Id. at 182. The court faced a similar situation in Valero Transmission Co. v. Mitchell Energy Co. , 743 S.W.2d 658, 660 (Tex. App.—Houston [1st Dist.] 1987, no writ). In Valero , the court held that because the change in market price was not listed, and a market downturn is a foreseeable event, the downturn was not a covered event under the force majeure provision. Following the court’s reasoning in Valero , the court held that the economic downturn is not a covered event and the performance of contractual duties is not excused solely because the duties became more economically burdensome. Id. at 183. In addition to the foreseeability factor, the court also concluded that the market downturn was not a covered event because of the principle of ejusdem generis . Ejusdem generis states that “the latter must be limited to things like the former.” The court found that the former, “fire, flood, storm, act of God, governmental authority, labor disputes, [and] war,” were not like the latter, an economic downturn. The court stated that because the former involve natural or man-made disasters which, although foreseeable, occur so infrequently that planning for them and allocating risks based on them is impracticable absent a force majeure provision. On the other hand, downturns in commodities markets occur fairly regularly and can easily be dealt with in a contract provision outside of a force majeure provision. Id. at 186. Because this was not a covered event under the force majeure provision, the court of appeals affirmed the lower court’s decision. Id. at 186. B. Liquidated damages
Olmos next claimed that the trial court erred in awarding liquidated damages because liquidated damages constitute an unenforceable penalty. Id. at 187. Applying the principal from Phillips v. Phillips , 820 S.W.2d 785, 788 (Tex. 1991), the court stated that contractual damages provisions are enforceable only if two elements are met: (1) it is impossible or very difficult to estimate the amount of damages, and (2) the amount of damages is reasonable under the circumstances. Olmos did not challenge the first element, but claimed that the second element was not satisfied because the amount estimated at the time of the agreement was not necessarily the estimated amount agreed to at the time of the breach. However, the court stated that this is not the test. The test looks to whether or not the provision is a reasonable estimate of the damages at the time of the agreement, not at the time of the breach. Id. at 187. Therefore, because all of Olmos’s evidence focused on the time of the breach, they did not raise a fact issue and the trial court properly granted summary judgment in favor of ConocoPhillips. Id. at 188. On August 15, 2018, Olmos petitioned the Texas Supreme Court for review, arguing that the appellate court incorrectly read a foreseeability requirement into the force majeure provision. Olmos argues that no foreseeability requirement was written into the contract, challenging the appellate court’s ruling that foreseeability is “rooted in the common law” of the force majeure provision. brush and predator control, game surveys, and, most importantly, deer captures. Deer captures involve the use of helicopters to locate the deer. The pilot then chases the deer approximately 4-5 feet above the ground, weaving in and out of brush, trees, and other obstacles. Finally, a passenger will use a net gun to trap the deer so that they can be bred or relocated. This is regarded as the most cost efficient method and least stressful process for the deer. VirTex Operating Co. v. Bauerle , No. 04–16–00549–CV, 2017 WL 5162546, at *1 (Tex. App.—San Antonio Nov. 8, 2017, pet. filed) (mem. op.). 3. The Texas Supreme Court
2. VirTex Operating Co. v. Bauerle Does the accommodation doctrine prevent a lessee from installing power lines when the surface owner uses helicopters for commercial hunting purposes on its ranch? 1. Background Robert Leon Bauerle and Cynthia Bauerle (“the Bauerles”) own an 8,500 acre ranch that is primarily used for commercial hunting. The Bauerles lease the ranch to numerous hunters on a yearly basis. These hunters utilize helicopters throughout the year to conduct
11
G r o w t h T h r o u g h E d u c a t i o n - O c t o b e r / N o v e m b e r / D e c e m b e r 2 0 1 8
Made with FlippingBook flipbook maker