Kern Oil & Refining Co., Plaintiff/counter-Defendant/appellee v. Tenneco Oil Company, Defendant/counter-Claimant/appellant

Tenneco Oil Company appeals from a district court judgment awarding $32 million in damages, interest, and attorneys’ fees to Kern Oil & Refining Company for Tenneco’s breach of contract and fraud. We affirm.

I.

FACTS AND PROCEEDINGS BELOW

Kern Oil & Refining Company (Kern) is a crude oil refiner whose refinery is located in Bakersfield, California. Kern has no crude oil production of its own and therefore must acquire from others the crude it runs through its refinery. Tenneco Oil Company (Tenneco) is an “integrated” oil company with crude production in California and elsewhere, a refinery in Louisiana, and marketing facilities around the country.

In October 1975, Kern and Tenneco agreed that Kern would purchase oil from Tenneco’s fields in Yowlumne, California. As Tenneco brought new Yowlumne fields into production, it sold most of that oil to Kern as well. In May 1977, Kern and Tenneco entered into a contract that formally committed Tenneco to sell Kern all crude produced by Yowlumne properties from which Kern was already purchasing crude. The trial court found that at about the same time, “Kern and Tenneco orally agreed that Tenneco would sell to Kern, under the terms of…