Atlantic Richfield Co. v. Long Trusts

In Atlantic Richfield Co. v. Long Trusts, 860 S.W.2d 439 (Tex. App.-Texarkana 1993, writ denied) ARCO was the operator of gas wells for the Trusts. The operating agreement required the Trusts to contribute to the operating expenses. The agreement provided for payment of attorney's fees in the event of untimely non-payment. The Trusts breached this agreement, ARCO sued the Trusts for breach of the operating agreement, and the Trusts sued ARCO, claiming in part they were overcharged. Id. at 450. While suit was pending, ARCO mitigated its damages by recouping some of the unpaid operating expenses by selling some of the Trusts' share of the gas. Id. At trial, the jury found the Trusts breached the operating agreement by failing to pay ARCO in accordance with the agreements, but the jury awarded ARCO "zero" damages. On appeal, ARCO complained the trial court erred by failing to disregard the jury finding of zero damages and by failing to award ARCO its attorney's fees. Id. at 442, 449. Reliance upon the Atlantic Richfield decision is problematic. ARCO's point of error on appeal challenging the jury's zero damages finding actually focused on its entitlement to attorney's fees, not its entitlement to damages. Id. at 450 n.14. Even ARCO's motion to disregard and his later argument on appeal that the trial court erred in failing to disregard the jury finding of zero damages was not availing. Id. If the jury finding had been set aside, no finding on damages would have remained, and ARCO would have had to take the untenable position that its damages were established as a matter of law. Id. Applying the principle that "when a party prevails and establishes a valid claim, the party can be entitled to attorney's fees without achieving a monetary recovery on the claim itself," the court held ARCO was entitled to attorney's fees based upon the litigation of the portion of the suit dealing with drilling costs. Id. at 450.