                   United States Court of Appeals,
                            Fifth Circuit.


                       Nos. 93-7519, 93-7525.

     EXXON CORPORATION, Plaintiff-Appellee, Cross-Appellant,

                                     v.

    CROSBY-MISSISSIPPI RESOURCES, LTD., A Mississippi Limited
Partnership, et al., Defendants-Appellants Cross-Appellees.

             CROSBY-MISSISSIPPI, Plaintiff-Appellant,

                                     v.

   FLORIDA GAS TRANSMISSION COMPANY and Citrus Marketing, Inc.,
Defendants-Appellees.

                              Jan. 3, 1995.

Appeals from the United States District Court for the Southern
District of Mississippi.

Before POLITZ, Chief Judge, KING and DAVIS, Circuit Judges.

     PER CURIAM:

                   I. FACTS AND PROCEDURAL HISTORY

     Appeal No. 93-7519, involving a dispute between the parties to

an operating agreement, and appeal No. 93-7525, involving a dispute

between the parties to a gas-purchase contract, were consolidated

on appeal because they both involve similar contractual provisions

and the question of whether those provisions violate MISS.CODE ANN.

§ 15-1-5.

                           A. APPEAL NO. 93-7519

     On April 3, 1985, Exxon, as operator, and Crosby Mississippi

Resources Limited (CMR), as non-operator, entered into a joint

operating agreement for the drilling, completion, and operation of

the Oliver   Poole   4-1    Oil   Well    in   Amite   County,   Mississippi.

                                     1
Pursuant to the operating agreement, Exxon was in charge of "all

operations necessary or proper for the development, operation,

protection and maintenance" of the joint property.                CMR was to

share in the costs of drilling the well as well as any royalties

derived from the drilling operation.

     The parties utilized two standard form contracts to create

their   joint   operating   agreement:     Form   610     of   the   American

Association     of   Petroleum   Landmen   1982   Model    Form      Operating

Agreement (form 610), and the Council of Petroleum Accountant

Societies (COPAS) Accounting Procedure Joint Operations. The COPAS

accounting procedure was developed for use in conjunction with form

610. The COPAS accounting procedure "allocates the liabilities and

expenditures for which all parties to the Joint Operating Agreement

will be responsible and defines the ways in which an Operator will

account for the costs incurred in operating an oil well."               Exxon

Corp. v. Crosby-Mississippi Resources, Ltd., 775 F.Supp. 969, 972

(S.D.Miss.1991).

     To recoup CMR's proportionate share of the costs associated

with drilling the well, Exxon sent CMR monthly billings, beginning

in   February    1985,    entitled   "Joint   Operations       Statements."

Apparently, CMR received a monthly billing statement every month

from February 1985 through September 1988, except for February and

May of 1985.     Exxon also sent CMR a monthly "Status of Account"

statement.      The Status of Account statements showed the unpaid

balance due from the previous month and added current monthly

charges reflected on the Joint Operations Statements.


                                     2
     CMR never paid Exxon for its share of the expenses associated

with the oil well.        Finally, on November 6, 1989, Exxon brought

suit against CMR and two general partners of CMR, Stewart Gammill,

III, and Lynn Crosby Gammill (collectively referred to as CMR),

seeking to recover the monies which CMR owed it under the joint

operating agreement. CMR answered, denying liability, and asserted

several defenses to Exxon's collection efforts.                   CMR asserted that

it was not liable for costs which were the result of Exxon's gross

negligence or willful misconduct. CMR further asserted that it was

not liable for charges made by Exxon in violation of the operating

agreement.

     Shortly      after   the     filing       of   the    instant   suit,   serious

discovery disputes arose between the parties.                         CMR requested

information relating to the particulars of Exxon's expenditures in

developing the well.            Exxon resisted CMR's efforts because it

believed   that    the    COPAS    accounting        procedures      foreclosed   any

argument by CMR that the bills were improper.                 Specifically, Exxon

argued   that   the   following      provision        of    the   COPAS   accounting

procedures established a conclusive presumption concerning the

amounts which CMR owed under the joint operating agreement:

     4. Adjustments

     Payment of any such bills shall not prejudice the right of any
     Non-Operator to protest or question the correctness thereof:
     provided, however, all bills and statements rendered to Non-
     Operators by Operator during any calendar year shall
     conclusively be presumed to be true and correct after
     twenty-four (24) months following the end of any such calendar
     year, unless within the said twenty-four (24) month period a
     Non-Operator takes written exception thereto and makes claim
     on Operator for adjustment


                                           3
(paragraph    four).   Likewise,    CMR   resisted   Exxon's   discovery

requests.     CMR and Exxon both filed motions to compel, and a

hearing was held before a magistrate judge.      The magistrate judge

ordered CMR to supplement portions of its discovery responses.

However, the magistrate judge held the rest of Exxon's discovery

requests "in abeyance" pending resolution of CMR's motion to

compel.     Because Exxon's refusal to comply with CMR's discovery

requests was based on its assertion that the operating agreement

created a conclusive presumption as to the correctness of the

billing statements sent CMR, the magistrate judge suggested that

the discovery issue raised by CMR's motion to compel could be

disposed of by Exxon filing a motion for partial summary judgment.

Therefore, the magistrate judge declined to rule on CMR's motion to

compel until a summary judgment motion had been filed and ruled on.

     Exxon then filed a motion for partial summary judgment based

on the conclusive presumption established by paragraph four of the

COPAS accounting procedures.       In response to Exxon's motion for

partial summary judgment, CMR contended, inter alia, that the

conclusive presumption violated MISS.CODE ANN. § 15-1-5. Section 15-

1-5 provides:

     The limitations prescribed in this chapter shall not be
     changed in any way whatsoever by contract between parties, and
     any change in such limitations made by any contracts [sic]
     stipulation whatsoever shall be absolutely null and void, the
     object of this section being to make the period of limitations
     for the various causes of action the same for all litigants.

     Initially, the district court rejected CMR's contention that

paragraph four did not apply to a situation when no payments had

even been made. Exxon Corp. v. Crosby-Mississippi Resources, Ltd.,

                                    4
775 F.Supp. 969, 974-75 (S.D.Miss.1991).                   Next, the district court

considered whether MISS.CODE ANN. § 15-1-5 rendered paragraph four

null and void.      Id. at 975-76.           The district court concluded that

paragraph four did not violate Mississippi law because the contract

provision    created       a     "condition        precedent      to   be   met    before

challenging    the        validity      of    monthly       billing     statements....

[paragraph    four]       merely       enumerates        time-based     conditions       as

predicates    to     a     Non-Operator's          right    to    challenge       billing

statements,   and        does    not   create      a    statute   of   limitations       in

violation of Miss.Code Ann. § 15-1-5."                    Id. at 976.

     Following      its     determination          that    paragraph    four      did   not

violate § 15-1-5, the district court concluded that even though

paragraph four created a conclusive presumption, the presumption

was not irrebuttable.           Specifically, the district court determined

that the presumption could be rebutted upon a finding of fraud or

bad faith breach of contract.                Id.       The district court, however,

concluded that CMR had not propounded any evidence to demonstrate

fraud or bad faith breach of contract.                    Id. at 976-77.

     The district court then addressed CMR's contention that the

conclusive presumption applies only if CMR actually received the

bills or statements.            According to CMR, it never received billing

statements for the months of February and May of 1985;                         thus, the

conclusive presumption could not apply to those bills.                         While the

district court observed that the presumption should apply only if

CMR actually received the bills in question, it noted that CMR had

received "Status of Account" statements from Exxon which included


                                             5
the billing amounts for February and May and found that the

presumption of correctness applied because paragraph four applies

to both "bills and statements."

       By       this   point,    the   district    court    had   concluded      "that

[paragraph four] obligates a Non-Operator to satisfy bills not

excepted to in writing, in the absence of fraud or breach of

contract."         The district court, however, declined to award Exxon

the full amount it had requested pursuant to its motion for partial

summary judgment based upon its conclusion that there was a fact

issue as         to    whether   CMR's   answer    and    discovery     requests    had

satisfied paragraph four's requirement of a written exception for

bills and statements rendered after January 1, 1987.                          In other

words, if CMR's answer constituted a written exception under

paragraph four, the conclusive presumption would not apply to

billings rendered after January 1, 1987, because CMR would have

taken written exception within twenty-four months following the end

of the calendar year that those bills were received by CMR.                          In

light of its rulings, the district court entered a partial summary

judgment for Exxon in the amount of $428,668.76.

       After a bench trial concerning the meaning of the terms

"written exception" and "claim for adjustment," the district court

concluded that CMR's answer and discovery requests were not written

exceptions under paragraph four.1               Thus, the court concluded that

each       of   the    bills    and   statements   sent    by   Exxon    to   CMR   was

       1
      CMR does not appeal from the district court's determination
that its answer and discovery requests were not "written
exceptions" pursuant to paragraph four.

                                            6
conclusively presumed to be true and that Exxon was entitled to

judgment for the entire amount billed.

     Following     its   ruling,   the   district   court   instructed   the

parties to attempt to resolve the amount of interest and attorneys'

fees CMR owed Exxon under the joint operating agreement.                 Not

surprisingly, the parties were unable to reach an agreement.             The

district court considered the remaining issues by way of affidavits

and post-trial briefs. The following provision governed the amount

of interest owed by CMR under the agreement:

     Each Non-Operator shall pay its proportion of all bills within
     thirty (30) days after receipt. If payment is not made within
     such time, the unpaid balance shall bear interest monthly at
     the rate of twelve percent (12%) per annum or the maximum
     contract rate permitted by the applicable usury laws in the
     state in which the Joint Property is located, whichever is the
     lesser, plus attorney's fees, court costs, and other costs in
     connection with the collection of unpaid amounts.

Exxon argued before the district court that the contract called for

compound interest;       CMR asserted that the contract called for

simple interest.     Exxon argued that because it "included in its

bills and statements interest for the period prior to the end of

December   1986,    interest   is    also   covered    by   the    operating

agreement's conclusive presumption of correctness."               First, the

district court concluded that because " "the Joint Operations

Statements' are the "bills and statements' contemplated under the

COPAS Accounting Procedure and the "Status of Account Statements'

are not, and since Exxon set forth its claimed interest only on the

"Status of Account Statements,' the conclusive presumption does not

apply."    Second, based on a COPAS bulletin, which explains the

COPAS accounting procedures, the district court determined that the

                                     7
contract provided for the application of simple interest and not

compound interest.

     On July 19, 1993, the district court entered a final judgment

against the defendants jointly and severally in the amount of

$781,531.82.      The district court's final judgment further provided

that $304,041.97 of the judgment would bear interest at the simple

interest rate of 12% per annum from July 1, 1993, until paid.

     After the entry of final judgment, Exxon and CMR each filed a

notice of appeal.        On appeal, CMR asserts that the district court

erred (1) in determining that paragraph four did not violate

MISS.CODE ANN. § 15-1-5, (2) in determining there was no material

issue of fact as to whether CMR had rebutted paragraph four's

conclusive presumption, (3) in refusing to stay its ruling on

Exxon's motion for partial summary judgment pending additional

discovery, and (4) in determining that paragraph four's conclusive

presumption applied to statements for the months of February and

May of 1985 when CMR never received billing statements for those

months.     Exxon cross-appeals and asserts that the district court

erred     (1)    in   determining    that       paragraph     four's      conclusive

presumption did not apply to the interest which Exxon had charged

CMR pursuant to the contract, and (2) in determining that Exxon was

entitled to simple interest and not compound interest.

                             B. APPEAL NO. 93-7525

     This       appeal   involves   the       sale   of   natural   gas    from   the

Poplarville gas field in Pearl River County, Mississippi. CMR owns

a portion of the mineral interests in the Poplarville Field in


                                          8
Pearl River County, Mississippi.         Exxon also owns a significant

interest in a number of the producing wells in the Poplarville

Field.   In 1985, Exxon entered into a gas-purchase contract (Exxon

contract) with Florida Gas Transmission Company (FGT). Pursuant to

the Exxon contract, FGT was to purchase natural gas from Exxon

which was attributable to Exxon's interests in the Poplarville

Field.

     Following   the   successful       negotiations   with   Exxon,   FGT

approached CMR about purchasing CMR's gas in the Poplarville Field.

On August 15, 1986, CMR and FGT executed a contract for FGT to

purchase gas from CMR.     The contract between CMR and FGT was

actually a copy, with certain modifications, of the Exxon contract.

     Article VII of the contract determined the price which FGT was

to pay CMR for the gas.   Paragraph 1(a), of Article VII, provided

that for the first ninety days following the initial delivery of

gas, the total price payable under the contract "inclusive of all

taxes and other payments to or on behalf of Seller, shall be two

dollars and fifty-five cents ($2.55) per MMBTU."          Following this

initial three-month period, paragraph 1(b) provided that for the

next twelve months the total price for the gas "inclusive of all

taxes and other payments to or on behalf of Seller, shall be the

lower of two dollars and seventy-five cents ($2.75) per MMBTU or

eighty percent (80%) of the equivalent MMBTU price of No. 6 Fuel

Oil." Paragraph 1(c) provided that the price following the initial

three-month period and the subsequent twelve-month period was

"inclusive of all taxes and other payments to or on behalf of


                                    9
Seller, shall be seventy-five percent (75%) of the equivalent MMBTU

price    of   No.   6   Fuel    Oil."     However,   paragraph   1(c)   further

contained     a   floor   or    minimum   price   provision.     The    contract

provided that the floor price was "the price being paid for gas

qualifying for Section 109 of the NGPA."2

     Once the pricing provisions of paragraph 1(c) took effect,

paragraph two of Article VII gave FGT the right to "market out."

Essentially, this right to "market out" allowed FGT to set its own

price for the gas.             However, once FGT exercised its right to

"market out," paragraph two provided CMR with the right to accept

FGT's proposed price or to cancel the contract.

     On March 4, 1987, the pricing provisions of paragraph 1(c) of

the contract were to become effective. In order to avoid paragraph

1(c)'s floor provision, FGT proposed, on February 3, 1987, an

extension of the current pricing provision until both parties could

agree on a new price or until March 31, 1987, whichever was

earlier.      CMR agreed to FGT's written proposal.

     Because the February 3 letter agreement expired on March 31,

1987, FGT, on March 31, 1987, sent another letter proposing a

second price extension until May 31, 1987, or until both parties

could agree on a new price.         CMR agreed to this written proposal by

signing and returning the letter agreement.

     After the March 31, 1987, letter agreement expired, the

parties did not enter into another written modification of the


     2
      The parties stipulated that "NGPA" refers to the Natural
Gas Policy Act of 1978, 15 U.S.C. § 3301 et seq.

                                          10
contract.        Therefore,   pursuant         to   the   express    terms   of   the

contract, paragraph 1(c), with its floor price, governed the price

payable.     Even though the parties never entered into a formal

modification agreement, they did negotiate towards the development

of a mutually agreeable price provision.

     On June 4, 1987, FGT sent CMR a fax requesting a waiver of the

floor provision.       Thereafter, about June 9, 1987, FGT sent CMR

three duplicate originals of a revised draft of the proposal which

FGT had faxed on June 4, 1987.                 The terms of the proposal, in

pertinent part, provided:

     In lieu of FGT exercising its market-out right as set forth in
     Article VII, Paragraph 2 of said Contract, the parties hereby
     agree that, for the period commencing June 1, 1987 and
     thereafter until this agreement is terminated by either party
     upon prior written notice (i) FGT shall purchase, to the
     extent that such gas is made available to FGT, 100% of the gas
     dedicated by [CMR] under said Contract, and (ii) Crosby shall
     waive the NGPA Sec. 109 floor price set forth in Article VII,
     Paragraph 1.(c), for as long as this agreement is in effect.

It is undisputed that CMR did not execute and return any of the

duplicate originals to FGT.

     Even though CMR failed to execute the contract, FGT began

performing as if this agreement was in full force.                  The price which

FGT was paying CMR and the price which the express terms of the

parties' agreement called for were significantly different.                       For

the period from June 1, 1987, to January 31, 1992, including

prejudgment interest, the record suggests that the principal amount

of the underpayments amounted to over seven million dollars.

     At    the   end   of   1991,   FGT    assigned       its   rights   under    the

gas-purchase      contract     to    Citrus         Marketing    Inc.    (Citrus).


                                          11
Apparently, because Citrus would now be performing under the

gas-purchase    contract,    CMR   had    its   legal   counsel    review   the

contract.    Finally, in late 1991, CMR claims to have discovered

that FGT had been paying it less than the floor price since June

1987. On December 31, 1991, CMR filed suit, seeking to recover the

difference between the amount actually paid by FGT and the amount

FGT would have paid pursuant to the § 109 floor price.                    After

learning that CMR was now objecting to the price which it had

continuously accepted for over four years, Citrus exercised its

right to "market out."

     Subsequently, CMR filed an amended complaint adding Citrus as

a defendant.    FGT and Citrus filed an answer and a counterclaim

alleging fraud.       On February 2 and 3, the district court held a

bench trial. The district court initially noted that CMR could not

challenge the validity of the amounts paid by FGT "as to which the

statements from the defendants to the plaintiff itemizing such

purchases were rendered more than two years prior to plaintiff's

objecting to the defendants as to the accuracy of such statements."

Crosby-Mississippi Resources v. Florida Gas Transmission Co., 815

F.Supp. 977, 979 (S.D.Miss.1993).3              Specifically, the district

court    determined   that   the   contract's     presumption     of   accuracy

applied to all statements for gas sold prior to November 1989.              Id.

Next, the district court determined that the parties, sometime

before June 4, 1987, entered into a verbal agreement, the terms of

     3
      The district court found that CMR did not object to FGT's
failure to pay the § 109 floor price until December 30, 1991.
Crosby-Mississippi Resources, Co., 815 F.Supp. at 979.

                                     12
which were the same as the proposal set forth in the letter dated

June 4.   Id. at 980.       The district court further found that Stewart

Gammill III knew from June of 1987 forward that CMR was not being

paid the § 109 floor price.            Id.    Even though the district court

determined that the parties had entered into an oral modification

of the contract, it concluded it was unenforceable under MISS.CODE

ANN. § 75-2-209 (1971).          Id.     However, the district court then

found that "this is a classic case for waiver under subsection (4)

of   MISS.CODE   ANN.   §    75-2-209    since   there   was   an   attempt   at

modification or rescission."             Id.     The district court further

determined that a stamped notation on the backs of the checks was

ineffective to demonstrate that CMR's course of conduct over four

and a half years did not constitute a waiver of the § 109 floor

price.    Id. at 981.       In sum, the district court concluded that FGT

had proven its affirmative defense of waiver under the UCC and that

CMR should take nothing.

                            II. STANDARDS OF REVIEW

      We review the granting of summary judgment de novo, applying

the same criteria used by the district court in the first instance.

Conkling v. Turner, 18 F.3d 1285, 1295 (5th Cir.1994).               First, we

consult the applicable law to ascertain the material factual

issues.    King v. Chide, 974 F.2d 653, 655-56 (5th Cir.1992).                We

then review the evidence and inferences to be drawn therefrom in

the light most favorable to the nonmoving party.                    Lemelle v.

Universal Mfg. Corp., 18 F.3d 1268, 1272 (5th Cir.1994);               Federal

Deposit Ins. Corp. v. Dawson, 4 F.3d 1303, 1306 (5th Cir.1993),


                                         13
cert. denied, --- U.S. ----, 114 S.Ct. 2673, 129 L.Ed.2d 809

(1994). Summary judgment is proper "if the pleadings, depositions,

answers to interrogatories, and admissions on file, together with

the affidavits, if any, show that there is no genuine issue as to

any material fact and that the moving party is entitled to judgment

as a matter of law."     FED.R.CIV.P. 56(c).

     A district court's findings of fact must be accepted unless

clearly erroneous;      a district court's conclusions of law are

reviewable de novo.     Prudhomme v. Tenneco Oil Co., 955 F.2d 390,

392 (5th Cir.), cert. denied, --- U.S. ----, 113 S.Ct. 84, 121

L.Ed.2d 48 (1992).    The interpretation of an unambiguous contract

is a question of law and is therefore subject to our de novo

review. Haber Oil Co. v. Swinehart (In re Haber Oil), 12 F.3d 426,

443 (5th Cir.1994).    The initial question of whether a contract is

ambiguous is also a question of law.      Id.

                            III. DISCUSSION

                         A. APPEAL NO. 93-7519

                       1. MISS.CODE ANN. § 15-1-54

     Initially, we address the question of whether paragraph four

of the COPAS accounting procedures violates MISS.CODE ANN. § 15-1-5.

As noted above, § 15-1-5 provides:

     The limitations prescribed in this chapter shall not be

     4
      Although appeal No. 93-7519 was consolidated with appeal
No. 93-7525 because they both involved the question of whether
the contracts at issue violated § 15-1-5, we need not address
whether the contract provision at issue in the latter appeal
violated § 15-1-5 because CMR clearly waived enforceability of
the floor provision, thus rendering the § 15-1-5 discussion
unnecessary. See Part B infra.

                                   14
      changed in any way whatsoever by contract between parties, and
      any change in such limitations made by any contracts [sic]
      stipulation whatsoever shall be absolutely null and void, the
      object of this section being to make the period of limitations
      for the various causes of action the same for all litigants.

As   we have   already   stated,   CMR    contends     that   paragraph   four

violates this provision of Mississippi law.            Paragraph four bears

repeating:

      4. Adjustments

      Payment of any such bills shall not prejudice the right of any
      Non-Operator to protest or question the correctness thereof:
      provided, however, all bills and statements rendered to Non-
      Operators by Operator during any calendar year shall
      conclusively be presumed to be true and correct after
      twenty-four (24) months following the end of any such calendar
      year, unless within the said twenty-four (24) month period a
      Non-Operator takes written exception thereto and makes claim
      on Operator for adjustment.

      In finding that paragraph four did not violate MISS.CODE ANN.

§ 15-1-5, the district court concluded that "contractual conditions

precedent that must be met for rights to accrue do not violate

Miss.Code Ann. § 15-1-5."          Exxon Corp. v. Crosby-Mississippi

Resources Ltd., 775 F.Supp. 969, 975 (S.D.Miss.1991). The district

court went on to conclude that the provision at question created

conditions precedent to be met before challenging the validity of

monthly   billing   statements.     Id.    at   976.     In   reaching    this

conclusion, the district court relied on cases in which Mississippi

courts had upheld notice provisions in insurance contracts. Id. at

975-76.

      For example, in Brander v. Nabors, the district court held

that a provision in a "claims made" medical malpractice insurance

policy requiring a claim to be made against the insured within


                                    15
thirty-six months of the policy's termination date did not violate

§ 15-1-5.      443 F.Supp. 764, 770-72 (N.D.Miss.), aff'd, 579 F.2d 888

(5th Cir.1978). The pertinent provision of the insurance policy at

issue in Brander provided:

     5. In the event of

     (a) the expiration of this Insurance by reason of nonrenewal,
     ...

     then this Insurance shall extend, subject otherwise to its
     terms, limitations, exclusions and conditions, to apply to
     claims made against the Assured during the thirty-six calendar
     months following immediately upon such expiration or
     termination but only for Malpractice committed or alleged to
     have been committed between the Retroactive Date [the
     beginning date of the policy] and such expiration or
     termination.

Id. at 766.

     Under the terms of the policy, coverage extended to all acts

of malpractice committed by the insured while the policy was in

force.    However, the policy limited its coverage to claims made

against the insured within thirty-six months of the policy's

termination.       In Brander, suit was brought against the insured

fifty-two      months    after    the   policy   terminated   for   malpractice

allegedly committed while the policy was in force.                  Id. at 767.

The insurer claimed it was not liable under the policy because no

claim    was    made    against   the   insured   within   thirty-six    months

following the termination of the policy.             Id.   The insured argued

that the policy's thirty-six month notice provision violated § 15-

1-5 because it impermissibly shortened the applicable statute of

limitations.      Id.    The district court determined that the question

to be answered in the case was whether "the restrictions as to time


                                         16
articulated in the policy, during which claims must be made against

the assured, are valid conditions precedent to the insurer's

liability    or     impermissible      attempts     to   shorten   the    state's

applicable" statute of limitations.           Id. at 770-71.       The district

court found that the "policy limitations relating to the time

within which a claim must be made against the assured are valid

conditions    precedent    to    the    insurer's     liability    and   are   not

violative of § 15-1-5."         Id. at 772;        see Cox v. Lamar Life Ins.

Co., 208 Miss. 146, 43 So.2d 884, 886 (1950) (holding that a

provision in a life insurance policy which allowed for the waiver

of premiums and a monthly income if the insured supplied the

insurer with proof of permanent disability by the anniversary date

of   the   policy    nearest    the    insured's    sixtieth   birthday    was a

condition precedent to the insurer's liability and therefore not a

restriction on the applicable statute of limitations).

      CMR argues that cases such as Brander are inapplicable to the

present issue because the notice provisions in those cases were

valid conditions precedent to liability, while the contractual

provision in this case limits the time within which a party may act

to enforce his rights.          As support for its contention that the

provision at issue in this case violates Mississippi law, CMR

relies on Dodson v. Western Union Telegraph Co., 97 Miss. 104, 52

So. 693 (1910), and Illinois Central Railroad Co. v. Jordan, 108

Miss. 140, 66 So. 406 (1914).

      In Dodson, the plaintiff sued Western Union for its failure to

deliver a telegram.       52 So. at 693.      Western Union contended that


                                         17
the following provision relieved it of any liability:

      The company will not hold itself liable for errors or delays
      in transmission or delivery of unrepeated messages, beyond the
      amount of tolls paid thereon, nor in any case where the claim
      is not presented in writing within sixty days after the
      message is filed with the company for transmission.

Id.   Dodson failed to present his claim within sixty days, and the

lower    court   determined   that   this   failure   precluded     him   from

recovering any damages from the company.              Id.    On appeal, the

Mississippi Supreme Court noted that it had previously upheld a

provision such as this as a valid "condition precedent, with which

the claimant must comply or lose his claim, and if he does comply

he may sue within the time limited by the statute, and that it is

not a limitation but a reasonable regulation."               Id.   The court,

however, noted that a recently passed statute, § 3127—predecessor

to § 15-1-5—was intended to void contractual provisions which have

the effect of shortening the applicable statute of limitations.

Id.     The court concluded that "[a]ll contracts which directly or

indirectly have that effect are condemned."                 Id. at 694.     On

suggestion for rehearing, the court noted that previous cases

upholding provisions such as this were, in essence, overruled by

the new statute.     Id.

      Likewise, in Illinois Central Railroad Co. v. Jordan, the

Mississippi Supreme Court determined that a provision in a bill of

lading which stated that

      [i]t is further agreed by the shipper that no claim for loss
      or damage to stock shall be valid against said railroad
      company unless it shall be made in writing, verified by
      affidavit, and delivered to the general freight agent of the
      company at the station from which the stock is shipped, or the
      agent of the company at the point of destination, within 10

                                     18
      days from the time said stock is removed from the cars

was invalid as an improper attempt to change the applicable statute

of limitations.      66 So. at 406.

      Based on Dodson and Jordan, CMR asserts that the contractual

provision at issue is an improper attempt to shorten the applicable

statute of limitations.5      Certainly, the broad language in Dodson

and its rejection of previous cases upholding notice provisions as

proper conditions precedent would certainly appear to control the

instant case.    However, we believe that the full import of Dodson

and   Jordan   has   been   limited   by   subsequent   decisions   by   the


      5
      CMR also attempts to rely on Smith v. Orkin Exterminating
Co., Inc., to support its contention that paragraph four violates
Mississippi law. 791 F.Supp. 1137 (S.D.Miss.1990), aff'd, 943
F.2d 1314 (5th Cir.1991). However, we do not find Smith to be
applicable to this case. In Smith, the court was confronted with
the question of whether a contractual limitation of remedies
provision was enforceable under Mississippi law. Id. at 1140.
The agreement contained a provision which provided for a one year
period in which to instigate suit. Id. at 1142. The plaintiff
argued that the provision calling for the instigation of suit
within one year was void under Mississippi law. Id. The
agreement further provided that the limitation of remedy
provision was "[s]ubject to the general terms and conditions" of
the contract. Id. Because the limitation of remedy provision
was "subject" to the allegedly void instigation of suit
provision, the plaintiff argued that the limitation of remedy
provision was likewise unenforceable. Id. The district court
rejected this argument because it determined it could "easily
sever the allegedly unenforceable clause from the remainder of
the contract without reforming the substance of the contract."
Id. However, the district court did not discuss whether the
provision providing for a one year time period to bring suit
violated Mississippi law. Further, the district court's opinion
does not indicate whether the plaintiff had violated the
provision. The district simply concluded that even if the
provision was invalid under Mississippi law, the limitation of
remedy provision was not automatically rendered void. Thus,
because the district court did not discuss the enforceability of
the contract's instigation of suit provision, the Smith decision
is of no help in resolving the issue before this court.

                                      19
Mississippi Supreme Court.

     For example, in Aetna Life Insurance Co. v. Walley, an insured

sued his insurer in an attempt to collect money he had spent in

settlement of a malpractice judgment entered against him, as well

as money expended in defending the original suit.   174 Miss. 365,

164 So. 16, 16 (1935).       The insurer defended the suit on the

grounds that the insured had failed to comply with clauses A, B,

and C of the contract which provided:

     A. Upon becoming aware of any malpractice, error or mistake,
     or any allegation of such malpractice, error or mistake, the
     Assured shall give immediate written notice thereof with the
     fullest information obtainable at the time to the Company, or
     its duly authorized agent. If claim is made on account of
     such malpractice, error or mistake, or allegations thereof,
     the Assured shall give like notice of such claim, together
     with full particulars.    The Assured shall, at all times,
     render to the Company all co-operation and assistance in his
     power.

     Report and defense of suits.

     B. If suit is brought against the Assured to enforce a claim
     for damages covered by this policy, he shall immediately
     forward to the Company every summons or other process as soon
     as the same shall have been served on him, and the Company
     will, at its own cost, defend such suit in the name and on
     behalf of the Assured.

     Co-operation of Assured.    Expenses.

     C. The Assured, whenever requested by the Company, shall aid
     in securing information and evidence, and the attendance of
     witnesses, and in prosecuting appeals, but the Assured shall
     not voluntarily assume any liability or interfere in any
     negotiations for settlement, or in any legal proceedings, or
     incur any expense or settle any claim, except at his own cost
     without the written consent of the Company previously given.

     In construing the applicable provisions, the Walley court

noted that

     [t]he requirements of clauses A, B, and C of the policy
     conferred a valuable right upon the [insurer], the purpose of

                                 20
     which was to enable it to investigate a claim against the
     appellee covered by the policy; to itself decide whether the
     claim should be settled without litigation, and, if not, to
     prepare its defense thereto, and should have been complied
     with, unless compliance therewith was waived or excused under
     some pertinent rule of law.

Walley, 164 So. at 19.     In rejecting the insured's argument that

clauses A, B, and C of the contract were void as impermissible

restrictions on the applicable statute of limitations, the court

stated that the

     notice here required in no way affects the time within which
     suit must be brought on a policy, or within which notice must
     be given of a liability claimed to have arisen thereunder.
     The right of the insured to recover on this policy does not
     arise, if at all, until the termination of a suit against him
     for malpractice, and the time within which the insured must
     sue on the policy begins when, but not until, the termination
     of such a suit.

Id. at 19.    The court concluded that these "clauses of the policy

relate only to things to be done before liability thereon becomes

fixed, and when such is the case [ ] Section 2294, Code of 1930, is

not violated."    Id. at 19-20.

     In Western Casualty and Surety Co. v. Honeywell, Inc., the

Mississippi    Supreme   Court    considered   whether   the   following

provision in a payment bond violated Mississippi public policy:

     3. No suit or action shall be commenced hereunder by any
     claimant:

     a) Unless claimant, other than one having a direct contract
     with the Principal, shall have given written notice to any two
     of the following: the Principal, the Owner, or the Surety
     above named, within 90 days after such claimant did or
     performed the last of the work or labor, or furnished the last
     of the materials for which said claim is made, stating with
     substantial accuracy the amount claimed and the name of the
     party to whom the materials were furnished, or from whom the
     work or labor was done or performed.

380 So.2d 1385, 1387 (Miss.1980).        The payment bond at issue was

                                    21
executed pursuant to Mississippi statutory law which required the

general contractor to execute a bond assuring that all persons

supplying labor or material would be promptly paid.            Id. at 1388.

Mississippi statutory law did not address the question of whether

the notice provision at issue was a valid provision of the required

bond.6   Further, the applicable statute of limitations provided

that suit must be brought within one year of final settlement of

the construction contract.     Id. at 1386.

     Honeywell, a supplier of a subcontractor, did not have a

contract with the prime contractor, and, thus, was required, under

the terms of the payment bond, to give written notice before filing

an action to collect under the payment bond.                  Id. at 1387.

Honeywell, however, failed to furnish the required notice.                Id.

Honeywell filed suit against the surety within the applicable

statute of limitations for a suit on a bond.          Id.    The trial court

concluded   the   ninety-day   notice     provision    was    repugnant    to

Mississippi public policy.     Id.

     On appeal, the Mississippi Supreme Court determined that the

applicable notice provision did not violate public policy.                The

precise question on appeal was whether the ninety-day notice

provision violated public policy as expressed in the applicable

statute of limitation which allowed for suit on the bond "to be

commenced [ ] after the complete performance of said contract and


     6
      The Mississippi Supreme Court noted that the ninety-day
notice provision contained in the bond is a mandatory provision
for federal construction contracts. Western Casualty and Sur.
Co., 380 So.2d at 1387.

                                     22
final settlement thereof, and shall be commenced within one year

after the performance and final settlement of said contract and not

later."     Id. at 1386.          Even though § 15-1-5 was not directly

applicable to the case, the court relied on its earlier decision in

Aetna Life Ins. Co. v. Walley, 164 So. 16 (1935) to conclude that

the ninety-day notice provision did not violate public policy.

Specifically, the court noted that, "[t]he 90 day notice provision

in the payment bond did not limit the time that Honeywell could

bring   suit    under     section       31-5-7    [the    applicable     statute    of

limitations] but related only to things to be done by Honeywell as

a supplier of a sub-contractor before Western Casualty became

liable to Honeywell."        Western Casualty and Sur. Co., 380 So.2d at

1388.      Thus,    the   court       concluded   that    the    ninety-day    notice

provision was a condition precedent to recovery by Honeywell.                      Id.

at 1390.

     However, it must be noted that not all notice provisions

contained      in   insurance         contracts    have    been    upheld     by   the

Mississippi Supreme Court.             In Latham v. United States Fidelity &

Guaranty Co., the Mississippi Supreme Court determined that the

following    provision     of     a    fidelity    bond    was    an   impermissible

restriction of the applicable statute of limitations:

     No action shall lie against the Underwriter unless, as a
     condition precedent thereto, there shall have been full
     compliance with all the terms of this bond, not until ninety
     days after the required proofs of loss have been filed with
     the Underwriter, nor at all unless commenced within one year
     from the date when the Insured discovers the loss. If any
     limitation of time for notice of loss or any legal proceeding
     herein contained is shorter than that permitted to be fixed by
     agreement under any statute controlling the construction of
     this bond, the shortest permissible statutory limitation of

                                           23
     time shall govern and shall supersede the time limitation
     herein stated.

267 So.2d 895, 896 (Miss.1972) (alteration in original).           However,

Latham is distinguishable from the instant case.            In Latham, the

contractual provision at question required the insured to bring

suit within one year of discovery of the loss even if the insured

had complied with all other requirements of the contract.               It is

hard to imagine a provision which would more clearly violate § 15-

1-5 than this one.

         Sitting in diversity, our quest is to determine how the

Mississippi Supreme Court would construe the provision at issue in

this appeal.     We believe that, presented with the question before

us, the Mississippi Supreme Court would determine that paragraph

four of the COPAS accounting procedures does not violate § 15-1-5.

First,    we   note   that   this   provision   is   different   from   other

provisions which the Mississippi Supreme Court has struck down

because it does not completely foreclose CMR from bringing suit

against Exxon.        E.g., Latham, 267 So.2d at 896 (striking down a

contractual provision which provided that an insurer could not

bring suit unless the suit was commenced within one year from when

the insurer discovered the loss). Rather, the provision creates an

evidentiary presumption, albeit a conclusive one, in favor of

Exxon's billing statements upon the non-operator's failure to take

exception to those statements within the applicable time period.7

     7
      We further note that paragraph four's requirements are
minimal. All the provision requires is that CMR, the
non-operator, send Exxon, the operator, a written exception to
any bill within two years. In fact, the operating agreement

                                      24
       If it is theoretically possible that paragraph four could be

interpreted as foreclosing a claim before the applicable statute of

limitations has run—a matter we need not decide—this is not such a

case.    In the instant case, CMR has asserted defenses to Exxon's

collection      efforts,   but    no    affirmative      claims   for   relief.

Specifically, CMR has interposed as an affirmative defense the

following:     gross negligence, willful misconduct, and failure "to

meet    the   requirements   of   and    satisfy   the    provisions    of   the

agreement."     CMR does not, because it cannot, argue that its right

to pursue these affirmative defenses to avoid liability to Exxon is

subject to any limitation periods—statutory or otherwise.                    See

Distribution Servs. Ltd. v. Eddie Parker Interests, Inc., 897 F.2d

811, 813 (5th Cir.1990) (noting that a defense is never barred by

limitations so long as the plaintiff's main action itself is

timely).       Thus, paragraph four cannot, in this case, act to

terminate CMR's defense to Exxon's suit prematurely.               Even though

CMR has attempted to couch its defenses to Exxon's collection



further protects a non-operator, such as CMR, by granting it the
right to conduct an audit of Exxon's accounts and records. The
relevant provision provides:

              A Non-Operator, upon notice in writing to Operator and
              all other Non-Operators, shall have the right to audit
              Operator's accounts and records relating to the Joint
              Account for any calendar year within the twenty-four
              (24) month period following the end of such calendar
              year; provided, however, the making of an audit shall
              not extend the time for taking of written exception to
              and the adjustments of accounts as provided in
              Paragraph 4 of this Section I.

       In essence, the audit provision allows a non-operator to
       conduct a fishing expedition.

                                        25
efforts as claims for relief, these are really defenses in that

they seek to deduct from Exxon's recovery under the contract.

Further, even if CMR has asserted claims which were improperly

labeled as defenses, those claims were properly dismissed because

CMR   failed    to   present   any    evidence     in     support,   not    because

paragraph four foreclosed them.            See Part III.2 supra.         Therefore,

under   the    facts   presented     in    this   case,    we   cannot     say   that

paragraph four violates Mississippi law as an impermissible limit

on any applicable statute of limitations.

                       2. Attacking the Presumption

      Next, CMR asserts that the district court improperly granted

summary judgment for Exxon because there were material issues of

fact as to whether CMR could rebut paragraph four's conclusive

presumption.      The district court determined that the conclusive

presumption established by the joint operating agreement could be

rebutted upon a showing of fraud or bad faith breach of contract.

Exxon Corp. v. Crosby-Mississippi Resources, Ltd., 775 F.Supp. 969,

976-77 (S.D.Miss.1991).        However, the district court ultimately

granted Exxon's motion for partial summary judgment because CMR did

not submit any evidence to demonstrate it would be able to rebut

the conclusive presumption. Id. The district court further denied

CMR's request for additional discovery because it believed CMR

wished to conduct a fishing expedition.             Id.

      First, we address CMR's contention that the district court

improperly granted Exxon's motion for partial summary judgment

because of the existence of material issues of genuine fact.                     CMR


                                          26
contends that the following allegations, contained in its discovery

responses, establish material issues of fact which should have

precluded summary judgment:      (1) Exxon had failed to pay CMR its

share of the proceeds from the sale of production from the well,

and (2) Exxon had over-engineered the well by the use of "overly

designed and unneeded equipment8."

          After reviewing the evidence which CMR cites us, we conclude

that the district court did not err in granting Exxon summary

judgment.      Even assuming CMR's contention that Exxon's failure to

pay   production    proceeds   would   be   relevant   in   rebutting   the

conclusive presumption, CMR presents no evidence that such money


      8
      CMR's evidence in this regard is confined to the following
response to Exxon's interrogatories:

              Defendants specifically question some expenditures
              based upon an examination of the drillsite and
              equipment by J. Terry Owen, petroleum engineer,
              Jackson, Mississippi, consultant to Defendants, and
              upon a conversation or conversations had between Mr.
              Owen and an engineer of Exxon. Mr. Owen's onsite
              examination led him to believe that the tank battery
              for the subject well was far more than was needed for
              this well. Likewise, Mr. Owen is of the opinion that
              much of the surface equipment such as heater treaters,
              was overdesigned in the sense that equipment of that
              design and capacity was not needed for this well. In a
              conversation with an engineer of Exxon, Mr. Owen
              determined that Exxon was using heavy walled tubulars
              of the type normally used when one encounters hydrogen
              sulphide. The Exxon engineer indicated that it was
              used because the Exxon research department recommended
              such. In the opinion of Mr. Owen, and based upon his
              knowledge of the situation, the use of such tubulars
              was unnecessary as hydrogen sulphide has not been
              encountered in wells drilled in the lower Tuscaloosa
              formation in Mississippi.

      CMR has not directed this court to any sworn statement by
      Mr. Owen in support of these allegations.

                                   27
was owing.    In fact, in its discovery responses, CMR admits that

Exxon paid it the only amount which CMR was aware Exxon owed it.9

We further conclude that the other evidence which CMR proffered to

establish a genuine issue of fact is equally unavailing.                 See

Martin v. John W. Stone Oil Distrib., 819 F.2d 547, 549 (5th

Cir.1987) ("Neither the district court nor this court may properly

consider hearsay evidence in affidavits and depositions.").

     Next, we address CMR's contention that the district court

erred in granting summary judgment without allowing it to complete

further discovery.     CMR asserts it was unable to establish any of

its defenses because the district court granted Exxon summary

judgment before it was able to sufficiently conduct discovery and

obtain proof for its defenses.            In denying CMR's request, the

district court determined it should not delay ruling on Exxon's

motion for summary judgment because CMR had not "set forth specific

instances of breach of contract, nor do they list the facts that

might support a showing of breach of contract.         The Court will not

refrain   from    ruling   on   [Exxon's]   Motion   for   Partial   Summary

Judgment simply because [CMR] wish[es] to engage in speculative

discovery."      Exxon Corp., 775 F.Supp. at 977.

     9
      We further note that the district court gave CMR credit for
production proceeds which Exxon had withheld. In its final
judgment of July 3, 1993, the district court stated that CMR is
"entitled to a credit of $26,895.10 as Defendants' share of
production proceeds held by Exxon Corporation for production
during the period of February, 1985 through February, 1986." CMR
has not argued on appeal that the amount which the district court
offset was incorrect or that the district court failed to offset
other withheld production revenues; rather, CMR argues only that
because Exxon wrongfully withheld production revenues, the
district court could not grant summary judgment.

                                     28
         We review a district court's decision to preclude further

discovery prior to granting summary judgment under the abuse of

discretion standard.            Wichita Falls Office Assocs. v. Banc One

Corp., 978 F.2d 915, 918 (5th Cir.1992), cert. denied, --- U.S. ---

-, 113 S.Ct. 2340, 124 L.Ed.2d 251 (1993).                   The party moving for a

continuance of discovery must establish three general requirements:

(1) request extended discovery prior to the district court's ruling

on summary judgment, (2) place the district court on notice that

further discovery pertaining to the summary judgment is being

sought, and (3) demonstrate to the district court how the requested

discovery pertains to the pending motion.                    Id. at 919.

         Initially, we note that the district court did not err in

refusing       discovery   on    matters   which       were     foreclosed   by   the

conclusive      presumption      established      by    paragraph     four   of   the

operating agreement.            Many of CMR's discovery requests relate

solely    to    the   appropriateness      of    Exxon's       billing   statements.

However, because Exxon's charges were deemed established, the

district court properly rejected CMR's request to extend discovery

to enable it to demonstrate the billings were inappropriate.

Calpetco 1981 v. Marshall Exploration, Inc., 989 F.2d 1408, 1417

(5th Cir.1993) (upholding district court's rejection of evidence to

dispute the validity of charges which were conclusively established

under the parties' operating agreement).

         Further, we do not believe the district court abused its

discretion      in    denying    CMR's   request       for    additional   discovery

concerning its remaining defenses.              In its reply to Exxon's motion


                                         29
for partial summary judgment, CMR's attorney attached an affidavit

outlining why CMR needed additional discovery to oppose Exxon's

motion.    In    his    affidavit,     CMR's   attorney   stated   that    his

"experience     [had]   led    [him]   to   the   conclusion   that   in    an

undertaking as complex and expensive as the drilling of an oil

well, there is the reasonable probability of errors which would

constitute breaches of the [joint operating agreement] by the

Operator." We agree with the district court that CMR's request for

an extension of discovery was merely a request by CMR to conduct a

fishing expedition. Thus, we uphold the district court's denial of

CMR's request for additional discovery.            Robbins v. Amoco Prod.

Co., 952 F.2d 901, 907 (5th Cir.1992) (upholding the district

court's denial of a motion for additional discovery because the

party's request "contains only the vague assertion that additional

discovery is needed");        Paul Kadair, Inc. v. Sony Corp. of Am., 694

F.2d 1017, 1030 (5th Cir.1983) (noting that Rule 56(f) cannot be

relied upon to defeat a motion for summary judgment "where the

result of a continuance to obtain further information would be

wholly speculative").

 3. Does paragraph four's conclusive presumption apply to Exxon's
billing statements for February and May 1985

      CMR asserts the district court erred in applying paragraph

four's conclusive presumption to amounts which Exxon billed it for

February and May 1985.         CMR argued below that even if paragraph

four's conclusive presumption applied to Exxon's bills, it could

not apply to amounts which Exxon had attempted to bill for February

and May of 1985 because CMR never received billing statements for

                                       30
those months. The district court determined that actual receipt of

the bill by CMR was required for the presumption of conclusiveness

to apply.    Exxon Corp., 775 F.Supp. at 978.           The district court

then noted that Exxon also prepared "Status of Account Statements"

which reflected the billing amounts for February and May 1985.

Because the Status of Account Statements reflected the charges

incurred in February and May 1985, the district court determined

that   paragraph    four's      conclusive   presumption   attached   to   the

amounts billed for those months.

       The Status of Account Statement which the district court found

reflected the charges incurred in February and May 1985 was issued

in December 1986.       Our review of the record demonstrates that this

Status of Account Statement "reflects" the billing statements for

February and May 1985 by including them in the total which CMR owed

to Exxon.    In other words, the statements did not specifically set

out what the billing amounts for February and May 1985 were.               The

parties' joint operating agreement required Exxon to prepare bills

for the preceding month which "will be accompanied by statements

which identify the authority for expenditure, lease or facility,

and    all   charges      and     credits,   summarized    by   appropriate

classifications of investment and expense except that items of

Controllable Material and unusual charges and credits shall be

separately identified and fully described in detail."                 Exxon's

Status of Account Statements are not detailed enough to satisfy the

joint operating agreement's billing requirements and therefore are

not    entitled    to   the   presumption    of   correctness   afforded    by


                                       31
paragraph four.

                           4. Exxon's cross-appeal

       On cross-appeal, Exxon asserts that the district court erred

in determining that the operating agreement called for simple

rather than compound interest.           As stated earlier, the relevant

contractual provision provides:

      Each Non-Operator shall pay its proportion of all bills within
      thirty (30) days after receipt. If payment is not made within
      such time, the unpaid balance shall bear interest monthly at
      the rate of twelve percent (12%) per annum or the maximum
      contract rate permitted by the applicable usury laws in the
      state in which the Joint Property is located, whichever is the
      lesser, plus attorney's fees, court costs, and other costs in
      connection with the collection of unpaid amounts.

      Exxon     argued   before   the   district     court   that    the   above

provision clearly and unambiguously calls for compound interest.

The district court, however, determined that the COPAS accounting

procedures called for the application of simple interest.                     In

reaching this conclusion, the district court relied on COPAS

bulletin No. 5.          COPAS bulletins explain the COPAS accounting

procedures.     Exxon argued that COPAS bulletin No. 5 was irrelevant

to the issue before the district court because bulletin No. 13 was

the   current    bulletin    at   the   time   the   contract   at   issue   was

executed.     The district court, however, determined that bulletin

No. 5 was the applicable bulletin because a COPAS bulletin remains

effective until a subsequent bulletin expressly overrules it.

Because bulletin No. 13 did not expressly overrule No. 5, the

district court looked to that bulletin for guidance.             Bulletin No.

5 stated that simple interest should accrue on all unpaid payments.

      As further support for its contention that the joint operating

                                        32
agreement provides for compound interest, Exxon relies on Texon

Energy Corp. v. Dow Chem. Co., 733 S.W.2d 328 (Tex.App.—Houston

[14th Dist.] 1987, writ ref'd n.r.e.).             In Texon, the court

interpreted the following provision as clearly and unambiguously

providing for compound interest:         "If payment is not made within

such time, the unpaid balance shall bear interest monthly at the

rate of twelve percent (12%) per annum."         Id. at 331.   The Texon

court rejected the argument that the term unpaid balance referred

to the unpaid principal balance because it believed that such a

construction rendered the term monthly "totally meaningless."         Id.

     CMR argues that Texon is not persuasive authority because

Mississippi law requires that a contract specify that interest will

be compounded while Texas does not have such a requirement.            To

support this contention, CMR relies on this court's decision in

Stovall v. Illinois Cent. Gulf R.R., 722 F.2d 190 (5th Cir.1984).

In Stovall, we considered "whether interest awarded by a 1981

judgment was intended to be computed on a simple basis or instead

to be compounded annually."         Id. at 191.      We concluded that

pre-judgment    interest     was   to    be   compounded   annually   and

post-judgment interest was to be compounded on a simple basis.        Id.

We concluded that MISS.CODE ANN. § 75-17-1(1), which provided that

the legal rate of interest was to be "six percent (6%) per annum,

calculated according to the actuarial method," had the "technical

meaning that interest be computed at the specified rate, compounded

annually."     Id. at 192.     Thus, we upheld the district court's

determination that pre-judgment interest should be computed at six


                                    33
percent per annum, compounded annually.           Id.

     In determining the proper rate of interest for post-judgment

interest, we construed MISS.CODE ANN. § 75-17-7, which provided that

judgments on accounts " "shall bear interest at the rate of eight

percentum (8%) per annum' " as providing for simple interest.              Id.

In reaching this conclusion, we noted that the general rule is that

"when interest is allowable, it is to be computed on a simple

rather than compound basis in the absence of express authorization

otherwise."     Id.

     However, even if Mississippi follows the general rule that

when interest is allowed it is to be computed on a simple rather

than compound basis absent express authorization, we believe that

the contract provision at question unambiguously and as a matter of

law calls     for     compound   interest.     Therefore,   we   reverse   the

district court's determination that the joint operating agreement

between Exxon and CMR provided for simple interest.

     In conclusion, we affirm the district court's determination

that paragraph four of the COPAS accounting procedures, as applied

here, did not violate § 15-1-5, reverse the district court's

determination       that   the   conclusive   presumption   applies   to   the

amounts Exxon billed CMR for February and May 1985, and reverse the

district court's determination that the joint operating agreement

called for simple interest.

                             B. APPEAL NO. 93-7525

      The principal issue in this case is whether CMR has waived

the gas-purchase contract's floor pricing provision which required


                                       34
FGT to pay a price for CMR's gas not less than the price set forth

under § 109 of the NGPA.         The resolution of this case is controlled

by the Uniform Commercial Code (UCC), which has been adopted by

Mississippi.     MISS.CODE ANN. § 75-2-107(1) (1981) ("A contract for

the sale of minerals or the like (including oil and gas) ... is a

contract   for    the     sale    of     goods   within     this     chapter....)

(parenthesis in original).             The applicable statutory provisions

include MISS.CODE ANN. § 75-2-208(3), and § 75-2-209(2), (4).

     Section 75-2-209(2) provides:               "A signed agreement which

excludes modification or rescission except by a signed writing

cannot be otherwise modified or rescinded, but except as between

merchants such a requirement on a form supplied by the merchant

must be separately signed by the other party."                     This provision

allows the parties to a contract to expand the UCC's statute of

frauds provision.       Thus, the parties may include in their contract

a provision which requires any modification or rescission of the

contract to be writing.

     However, the UCC limits the effect of this provision by

providing that "[a]lthough an attempt at modification or rescission

does not satisfy the requirements of subsection (2) or (3) [75-2-

209(2), (3) ] it can operate as a waiver."                MISS.CODE ANN. § 75-2-

209(4) (1981).        The UCC further provides that "[s]ubject to the

provisions of section 75-2-209 on modification and waiver, such

course of performance shall be relevant to show a waiver or

modification     of    any   term      inconsistent   with    such     course   of

performance."     MISS.CODE ANN. § 75-2-208(3) (1981).               Thus, "[t]he


                                         35
combination of §§ [75-2-208(3) and 75-2-209(4) ] establishes that

the parties course of performance after execution of the contract

can operate as a waiver of specific contractual provisions."                     T.J.

Stevenson & Co. v. 81,193 Bags of Flour, 629 F.2d 338, 365 (5th

Cir.1980).

      In the instant case, the district court determined that CMR

had   waived   enforcement    of    the    §    109   floor    price.       Crosby-

Mississippi Resources v. Florida Gas Transmission, 815 F.Supp. 977,

981 (S.D.Miss.1993).     First, the district court determined that

Stewart Gammill III "was aware from June 1987 forward that [CMR]

was not being paid according to the 109 floor price even though

[Stewart Gammill III] might not have known the exact amount of the

floor price."    Id. at 980.       The district court concluded that CMR

and FGT   unsuccessfully     attempted         to   modify    the   terms   of   the

gas-purchase contract.       Id. at 980-81.           However, even though the

attempt at modification proved unsuccessful because it was never

put forth in a signed writing, the district court determined that

CMR knew it was not being paid according to the § 109 floor

provision and, because it continued to accept payment at a lower

price, it had waived the contract's floor provision.                  Id. at 981.

      On appeal, CMR asserts that the district court erred because

it erroneously interpreted the following contractual provision:

      This Contract constitutes the entire agreement between the
      parties and no waiver, representation, or agreement, oral or
      otherwise, shall affect the subject matter hereof unless and
      until such waiver, representation or agreement is reduced to
      writing and executed by authorized representatives of the
      parties.

According to CMR, the preceding "no waiver" provision precludes a

                                      36
finding of waiver because the provision expressly provides that no

waiver is enforceable unless it is in writing.     In response to this

argument, the district court determined that the use of the word "

"waiver' was not used as a term of art attempting to bring this

contract out from subsection (4) of Miss. Code Ann. § 75-2-209

(1972)."   Id. at 979.   Rather, the district court determined that

the word waiver was basically used synonymously for modification.

Id.

      As further support for its position, CMR relies on cases which

have refused to recognize oral waivers in the face of no waiver

clauses.   See, e.g., Marlowe v. Argentine Naval Comm'n, 808 F.2d

120, 123 (D.C.Cir.1986).     For example, in South Hampton Co. v.

Stinnes Corp., 733 F.2d 1108 (5th Cir.1984), this court rejected

South Hampton's argument that a contractual provision had been

waived. In South Hampton, we determined that Stinnes was justified

in cancelling its contract with South Hampton because South Hampton

had failed to construct shore tank facilities which were to be used

to determine the quantity and quality of the product delivered to

Stinnes, the buyer.   Id. at 1116.    In an effort to demonstrate that

Stinnes had wrongfully cancelled the contract, South Hampton argued

that the parties had agreed to change the contract's delivery

requirements such that failure to construct shore tank facilities

would not justify cancellation of the contract.           Id. at 1117.

According to South Hampton, the new delivery agreement was not a

modification of the contract but a "waiver."        Id.   We concluded

that the following contractual provision foreclosed South Hampton's


                                 37
position:   "[T]he contract may not be changed or terminated orally

and no attempted change, termination or waiver of any of the

provisions hereof shall be binding unless it is in writing."           Id.

In essence, South Hampton argued that it had waived enforcement of

the original terms of the contract, which were intended to operate

for its benefit.     We emphasized the novelty of South Hampton's

position:

      We note that South Hampton, in its offensive use of waiver
      theory, has taken a somewhat novel position. It insists that
      it, not Stinnes, has waived the shore tankage requirement.
      Consequently we are not called upon to decide if Stinnes's
      acceptance of product delivered on an out-turn basis
      constitutes a waiver of the shore tank requirement.
      Similarly, South Hampton has not argued that Stinnes' actions
      could be construed as a ratification of any modification.

Id. at 1118 n. 14.       While we did determine that a no oral

modification clause precluded South Hampton's waiver argument, we

did not address the issue presented in this case.

      Next, CMR attempts to attack the district court's decision by

arguing that the district court erroneously concluded that it had

affirmatively waived enforcement of the floor provision.          First,

CMR contends that the parties' previous course of performance in

altering the gas-purchase contract's pricing provision demonstrates

that it did not intend to waive the floor provision. Specifically,

CMR asserts that this course of performance shows that the parties

did not intend to change the contract absent a signed writing.

Second, CMR contends that it did not accept or acquiesce in FGT's

failure to comply with the floor provision.         In support of this

argument, CMR points this court to the following endorsement, which

CMR   apparently   stamped   on   every   check   which   FGT   sent   it:

                                   38
"ACCEPTANCE     AND    ENDORSEMENT        BY   PAYEE    DOES    NOT   CONSTITUTE      A

RATIFICATION, AMENDMENT, OR REVISION OF ANY OIL, GAS, AND MINERAL

LEASE, POOLING, UNITIZATION AGREEMENT, OR JOINT OPERATING AGREEMENT

NOT ALREADY EXECUTED BY PAYEE, NOR DOES PAYEE WAIVE ANY RIGHTS TO

CORRECT MONIES DUE PAYEE."          In this vein, CMR relies on § 75-1-207

which provides:

      A party who with explicit reservation of rights performs or
      promises performance or assents to performance in a manner
      demanded or offered by the other party does not thereby
      prejudice the rights reserved.      Such words as "without
      prejudice," "under protest" or the like are sufficient

(emphasis added).         Finally, CMR attacks the district court's

conclusion that it knew that FGT was not complying with the floor

provision.      In     reaching     its    conclusion,        the   district      court

determined    that    "the   parties       entered     into    an   oral   or    verbal

agreement to change the original contract sometime prior to June 4,

1987, and that this agreement that they entered into verbally was

basically as set out in the letter of June 4, 1987."                            Crosby-

Mississippi Resources, 815 F.Supp. at 980.                      CMR attacks this

finding by arguing that the testimony which the court heard was not

credible.    Specifically, CMR points out instances in the witnesses

depositions which contradict their trial testimony.                   FGT, however,

presented evidence from two witnesses that CMR and FGT entered into

an oral agreement to waive the floor provision.                     After reviewing

the record, we cannot say the district court's determination that

CMR   entered   into    an   oral    modification        agreement     was      clearly

erroneous.

      Although CMR attempts to make much about the "no waiver"


                                          39
provision,    we   do   not    believe   that   the   provision   should   be

interpreted as foreclosing a finding that CMR waived enforcement of

the floor provision. See Westinghouse Credit Corp. v. Shelton, 645

F.2d 869 (10th Cir.1981) (anti-waiver provision itself may be

waived).     Further, we believe that CMR's interpretation of the

contractual provision would cause an inequitable result in this

case. Based on the district court's finding that CMR orally agreed

to change the pricing terms and forego enforcement of the floor

provision, CMR accepted payments, undisputedly below the floor

provision, for about four and one-half years. Requiring FGT to pay

the floor price after this consistent course of conduct would work

a serious injustice because it would effectively deprive FGT of its

right to "market out."        In other words, if CMR had told FGT that it

was not going to accept a price lower than the floor price, FGT

could have exercised its right to market out;               however, CMR's

course of conduct has limited that possibility.

     Moreover, we do not believe that the stamped notation on the

backs of the checks, which was done in the ordinary course of

business, precludes a finding that CMR waived enforcement of the

floor provision. We do not believe that the district court clearly

erred in determining that CMR's actions in this regard were not an

"explicit reservation" of rights, especially in light of CMR's

course of conduct in consistently accepting underpayments. In sum,

we conclude that even though the parties' attempted modification

was ineffective as such, the oral agreement to modify, coupled with

the course of performance, demonstrates that CMR waived enforcement


                                      40
of the floor provision.          E.g., T.J. Stevenson & Co. v. 81,193 Bags

of Flour, 629 F.2d 338, 365-66 (5th Cir.1980) (determining that

party     had   waived    compliance   with    contract's    notice    provision

because of the party's course of performance);                J.W. Goodliffe &

Son v. Odzer, 283 Pa.Super. 1487, 423 A.2d 1032, 1035 (1980)

(determining that parties' attempted modification, when combined

with a course of dealing over three years and involving hundreds of

transactions, constituted a waiver of contractual provision).10

                                 IV. CONCLUSION

                             A. APPEAL NO. 93-7519

     For the foregoing reasons, we REVERSE the district court's

determination      that    the   operating    agreement     called    for   simple

interest,       REVERSE   the    district     court's   conclusion     that    the

conclusive presumption applies to the amounts which Exxon billed

CMR for February and May 1985, and AFFIRM the district court's

judgment in all other respects.

                             B. APPEAL NO. 93-7525


     10
      CMR argues that the pretrial order does not list as a
disputed issue the meaning of the term "waiver" in the no-waiver
clause of the contract. Consequently, it argues that it did not
have fair notice that the court would consider the term to be
ambiguous. CMR reasons that the court could not properly
construe the term against it without CMR having any advance
notice that the meaning of the term "waiver" was a fact in issue.
Contrary to CMR's protestations, the pretrial order is replete
with references to issues of fact as to whether waiver had in
fact occurred. Although the issues may not be worded as
precisely as CMR would like, this court has never required—and
indeed cannot require—technical perfection in pretrial orders.
Moreover, CMR was fully aware of the trial court's interest in
this specific issue about which they now complain, as is
evidenced by the exchanges at oral argument on the pretrial
motions for summary judgment.

                                        41
    For the foregoing reasons, the district court's judgment is

AFFIRMED.




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