominations to Brubaker at Reliant. The nominations included information which Reliant needed to be able to pick up the gas. Originally, the nominations to Brubaker included the price information for the contract price of the gas as paid to Cotton Valley by Westfield. This information was later deleted from the original nominations sent to Brubaker after Brown learned that Reliant paid a different price for the gas.
Cotton Valley made its first nomination to Reliant on the same day that the sole purchase agreement was signed between Cotton Valley and Westfield, March 31, 1999. Brown faxed the nomination to Brubaker, Reliant's scheduler, providing the amount of mmBtus
In the beginning of the arrangement, Cotton Valley only sent the nominations to Reliant, but later Gouge requested that a copy be sent to him at Westfield because he wanted to be kept "in the loop." The copy sent to Gouge was only a carbon copy and did not mean that Westfield could pick up the gas. The system did not permit two different nominations for the same gas to two different people, and Westfield had no ability to pick up the gas because it had no relationship with the pipeline and no scheduler.
Before the nominations were sent, Brown would negotiate with Gouge regarding the price and volume of gas to be sold. Westfield and Cotton Valley would agree on a standard price based on a monthly price known as an "Inside FERC"
Cotton Valley would wait for the pipeline to "balance the system"
The amount paid by Reliant for the gas was not the same price paid by Westfield to Cotton Valley for the gas. Cotton Valley was not aware of the price that Reliant paid for the gas and never asked Reliant to pay Cotton Valley directly prior to July 2001. The price that Cotton Valley received for the gas was usually a fixed price of "Inside FERC" plus a premium. The price that Reliant paid for the gas was based on a variable or daily price—sometimes higher than Cotton Valley's price and sometimes lower.
In May 1999, Brown sent two invoices to Westfield for gas delivered to Reliant, one for a larger amount and one for a smaller amount, for two separate volumes of gas that flowed in the same month. Cotton Valley was paid on both invoices. Brown later mistakenly thought that Cotton Valley had been overpaid and, seeking to refund the "overpayment," sent a letter to Reliant along with a check refunding the smaller amount to Reliant directly. When Cotton Valley later realized that there had been no overpayment, a stop-payment order was placed on the check. Brown informed Brubaker of the confusion about
In February 2000, Cotton Valley asked Westfield to sign an escrow agreement that would ensure that Cotton Valley would be paid from the escrow account before Gouge took any funds from the account. Robert Kane,
Eakin was anxious to get the addendum signed by Gouge, and Brown continued to contact Gouge about signing the addendum for several months. Finally, in October 2000, Brown sent a fax to Gouge informing him that Eakin had told her to "only sell half our gas production to you for the month of November 2000, or until we can get a signed contract with you and a bank." In November, Cotton Valley sold some of its production to another company in an effort to put pressure on Gouge to sign. In December 2000, Gouge signed an addendum to the trust account that provided that direct disbursements would be made to Cotton Valley and that no money would be paid to Westfield until after such disbursements were complete. Bank One and Cotton Valley were also parties to the addendum, but Reliant was not.
In May 2001, Eakin sent Gouge a letter complaining that Gouge had not been returning Brown's phone calls and had not executed signature confirmation of volumes and dollar amounts and that such communication problems made Eakin uncomfortable and was unacceptable, particularly given the large amounts of money involved. The letter specifically complained about a late payment in February 2001.
Not addressed in the letter was a separate problem that Cotton Valley had with timely payments by Westfield. On occasion, Cotton Valley's payments were held up because of pricing issues that Westfield had with Reliant. When that occurred, Brown would call Gouge. If she could not reach him, she would call the accounting
Because nominations entered by producers are actually only estimates of projected gas flow, the nominations of gas entered by Cotton Valley for Reliant often turned out to be lower or higher than the amount of gas that actually flowed into the pipeline, and for which Reliant had entered nominations, leaving Reliant with either more or less gas than purchased. These imbalances were handled between Cotton Valley and Reliant by way of imbalance transfers between the two companies.
Cotton Valley tracked the imbalances between Reliant and itself and the two companies made numerous agreements for imbalance transfers of gas between themselves as needed. Westfield played no role in these transactions and none of the imbalances was ever credited to Westfield. Westfield had no relationship with the pipeline, nor did it have an operating-balance agreement with the pipeline to track what was owed to or from a company, which was required to conduct balance transfers. Cotton Valley did send an explanation once to Westfield when the transactions between Cotton Valley and Reliant affected invoicing to Westfield.
In August 1999, without the knowledge or agreement of Cotton Valley, Reliant did not make a nomination for Cotton Valley's gas for August 1, 1999, even though the gas had flowed from Cotton Valley to Reliant that day. By doing so, Reliant effectively made up "on its own" for an imbalance of Cotton Valley's gas that Reliant was due, without the customary procedures, without notifying the pipeline, and without any notice to Cotton Valley. Reliant "just essentially took [Cotton Valley's] gas without telling [Cotton Valley] about it." Brown discovered this when she received the allocation sheets from the pipeline in September. She sent a fax to Gouge, explaining the situation and protesting Reliant's action. Brown stated that she was "fine" with Reliant making up the imbalance but wanted to know "up front" what was going on and what Reliant wanted to do or Cotton Valley "would stop doing business with them."
In June 2001, Brown sent a nomination to Brubaker at Reliant for the expected July 2001 production, following the usual procedures. On July 25, 2001, Brown sent a fax to Brubaker, advising Brubaker that she wanted to do a nomination change to increase the amount of gas to be delivered because Cotton Valley had a new producer and so more gas was available. Brown actually dealt with Gary Groft, another scheduler for Reliant, and suggested an additional volume of gas to be sold at the "Gas Daily" price. Reliant agreed to accept the additional gas. Brown did not ask Westfield if it wanted to purchase the gas because Reliant was the company who was actually picking up Cotton Valley's gas. Brown did not inform Westfield
In August 2001, Cotton Valley sent an invoice to Westfield for the July gas, including the extra gas brought online in the last five days of the month, for a total amount due of $1,080,584.25. The extra gas was about $68,000 of the total due. Gouge sent back the invoice with a confirming signature authorizing payment. The 25th of the month fell on a weekend and so Cotton Valley was not expecting to get paid until the following Monday. When no money arrived on the following Monday, Brown tried to reach Gouge, but he did not return her calls. She did reach Campbell, who told her that he thought there was a pricing issue between Gouge and Reliant. Since such situations had arisen before, Brown did not become alarmed, although she was still concerned about the payment because Cotton Valley had expenses that it needed to pay and payments that it needed to make to the producers based on the producers' shares in the co-op. The producers themselves needed the payments to pay production taxes and royalty fees.
When Brown had not heard from Westfield by August 29, she called Dunnavant at Reliant to ask about the money that was due and the pricing issue mentioned to her by Campbell. Cotton Valley had been given Dunnavant's name as a contact by Gouge, but Brown had never spoken to him before. Dunnavant told her that he was not aware of any pricing issues, he was not involved in trading anymore and did not talk to Gouge about trading, but he would look into the matter and see what he could find out. Dunnavant also told Brown that he was not aware of any reason that Reliant would not have sent Gouge his money. Brown told Dunnavant that "he owes us a million and 80 thousand" and that the "guys" were getting "really uneasy." The following day, August 30, not having heard back from Dunnavant, she called him again, this time in the presence of Eakin. Dunnavant told her that he thought that there was a pricing issue, but that the money had been placed in the escrow account on August 27 and he did not know why Cotton Valley had not been paid. Late in the afternoon that day, Cotton Valley received a fax from Westfield explaining that there had been a pricing issue between Westfield and Reliant and that Cotton Valley would not be paid for the July 2001 gas. Cotton Valley was never paid for the gas by either Westfield or Reliant.
Cotton Valley subsequently filed the underlying suit in this appeal against Gouge, Westfield, and Reliant, seeking payment for the July 2001 gas under various legal theories. By the time the case went to trial, only Reliant remained as a defendant, and the only legal theories submitted to the jury were that Reliant was responsible to pay for the July 2001 gas because of either actual or apparent agency on the part of Westfield and that Cotton Valley was estopped from seeking a payment from Reliant for the July 2001 gas.
At trial, the following testimony was given by Westfield and Reliant regarding Westfield's role in the Cotton Valley deal and whether Westfield had actual authority to act as Reliant's agent for the purchase of natural gas from Cotton Valley.
Gouge testified that "had [Westfield] contracted Cotton Valley's gas directly with [Reliant], [he] undoubtedly would have negotiated terms and price on behalf of [Reliant] to do that; but [Westfield] didn't. [Cotton Valley] did contract with [Westfield]; and [Westfield] in turn, contracted with [Reliant].
Dunnavant understood the relationship between Westfield and Reliant, as far as the Cotton Valley gas was concerned, to be one in which Westfield was selling gas to Reliant. Dunnavant said that he was not aware that Gouge had used Reliant's name when Gouge approached Cotton Valley, that he had not discussed Cotton Valley with Gouge before Gouge approached it, and that he first heard of Cotton Valley after Gouge had secured an agreement with Cotton Valley for gas. According to Dunnavant, Westfield had not been authorized by Reliant to buy Cotton Valley's gas for Reliant's account. Dunnavant also stated that the fact that Reliant was receiving the nominations from Cotton Valley did not mean that it was buying the gas from Cotton Valley; Reliant's scheduler was involved in the process because the nominations received from Westfield only had volumes, but Reliant needed additional information, such as meter numbers, for the physical-nomination process so that the gas could actually flow to Reliant.
At trial, the jury was asked to answer the following questions, and it gave the following answers:
If you answered "Yes" to any part of Question No. 1, then answer the following question. Otherwise do not answer the following question.
Is Cotton Valley estopped from seeking payment from Reliant for its July 2001 gas production?
The jury was not asked to determine the amount of damages. Before the jury verdict, the parties stipulated that Cotton Valley had not been paid for the July 2001 gas production and that the amount in controversy was $1,067,322.19. The parties also subsequently stipulated as to attorney's fees.
After the jury verdict, Reliant filed a motion for judgment notwithstanding the verdict, challenging all three of the jury's findings. After reviewing briefing from both parties, and conducting a hearing on the motion, the trial court granted the motion as to the actual-authority finding and denied it as to the jury's findings on apparent authority and estoppel.
The trial court subsequently rendered a judgment in Cotton Valley's favor for $1,067,322.20 in damages, along with pre-and postjudgment interest and attorney's fees.
Reliant filed a motion for new trial asserting that (1) there was factually-insufficient evidence to support the jury's finding on actual authority, (2) there was factually-insufficient evidence to support the jury's finding on estoppel, (3) the admission of certain evidence was erroneous and likely caused the rendition of an improper verdict, and (4) a new trial should be granted in the interest of justice. The trial court denied Reliant's motion for new trial.
Three sufficiency issues are presented in this appeal. In its first issue, Reliant challenges the legal and factual sufficiency of the jury's finding of apparent authority. In its second issue, Reliant argues that it proved its affirmative defense of quasi-estoppel "as a matter of law," raising a legal-sufficiency challenge to the jury's adverse finding; elsewhere in its brief, Reliant also raises a factual-sufficiency challenge to this adverse finding. Finally, in its sole issue, Cotton Valley challenges the trial court's judgment notwithstanding the verdict on the issue of actual authority, an issue which we review under legal-sufficiency standards. See Wal-Mart Stores, Inc. v. Miller, 102 S.W.3d 706, 709 (Tex. 2003).
When a party attacks the legal sufficiency of an adverse finding on an issue for which it did not have the burden of proof, it must demonstrate that there is no evidence to support the adverse finding. Croucher v. Croucher, 660 S.W.2d 55, 58 (Tex.1983). Such a no-evidence challenge will be sustained when "`(a) there is a complete absence of evidence of a vital fact, (b) the court is barred by rules of law or of evidence from giving weight to the only evidence offered to prove a vital fact, (c) the evidence offered to prove a vital fact is no more than a mere scintilla, or (d) the evidence conclusively establishes the opposite of the vital fact.'" King Ranch, Inc. v. Chapman, 118 S.W.3d 742, 751 (Tex.2003) (quoting Merrell Dow Pharms., Inc. v. Havner, 953 S.W.2d 706, 711 (Tex. 1997)). More than a scintilla of evidence exists when the evidence "rises to a level that would enable reasonable and fair-minded people to differ in their conclusions." Ford Motor Co. v. Ridgway, 135 S.W.3d 598, 601 (Tex.2004) (quoting Havner, 953 S.W.2d at 711). However, evidence does not exceed a scintilla if it is so weak as to do no more than to create a mere surmise or suspicion that the fact exists. Ford Motor Co., 135 S.W.3d at 601 (quoting Kindred v. Con/Chem, Inc., 650 S.W.2d 61, 63 (Tex.1983)).
When a party attacks the legal sufficiency of an adverse finding on an issue on which it has the burden of proof, it must demonstrate on appeal that the evidence establishes, as a matter of law, all vital facts in support of the issue. Dow Chem. Co. v. Francis, 46 S.W.3d 237, 241 (Tex.2001). In reviewing such a matter-of-law challenge, the reviewing court employs a two-part test. Pac. Employers Ins. Co. v. Dayton, 958 S.W.2d 452, 455 (Tex.App.-Fort Worth 1997, pet. denied) (citing Victoria Bank & Trust Co. v. Brady, 811 S.W.2d 931, 940 (Tex.1991)). The reviewing court first examines the record for evidence that supports the finding, while ignoring all evidence to the contrary. Dow Chem. Co., 46 S.W.3d at 241. If there is no evidence to support the finding, the reviewing court will then examine the entire record to determine if the contrary proposition is established as a matter of law. Id. The issue should be sustained only if the contrary proposition is conclusively established. Id.
In a factual-sufficiency review, we must examine both the evidence supporting and contrary to the judgment. See Dow Chem. Co., 46 S.W.3d at 242; Plas-Tex, Inc. v. U.S. Steel Corp., 772 S.W.2d 442, 445 (Tex.1989). The jury is the sole judge of witnesses' credibility, and it may choose to believe one witness over another; a reviewing court may not impose
In reviewing a factual-sufficiency challenge to a jury finding on an issue on which the party did not have the burden of proof, we consider and weigh all of the evidence and set aside the verdict only if the evidence that supports the jury finding is so weak as to make the verdict clearly wrong and manifestly unjust. Cain v. Bain, 709 S.W.2d 175, 176 (Tex.1986); Bay, Inc. v. Ramos, 139 S.W.3d 322, 329 (Tex.App.-San Antonio 2004, pet. denied).
When a party attacks the factual sufficiency of an adverse finding on an issue on which it has the burden of proof, it must demonstrate on appeal that the adverse finding is against the great weight and preponderance of the evidence. Dow Chem. Co., 46 S.W.3d at 242. The court of appeals must consider and weigh all of the evidence, and the court can set aside a verdict only if the evidence is so weak or if the finding is so against the great weight and preponderance of the evidence that it is clearly wrong and unjust. Id.
A trial court may render a judgment notwithstanding the verdict on a jury finding if (1) there is no evidence to support the finding or (2) a legal principle precludes recovery. TEX.R. CIV. P. 301 (providing that court "may render judgment non obstante verdicto if a directed verdict would have been proper, and . . . may . . . disregard any jury finding on a question that has no support in the evidence"); Tiller v. McLure, 121 S.W.3d 709, 713 (Tex. 2003); Williams v. Briscoe, 137 S.W.3d 120, 124 (Tex.App.-Houston [1st Dist.] 2004, no pet.); John Masek Corp. v. Davis, 848 S.W.2d 170, 173 (Tex.App.-Houston [1st Dist.] 1992, writ denied).
In reviewing a judgment notwithstanding the verdict, we apply a legal-sufficiency-review standard, viewing the evidence in the light most favorable to the jury's verdict and disregarding all evidence and inferences to the contrary. Miller, 102 S.W.3d at 709; see also City of Keller, 168 S.W.3d at 823 (explaining when there is "no-evidence" of fact). If more than a scintilla of competent evidence supports the jury's findings, "the jury's verdict and not the trial court's judgment must be upheld." Miller, 102 S.W.3d at 709; Williams, 137 S.W.3d at 124.
When neither party objects to a jury instruction, an appellate court must review the sufficiency of the evidence in light of the instruction actually given, even if the statement of the law given in the charge is not correct, and even if the charge as given effectively increases the burden of proof on a party beyond that actually required by the correct law or results in a "more rigorous standard" of proof. See Romero v. KPH Consol., Inc., 166 S.W.3d 212, 220-21 (Tex.2005); Wal-Mart Stores, Inc. v. Sturges, 52 S.W.3d 711, 715 (Tex.2001); City of Fort Worth v. Zimlich, 29 S.W.3d 62, 71 (Tex.2000); IP Petroleum Co., Inc. v. Wevanco Energy, L.L.C., 116 S.W.3d 888, 897, n. 8 (Tex. App.-Houston [1st Dist.] 2003, pet. denied).
"An agent is one authorized by another to transact some business for the principal; the relationship is a consensual one between two parties, by which one
The law does not presume agency, and the party asserting agency has the burden to prove it. IRA Res., Inc. v. Griego, 221 S.W.3d 592, 597 (Tex.2007). A "good faith belief" on the part of a third-party that a person with whom it is dealing is the agent of another is not enough to bind the purported principal. 2616 S. Loop LLC v. Health Source Home Care, Inc., 201 S.W.3d 349, 356 (Tex.App.-Houston [14th Dist.] 2006, no pet.); Coker v. Cramer Fin. Grp., Inc., 992 S.W.2d 586, 595 (Tex.App.-Texarkana 1999, no pet.). A principal is liable for the acts of another acting as its agent only when the agent has actual or apparent authority to do those acts or when the principal ratifies those acts. Spring Garden 79U, Inc. v. Stewart Title Co., 874 S.W.2d 945, 948 (Tex.App.-Houston [1st Dist.] 1994, no pet.). An agent's authority to act on behalf of a principal depends on words or conduct by the principal either to the agent (actual authority) or to a third-party (apparent authority). Id. at 950; see also Walker Ins. Servs. v. Bottle Rock Power Corp., 108 S.W.3d 538, 550 (Tex.App.-Houston [14th Dist.] 2003, no pet.); Suarez v. Jordan, 35 S.W.3d 268, 272-73 (Tex.App.-Houston [14th Dist.] 2000, no pet.).
Actual authority includes both express and implied authority. 2616 S. Loop LLC, 201 S.W.3d at 356; Spring Garden 79U, 874 S.W.2d at 948. Express authority is delegated to an agent by words of the principal that expressly and directly authorize the agent to do an act or series of acts on behalf of the principal. Crooks v. MI Real Estate Partners, Ltd., 238 S.W.3d 474, 483 (Tex.App.-Dallas 2007, pet. denied). Implied authority is the authority of an agent to do whatever is necessary and proper to carry out the agent's express powers. Id. Implied agency therefore exists only as an adjunct to express actual authority; an agent that does not have express authority cannot have implied authority. Id.; Spring Garden 79U, 874 S.W.2d at 948.
Actual authority denotes the authority which a principal (1) intentionally confers upon an agent, (2) intentionally allows the agent to believe he possesses, or (3) by want of ordinary care allows the agent to believe himself to possess. Behring Intern., Inc. v. Greater Houston Bank, 662 S.W.2d 642, 649 (Tex.App.-Houston [1st Dist.] 1983, writ dism'd); see also Crooks, 238 S.W.3d at 483. In order to prove actual authority, therefore, there must be evidence that either (1) the principal intentionally conferred authority on another to act as its agent, or (2) the principal intentionally, or by a want of due care, allowed another to believe that it possessed authority to act as the principal's agent. See 2616 S. Loop LLC, 201 S.W.3d at 356; Spring Garden 79U, 874 S.W.2d at 949-50.
Accordingly, in determining whether a party had actual authority to act for another, we examine the words and conduct by the principal to the alleged agent regarding the alleged agent's authority to act for the principal. See Walker Ins. Servs., 108 S.W.3d at 550; Suarez, 35 S.W.3d at 273; Spring Garden 79U, 874 S.W.2d at 950.
Apparent authority is the power of an agent to affect the legal relations of the principal by transactions with a third person. Ames v. Great S. Bank, 672 S.W.2d 447, 450 (Tex.1984). An agent acting within the scope of his apparent authority binds the principal as if the principal itself had taken the action. Id. Apparent authority is based on estoppel, and only the conduct of the principal in leading a third party to believe that the agent has authority may be considered. Gaines v. Kelly, 235 S.W.3d 179, 182 (Tex.2007); NationsBank, N.A. v. Dilling, 922 S.W.2d 950, 953 (Tex.1996). Declarations of authority by the alleged agent, without more, do not establish either the existence or the scope of the alleged authority. Gaines, 235 S.W.3d at 183-84. Rather, the reviewing court looks to "acts of participation, knowledge, or acquiescence by the principal." Ins. Co. of N. Am. v. Morris, 981 S.W.2d 667, 672 (Tex.1998). Without the principal's participation, either through its "acts or knowledge of, and acquiescence in those of the agent," no mere combination of circumstances, including acts of the purported agent which may mislead persons into a false inference of authority, however reasonable, will serve as the predicate for apparent authority. Hall v. F.A. Halamicek Enters., Inc., 669 S.W.2d 368, 375 (Tex.App.-Corpus Christi 1984, no pet.); see also Sikes v. Heritage Oaks W. Ret. Vill., 238 S.W.3d 807, 810 (Tex.App.-Waco 2007, pet. denied); Suarez, 35 S.W.3d at 268; Disney Enterps. Inc. v. Esprit Fin., Inc., 981 S.W.2d 25, 30 (Tex.App.-San Antonio 1998, pet. dism'd w.o.j.).
Apparent authority arises either from (1) a principal knowingly permitting an agent to hold himself out as having authority, or (2) a principal's actions which lack such ordinary care as to clothe an agent with the indicia of authority, thus leading a reasonably prudent person to believe that the agent has the authority he purports to exercise. Gaines, 235 S.W.3d at 182. The standard used is that of "a reasonably prudent person, using diligence and discretion to ascertain the agent's authority." Id. at 182-83 (citing Chastain v. Cooper & Reed, 152 Tex. 322, 257 S.W.2d 422, 427 (1953)). In order for apparent authority to be established, it is also essential that the principal have full knowledge of all material facts at the time of the conduct alleged to be the basis for the estoppel. Gaines, 235 S.W.3d at 182; Rourke v. Garza, 530 S.W.2d 794, 803 (Tex.1975). Because apparent authority is an estoppel principle, a party seeking to recover under such legal theory must show justifiable reliance on the principal's words or conduct resulting in harm to the party. See Tex. S. Rentals, Inc. v. Gomez, 267 S.W.3d 228, 246 (Tex.App.-Corpus Christi 2008, no pet.) (citing Baptist Mem. Hosp. Sys. v. Sampson, 969 S.W.2d 945, 948 & n. 2 (Tex.1998) (holding that apparent agency in Texas is based on "the notion of estoppel, that is, a representation by the principal causing justifiable reliance and resulting harm.")).
Accordingly, in order to determine an agent's apparent authority, we examine the conduct of the principal and the reasonableness of the third party's assumptions regarding authority. See Gaines, 235 S.W.3d at 183.
We consider first Cotton Valley's sole issue. Cotton Valley asserts that the trial court erred in rendering a judgment notwithstanding the verdict on the issue of actual authority and argues that "there was factually and legally sufficient evidence to support the actual authority finding." As we have noted, a challenge to a
Under the charge actually given to the jury in this case, in order for the jury to determine that actual "authority" existed for Westfield to act for Reliant, it was required to find that Reliant had an "agreement" with Westfield that "Westfield act on behalf and for the benefit of Reliant in purchasing gas from Cotton Valley."
Reviewing the record in the light most favorable to the jury's finding, we conclude that the trial court did not err in rendering the judgment notwithstanding the verdict on the issue of actual authority. The answers of Gouge and Dunnavant in cross-examination relied upon by Cotton Valley to support its issue do not present any evidence that an actual agreement between Reliant and Westfield existed that "Westfield act on behalf and for the benefit of Reliant in purchasing gas from Cotton Valley."
We overrule Cotton Valley's sole issue.
In its first issue, Reliant asserts that there is no evidence to support the jury's finding that Westfield had apparent authority to act for Cotton Valley or, alternatively, that the jury's finding was against the great weight and preponderance of the evidence.
Reliant complains that (1) there was no evidence that Cotton Valley exercised "reasonable diligence to ascertain the fact or scope of Westfield's apparent authority," (2) there was no conduct on the part of Reliant that bestowed indications of authority on Westfield, and (3) there was no evidence of "reasonable reliance" by Cotton Valley on any conduct by Reliant. Reliant contends that, in reviewing the sufficiency of the evidence to support this finding, we may not consider the acts of Gouge, any facts not known to Cotton Valley, or any conduct by Cotton Valley that was consistent with the parties' actual relationship. Reliant then argues that any "omissions" by it cannot support an apparent authority finding, that there was no evidence that Cotton Valley exercised diligence to ascertain the fact or scope of Westfield's apparent authority, there was no evidence of any acts on its part which bestowed indications of authority on Westfield, and that there was no evidence of "reasonable reliance" by Cotton Valley on any conduct by Reliant.
Because there was no objection to the language of the jury charge regarding apparent authority,
The jury was also instructed that (1) "only the acts or omissions
We first note that, under the jury charge submitted, the jury was not required to consider whether Cotton Valley exercised "reasonable diligence to ascertain the fact or scope of Westfield's apparent authority" in making its apparent authority finding. "[R]easonable diligence to ascertain [an] agent's authority" is part of the standard under Texas law for determining whether a person is "reasonably prudent" in the context of apparent authority, see Gaines, 235 S.W.3d at 182-83, and, therefore, an instruction requiring a jury to evaluate "a reasonably prudent person" under that standard would be appropriate. See TEX.R. CIV. P. 273, 277. However, in the instant case, no such instruction was requested by any party, nor was its omission objected to by either party. Nor was the jury instructed that Cotton Valley was not entitled to recover on a theory of apparent authority in the absence of the use of "reasonable diligence to ascertain [Westfield's] authority."
Instead, the jury was instructed that it could find apparent authority if it found, by a preponderance of the evidence,
We overrule this portion of Reliant's legal-sufficiency challenge.
In our review of the remaining sufficiency complaints regarding apparent authority, consistent with the instructions given to the jury, we consider (1) only the "acts and omissions of Reliant,"
Reliant argues that Cotton Valley relies principally on representations by Westfield to Cotton Valley and facts that were not known to Cotton Valley, which it properly points out may not be relied upon in establishing apparent authority.
Reliant is correct that the record indicates that Reliant took no actions prior to the April 1999 contract between Cotton Valley and Westfield upon which Cotton Valley could have relied in making such contract. However, the record reveals that the contract, although supposed to be self-renewing according to Gouge, was not, and so Cotton Valley's decisions to sell its gas were made on a monthly basis and Cotton Valley's initial decision to sell the July 2001 gas in question was made on or about June 28, 2001, when the first nomination was sent. We therefore consider whether Reliant engaged in any "acts or omissions" prior to June 28, 2001 which bestowed indications of authority on Westfield.
Cotton Valley contends that (1) Reliant's taking physical delivery of the gas directly from Cotton Valley, (2) its arrangements with Westfield regarding the use of its schedulers, accounting department, and transportation agreements on the Williams pipeline, (3) its allowing its name to be disclosed to Cotton Valley in contravention of the usual business practices and its regular communications with Cotton Valley, and (4) its direct communications with Cotton Valley on end-month reconciliations, gas-balance transfers, and ultimately, its direct acceptance of the second July gas-production packet, all served to bestow indications of authority on Westfield.
Reviewing the legal sufficiency of the evidence to support the jury's finding of apparent authority under either paragraph of the charge given, we conclude that there is some evidence to support the jury's finding that there were "acts or omissions" by Reliant prior to June 28, 2001 which bestowed on Westfield indications of authority. While we would agree that there was no evidence to support a finding under the first paragraph (that Reliant knowingly permitted Westfield to hold itself out as having authority to contract on Reliant's behalf),
We next consider whether there is some evidence to support a finding of reasonable reliance on the part of Cotton Valley. In doing so, we look at Reliant's conduct from March 31, 1999 through June 28, 2001. Reliant argues that Cotton Valley did not rely on Reliant's actions as bestowing authority on Westfield to act for Reliant, or that its reliance was not reasonable, because Cotton Valley (1) signed documents that listed Reliant as a resale customer and indicated that Cotton Valley was selling gas to Westfield and Westfield was selling gas to Reliant, (2) took actions to ensure that it received payment by Westfield through a proposed escrow agreement, and (3) knew that the price that it received from Westfield and the price that Reliant paid for the gas differed. We review the sufficiency of the evidence as to reliance in light of the jury charge actually given. See Romero, 166 S.W.3d at 220-21; Zimlich, 29 S.W.3d at 71. The jury charge mentions reliance twice: (1) in the second paragraph, which permits the jury to find that actual authority exists if Reliant, "through lack of ordinary care, bestowed on Westfield such indications of authority that would lead a reasonably prudent person to rely on the apparent existence of authority to his detriment" and (2) in an instruction which stated that "[a]pparent authority may only be based on facts known to, and relied upon by, Cotton Valley." (Emphasis added.)
Reliant argues that its cited evidence conclusively proves that Cotton Valley did not rely on its dealings with Reliant, or at least not reasonably so.
Reliant's entire factual-sufficiency challenge to the jury's finding on apparent authority, after setting out the standard of review for legal sufficiency, reads:
For the reasons set out in our discussion of the legal sufficiency of the evidence, we disagree. After considering and weighing all of the evidence, we hold that the evidence supporting the jury's finding and apparent authority is not so weak as to make the verdict clearly wrong and manifestly unjust. See Cain, 709 S.W.2d at 176; Ramos, 139 S.W.3d at 329.
We overrule Reliant's first issue.
In its second issue, Reliant complains that it proved its affirmative defense
"Quasi-estoppel precludes a party from asserting, to another's disadvantage, a right inconsistent with a position previously taken." Lopez v. Munoz, Hockema & Reed, L.L.P., 22 S.W.3d 857, 864 (Tex.2000). "The doctrine applies when it would be unconscionable to allow a person to maintain a position inconsistent with one to which he acquiesced, or from which he accepted a benefit." Id. "Thus, quasi-estoppel forbids a party from accepting the benefits of a transaction and then subsequently taking an inconsistent position to avoid corresponding obligations or effects." Eckland Consultants, Inc. v. Ryder, Stilwell Inc., 176 S.W.3d 80, 87 (Tex. App.-Houston [1st Dist.] 2004, no pet.).
In order to meet its burden to show that it proved its affirmative defense of quasi-estoppel, Reliant must demonstrate on appeal there is evidence that establishes, as a matter of law, all vital facts in support of the issue. Dow Chem. Co., 46 S.W.3d at 241. In reviewing such a matter-of-law challenge, we first examine the record for evidence that supports the finding, while ignoring all evidence to the contrary; only if there is no evidence to support the finding do we then examine the record to determine if the contrary proposition is conclusively established as a matter of law. See id. at 241-42.
Reviewing the entire record, we conclude that Reliant has not met its burden. There is some evidence in the record, particularly in the testimony of Brown and Eakin, and in the evidence regarding the nature of the payment arrangement, which from the inception specifically involved Reliant paying funds into the escrow account specifically for the gas purchased from Cotton Valley, that would support a jury finding that Cotton Valley's seeking of payment from Reliant after July 2001 was not inconsistent with its invoicing of Westfield for the gas delivered to Reliant. There was evidence in the record that, prior to July 2001, Cotton Valley's position was that Reliant was responsible for the payment of the gas purchased, even though invoicing was made to, and payment made by, Westfield. Reliant acknowledges some of such evidence, but argues that it is "not credible" and so amounts to "no evidence."
The jury is the sole judge of the credibility of witnesses and a reviewing court may not impose its own opinion to the contrary. City of Keller, 168 S.W.3d at 819. It is also the province of the jury to draw whatever inferences it wishes from the evidence if more than one inference is possible. Id. at 821. If the evidence at trial would enable reasonable and fair-minded people
In the present case, we conclude that reasonable and fair-minded people could differ in their conclusions as to whether Cotton Valley took the position, prior to July 2001, that Reliant was ultimately liable for payment for the gas, even though Cotton Valley previously sought payment from Westfield, not Reliant, for the gas. Accordingly, we hold that there is some evidence to support the jury's finding on the affirmative defense of quasi-estoppel.
We overrule Reliant's second issue.
In its third issue, Reliant complains of the admission of certain evidence, offered by Cotton Valley as relevant to the issue of actual authority, namely (1) evidence that Westfield acted as Reliant's actual agent for transactions with three different companies, (2) evidence of Reliant's "early-pays" of Westfield, and (3) evidence of some correspondence that Westfield sent to another company and of which Cotton Valley did not know. Reliant asserts that this evidence was not relevant as to either actual or apparent authority and therefore mislead the jury.
We review a trial court's evidentiary rulings for an abuse of discretion. See Horizon/CMS Healthcare Corp. v. Auld, 34 S.W.3d 887, 906 (Tex.2000). A trial court abuses its discretion when it acts without regard for any guiding rules or principles. Downer v. Aquamarine Operators, Inc., 701 S.W.2d 238, 241-42 (Tex. 1985). Even if an evidentiary ruling is erroneous, we will not reverse unless the erroneous ruling probably caused the rendition of an improper judgment. See Auld, 34 S.W.3d at 906. Reversible error in connection with rulings on questions of evidence usually does not occur unless the complaining party can demonstrate that the whole case turned on the evidence that was admitted. City of Brownsville v. Alvarado, 897 S.W.2d 750, 753-54 (Tex.1995). We determine whether the case turns on the admitted evidence by reviewing the entire record. See id.
We first note that, although the trial court clearly indicated to the parties that it was admitting the evidence solely as to the issue of actual authority, Reliant did not request any limiting instruction to the jury, either at the time that the evidence was offered or in the charge to the jury. Accordingly, if the evidence was admissible for any purpose, the trial court's admission should be affirmed. See TEX.R. EVID. 105(a); Auld, 34 S.W.3d at 906. We consider first the purpose for which the trial court actually admitted the evidence—to show actual authority.
As to actual authority, Reliant argues that the challenged evidence was not relevant because "the only relevant evidence" in determining actual authority is (1) evidence of communications between the principal and the agent conferring authority and (2) evidence of the alleged agent's understanding about its authority. We disagree.
Evidence is relevant if it has "any tendency to make the existence of any fact that is of consequence to the determination of the action more probable or less probable than it would be without the evidence." TEX.R. EVID. 401. In determining relevancy, we look at the purpose of offering the evidence and, if there is some logical connection, either directly or by inference, between the fact offered and the fact to be proved, the relevancy test is satisfied. Serv. Lloyds Ins. Co. v. Martin, 855 S.W.2d 816, 822 (Tex.App.-Dallas 1993, no pet.).
Reviewing the record as a whole, we conclude that the trial court did not abuse
We overrule Reliant's third issue.
In its fourth and final issue, Reliant requests this Court to "grant a new trial" in the interest of justice due to "cumulative error" by way of "the erroneous admission of inadmissible and prejudicial evidence in combination with Cotton Valley's improper argument."
We first note that, as a reviewing court, we may not "grant a new trial in the interest of justice." See In re Columbia Med. Ctr., L.P., 290 S.W.3d 204, 213 (Tex. 2009). A trial court has the discretion to do so, but we as a reviewing court have no such authority. Id. at 211 ("[A] trial court [has] considerable discretion to set aside a jury verdict, even on its own motion . . . [a]ppellate judges have much less discretion. . ."). Compare TEX.R. CIV. P. 320 (providing trial court authority to grant "a new trial . . . for good cause") with TEX. R.APP. P. 43.3 (providing court of appeal authority to remand for new trial in interest of justice, if it concludes there is reversible error in trial court's judgment).
To the extent that Reliant is raising a complaint regarding improper jury argument by Cotton Valley, we note that no objection was made to this argument, nor did Reliant claim in its motion for new trial that the argument was incurable, and so any complaint regarding the argument is waived. See TEX.R.APP. P. 33.1(a)(1)(A); Arias v. Brookstone, L.P., 265 S.W.3d 459, 467 (Tex.App.-Houston [1st Dist.] 2007, pet. denied). To the extent that Reliant is arguing that we should remand for a new trial because of the admission of the complained-of evidence in issue three, we have already determined there was no error as to that admission so there is no basis for a remand.
We overrule Reliant's fourth issue.
We affirm the judgment of the trial court.