Reliant Energy Services, Inc. v. Cotton Valley Compression, L.L.C.

Opinion issued February 10, 2011

In The

Court of Appeals

For The

First District of Texas

­­­­­­­­­­

NO. 01-08-00148-CV

RELIANT ENERGY

SERVICES, INC. , Appellant

V.

COTTON VALLEY COMPRESSION,

L.L.C., Appellee

and

COTTON VALLEY COMPRESSION,

L.L.C., Appellant

V.

RELIANT ENERGY

SERVICES, INC. , Appellee

On Appeal from

the 151st District Court

Harris County, Texas

Trial Court Cause No. 2002-08521

O P I N I O N

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”). [1] The jury found in favor of Cotton Valley on

both theories of agency and rejected Reliant’s affirmative defense of

quasi-estoppel. Thereafter, the trial

court rendered judgment against Reliant on the jury verdict under the theory of

apparent authority but granted Reliant’s motion for judgment notwithstanding

the verdict on the theory of actual authority.

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.

Background

A. Westfield

and Reliant

Ernie Gouge

founded and was sole owner and president of the Houston‑based Westfield

Oil and Gas [2] , a

small natural gas-trading company comprised of no more than three employees,

occasional contract workers, and several associates who helped bring in

business. From 1998 to 2001, Westfield

had no gas‑storage facilities, no pipeline, no transportation contract

with any pipeline, [3]

and no one acting as a scheduler in dealing with a pipeline. [4]

Gouge and his

associates had a talent for identifying production fields, establishing

relationships with gas producers, and aggregating significant volumes of

gas. In the mid-1990s, his company began

aggrevating or pooling gas from several producers specifically for delivery to

Reliant. Reliant relied upon gas‑trading companies like Westfield for

acquisitions from small independent producers in certain regions.

In 1995,

Westfield signed a base contract with Reliant [5]

to supply natural gas to Reliant. Westfield and Reliant additionally had a

number of unwritten agreements relating to their arrangement, including:

–one

permitting Westfield to utilize Reliant’s accounting and scheduling staff and

to rely on Reliant’s transportation contracts with pipelines rather than

purchasing its own;

–that

Reliant would pay Westfield earlier than the contract required (“prepays”) for

gas that had already been received; [6]

–a

“gentleman’s agreement” that Reliant would take all the gas that Westfield

could aggregate and Westfield would sell to no one else; and

–agreements

that Westfield could “play the gas” (receive a profit based on the daily price

of gas) when Reliant had directly contracted for gas with certain producers [7]

brought to Reliant by Westfield acting as its agent.

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. [8] The Reliant name provided Westfield

credibility with the producers. Although

it was unusual for an independent gas marketer to disclose the name of its buyer

to the producer and risk that producer selling directly to the buyer, Gouge was

unconcerned about disclosing Reliant’s status as the buyer because of his long

association with Reliant and the “gentleman’s agreement” between them. Once Westfield had arranged for delivery of

the gas, it was not involved in the actual transfer of the gas from the

producer to Reliant. Reliant worked

directly with the producers in executing the transactions required by the

transporting pipeline for the transfer of title to the gas, known as

nominations. Under this method, as far

as the pipeline data system was concerned, physical possession of the gas

passed directly from the producers to Reliant; Westfield never physically

possessed it.

B. The “Deal”

for Cotton Valley’s Gas

1. The Initial Contacts and Discussions

In early

1999, Westfield sought to expand into Oklahoma.

In March, Gouge wrote a letter to his then-contact at Reliant, Pat

Strange, expressing his desire to acquire gas from certain Oklahoma producers,

including Cotton Valley, and asked for Reliant’s assistance.

Cotton

Valley was a cooperative comprised of several local northeastern Oklahoma

independent natural‑gas producers that joined together to build a gas‑compression

station [9]

and to market and sell the cooperative’s gas.

In 1999, it had two employees—John Eakin, the general manager, and Pam

Brown, the assistant manager—and its office was located in Bartlesville,

Oklahoma. Brown handled all the

day-to-day operations, including selling the gas and inputting nominations into

the system.

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 [10]

by accepting nominations at that point. Once

the gas passed through the meter, was measured, and got into the pipeline

system, it was Reliant’s gas. Reliant

would pay the pipeline’s charges to transport the gas to the Cotton Valley

compression station, and then pay the pipeline’s charges to transport the gas

to the market zone. [11] Cotton Valley would confer directly with Reliant’s

scheduling department to give them Cotton Valley’s nominations; Reliant would

then put the nominations into the database system to pick up the gas and would place

money to pay for the gas directly into an escrow account which had been set up

at Bank One by Westfield. The purpose of

the escrow account was to ensure that the producers were paid before Gouge took

any excess money out of the account.

Gouge told Cotton Valley that (1) Westfield was gathering gas for Reliant,

(2) Westfield and Reliant had “some kind of relationship,” (3) Westfield could

pay a bonus or premium over the market for the gas because of that

relationship, (4) Cotton Valley would be delivering the gas directly to Reliant,

(5) Westfield could set up an escrow account where cash would come directly

from Reliant, and (6) Cotton Valley would be paid by the 25th of each month,

every month. Cotton Valley believed that

it was going to be in business with both Westfield and Reliant, with Westfield

operating as the “gas aggregator” or “middleman” for Reliant, but Westfield

itself never receiving title to the gas.

It was significant to Cotton Valley that Reliant was getting the gas

because Reliant was a major company, so Cotton Valley did not anticipate having

credit issues in the transaction. Eakin

called a reference for Westfield, John Alden at Swift Energy, who spoke well of

Westfield. Neither Eakin nor Brown

contacted anyone at Reliant before Cotton Valley agreed to the deal with

Westfield, nor did they request Westfield’s financial statements. Apart from the fact that there was one,

Cotton Valley did not know any particulars of the relationship between

Westfield and Reliant and never sought clarification on this point from

Reliant.

2. The March 31, 1999 Purchase Agreement

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.

3. The Day-to-Day Operations of the Arrangement

a.

Communications and Points of Contact

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.

b. Transfer of Gas

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 [12]

at Reliant, who would then pass it on to his gas‑control people. Verbal nominations were later followed up

with hard copies of the nominations.

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 [13]

per day that Cotton Valley was going to be putting into the pipeline and where

they could be received, so that Reliant could then submit a nomination into the

Williams pipeline database to “pick up” the listed mmBtus at the receipt points. Reliant “picked up” the gas for April and

deposited the money for the gas in the escrow account in May. This process was repeated for the rest of the

time that Cotton Valley delivered gas to Reliant. Because the gas was actually “picked up” by

Reliant, the monthly pipeline allocation documents ( “the Quapaw receipts”)

issued by the Williams pipeline that indicated the volumes of gas nominated

versus the amount of gas that actually flowed into the pipeline at the Cotton

Valley’s receipt point showed that Reliant picked up the gas from Cotton Valley,

not Westfield.

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.

c.

Billing and Payment

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” [14]

basis, along with an additional premium, a small additional amount, such as a

penny, except when additional production was brought on the line, which production

was priced at a “Gas Daily” [15]

price. Any discussions about price took

place between Westfield and Cotton Valley prior to the gas actually flowing and

the nominations being sent.

Cotton

Valley would wait for the pipeline to “balance the system” [16]

within eight days and then invoice Westfield. On the 25th day of the following month, it

would get paid for the previous month’s gas.

Cotton Valley had been asked not to send invoices to Reliant directly

because of the arrangement that Westfield had with Reliant, but instead to send

them to Westfield, which it did. Cotton

Valley never invoiced Reliant. The invoice often, but not always, included a

signature‑confirmation line for Gouge to authorize a pay-out to Cotton

Valley via wire transfer for the invoiced amount from Westfield’s escrow account. On four occasions, Westfield wired a portion

of the payment owed to Cotton Valley from a separate Wells Fargo account owned

by Westfield, rather than the Bank One escrow account. The Bank One escrow account was not

specifically set up for Cotton Valley, but had existed for a number of years,

and had been set up for Swift Energy. Cotton Valley knew that Swift Energy was also

being paid from the account, but did not know the exact arrangement or what

priority Swift had on the account, though Cotton Valley presumed that Swift

Energy would be paid first because it had the arrangement first.

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. [17] Each month, Gouge would propose a price to

Reliant for the gas that would flow to Reliant the following month. Reliant and Westfield then would negotiate

and come to an agreement on the price and Westfield would invoice Reliant after

the gas had been received by Reliant. When

Reliant’s price was not higher than Cotton Valley’s, Westfield made no money on

the gas. Generally, when the market

dropped, a broker could take the gas and sell it to the highest bidder, but

Westfield could not do so because of its “gentleman’s agreement” with

Reliant. When Westfield lost money, it

would use cash reserves; if it had none, Reliant would advance money to

Westfield for gas already received, but whose payment was not yet due, in what

was known as an “early pay.”

C. Issues with Payments and

Gas Transfers from May 1999 through July 2001

1. The May

1999 “Refund” Check to Reliant

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

overpayment and the stop-payment order on the check. Brubaker thanked Brown for the information,

but did not ask Brown why Cotton Valley had sent Reliant the check nor indicate

that the money should have gone to Westfield.

2. The

February 2000 Proposed Escrow Agreement and the December 2000 Addendum to the Trust

Agreement

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, [18]

one of the owner-producers of Cotton Valley and a practicing lawyer, reviewed

the draft escrow agreement before it was sent to Gouge. The draft agreement—which defined Cotton

Valley as the seller, Westfield as the buyer, and Bank One as the agent—stated

that on February 1, 2000, [19]

Cotton Valley and Westfield had entered into a gas purchase and sales agreement

under which Cotton Valley agreed to sell and deliver gas to Westfield, Westfield

agreed to sell and deliver gas to Reliant, and Reliant agreed to purchase gas

from Westfield. Reliant was not listed

as a party to the draft agreement, but was defined in the document as

Westfield’s “resale customer.” The

agreement also stated that Cotton Valley and Westfield had asked Bank One to

receive payment from “the Resale Customer” (Reliant) for gas purchased by Reliant

from Westfield, and provided that Bank One would disburse those funds as

provided by the agreement. The document

was already signed by Eakin on behalf of Cotton Valley when it was sent to

Gouge for his signature and for a signature by a representative of Bank One,

but the document was never executed.

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.

3. Problems

in Communications with, and Payment by, Westfield

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 department, and if the delay

was more serious, she would call Bank One.

Reliant would also take Brown’s calls if she had a question about

accounting.

4. The Gas Balance Transfers

Between Cotton Valley and Reliant, and Reliant’s Unannounced Transfer of Cotton

Valley’s Gas in August 1999

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. [20] Imbalance transfers were effectuated by

filling out a form from the pipeline system to transfer volumes from one party

to another so that the pipeline could track and allocate the proper volumes to

the proper parties.

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.”

D. The July

2001 Gas Transfers and August 2001 Billing

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 about the additional gas, and no one at Reliant told Brown

that she needed to talk to Westfield; Reliant simply agreed to accept the

additional gas at the proposed price. Reliant

received physical possession of the gas and later either Reliant traded it or

its affiliates burned it and sold it as electricity.

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.

E. Testimony at Trial from

Gouge and Reliant Regarding Westfield’s Status as an Agent for Reliant Relative

to the Cotton Valley Deal

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.

1. The Testimony of Gouge

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]. [21] So, the terms and conditions that [Gouge]

negotiated with Cotton Valley were done to the benefit of Westfield.” Gouge agreed that he did not have to check

with Reliant before aggregating the gas because Reliant had agreed to take all

he could aggregate and agreed that “as a result, [he] had the authority from [Reliant]

to go out and get this gas; [he would] negotiate a price and terms for gas that

was to be delivered to [Reliant]; [t]hat was the deal[.]” Gouge testified that Cotton Valley sold its

gas to Westfield and Westfield then sold the gas to Reliant and reiterated that

he had been buying Cotton Valley’s gas on behalf of Westfield. Gouge also acknowledged that Westfield owed

Cotton Valley the disputed amount for the July 2001 gas, but stated that he

felt “that Reliant is also responsible.”

2. The

Testimony of Dunnavant

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.

3. The Jury’s Verdict

At trial,

the jury was asked to answer the following questions, and it gave the following

answers:

QUESTION NO. 1

Did Reliant and Cotton Valley agree that Reliant would pay

Cotton Valley for its 2001 gas production?

Definitions

and Instructions

A party’s conduct includes

the conduct of another who acts with the party’s authority or apparent

authority.

“Authority” for Westfield to

act for Reliant must arise from Reliant’s agreement that Westfield act on

behalf and for the benefit of Reliant in purchasing gas from Cotton Valley.

“Apparent

authority” exists if Reliant:

(1) knowingly permitted Westfield to hold itself out to

Cotton Valley as having authority to act on Reliant’s behalf in purchasing gas

from Cotton Valley, or

(2) 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.

Only the acts or omissions

of Reliant may be considered in determining whether apparent authority exists. Apparent authority may only be based on facts

known to, and relied upon by, Cotton Valley.

(1) Answer “Yes” or “No” as to authority: Yes

(2) Answer “Yes” or “No” as

to apparent authority: Yes

If you answered “Yes” to any

part of Question No. 1, then answer the following question. Otherwise do not answer the following

question.

QUESTION NO. 2

Is Cotton Valley estopped from seeking payment from Reliant

for its July 2001 gas production?

Definitions

and Instructions

“Estoppel” precludes a party

from asserting, to another’s disadvantage, a right inconsistent with a position

previously taken.

Answer “Yes” or “No” No

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.

4. The

Judgment Notwithstanding the Verdict, the Rendition of Judgment, and the Motion

for New Trial

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.

Sufficiency Contentions on Appeal

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).

A. Sufficiency Standards of

Review

1. Legal‑sufficiency standard

In reviewing the legal sufficiency of the evidence, we

must consider the evidence in the light most favorable to the fact-finder’s

decision and indulge every reasonable inference that would support it. City of

Keller v. Wilson , 168 S.W.3d 802, 822 (Tex. 2005). “T he final test for legal

sufficiency must always be whether the evidence at trial would enable

reasonable and fair-minded people to reach the verdict under review. . . .

[L]egal-sufficiency review in the proper light must credit favorable evidence

if reasonable jurors could, and disregard contrary evidence unless reasonable

jurors could not.” Id. at 827 . 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 its own opinion to the contrary. Id. at 819 . Because it is the jury’s province to resolve

conflicting evidence, we must assume that jurors resolved all conflicts in

accordance with their verdict if reasonable human beings could do so. Id.

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.

2. Factual‑sufficiency

standard

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 its own opinion to the contrary. See Golden Eagle Archery, Inc. v. Jackson ,

116 S.W.3d 757, 761 (Tex. 2003).

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.

3. Review of judgment

notwithstanding the verdict

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 .

4. Sufficiency

of Jury Finding Measured by Charge Actually Given to Jury Absent Objection

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).

B. Actual and Apparent

Authority

1. Legal

principles Governing Actual and Apparent Authority

a. General Agency Principles

“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 party acts

on behalf of the other, subject to the other’s control.” Jamison v. Nat’l Loan Investors, L.P. , 4 S.W.3d 465, 468 (Tex.

App.—Houston [1st Dist.] 1999, pet. denied).

Authorization to act and control of the action are the two essential

elements of agency. Gonzales v. Am. Title Co. , 104 S.W.3d 588, 593 (Tex. App.—Houston

[1st Dist.] 2003, pet. denied).

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.).

b. Actual Authority

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 .

c.

Apparent Authority

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 , 257

S.W.2d 422, 427 (Tex. 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’l Hosp. Sys. v. Sampson , 969 S.W.2d 945 , 948 & n.2 (Tex. 1988)

(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 , 253 S.W.3d at 183.

2. The Judgment

Notwithstanding the Verdict on Actual Authority

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 trial court’s rendition of a judgment notwithstanding the verdict

is reviewed under a legal‑sufficiency standard. Miller ,

102 S.W.3d at 709 . We therefore consider

whether, viewing the evidence in the light most favorable to the jury verdict,

there is more than a scintilla of evidence supporting the jury’s verdict on

actual authority. Id.

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.” [22] The charge as submitted to the jury only

permitted the jury to find actual authority by way of an intentional conference

of authority in an agreement between the parties; the charge did not provide

the jury with the option to find actual authority on any other allowable legal

basis, such as by Reliant intentionally, or by want of due care, allowing

Westfield to believe that it had authority.

See Berhing Int’l, Inc. , 662

S.W.2d at 649 . Because neither party

objected to the wording of this instruction as given to the jury, [23]

we measure the sufficiency of the evidence to prove actual agency in light of

the actual instruction given to the jury, rather than by the instruction that

should have been given. See Scottsdale Ins. Co. v. Nat’l Emergency

Servs., Inc. , 175 S.W.3d 284 , 300–01 (Tex. App.—Houston [1st Dist.] 2004,

pet. denied); see also Ancira Enters.,

Inc. v. Fischer , 178 S.W.3d 82, 93 (Tex. App.—Austin 2005, no pet.)

(reviewing sufficiency by definition of “malice” actually submitted to jury

rather than stricter definition of malice that was legally applicable).

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.” [24] While there was evidence of a written base‑purchase

agreement between Reliant and Westfield establishing a purchaser-seller

relationship, and evidence of an oral agreement between them that Reliant would

purchase as much gas as Gouge could aggregate from producers for delivery to

Reliant, there was no evidence of any agreement that Westfield “act on behalf

and for the benefit of Reliant in purchasing gas from Cotton Valley.” The testimony cited by Cotton Valley would,

at most, “create a mere surmise or suspicion” regarding the existence of such

an agreement, see Ford Motor Co. , 135

S.W.3d at 601 , and even such a “surmise or suspicion” would have been dispelled

by (1) the direct evidence of the written agreement between the parties

establishing a seller‑purchaser, not a principal‑agent,

relationship, (2) the testimony by Brown and Gouge that the “price and terms of

gas” negotiated by Gouge with Cotton Valley were not the “price and terms”

applicable to Reliant, but were applicable only to Westfield, and (3) the

specific testimony from Dunnavant denying that Reliant had given Westfield

authority to buy Cotton Valley’s gas on Reliant’s behalf and from Gouge that he

had been acting on Westfield’s behalf, not Reliant’s, when he purchased Cotton

Valley’s gas. [25]

We overrule

Cotton Valley’s sole issue.

3. The Jury’s

Verdict of Apparent Authority

a. Reliant’s Contentions and

Our Standard of Review

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.

In conducting our legal‑sufficiency

review, we consider the evidence in the light most favorable to the

fact-finder’s decision and indulge every reasonable inference that would

support it. City of Keller , 168 S.W.3d at 822 .

Reliant must establish that there is “no evidence” to support the

challenged finding. Chapman , 118 S.W.3d at 751 . In reviewing Reliant’s factual‑sufficiency

challenges, we must consider

and weigh all of the evidence and may set aside the verdict only if the

evidence that supports the challenged jury finding is so weak as to make the

verdict clearly wrong and manifestly unjust.

Cain , 709 S.W.2d at 176 ; Bay, Inc. , 139 S.W.3d at 329 .

Because

there was no objection to the language of the jury charge regarding apparent

authority, [26]

we measure the sufficiency of the evidence to support the jury’s finding of

apparent authority in light of the jury charge actually given. [27] See

Romero , 166 S.W.3d at 220–21. Under

the charge submitted, the jury was authorized to find that apparent authority

existed if Reliant

(1) knowingly permitted

Westfield to hold itself out to Cotton Valley as having authority to act on

Reliant’s behalf in purchasing gas from Cotton Valley, or

(2) 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.

The jury

was also instructed that (1) “only the acts or

omissions [28]

of Reliant” could be considered in determining whether apparent authority

existed and (2) apparent authority could only be based on facts known to, and

relied upon by, Cotton Valley. (Emphasis

added.)

b. “Reasonable Diligence to Ascertain Fact or Scope

of

Westfield’s Apparent

Authority”

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, s ee 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, that through lack of ordinary care, Reliant

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. On appeal, we must measure the sufficiency of

the evidence by the language actually given to the jury in the charge, rather

than by the correct legal standard under Texas law of “a reasonably prudent

person, acting with diligence and discretion to ascertain the agent’s

authority” as set out in Gaines . See

Romero , 166 S.W.3d at 220–21; Sturges , 52 S.W.3d at 715 ; Zimlich , 29 S.W.3d at 71 ; see also Kroger Co. v. Brown , 267 S.W.3d 320, 323 (Tex. App.—Houston [14th Dist.]

2008, no pet.) (measuring sufficiency by commonly-understood meaning

of disfigurement, when definition of disfigurement recognized in Texas law was

not submitted in jury charge); EMC Mortg.

Corp. v. Jones , 252 S.W.3d 857 , 868–69 (Tex. App.—Dallas 2008, no pet.)

(reviewing sufficiency based on common meaning of “unreasonable,” rather than

correct legal standard, when no definition or instruction placing

“unreasonable” in proper legal context was given to jury and no objection made

to language of charge); Ancira Enters.,

Inc. , 178 S.W.3d at 93 (reviewing sufficiency under less‑stringent

definition of malice than actually applicable by law to retaliation suits

because jury charge provided less‑stringent definition rather than

correct stricter definition). The jury

was authorized, under the charge given, to find apparent authority without

evidence of Cotton Valley’s “using diligence and discretion to ascertain

[Westfield’s] authority.”

We overrule

this portion of Reliant’s legal‑sufficiency challenge.

c. Conduct of Reliant and Cotton Valley’s Reliance

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,” [29]

not those of Gouge or Westfield, and (2) only the facts known to, and relied

upon by Cotton Valley. [30]

(i) Reliant’s

Conduct Bestowing Indications of Authority on Westfield

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

also asserts that Reliant made no representations about Westfield before Cotton

Valley began selling its gas in April 1999 in the arrangement at issue, and

that any actions taken later by Reliant—such as receiving the gas directly and

communicating with Cotton Valley through schedulers—were consistent with its

actual relationship with Westfield and so could not have been relied upon by

Cotton Valley as bestowing indications of authority on Westfield.

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), [31]

we hold that there is some evidence to support a jury finding under the second

paragraph (that Reliant, “through lack of ordinary care, bestowed on Westfield

such indications of authority that would le ad a reasonably prudent

person to rely on the apparent

existence of authority to his detriment.”).

Considering the usual practices of the gas-selling business as testified

to at trial, [32]

we conclude that there was some evidence of a “pattern of conduct” [33]

by Reliant in its dealings with Cotton Valley that amounted to a “lack of

ordinary care” that bestowed “indications of authority” on Westfield. Although there were facts known to Cotton

Valley, such as the different prices paid by Westfield and Reliant for the gas,

suggesting that Westfield was not Reliant’s actual agent, the actual—and

unusual—course of dealing between Reliant and Cotton Valley regarding the gas

arrangement, sometimes involving Westfield (as in the escrow account),

sometimes not, particularly the direct exchange of gas between Cotton Valley

and Reliant in gas‑imbalance transfers, and especially the August 1999

transaction in which Reliant essentially “took” Cotton Valley’s gas, supported

Cotton Valley’s belief in a “direct deal” between Cotton Valley and Reliant and

bestowed indications of authority on Westfield as Reliant’s apparent agent in

the arrangement. Such evidence at least

“rises to a level that would enable reasonable and fair-minded people to differ

in their conclusions,” Ridgway , 135

S.W.3d at 601 . We therefore hold that

the evidence is legally sufficient to support the jury’s finding of conduct by

Reliant that “bestowed on Westfield. . . indications of authority.”

(ii) Reasonable Reliance by

Cotton Valley

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. [34] We disagree.

As discussed previously, there is evidence in the record of an unusual

course of dealings between Reliant and Cotton Valley that supports a belief in

a “direct deal” between Reliant and Cotton Valley. There is also evidence that Cotton Valley

relied on Reliant’s conduct during this unusual course of dealings in making

its decision to sell the July 2001 gas for delivery to Reliant. We hold that the evidence in the record

supporting the jury findings on reliance “rises to a level that would enable

reasonable and fair-minded people to differ in their conclusions” as to whether the indications bestowed

by Reliant were such as would lead a “ reasonably

prudent person to rely on the

apparent authority to his detriment” and whether Reliant’s acts were actually “ relied upon by [] Cotton Valley .” We therefore hold that the evidence is

legally sufficient to support the jury’s findings regarding reliance.

d. Review of

Factual‑Sufficiency Complaint

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:

Here, considering and

weighing all the evidence in support of and contrary to the apparent authority

finding demonstrates any evidence is factually insufficient. Even accepting arguendo the correctness of Cotton Valley’s assertion that some

evidence supports an apparent authority finding, that evidence is so weak as to

render the jury’s finding manifestly erroneous when properly weighed against

all the documentary and testimonial evidence that Cotton Valley could not have

relied on that evidence because it was on notice that the terms of the parties’

relationships were inconsistent with an agency relationship. At a minimum, a new trial is required.

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.

C. Affirmative

Defense of Quasi-Estoppel

In its second issue, Reliant complains

that it proved its affirmative defense of quasi-estoppel as a matter of law and

so it effectively challenges the legal sufficiency of the adverse jury finding

on quasi-estoppel in answer to jury question No. 2. [35] See Tex. R. App. P. 38.1(f), 38.9; Sterner v. Marathon Oil Co. , 767 S.W.2d

686, 690 (Tex. 1989) (holding that attack on adverse jury finding on which

appellant had burden of proof should be reviewed as assertion that appellant

had established its affirmative defense “as a matter of law.”). Reliant argues that because Cotton Valley

always previously invoiced and looked to Westfield for the gas delivered to

Reliant, including the July 2001 gas, Cotton Valley is now estopped, as a

matter of law, from seeking payment from Reliant for the July 2001 gas.

“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 to differ in their

conclusions, a legal‑sufficiency review is at an end. Id. at

822.

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.

Evidentiary Complaints

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 its

discretion in admitting the challenged evidence. The evidence of early pays and

Westfield’s relationship with Reliant as to other gas-producing companies was

admitted for the purpose of demonstrating that Reliant and Westfield had oral

agreements regarding their relationship and Westfield’s authority that were not

encompassed by the sole written contract between them and so would be logically

connected to the communications regarding authority between Reliant and

Westfield. [36] Moreover, reviewing the record as a whole, it

is clear that the challenged evidence makes up only a small part of the

evidence and it cannot reasonably be said that the verdict would have probably

been different if it had been excluded.

We overrule

Reliant’s third issue.

New Trial for Cumulative Error

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.

Conclusion

We affirm

the judgment of the trial court.

Jim

Sharp

Justice

Panel

consists of Justices Keyes, Alcala, and Sharp.

[1] Westfield

Oil & Gas, Inc. and Ernie Gouge, d/b/a Westfield Oil & Gas were

originally parties to the suit, as were several other plaintiffs; however, none

is a party to the judgment at issue and none is a party to this appeal.

[2] The company is also known as Westfield Oil and Gas,

Inc.

[3] Pipelines charge a fee for transporting gas on a

pipeline, similar to a motorist paying a toll for accessing a toll road, based

on the amount of capacity sought. Only

companies affiliated with the pipeline are permitted to transport on the

pipeline.

[4] The pipeline’s data system allowed access to producers

who purchased a “receipt point.” The

system functioned as a communication center between buyers and sellers,

allowing parties to close deals by way of the nomination process. A scheduler for a producer would submit a

nomination to the pipeline’s data system, entering the amount of volume of gas

that the seller was putting into the pipeline.

Nominations had to be in the system on the last day of the month prior

to the month in which the gas was to be sold.

The nomination was then matched up with the entity receiving the gas on

the other end. A buyer could “pick up”

the gas purchased by making a nomination through its own scheduler into the

pipeline data system of the volume of gas to be retrieved from the system. The act of inputting the nomination was the

only way the pipeline system could determine to whom the gas belonged.

[5] Under its predecessor name of NorAm.

[6] Reliant

would charge Westfield interest on these early pays because of the time value of

money. Reliant also made early‑pay

accommodations to other companies.

[7] Reliant

made such direct contracts with three companies—Crosstex, Cinergy, and

Tri-Union.

[8] It

is unclear when Reliant told Westfield to stop using its name, but the record

suggests that it was sometime after the Cotton Valley deal had been made.

[9] Producers

transported their gas to market via pipelines. The pipeline in the area of

Cotton Valley was the Williams pipeline which had several different pipelines

to handle different amounts of pressure, and it was necessary to compress the

gas coming from the fields of various producers in order to get it into the

small‑pressure pipeline that traveled to where the marketers preferred to

buy, which was called the market zone.

[10] The

point at which gas entered the pipeline from a production field was called a

receipt point (also known as a wellhead).

The pipeline would sell “taps,” which were meters to measure the gas

going out of a field and into the pipeline at receipt points. The area where the gas entered the pipeline

at receipt points was called the production zone.

[11] Westfield

had no transportation capacity on the Williams pipeline.

[12] David

Dunnavant worked for Reliant during the period from 1999 through August

2001. Among his responsibilities was

assembling a supply of natural gas for Reliant to trade and, along with Pat

Strange, Dunnavant dealt with Westfield regarding the Cotton Valley gas.

[13] An mmBtu

is a measurement for natural gas, a unit of energy equal to a thousand cubic

feet of natural gas with a heating content of a thousand Btus (British thermal

units).

[14] Inside FERC

is the name of a publication whose fixed monthly pricing of gas is the standard

for the industry. “FERC” is an

abbreviation for the Federal Energy Regulatory Commission.

[15] Gas Daily is

another industry publication.

[16] When

a producer makes a nomination, the nomination is only a projection of the

amount of gas that is expected to flow into the pipeline; the actual amount may

vary due to numerous conditions. If the

actual amount of gas that flows into the system from the producer is less than

the nomination made, an imbalance is created.

If the buyer of the gas enters a nomination to pick up more or less gas

than the seller actually places into the system, this also creates an

imbalance.

[17] Reliant

was always invoiced by Westfield, never Cotton Valley.

[18] Kane

later became manager of Cotton Valley after Eakin was discharged.

[19] There

was no written gas purchase and sales agreement entered into between Cotton Valley

and Westfield on February 1, 2000.

[20] Imbalances

between buyers and sellers could also be “cashed out,” meaning the seller could

pay the buyer the offset, but Cotton Valley preferred to do imbalance

transfers.

[21] Reliant

kept track of gas purchases through a computer system that gave each deal a

specific number and tracked physical trades and financial transactions. In regard to Cotton Valley’s gas, Westfield

was shown as the other party to Reliant’s deal, not Cotton Valley, in contrast

to deals where Reliant had contracted directly with purchasers.

[22] See

Definitions and Instructions for Jury Question No. 1.

[23] Cotton

Valley made no objection to the charge.

Reliant objected to the giving of any instruction on either actual or

apparent agency on the ground that there was no evidence of either actual or

apparent agency to support the giving of any instructions, including no

evidence that Cotton Valley knew or relied on any acts or omissions by

Reliant. Reliant also objected that the

agency issue should be submitted “in broad form; so two separate lines.” However, neither Reliant nor Cotton Valley

raised any objection to the wording of the “instructions and definitions” of

either actual or apparent agency given to the jury, nor does either claim on

appeal that the instructions actually given were defective. “A party objecting to a charge must point out

distinctly the objectionable matter and the grounds of objection. Any complaint

. . . on account of any defect, omission, or fault in pleading, is waived

unless specifically included in the objections.” Tex.

R. Civ. P. 274. A general

objection to the submission of an instruction on the ground that it was “not

raised by the evidence” will not serve to alert the trial court to a specific

complaint regarding any defects in wording of the instruction actually

given. See Davis v. Campbell , 572 S.W.2d 660, 663 (Tex. 1978).

[24] Cotton

Valley relies on three answers by Gouge in cross-examination by Cotton Valley,

in which Gouge (1) acknowledged that he had an agreement with Reliant that it would

“take” whatever gas he could aggregate; and (2) answered “Yes” to the follow-up

question, as to whether he “had the authority from Reliant to go out and get

this gas; you negotiate a price and terms for gas that was to be delivered to

Reliant? That was the deal, correct?”; and (3) answered “Yes,” when asked if

Reliant knew that he was using their name in his attempts to find gas to

aggregate. Cotton Valley also quotes an

answer by Dunnavant acknowledging the arrangement with Gouge that if Gouge

could bring Reliant packages of gas in certain areas, Reliant “w[as] interested

in that” and that Gouge “filled a slot” that its own people did not.

[25] We do

not address Cotton Valley’s arguments regarding evidence of Reliant’s “lack of

due care” because, as noted, the jury was not authorized by the charge to find

actual authority under that legal principle.

We likewise do not address Cotton Valley’s arguments as to the factual

sufficiency of the evidence to support the jury’s finding of actual authority

because a review of a trial court’s rendition of a judgment notwithstanding the

verdict is conducted under legal‑sufficiency standards. See

Miller , 102 S.W.3d at 709 .

[26] Neither

party raises any complaint about the charge on appeal.

[27] The

language of the charge given is almost exactly the same language proposed by

Reliant in its First Amended Proposed Jury Charge and is based on Texas Pattern

Jury Charge 101.4. Comm. On Pattern Jury Charges, State Bar of

Tex., Texas Pattern Jury Charges: Business · Consumer · Insurance · Employment

PJC 101.4 (2010).

[28] The

phrase “or omissions” was not contained in Reliant’s First Amended Proposed

Jury Charge, nor is it a part of the Texas Pattern Jury Charge 101.4. However, Reliant lodged no objection below to

the inclusion of this language and has not claimed on appeal that this

instruction was defective because of the inclusion of this phrase.

[29] As

previously noted, Reliant argues that omissions on the part of Reliant may not

be considered as evidence to support the jury’s finding. However, because the jury was explicitly

permitted to consider the omissions of Reliant in making its determination, and

there was no objection lodged to this instruction, we must review the sufficiency

of the evidence in light of the instruction actually given to the jury. See

Romero , 166 S.W.3d at 220–21; Zimlich ,

29 S.W.3d at 71 .

[30] Reliant

also contends that we may not consider any actions by Reliant that are

consistent with its actual relationship with Westfield, citing Gaines v. Kelly , 235 S.W.3d 179, 184

(Tex. 2007). We disagree. We do not read the cited passage to

constitute a prohibition against considering actions by a principal which are

consistent with its actual relationship with a purported agent in determining

apparent authority. Rather, the cited

passage simply held, under the facts of that case, that the failure of the

principal to explain to a party that a special agent did not have also some

further additional authority was not conduct from which that party might

reasonably infer further authority than the agent actually possessed. However, we agree that actions by a principal

that are consistent with its actual relationship with a purported agent,

standing alone, would not suffice to establish apparent authority.

[31] In

support of a jury finding under this prong, Cotton Valley points only to the

evidence that Gouge used Reliant’s name in its marketing efforts and observes

that “this is the only evidence in the record on this point.” We note that there was no specific evidence

that Reliant knew that Gouge used Reliant’s name in its marketing efforts to

Cotton Valley. While Gouge initially

answered “Yes” when asked about Reliant’s knowledge of his use of the Reliant

name with Cotton Valley, an objection was lodged to the question, the question

was rephrased, and Gouge then answered that he could not recall a specific

conversation with Reliant regarding Cotton Valley prior to the deal being

struck. Moreover, even if Reliant knew

that Gouge used Reliant’s name in its marketing efforts to Cotton Valley, this

fact alone is not evidence that Reliant “knowingly permitted Westfield to hold

itself out as having authority to

contract on Reliant’s behalf .”

[32] See Elliot Valve Repair Co. v. B.J. Valve &

Fitting Co. , 675 S.W.2d 555, 562

(Tex. App.—Houston [1st Dist.]), rev’d on

other grounds , 679 S.W.2d 1 (Tex. 1984); Behring Int’l, Inc. v. Greater Houston Bank , 662 S.W.2d 642, 649

(Tex. App.—Houston [1st Dist.] 1983,

writ dism’d).

[33] See Ames v. Great S. Bank , 672 S.W.2d 447, 450 (Tex. 1984) (considering whether

there was “pattern of conduct” by principal that would establish apparent

agency).

[34] Reliant

refers us to Sanders v. Total Heat &

Air, Inc. , 248 S.W.3d 907 (Tex. App.—Dallas 2008, no pet.). We find Sanders

distinguishable. In Sanders , the Dallas Court of Appeals found it unreasonable for a

subcontractor to believe that a general contractor was a homeowner’s agent,

even though the owner had direct dealings with the subcontractor. In its opinion, the court of appeals held

that “in light of [the subcontactor’s] many years of experience in the

construction industry, his perception that [the general contractor] was an

agent, when the [homeowner twice] told the subcontractor that [the general

contractor] was her general contractor, was not reasonable.” Id . at 917. The phrase “in light of [the subcontractor’s]

many years of experience in the construction industry,” however, is what

propels the finding of the unreasonableness of the subcontractor’s reliance in Sanders , and distinguishes it from the

case before us. In the construction

industry, a subcontractor is required (absent an express contract with the

owner) to look to the general contractor for payment, not the homeowner, “even

if ‘the work is done under the direction of and in accordance with the plans

furnished by the owner.’” Id. at 913 (internal citations

omitted). Therefore, an owner’s direct

dealings with a subcontractor do not make an owner liable for payment and a

subcontractor may still only look to the general contractor for payment, unless

the subcontractor has an express contract directly with the owner. Id .;

see also City of Corpus Christi v. Acme

Mech. Contractors, Inc. , 736 S.W.2d 894, 898 (Tex. App.—Corpus Christi

1987, writ denied). Accordingly, in

light of the usual practices of the construction industry, it was not

reasonable for the subcontractor in Sanders

to believe that the general contractor was acting as the homeowner’s agent,

rendering the homeowner liable for payment, simply because the homeowner dealt

directly with the subcontractor, especially in light of the homeowner’s (the

alleged principal) statements directly to the “relying” party confirming the

relationship between the owner and the general contractor.

[35] Reliant

also argues that the evidence is factually insufficient to support this adverse

jury finding. However, as adverse jury

findings on which an appellant has the burden of proof are to be reviewed under

a legal‑sufficiency standard, Sterner

v. Marathon Oil Co. , 767 S.W.2d 686, 690 (Tex. 1989), we do not

address Reliant’s factual‑sufficiency

contention.

[36] Reliant

also complains of evidence of a solicitation letter to an unrelated company by

Westfield. Reliant fails to provide a

specific citation to the record identifying where this evidence was admitted or

where any objection was made to its admission.

Cotton Valley states that no solicitation letter was admitted and that

there was only evidence that marketing letters were sent out that used

Reliant’s name. Because no specific

citations were provided identifying this particular challenged evidence, we are

unable to evaluate this complaint and decline to review it. See Tex. R. App. P. 38.1(i) (brief must contain

appropriate citations to record); Nga Van

Nguyen v. Kosnoski , 93 S.W.3d 186, 188 (Tex. App.—Houston [14th Dist.]

2002, no pet.) (holding that appellate court “has no duty to search a

voluminous record without guidance from [a party] to determine whether an

assertion of reversible error is valid”).