Bryan C. Wagner and Duer Wagner III v. Exxon Mobil Corporation

A Beck Redden appellate team achieved a win for ExxonMobil Corp., reinstating a $57.5 million jury verdict for the company that requires the owners of Wagner Oil Co. to indemnify Exxon for a settlement reached in Louisiana over environmental claims for oil and gas interests it bought in the 1990s.

Harris County District Judge Bill Burke had reduced the jury verdict to $14.11 million in 2018, but the Fourteenth Court of Appeals panel said that because sufficient evidence supports the jury’s findings, they shouldn’t have been disregarded and Exxon should recover the full amount of the verdict.

The panel said that to recover the amount of the settlement, Exxon had to show only its potential liability to a claimant and that the settlement was “reasonable, prudent and made in good faith under the circumstances.” Those standards were incorporated into questions presented to the jury when it was asked to decide if the settlement was reasonable, the panel said, noting that the jury was given “wide latitude” on the factors it could consider in answering that question.

Considering the indemnity provisions outlined in agreements between the parties in conjunction with the evidence at trial addressing the source and extent of the environmental contamination at issue, the panel agreed with Exxon’s counter-defense that “all costs related to the settlement of the M.J. Farms litigation likely fall within the scope of the Wagners’ indemnity obligations.”

“In their appeal, the Wagners raised five issues challenging (1) the viability of Exxon’s indemnity claims and the evidence offered to support them; (2) this court’s prior decision in a pretrial mandamus proceeding; and (3) the prejudgment interest awarded in the trial court’s final judgment.” On each of the issues, the panel overruled, reversing the trial court’s judgment, reinstating the jury’s verdict, and remanding for entry of judgment in accordance with that verdict.

The Beck Redden appellate team members included David Gunn, who argued the appeal, David J. Beck, and Erin Huber.