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CAUSE NO. 2015-48580
APACHE CORPORATION, § IN THE DISTRICT COURT OF
Plaintiff,
v. § HARRIS COUNTY, TEXAS
CASTEX OFFSHORE, INC.,
CASTES ENERGY, INC., CASTEX §
ENERGY PARTNERS, L.P.,
CASTEX ENERGY 2008, LP, AND §
CASTEX ENERGY
DEVELOPMENT FUND, LP
Defendants § 133 JUDICIAL DISTRICT
PACHE OTION TO ODIFY
CORRECT OR EFORM THE UDGMENT
Under Tex. R. Civ. P. 329b, Apache Corporation, moves this Court to modify, correct, or
reform the judgment:
Because Castex failed to prove presentment, Castex is not entitled to attorney’s fees.
Texas law has long required a party seeking attorney’s fees to present its claim to the
opposing party. Tex. Civ. Prac. & Rem. Code 38.002 (2) (“the claimant must present the claim to
the opposing party . . . .”). The rationale is that fairness dictates giving the party an opportunity to
resolve the claim within 30 days, before enormous fees are incurred. E.g. Jones v. Kelley, 614
S.W.2d 95, 100 (Tex. 1981); Gibson v. Cuellar, 440 S.W.3d 150, 157 (Tex. App.Houston [ 14th
Dist.] 2013, no pet.).
“Presentment is a demand or request for payment or performance, whether written or oral.”
Svoboda v. Thai, No. 01-17-00584-CV, 2019 WL 1442434, at *3 (Tex. App.Houston [1st Dist.]
Apr. 2, 2019, no pet.) (mem. op.) (citing Jones v. Kelley, 614 S.W.2d at 100). Here, despite
Apache’s objection , the Court did not submit a jury question about presentment, so there can be
no deemed finding. See Svoboda, 2019 WL 1442434, at *4; Tex. R. Civ. P. 279.
Instead, Castex was required to establish its presentment as a matter of law. See id. Because
Castex did not establish presentment of its claim as a matter of law, it is not entitled to any
attorney’s fees. See Svoboda, 2019 WL 1442434, at *7 (“Presentment is a necessary element for
recovery of attorney’s fees under Chapter 38, but it was neither found as a fact nor proved as a
matter of law. Therefore, we hold that the trial court erred by awarding attorney’s fees . . . .”).
Thus, at a minimum, this Court must delete the award of $3,152,301 in attorney’s fees to Castex.
Alternatively, the Court should not award prejudgment interest on the award of
astex’s attorneys’ fees
Many Texascourts categorically prohibit any award of prejudgment interest on attorneys’
fees See Power Reps, Inc. v. Cates, 2015 WL 4747215, at *22 (Tex. App.Houston [1st Dist.]
2015, no pet.) Carbona v. CH Med., Inc., 266 S.W.3d 675, 688 (Tex. App.Dallas 2008, no pet.).
Apache acknowledges that the Fourteenth Court and some other disagree with this conclusion
holding there is an exception under which a court has the discretion to award interest on fees that
have already been paid Alma Invs., Inc. v. Bahia Mar Co Owners Ass’n, Inc., 497 S.W.3d 137,
147 (Tex. App.Corpus Christi 2016, Nova Cas. Co. v. Turner Const. Co., 335 S.W.3d 698,
706 (Tex. App.Hous ton [14th Dist.] 2011, no pet.) Williams v. Colthurst, 253 S.W.3d 353, 362
(Tex. App.Eastland 2008, no pet.) A.V.I., Inc. v. Heathington, 842 S.W.2d 712, 717 (Tex. App.
Amarillo 1992, writ denied) ecause the Houston First and Dallas court are correct prejudgment
interest should not beallowed on awards of attorneys’ fees.
Apache objected: “Question 9 is immaterial because there is no evidence of presentment. Apache
further objects to the omission of a jury question about whether presentment occurred.” Apache’s
Formal Objections to the Court’s Charge, p. 6. The objections were overruled. Tr. 4/11/19 at 6.
Second, the Court should eliminate the prejudgment interest because the so called evidence
was not undisputed. After the verdict has been received, a trial court can receive additional
undisputed evidence. Tex. R. Civ. P. 270. Here, however, the affidavit of Mr. Thomas tendered a
few minutes before the hearing consisted of naked hearsay upon hearsay from an undesignated
witness here was no evidence in the trial record that Castex paid any of the fees on which Castex
now seeks prejudgment interest, and there has been no undisputed evidence after the trial record
hat it has All Castex provides with its motion is a chartunsupported by any affidavit that was
clearly prepared for the purposes of this motion This chart, which was first prepared after trial
ended, is not evidence It was not introduced at trial And even, if it had been, it is not a business
record under Rule 803(6) Nor would it have been admissible under Rule 1006 as a summary as
there is no showing that the underlying records were voluminous nor did Castex make available
the underlying records that show when the purported payments were made. Further, this Court
routinely excluded summary evidence at trial.
In fact, Castex refused to provide such information in discovery as part of its overall refusal
to fully disclose the attorneys’ fees it charged Castex in this case Having refused to produce this
information and discovery and then having failed to introduce this evidence at trial,the Court
should eliminate the award for prejudgment interest even if it thinks the chart is sufficient evidence
(which it is not) because Castex made the tactical choice to not disclose this information in
discovery Castex should not have been allowed to gain an advantage from purported facts that it
refused to disclose before trial. By allowing it to do so, this Court abused its discretion. The way
to fix the error is to modify or reform the judgment to delete the award of prejudgment interest on
attorney’s fees.
The Court should eliminate Castex’s request for prejudgment interest for its alleged
damages for breach of the Potomac JOA
The award to Castex prejudgment interest on its purported unrecoverable reserve
damages should be eliminated because it failed to request (let alone obtain) the necessary jury
findings to allow the award to calculate the amount of prejudgment interest to which Castex is
entitled, if any. Prejudgment interest should begin to run when each well ceased production But
Castex failed to obtain findings as to its unrecoverable reserves damages as to each well Instead,
the jury found the total amount of unrecoverable reserves for all four wells.
The failure to obtain the necessary findings to allow the Court to correctly determine what
prejudgment interest, if any, should be awarded to Castex should be fatal to any award of
prejudgment interest Texas courts have repeatedly held that the failure to obtain jury findings that
segregate damages so as to allow a proper prejudgment interest calculation precludes any award
of prejudgment interest KMG Kanal Muller Gruppe Deutschland GmbH & Co. KG v. Davis
S.W.3d 379, 397 (Tex. App.Houston [1st Dist.] 2005, no pet.) (vacating award of prejudgment
interest whe plaintiff failed to obtain segregated damages findings); Yowell v. Piper Aircraft
Corp., 703 S.W.2d 630, 636 (Tex. 1986) (holding that prejudgment interest award was improper
due to failure to segregate damage).
Alternatively, the Court should allow pre judg nt interest to begin to run only as of the
last date that Castex is entitled to have prejudgment interest to begin to run as to any of the four
wells at issue That date, as admitted by Castex, is October 31 Modifying the judgment in
that respect would ameliorate the harm caused by Castex’s failure to obtain the necessary findings
to allow a proper calculation of prejudgment interest without depriving them of all prejudgment
interest.
While Prejudgment Interest on Castex’s Claims for Breach of the Potomac JOA Are
Governed by Louisiana Law, Postjudgment Interest is Governed by Texas Law
The award to Castex’s of post judgment interest on its Potomac JOA claims based on
Louisiana law is incorrect rejudgment interest is in the nature of damages and thus is governed
by the substantive law that applies to Castex’s claim, Louisiana But postjudgment interest i
procedural. NisshoIwai Co., Ltd. v. Occidental Crude Sales, Inc., 848 F.2d 613, 623 (5th Cir.
1988) (“postjudgment interest is better characterized as procedural because it confers no right in
and of itself. Rather, it merely follows and operates on the substance of determined rights.”) ARY
Jewelers, L.L.C. v. Krigel, 85 P.3d 1151, 1161 (Kan. 2004) (holding that Missouri law applied to
prejudgment interest based on choice law clause but “that postjudgment interest is question of
procedure; accordingly, the law of Kansas as the forum state applies.”)
he law of the forum (Texas) still governs procedural matters, which includes
postjudgment interest Arkoma Basin Exploration Co. v. FMF Assocs., 249 S.W.3d 380, 387 (Tex.
2008) (holding that Texas procedural law applies even when claims governed by Virginia law).
Therefo e, the postjudgment interest rate on the entire judgment is governed by Texas law and
thus should be 5.5% See also ODE §304.003(a) (“A money judgment of a court of this
state to which Section 304.002 does not apply, including court costs awarded in the judgment and
prejudgment interest, if any, earns postjudgment interest at the rate determined under this
section.
RAYER
Apache asks this Court to grant its motion, to modify the judgment by deleting the award
of attorney’s fees or alternatively prejudgment interest on attorney’s fees, by eliminating or at least
correcting the award of prejudgment interest on Potomac damages, and by changing the
postjudgment interest rate to Texas law. Apache also asks for all other relief to which it is entitled.
Respectfully submitted,
CHIFFER ICKS OHNSON PLLC
/s/ Adam P. Schiffer
Adam P. Schiffer
State Bar No. 17745763
700 Louisiana Street, Suite 2650
Houston, TX 77002
T: 713
E: aschiffer@shjlawfirm.com
OGLER RAR ORD O’NEIL RAY LLP
Murray Fogler
State Bar No. 07207300
2 Houston Center
Fannin Street, Suite 1640
Houston, TX 77002
T: 713
E: mfogler@fbfog.com
OKINOS OUNG
Roger D. Townsend
State Bar No. 20167600
Four Houston Center
1221 Lamar St. 16 Floor,
Houston, TX 77010
T: 713
E: rtownsend@cokinoslaw.com
Counsel for Plaintiff, Apache Corporation
ERTIFICATE OF ERVICE
On June 5, 2019, I served a copy of this motion by electronic filing notification and e mail
to the following counsel of record:
W. Ray Whitman rwhitman@bakerlaw.com
James H. Nye jnye@bakerlaw.com
Joshua C. Thomas jthomas@bakerlaw.com
AKER OSTETLER LLP
811 Main Street, Suite 1100
Houston, TX 77002
/s/ Adam P. Schiffer
Adam P. Schiffer
Preview
CAUSE NO. 2015-48580 APACHE CORPORATION, § IN THE DISTRICT COURT OF Plaintiff, v. § HARRIS COUNTY, TEXAS CASTEX OFFSHORE, INC., CASTES ENERGY, INC., CASTEX § ENERGY PARTNERS, L.P., CASTEX ENERGY 2008, LP, AND § CASTEX ENERGY DEVELOPMENT FUND, LP Defendants § 133 JUDICIAL DISTRICT PACHE OTION TO ODIFY CORRECT OR EFORM THE UDGMENT Under Tex. R. Civ. P. 329b, Apache Corporation, moves this Court to modify, correct, or reform the judgment: Because Castex failed to prove presentment, Castex is not entitled to attorney’s fees. Texas law has long required a party seeking attorney’s fees to present its claim to the opposing party. Tex. Civ. Prac. & Rem. Code 38.002 (2) (“the claimant must present the claim to the opposing party . . . .”). The rationale is that fairness dictates giving the party an opportunity to resolve the claim within 30 days, before enormous fees are incurred. E.g. Jones v. Kelley, 614 S.W.2d 95, 100 (Tex. 1981); Gibson v. Cuellar, 440 S.W.3d 150, 157 (Tex. App.Houston [ 14th Dist.] 2013, no pet.). “Presentment is a demand or request for payment or performance, whether written or oral.” Svoboda v. Thai, No. 01-17-00584-CV, 2019 WL 1442434, at *3 (Tex. App.Houston [1st Dist.] Apr. 2, 2019, no pet.) (mem. op.) (citing Jones v. Kelley, 614 S.W.2d at 100). Here, despite Apache’s objection , the Court did not submit a jury question about presentment, so there can be no deemed finding. See Svoboda, 2019 WL 1442434, at *4; Tex. R. Civ. P. 279. Instead, Castex was required to establish its presentment as a matter of law. See id. Because Castex did not establish presentment of its claim as a matter of law, it is not entitled to any attorney’s fees. See Svoboda, 2019 WL 1442434, at *7 (“Presentment is a necessary element for recovery of attorney’s fees under Chapter 38, but it was neither found as a fact nor proved as a matter of law. Therefore, we hold that the trial court erred by awarding attorney’s fees . . . .”). Thus, at a minimum, this Court must delete the award of $3,152,301 in attorney’s fees to Castex. Alternatively, the Court should not award prejudgment interest on the award of astex’s attorneys’ fees Many Texascourts categorically prohibit any award of prejudgment interest on attorneys’ fees See Power Reps, Inc. v. Cates, 2015 WL 4747215, at *22 (Tex. App.Houston [1st Dist.] 2015, no pet.) Carbona v. CH Med., Inc., 266 S.W.3d 675, 688 (Tex. App.Dallas 2008, no pet.). Apache acknowledges that the Fourteenth Court and some other disagree with this conclusion holding there is an exception under which a court has the discretion to award interest on fees that have already been paid Alma Invs., Inc. v. Bahia Mar Co Owners Ass’n, Inc., 497 S.W.3d 137, 147 (Tex. App.Corpus Christi 2016, Nova Cas. Co. v. Turner Const. Co., 335 S.W.3d 698, 706 (Tex. App.Hous ton [14th Dist.] 2011, no pet.) Williams v. Colthurst, 253 S.W.3d 353, 362 (Tex. App.Eastland 2008, no pet.) A.V.I., Inc. v. Heathington, 842 S.W.2d 712, 717 (Tex. App. Amarillo 1992, writ denied) ecause the Houston First and Dallas court are correct prejudgment interest should not beallowed on awards of attorneys’ fees. Apache objected: “Question 9 is immaterial because there is no evidence of presentment. Apache further objects to the omission of a jury question about whether presentment occurred.” Apache’s Formal Objections to the Court’s Charge, p. 6. The objections were overruled. Tr. 4/11/19 at 6. Second, the Court should eliminate the prejudgment interest because the so called evidence was not undisputed. After the verdict has been received, a trial court can receive additional undisputed evidence. Tex. R. Civ. P. 270. Here, however, the affidavit of Mr. Thomas tendered a few minutes before the hearing consisted of naked hearsay upon hearsay from an undesignated witness here was no evidence in the trial record that Castex paid any of the fees on which Castex now seeks prejudgment interest, and there has been no undisputed evidence after the trial record hat it has All Castex provides with its motion is a chartunsupported by any affidavit that was clearly prepared for the purposes of this motion This chart, which was first prepared after trial ended, is not evidence It was not introduced at trial And even, if it had been, it is not a business record under Rule 803(6) Nor would it have been admissible under Rule 1006 as a summary as there is no showing that the underlying records were voluminous nor did Castex make available the underlying records that show when the purported payments were made. Further, this Court routinely excluded summary evidence at trial. In fact, Castex refused to provide such information in discovery as part of its overall refusal to fully disclose the attorneys’ fees it charged Castex in this case Having refused to produce this information and discovery and then having failed to introduce this evidence at trial,the Court should eliminate the award for prejudgment interest even if it thinks the chart is sufficient evidence (which it is not) because Castex made the tactical choice to not disclose this information in discovery Castex should not have been allowed to gain an advantage from purported facts that it refused to disclose before trial. By allowing it to do so, this Court abused its discretion. The way to fix the error is to modify or reform the judgment to delete the award of prejudgment interest on attorney’s fees. The Court should eliminate Castex’s request for prejudgment interest for its alleged damages for breach of the Potomac JOA The award to Castex prejudgment interest on its purported unrecoverable reserve damages should be eliminated because it failed to request (let alone obtain) the necessary jury findings to allow the award to calculate the amount of prejudgment interest to which Castex is entitled, if any. Prejudgment interest should begin to run when each well ceased production But Castex failed to obtain findings as to its unrecoverable reserves damages as to each well Instead, the jury found the total amount of unrecoverable reserves for all four wells. The failure to obtain the necessary findings to allow the Court to correctly determine what prejudgment interest, if any, should be awarded to Castex should be fatal to any award of prejudgment interest Texas courts have repeatedly held that the failure to obtain jury findings that segregate damages so as to allow a proper prejudgment interest calculation precludes any award of prejudgment interest KMG Kanal Muller Gruppe Deutschland GmbH & Co. KG v. Davis S.W.3d 379, 397 (Tex. App.Houston [1st Dist.] 2005, no pet.) (vacating award of prejudgment interest whe plaintiff failed to obtain segregated damages findings); Yowell v. Piper Aircraft Corp., 703 S.W.2d 630, 636 (Tex. 1986) (holding that prejudgment interest award was improper due to failure to segregate damage). Alternatively, the Court should allow pre judg nt interest to begin to run only as of the last date that Castex is entitled to have prejudgment interest to begin to run as to any of the four wells at issue That date, as admitted by Castex, is October 31 Modifying the judgment in that respect would ameliorate the harm caused by Castex’s failure to obtain the necessary findings to allow a proper calculation of prejudgment interest without depriving them of all prejudgment interest. While Prejudgment Interest on Castex’s Claims for Breach of the Potomac JOA Are Governed by Louisiana Law, Postjudgment Interest is Governed by Texas Law The award to Castex’s of post judgment interest on its Potomac JOA claims based on Louisiana law is incorrect rejudgment interest is in the nature of damages and thus is governed by the substantive law that applies to Castex’s claim, Louisiana But postjudgment interest i procedural. NisshoIwai Co., Ltd. v. Occidental Crude Sales, Inc., 848 F.2d 613, 623 (5th Cir. 1988) (“postjudgment interest is better characterized as procedural because it confers no right in and of itself. Rather, it merely follows and operates on the substance of determined rights.”) ARY Jewelers, L.L.C. v. Krigel, 85 P.3d 1151, 1161 (Kan. 2004) (holding that Missouri law applied to prejudgment interest based on choice law clause but “that postjudgment interest is question of procedure; accordingly, the law of Kansas as the forum state applies.”) he law of the forum (Texas) still governs procedural matters, which includes postjudgment interest Arkoma Basin Exploration Co. v. FMF Assocs., 249 S.W.3d 380, 387 (Tex. 2008) (holding that Texas procedural law applies even when claims governed by Virginia law). Therefo e, the postjudgment interest rate on the entire judgment is governed by Texas law and thus should be 5.5% See also ODE §304.003(a) (“A money judgment of a court of this state to which Section 304.002 does not apply, including court costs awarded in the judgment and prejudgment interest, if any, earns postjudgment interest at the rate determined under this section. RAYER Apache asks this Court to grant its motion, to modify the judgment by deleting the award of attorney’s fees or alternatively prejudgment interest on attorney’s fees, by eliminating or at least correcting the award of prejudgment interest on Potomac damages, and by changing the postjudgment interest rate to Texas law. Apache also asks for all other relief to which it is entitled. Respectfully submitted, CHIFFER ICKS OHNSON PLLC /s/ Adam P. Schiffer Adam P. Schiffer State Bar No. 17745763 700 Louisiana Street, Suite 2650 Houston, TX 77002 T: 713 E: aschiffer@shjlawfirm.com OGLER RAR ORD O’NEIL RAY LLP Murray Fogler State Bar No. 07207300 2 Houston Center Fannin Street, Suite 1640 Houston, TX 77002 T: 713 E: mfogler@fbfog.com OKINOS OUNG Roger D. Townsend State Bar No. 20167600 Four Houston Center 1221 Lamar St. 16 Floor, Houston, TX 77010 T: 713 E: rtownsend@cokinoslaw.com Counsel for Plaintiff, Apache Corporation ERTIFICATE OF ERVICE On June 5, 2019, I served a copy of this motion by electronic filing notification and e mail to the following counsel of record: W. Ray Whitman rwhitman@bakerlaw.com James H. Nye jnye@bakerlaw.com Joshua C. Thomas jthomas@bakerlaw.com AKER OSTETLER LLP 811 Main Street, Suite 1100 Houston, TX 77002 /s/ Adam P. Schiffer Adam P. Schiffer