093 Amoco Production Co. v. Smith
Thursday, September 3rd, 2015
The following is not a legal opinion. You should consult your attorney if the case may be of significance to you.
Amoco Production Co. v. Smith, 946 S.W.2d 162 (Tex. App. – El Paso 1997, n.w.h.), considers the statute of limitations applicable to the recovery of royalty overpayments in an action brought by lessee and whether lessee can recover attorney’s fees. Amoco listed both Herbert W. Smith and Huling W. Smith on its records as “H. W. Smith” and overpaid Herbert and underpaid Huling for years. Amoco reimbursed Huling and sued Herbert for the overpayment. The limitations issue was whether the two-year or the four-year statute would be applicable.
The claim was characterized as a cause of action for money had and received, which conceptually falls within the doctrine of unjust enrichment. “Unjust enrichment is not an independent cause of action but rather characterizes the result of a failure to make restitution of benefits under circumstances which give rise to an implied or quasi-contractual obligation to return the benefits.” The law implies a contract, and it is therefore a contract cause of action for debt not evidenced by a writing.
At one time, Texas had a two-year statute of limitations applicable to oral contracts and a four-year statute applicable to written contracts. It was therefore uniformly held that the two-year statute of limitations was applicable to suits for unjust enrichment. However, the limitation statute was amended in 1979 and continues to provide that all actions for debt will be under the four-year statute. The statute of limitations applicable to this cause of action is now four years.
The trial court had declined to award attorney’s fees to Amoco, and on appeal the court refused to reverse the trial court’s decision, noting that the standard for review is abuse of discretion. The appellate court was apparently persuaded that the refusal to award attorney’s fees was supportable because the overpayment was attributable to Amoco’s own mistake. Of more significance is the court’s conclusion that attorney’s fees could be awarded in a proper case under Tex. Civ. Prac. & Rem. Code Ann. §38.001 as a suit based on a contract, even though the contract is neither written nor oral, but implied.