Most of an award in favor of Vitol Americas Corp. was upheld Tuesday by a Texas appellate panel that determined $129 million in damages tied to breach of contract in the suit over a soured deal for a crude oil storage and processing facility can stand.
A three-justice panel of the Fourteenth Court of Appeals did trim the award, however, finding that the energy and commodity trading company couldn’t also hang on to about $10.5 million in damages stemming from a fraud claim against midstream resource management company Targa Channelview.
Chief Justice Tracy Christopher, writing for the panel, noted that even Vitol didn’t object to the elimination of those damages because Harris County District Judge Larry Weiman, who presided over the five-week bench trial, awarded those damages on a theory Vitol had disclaimed in the litigation.
“Vitol pleaded that Targa fraudulently induced the agreement and fraudulently misrepresented the capacity of Targa’s dock, but the trial court rejected both of those theories in its findings of fact and conclusions of law,” Justice Christopher wrote. “The trial court instead awarded Vitol fraud damages based on the theory Targa failed to provide Vitol with updates on the construction of the splitter facility.”
Judge Weiman’s final judgment, signed Oct. 23, 2020, also awarded Vitol $17.6 million in prejudgment interest on the contract claim.
The dispute between the companies is rooted in a December 2015 agreement under which Vitol would deliver crude to a so-called “splitter facility” where crude oil is separated into various products that would be built, owned and operated by Targa.
When Targa failed to build the facility 27 months later, as required under the deal, Vitol terminated the agreement, according to the opinion, and filed suit alleging breach of contract and that Targa had fraudulently misrepresented the capacity of the facility.
Under the deal, Vitol was required to pay Targa about $43 million annually, and when the agreement fell apart there was $129 million in the account Vitol had paid into. In the lawsuit, it sought all of those funds and additional damages for the fraud claim.
Justices Frances Bourliot and Randy Wilson also sat on the panel.
Vitol is represented by Macey Reasoner Stokes, Anthony J. Lucisano and Elisabeth C. Butler of Baker Botts and Lee L. Kaplan, Garland “Land” Murphy, Eugene Zilberman and Johnathan Mondel of Smyser Kaplan & Veselka.
Targa is represented by David Keltner, Joe Greenhill, Caitlyn E. Hubbard and Jacob A. deKeratry of Kelly Hart & Hallman, David M. Gunn and Erin H. Huber of Beck Redden, Thomas C. Wright and Rachel H. Stinson of Wright Close & Barger, William J. Boyce of Alexander Dubose & Jefferson, Jennifer Caughey and Danica L. Milios of Jackson Walker and Timothy C. Shelby, Daryl L. Moore, Ryan Hackney, Jason S. McManis, Paul Turkevich and Monica Uddin of Ahmad Zavitsanos & Mensing.
The cause number is 14-21-00048-CV.