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Lone Star Gas Company v. EFP Corporation

In the absence of the franchise agreement, the respondent, a commercial customer paying rates set by the petitioner's franchise with the City of Marlin, failed to prove as a matter of law that the petitioner's claim on the commercial account was barred by the statute of frauds.

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On Petition for Review from the Court of Appeals for the Tenth District of Texas

EFP Corporation operates a plastic molding manufacturing plant using natural gas purchased from Lone Star Gas Company. From November 3, 1993 to March 5, 1995, EFP was a commercial customer paying rates set by Lone Star’s franchise with the City of Marlin, where EFP’s plant is located. Since March 6, 1995, EFP has purchased gas under an industrial contract with Lone Star. In August 1997, Lone Star discovered that it had been charging EFP for only about ten percent of EFP’s actual consumption because it had mistakenly read only the first five of the six dials on EFP’s meter. Lone Star immediately corrected its mistake and sued EFP for the underpayment. EFP conceded that it had received and used the volumes of gas as asserted by Lone Star, but it moved for summary judgment on the grounds that Lone Star’s claim on EFP’s commercial account was barred by the UCC Statute of Frauds, Tex. Bus. & Com. Code � 2.201(a), and that Lone Star was estopped to assert its claim under the industrial contract because of its provision that “[m]eter measurements computed by [Lone Star] according to its standard operating practices shall be conclusive.” The trial court granted the motion, and the court of appeals affirmed. ___ S.W.3d ___ (Tex. App.-Waco 2000). We reverse and remand the case to the trial court for further proceedings.

The parties agree that a sale of gas is subject to the UCC, section 2.201(a) of which provides:

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