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  • QRE OPERATING LLC vs. PARSONS, ROGER D (IN HIS CAPACITY AS TRUSTEE OF THE LL & E ROYALTY TR HOMEOWNERS ASSOCIATION document preview
  • QRE OPERATING LLC vs. PARSONS, ROGER D (IN HIS CAPACITY AS TRUSTEE OF THE LL & E ROYALTY TR HOMEOWNERS ASSOCIATION document preview
  • QRE OPERATING LLC vs. PARSONS, ROGER D (IN HIS CAPACITY AS TRUSTEE OF THE LL & E ROYALTY TR HOMEOWNERS ASSOCIATION document preview
  • QRE OPERATING LLC vs. PARSONS, ROGER D (IN HIS CAPACITY AS TRUSTEE OF THE LL & E ROYALTY TR HOMEOWNERS ASSOCIATION document preview
  • QRE OPERATING LLC vs. PARSONS, ROGER D (IN HIS CAPACITY AS TRUSTEE OF THE LL & E ROYALTY TR HOMEOWNERS ASSOCIATION document preview
  • QRE OPERATING LLC vs. PARSONS, ROGER D (IN HIS CAPACITY AS TRUSTEE OF THE LL & E ROYALTY TR HOMEOWNERS ASSOCIATION document preview
  • QRE OPERATING LLC vs. PARSONS, ROGER D (IN HIS CAPACITY AS TRUSTEE OF THE LL & E ROYALTY TR HOMEOWNERS ASSOCIATION document preview
  • QRE OPERATING LLC vs. PARSONS, ROGER D (IN HIS CAPACITY AS TRUSTEE OF THE LL & E ROYALTY TR HOMEOWNERS ASSOCIATION document preview
						
                                

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CAUSE NO. 2015-47031 QRE OPERATING, LLC IN THE DISTRICT COURT OF Plaintiff HARRIS COUNTY, TEXAS ROGER D. PARSONS, IN HIS CAPACITY AS TRUSTEE OF THE LL&E ROYALTY TRUST Defendant RD JUDICIAL DISTRICT THIRD-PARTY DEFENDANTS CONOCOPHILLIPS COMPANY, BURLINGTON RESOURCES TRADING, LLC AND THE LOUISIANA LAND & EXPLORATION COMPANY, LLC’S JOINT MOTION IN LIMINE Third-Party Defendants ConocoPhillips Company, Burlington Resources Trading, LLC, and The Louisiana Land and Exploration Company, LLC (collectively, the “Third-Party Defendants”) move in limine—prior to voir dire and out of the presence and hearing of the jury panel—that the Court order all parties, attorneys, and witnesses not to refer, directly or indirectly, in any manner whatsoever, in the presence of any juror or panelist, to any of the matters identified below, without first approaching the Court out of the presence of the jury or jury panel, so that the Court may determine first the admissibility of such matters before they are disclosed to actual or prospective jurors. The specific actions or matters which the Third-Party Defendants request this Court rule upon and include within this Motion in Limine are as follows: Any reference, testimony, suggestion, or other evidence of alleged wrong-doing or damages associated with properties other than the Jay Field. Roger D. Parsons (“Parsons”), filed counterclaims against Breitburn centered on Breitburn’s acquisition of the Jay Field in December 2006 and its alleged refusal to pay royalties on production from the Jay Field to the LL&E Royalty Trust. See Parsons Eighth Amended IMANAGE\015940\0003\14191147v1-9/20/23 Page 1 of 8 Answer and Counterclaim at ¶ 3.20. Parsons claims that Breitburn’s alleged failure to pay royalties to the Trust breaches its obligations under the Conveyance of Overriding Royalty Interests for the Jay Field property (the “Jay Field Conveyance”). See id. at Section D. Cause of Action One. Parsons references the Jay Field Conveyance extensively throughout his live pleading and limits its allegations to the parties’ conduct in the Jay Field. Parsons also sued the Third-Party Defendants, alleging, in part, that they breached their fiduciary and contractual duties as Managing General Partner of the LL&E Partnership by failing to ensure Breitburn’s payment of the LL&E Trust’s royalties in the Jay Field in accordance with the terms of the Jay Field Conveyance. Similar to its allegations against Breitburn, Parsons’ allegations as to the Third-Party Defendants relate to the alleged underpayment of Jay Field royalties owed to the Trust. Parsons focuses his claims and allegations exclusively on the Jay Field. However, the LL&E Partnership owns interests in two other fields that are not owned or operated by Breitburn. These fields are known as South Pass 89 and Offshore Louisiana. Parsons raises no claims or allegations regarding royalties owed to the Trust related to the South Pass 89 and Offshore Louisiana properties. Parsons has disclosed no damage model or expert opinions regarding any properties other than Jay Field. Accordingly, any reference to (i) royalties allegedly owed, (ii) the parties’ operations, (iii) actual capital or P&A costs incurred, or (iv) future estimates capital or P&A costs related to South Pass 89 or Offshore Louisiana is irrelevant, immaterial, and would serve only to confuse the issues in dispute. See EX R. VID. 402, 403. GRANTED: ___________ DENIED: ___________ IMANAGE\015940\0003\14191147v1-9/20/23 Page 2 of 8 2. Any reference, testimony, suggestion, or evidence related to ConocoPhillips’ Escrow Account This case relates exclusively to the Jay Field. As described earlier, the LL&E Royalty Partnership also holds interests in two other fields, South Pass 89 and Offshore Louisiana. Separate and apart from Breitburn’s Jay Field Special Cost Escrow Account, ConocoPhillips, on behalf of LLEC, as Assignor of the South Pass 89 and Offshore Louisiana Properties, has also maintained a “Special Cost Escrow Account” according to the terms of the South Pass and Offshore Louisiana Conveyances. These accounts only relate to their respective properties, which are governed by their own Conveyance and have no relation to Breitburn’s Jay Field Special Cost Escrow Account. See Trial Exhibits COP-84, COP-085, and COP-089 (each of the three Conveyances, one for each LL&E Royalty Trust Property). Because Parsons brings no claims or allegations regarding royalties allegedly owed to the LL&E Trust for the South Pass 89 and Offshore Louisiana properties, the amount of funds placed by ConocoPhillips in the Special Cost Escrow Accounts for those properties are irrelevant. TEX R. VID 402, 403. Permitting Parsons to offer evidence, testimony, or argument regarding any Special Cost Escrow Account other than Breitburn’s account for the Jay Field would result in jury confusion and would be improper. GRANTED: ___________ DENIED: ___________ 3. Any reference, testimony suggestion, or evidence that ConocoPhillips or Burlington was the Managing General Partner of the LL&E Royalty Partnership Parsons’ claims against the Third-Party Defendants are based on alleged breaches of duties owed as Managing General Partner of the LL&E Royalty Partnership. Those claims, whether characterized as breach of contract or breach of fiduciary duty, all derive exclusively There is no physical escrow account; instead, ConocoPhillips, on behalf of LLEC, calculates the Special Cost Escrow amounts on its books. Exhibit A (Harmon Depo.) at 17:17-22:11. IMANAGE\015940\0003\14191147v1-9/20/23 Page 3 of 8 from the Partnership Agreement that governs the LL&E Royalty Partnership. The parties to the Partnership Agreement are the LL&E Royalty Trust (owner of 99% of the Sharing Ratio) and The Louisiana Land and Exploration Company (owner of 1% of the Sharing Ratio). Trial Exhibit COP-110 at 1. It is an indisputable fact that The Louisiana Land and Exploration Company LLC (“LLEC”) is the Managing General Partner in the Partnership Agreement: The Partnership Agreement clearly and unequivocally names only LLEC the Managing General Partner. From the inception of the Partnership in 1983 to present, the Managing General Partner has always been the Louisiana Land and Exploration Company, now LLEC. Equally indisputably, neither ConocoPhillips nor Burlington Resources Trading (“Burlington”) are parties to the Partnership Agreement, and neither are in privity with the LL&E Royalty Trust – not then, not now, and not any time in between. Any reference, testimony, or evidence that either refers to ConocoPhillips or Burlington as Managing General Partner would be false as a matter of law, irrelevant, unduly prejudicial and would confuse the jury. TEX R. VID. 402, 403; see First Bank v. Brumitt, 519 S.W.3d 95, 102 (Tex. 2017) citing House v. Hous. Waterworks Co., 88 Tex. 233, 31 S.W. 179, 179 (1895) (“As a general rule, the benefits and burdens of a contract belong solely to the contracting parties, []‘no person can sue upon a contract except he be a party to or in privity with it’”). While Parsons has alleged alter-ego theories against ConocoPhillips and Burlington, See Trial Exhibit COP-110 (Agreement of General Partnership of LL&E Royalty Partnership, dated Jun 1, 1983). IMANAGE\015940\0003\14191147v1-9/20/23 Page 4 of 8 asserting that LLEC was their alter-ego, such allegations do not change the fact that only LLEC was the Managing General Partner. If Parsons wishes to prove up and submit alter-ego questions to the jury, he is entitled to try. But, those are theories of recovery, not independent causes of action and neither would change the fact that the legal entity that was, and is, the Managing General Partner was LLEC alone. See Dodd v. Savino, 426 S.W.3d 275, 291 (Tex. App.— Houston [14th Dist.] 2014, no pet.) (“[a]lter ego, or piercing the corporate veil, is not an independent cause of action, but is instead a means of imposing liability for an underlying cause of action.”). To allow Parsons to improperly argue that ConocoPhillips or Burlington was, in fact, the Managing General Partner is incorrect as a matter of law, and would be confusing and prejudicial to the jury, as it would invite the jury to bypass any finding of alter ego. The Court should instruct Parsons not to reference or characterize ConocoPhillips or Burlington as Managing General Partner. GRANTED: ___________ DENIED: ___________ 4. Any argument or suggestion that any Third Party Defendant is “jointly and severally liable or “automatically liable” for any alleged misdeeds of the Plaintiff, Breitburn, or similar suggestions. Counsel for Parsons, as recently as pre-trial on September 18, 2023, has suggested that the Third Party Defendants would be “jointly and severally liable” for any damages found against Plaintiff/Counter-Defendant Breitburn. That is false as a matter of law and would mislead and confuse the jury. There is no legal theory plead (or available) under which the Third Party Defendants would have automatic joint and several liability. Breitburn and the Third-Party Defendants are not “co-obligors” under any contract that would give rise to such a claim. The claims in this case IMANAGE\015940\0003\14191147v1-9/20/23 Page 5 of 8 are governed by two distinct and separate contracts, and Parsons must prove the existence of a contractual relationship, a breach, causation and damages independently under the applicable contract for each party. More specifically, Parsons’ complaints against Breitburn concerning the calculation of royalty arise out of the Conveyance for the Jay Field and exclusively relate to time periods after 2006, when no Third-Party Defendant was a party to the Conveyance. Conversely, any duties owed to Parsons by Third-Party Defendants would necessarily and exclusively arise out of the Partnership Agreement governing the LL&E Royalty Partnership, in which LLEC is designated the Managing General Partner. Breitburn is not a party to the Partnership Agreement and Third Party Defendants are not, during the relevant time frame, parties to the Conveyance. Nothing in either contract makes Third Party Defendants a co-obligor, guarantor, or insurer as to alleged misdeeds by Breitburn. Instead Parsons’ claim against Third Party Defendants, no matter how described, all stem from the complaint that as Managing General Partner of the Partnership, LLEC should have investigated and brought claims against Breitburn at some earlier time frame. Parsons claims that the Trust has somehow been damaged because LLEC did not do so and Parsons elected to do so instead. To establish this, Parsons must establish several things: (1) privity - that the applicable Third Party Defendant was a party to the contract (ConocoPhillips and Burlington were not); (2) duty - that the Managing General Partner breached a duty to bring the very same claims against Breitburn that Parsons brings today; (3) causation - that had the Managing General Partner brought these claims at some earlier date, it would have prevailed against Breitburn and recovered damages for the Partnership; (4) damages – that for some reason Parsons cannot recover today from Breitburn on those same claims. Those are the necessarily and indispensable elements of the breach of contract and breach of IMANAGE\015940\0003\14191147v1-9/20/23 Page 6 of 8 fiduciary claims that Parsons brings against Third Party Defendants. Indeed, additionally and independently, because of limitation of liability language in the Partnership Agreement, Parsons can only recover against the Managing General Partner if those a losses are attributable to negligence, bad faith or fraud. Partnership Agreement Sec. 5.04. Any suggestion that a Third Party Defendant is automatically or “jointly and severally” liable for Breitburn’s alleged breach of the Conveyance is thus directly counter not only to the requirement that Parsons first establish that there was a breach of the Partnership Agreement and that such losses resulted from negligence, bad faith or fraud. In short, it would be false as a matter of law to argue or suggest to the jury that any Third Party Defendant is automatically liable, or “jointly and severally” liable for any alleged wrongs committed by Breitburn. Such argument would mislead and confuse the jury, contradicts the unambiguous provisions of the relevant contracts, and usurps the Court’s role in instructing the jury on the law. GRANTED: ___________ DENIED: ___________ Respectfully submitted, PORTER HEDGES LLP /s/ Joseph G. Thompson III Joseph G. Thompson III State Bar No. 00788534 Andrew B. Raber State Bar No. 24063730 Nabeela K. Arshi State Bar No. 24134422 1000 Main Street, 36th Floor Houston, Texas 77002 Telephone: (713) 226-6704 Facsimile: (713) 226-6304 Email: joe.thompson@porterhedges.com araber@porterhedges.com Attorneys for Third-Party Defendants IMANAGE\015940\0003\14191147v1-9/20/23 Page 7 of 8 CERTIFICATE OF SERVICE This is to certify that a true and correct copy of the foregoing has been served upon all counsel of record on this 20th day of September 2023. John Kim David A. McDougald The Kim Law Firm 4309 Yoakum, Suite 2000 Houston, Texas 77006 jhk@thekimlawfirm.com david@thekimlawfirm.com Geoff A. Gannaway Joe W. Redden, Jr. Allison Standish Miller Joel T. Towner Mary Kate Raffetto Bilma Canales Beck Redden LLP 1221 McKinney Street, Suite 4500 Houston, Texas 77010 ggannaway@beckredden.com jredden@beckredden.com amiller@beckredden.com jtowner@beckredden.com mkraffetto@beckredden.com bcanales@beckredden.com Joseph Y. Ahmad Ryan Hackney Emily Merritt Adler Jarmonique Smith Ahmad, Zavitsanos, Anaipakos, Alavi & Mensing, P.C. 1221 McKinney, Suite 2500 Houston, Texas 77010 joeahmad@azalaw.com rhackney@azalaw.com eadler@azalaw.com jsmith@azalaw.com /s/ Andrew B. Raber Andrew B. Raber IMANAGE\015940\0003\14191147v1-9/20/23 Page 8 of 8