Classic Oil & Gas, Inc. v. Allen Cook

NO. 12-05-00085-CV IN THE COURT OF APPEALS TWELFTH COURT OF APPEALS DISTRICT TYLER, TEXAS CLASSIC OIL & GAS, INC., § APPEAL FROM THE FOURTH APPELLANT V. § JUDICIAL DISTRICT COURT OF ALLEN COOK, APPELLEE § RUSK COUNTY, TEXAS MEMORANDUM OPINION Classic Oil & Gas, Inc. (Classic) appeals from an adverse judgment entered after a jury trial in Allen Cook’s suit against Classic for damages to his property. In five issues, Classic asserts there is no evidence to support the damage award and complains of charge error, improper multiple recovery for torts in a contract cause of action, and miscalculated interest. We reverse and render. Background Cook owns the surface rights to land in Rusk County that is subject to an oil and gas lease operated by Classic. Classic obtained a permit for operations on the land in the fall of 2002. Cook filed suit against Classic on June 11, 2003, seeking $500,000.00 in damages for nuisance, trespass, and negligence. The jury found that Classic was negligent, its actions created a nuisance, and it trespassed on Cook’s property. The jury awarded Cook $120,000.00 to compensate him for timber damaged by Classic’s operations, $750.00 to restore the property to the condition it was in before Classic’s negligence occurred, $75,000.00 for loss of use and enjoyment due to Classic’s negligence, $600.00 to restore the property to the condition it was in before Classic created the nuisance, $75,000.00 for loss of use and enjoyment due to the nuisance created by Classic, $600.00 to restore the property to the condition it was in before Classic’s trespass, and $75,000.00 for the loss of the market value due to Classic’s trespass. The court entered judgment on the jury’s verdict ordering Classic to pay Cook $346,950.00 and prejudgment interest in the sum of $44,960.91, with interest at the rate of ten percent per annum until paid. Expert Testimony In its first issue, Classic contends there is no evidence to support the jury’s finding of damages. Classic argues that Cook’s expert, Kenneth Frazier, was unqualified to testify on this subject, his testimony was unreliable and irrelevant, and, therefore, his testimony was not probative. Because Frazier provided the sole evidence of the amount of damages, the argument continues, Cook actually presented no evidence to support the amount of damages found by the jury. Applicable Law In reviewing a no evidence claim, the reviewing court must consider only the evidence and inferences tending to support the trial court’s finding, disregarding all contrary evidence and inferences. Wal-Mart Stores, Inc. v. Gonzalez, 968 S.W.2d 934, 936 (Tex. 1998). A no evidence point 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. Volkswagen of Am., Inc. v. Ramirez, 159 S.W.3d 897, 903 (Tex. 2004). If the expert’s testimony does not survive the no evidence challenge, we must determine whether in the remaining evidence there is more than a scintilla of evidence that supports the challenged jury finding. Id. at 904. Rule 702 of the Texas Rules of Evidence permits a witness qualified as an expert by knowledge, skill, experience, training, or education to testify on scientific, technical, or other specialized subjects if the testimony would assist the trier of fact in understanding the evidence or determining a fact issue. Tex. R. Evid. 702. The party offering the expert’s testimony bears the burden to prove that the witness is qualified. Gammill v. Jack Williams Chevrolet, Inc., 972 S.W.2d 713, 718 (Tex. 1998). The offering party must demonstrate that the witness possesses special knowledge as to the very matter on which he proposes to give an opinion. Id. Whether a witness qualifies as an expert is a matter of judicial discretion. Tex. R. Evid. 104(a); Broders v. Heise, 924 S.W.2d 148, 151 (Tex. 1996). Further, expert testimony must be relevant and based on a reliable foundation. Guadalupe-Blanco River Auth. v. Kraft, 77 S.W.3d 805, 807 (Tex. 2002). In determining reliability, the trial court should evaluate the methods, analysis, and principles relied on by the expert in reaching the opinion and ensure that the opinion comports with applicable professional standards and has a reliable basis in the knowledge and experience of the discipline. Gammill, 972 S.W.2d at 725-26. The reliability requirement focuses on the principles, research, and methodology underlying an expert’s conclusions. Kerr-McGee Corp. v. Helton, 133 S.W.3d 245, 254 (Tex. 2004). Expert testimony is unreliable if there is too great an analytical gap between the data and the opinion proffered. Gammill, 972 S.W.2d at 726. Further, expert testimony is unreliable if it is no more than subjective belief or unsupported speculation. Kerr-McGee Corp., 133 S.W.3d at 254. Opinion testimony that is conclusory or speculative is not relevant evidence because it does not tend to make the existence of a material fact more probable or less probable. General Motors Corp. v. Iracheta, 161 S.W.3d 462, 470-71 (Tex. 2005). Such evidence is incompetent and will not support a judgment. Id. at 471. Frazier’s Testimony Cook presented Kenneth Frazier to testify as to the damages allegedly caused by Classic’s operations. Frazier received a degree in petroleum engineering in 1958. He worked as an engineer for various companies from then until 1967. At that point, he became an “Independent Petroleum Consultant.” He has worked in the oil industry in the areas of drilling, producing, and consulting and as an owner and an operator. He has also done appraisal work and evaluation of mineral properties. As an operator, he has made estimates of damage done to the surface by his own operations. He has negotiated and settled damage claims as an operator and had to arrive at values of standing timber. Frazier testified that by experience and education he is qualified to render such opinions. Frazier visited Cook’s land briefly in 2000 for another matter and visited the land for this case in December 2003 for a couple of hours. He estimated the number of acres from which timber was removed and the number of trees per acre. He assumed that all land Classic used was covered with timber, and he assumed that it all contained the same amount of timber. He did not know where the pipelines were. Cook’s father told him they were not in the roadway. Cook’s father also told him Classic took clay from the building location and put it on the lease road. Frazier testified that there were already logging roads on the property that Classic could have used to minimize the damage. Frazier assumed Classic damaged the missing portion of the fence. Frazier testified that a lot of timber had been removed, pushed to the side, and buried. He estimated the number of trees, 200 per acre for pulpwood and 200 per acre for saw logs, that had been removed from the property. To arrive at the amount of timber and its value at the time the trees were cut, he used values given to him by a forester. He assumed that, in the future, Cook would plant twice as many trees and that ninety percent would survive over twenty-five years. The survival rate was advised by the forester. He factored in an assumption of thinning by Cook and applied a discount factor that he got from an accountant to bring the future value of the trees back down to present value. Cook also placed in evidence the report Frazier prepared, dated December 27, 2003. This report was based on Frazier’s two hour inspection of the property on December 8. He determined that six acres were temporarily damaged and the cost to plant trees on that acreage was $600.00. The total damage due to construction, which was based on the loss of four hundred trees, was $119,780.00. Finally, permanent damage of nonrecoverable use, that is, trees Cook would have harvested in the future, was $62,800.00. Thus, the total amount of damages according to Frazier’s report was $183,180.00, all of which was based on the value of trees that were destroyed and trees that presumably would be planted and harvested in the future. Discussion Frazier is an engineer with extensive experience in the oil and gas industry. He has negotiated and settled damage claims and determined values of standing timber. However, he was asked to testify as to the value, both past and future, of timber removed by Classic. The record does not indicate that he had any training in estimating timber damages. His experience in the same general field did not demonstrate that he possessed specialized knowledge about the value of timber. See Gammill, 972 S.W.2d at 719 (Witness experienced in designing and testing fighter planes and missiles was not an expert in automobile design.); In re S.E.W., 168 S.W.3d 875, 883 (Tex. App.–Dallas 2005, no pet.) (Expert in collecting samples and interpreting test results was not an expert in the actual testing.); Anthony Equip. Co. v. Irwin Steel Erectors, Inc., 115 S.W.3d 191, 206 (Tex. App.–Dallas 2003, pet. dism’d) (Owner of company who had specialized knowledge about obtaining repairs and parts and selecting a repair company did not have specialized knowledge of costs of repairs.); Montgomery v. State, 83 S.W.3d 909, 911-12 (Tex. App.–Eastland 2002, pet. ref’d) (Bank officer with extensive experience concerning vehicle loans and determining values of vehicles was qualified as an expert on the issue of values of vehicles.). The factors that go to the heart of Frazier’s calculations were outside his expertise and provided by a forester and an accountant, neither of whom testified at trial. Frazier was not able to testify as to the reliability or soundness of those factors because he did not have the knowledge or experience necessary. He could only identify their sources, the experts from which they came. Frazier was not qualified to testify about the value of the timber removed from Cook’s property. Therefore, his testimony as to valuation, the amount of damages owed by Classic, has no probative worth. See Gammill, 972 S.W.2d at 719; Leitch v. Hornsby, 935 S.W.2d 114, 119 (Tex. 1996). However, even if Frazier were qualified, his testimony is flawed in that it is not reliable. Frazier failed to show why it was permissible and reasonable for him to follow the advice of the forester and accountant. The underlying data supplied by the forester and accountant could not be independently evaluated. See Kraft, 77 S.W.3d at 808 (Review of underlying data revealed that the local sales the appraiser used to value the land at issue were not comparable and therefore his opinion was not reliable.) The record does not ensure that Frazier’s testimony, which was based on the advice of others, complied with applicable professional standards or that it had a reliable basis in the knowledge and experience of the discipline. In re S.E.W., 168 S.W.3d at 883-84. Neither did Frazier testify that his method for valuing timber, making assumptions after the fact and applying numbers given by a forester and an accountant, is the commonly accepted method for valuing timber. See Gammill, 972 S.W.2d at 725-26. Frazier did little more than guess at the amount of land cleared by Classic and the number and size of trees growing there at the time. He assumed the number of trees Cook would plant in the future and the number he would cut out by thinning. Frazier’s testimony on the value of the timber amounts to mere conjecture. Id. at 727-28; Leitch, 935 S.W.2d at 119. His unsupported conclusions do not constitute evidence of probative force. Iracheta, 161 S.W.3d at 471. The expert must have a sufficient basis for his opinion. Tex. R. Evid. 705(c). Thus, even if Frazier had been qualified to testify on the issue of the value of the timber removed by Classic, his opinion did not rise to the level of competent evidence. Iracheta, 161 S.W.3d at 471. There was no other evidence in the record of the value of the timber removed by Classic. Thus, there was no evidence to support the jury’s findings on damages. Leitch, 935 S.W.2d at 119-20. Accordingly, Cook is not entitled to recover against Classic. See Iracheta, 161 S.W.3d at 472. We sustain Classic’s first issue. Conclusion Because Classic’s first issue is dispositive, we need not reach Classic’s remaining issues. See Tex. R. App. P. 47.1. We reverse the trial court’s judgment and render judgment that Cook take nothing from Classic. SAM GRIFFITH Justice Opinion delivered April 12, 2006. Panel consisted of Worthen, C.J., Griffith, J., and DeVasto, J. (PUBLISH)