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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
						
                                

Preview

CASE NO. 2015 BREITBURN OPERATING, LP, IN THE DISTRICT COURT OF successor interest to QRE OPERATING, LLC Plaintiff ROGER D. PARSONS, in his capacity as Trustee of the LL&E Royalty Trust, Defendant HARRIS COUNTY, T E X A S QRE OPERATING, LLC, QR ENERGY, LP, BREITBURN ENERGY PARTNERS, LP, BREITBURN MANAGEMENT COMPANY, LLC, CONOCOPHILLIPS COMPANY, and JUDICIAL DISTRICT MAVERICK NATURAL RESOURCES, LLC Third Party Defendants. PARSONS’ RESPONSE TO THE BREITBURN PARTIES PLEA TO THE JURISDICTION COMES NOW ROGER D. PARSONS, in his capacity as trustee of the LL&E ROYALTY TRUST which is a General Partner in the LL&E Royalty Partnership and pursuing claims on behalf of the LL&E Royalty Partnership (“Parsons”), and for his response in opposition to he Breitburn Parties’ (“BBOP”) Plea to the Jurisdiction on all of Defendants’ Claims of Lack of Standing and Alternative Plea in Bar and Plea in Abatement for Lack of Capacity (“Plea”) would respectfully show unto the ourt as follows: I. SUMMARY AND INTRODUCTION On the eve of trial, BBOP has filed a motion that seeks this Court to rule as a matter of law that the LLE Trust and the LLE Partnership were terminated by December 31, 2007 and ceased to retain legal rights as of December 31, 2010. Such argument was available in this 2015 case long before last week given that the argument is based on the 1983 formation documents. This last-minute effort is belied by the fact that BBOP is not a party to the documents they seek to enforce, a unit holder filed suit regarding the termination in 2010, the Trust amended the termination language in 2013, and, most important, the parties have all acted as if the Trust existed to this date. II. LEGAL STANDARD Because the Breitburn Parties’ jurisdiction challenge implicates the merits of Parsons’ cause of action, and their plea to the jurisdiction includes evidence, this Court must review the relevant evidence to determine if a fact issue exists. If it does, this Court cannot grant the plea to the jurisdiction, and the fact issue must be resolved by the fact finder. Only if the relevant evidence is undisputed or fails to raise a fact question on the jurisdictional issue can the Court rule on the plea to the jurisdiction as a matter of law. See Suarez v. City of Texas City, 465 S.W.3d 623, 632– 633 (Tex. 2015); see also Texas Dep’t of Parks & Wildlife v. Miranda, 133 S.W.3d 217, 227–228 (Tex. 2004). III. EVIDENCE Exhibit A: SEC Form 8-K dated May 31, 2013 (amending LL&E Royalty Trust) Exhibit B: Wells Fargo Escrow Account Statement for May 2014, with “Duplicate Copy to LL&E Trust ATTN Roger Parsons” (Plaintiff’s Trial Exhibit 0953) Exhibit C: Letter dated April 12, 2021, from Breitburn Parties to LL&E Royalty Partnership (Plaintiff’s Trial Exhibit 0350) -2- Exhibit D: Letter dated April 26, 2021, from Breitburn Parties to LL&E Royalty Partnership (Plaintiff’s Trial Exhibit 0351) Exhibit E: Letter dated September 13, 2023, from Breitburn Parties to LL&E Royalty Partnership (Defendant’s Trial Exhibit 593) IV. ARGUMENT A. BBOP Lacks Standing to Assert This Challenge Since Breitburn is not a party to the Trust Agreement, it lacks standing to challenge the existence of the Trust or the Partnership. In addition, Breitburn is estopped by its and others’ years of treating the Trust and Partnership as existing entities, and its last minute “gotcha” attempt to dismiss Parsons’ action is unfounded and must be denied. None of the Breitburn Parties are parties to the Trust Agreement or the Partnership Agreement, and therefore lack standing to contest the actions of the Trust or the status of the Partnership. The legal standard cited by Breitburn Parties in support of their Plea is equally applicable to Parsons’ response: “Standing goes to the heart of the Court’s jurisdiction, as ‘[a] court has no jurisdiction over a claim made by a [party] who lacks standing to assert it.’” Heckman v. Williams Cty., 369 S.W.3d 137, 150 (Tex. 2012). Texas law requires that to establish standing, there must be ‘a real controversy between the parties that will be resolved by the court.’ Id. at 154. In essence, ‘courts must not decide hypothetical claims.’ DaimlerChrysler Corp. v. Inman, 252 S.W.3d 299, 303–04 (Tex. 2008).” There is no real controversy involving the Breitburn Parties vis-à-vis the Trust’s continued existence and by extension the existence of the Partnership because the Breitburn Parties are not parties to those agreements. B. Prior Unit Holder Lawsuit Preserved Status Quo and Led to Change in Trustee On November 23, 2010, a Unit Holder in the Trust, Jeff Beckett, filed suit against Bank of New York Mellon Trust Company, N.A. (“BNY”), the then-Trustee of the Trust, in part to -3- prevent the termination of the Trust based on that Trustee’s belief termination was required under the terms of the Trust. That lawsuit preserved the status quo, and ultimately resulted in the removal of BNY as Trustee and replacement by James Barlett, Parsons’ predecessor. Neither Barlett nor Parsons wound up the Trust, and Parsons of course has filed this lawsuit to recover damages on behalf of the Partnership. Indeed, Parsons later obtained agreement of the Trust’s Unitholders to amend the Trust’s termination provisions. The Trust has now been amended so that Parsons, in his “sole opinion,” can determine if the revenues of the Trust make it economically viable. See Ex. A at Section 3 (LLETX_031558). Considering this action is still ongoing, Parsons has not made that determination. C. The Parties Have Continued to Act as though the Trust and Partnership are Active The Breitburn Parties for their part continued to recognize Parsons in his Trust capacity well after the date they now claim the Trust and Partnership ceased to exist.. See Exhibit B, Wells Fargo Escrow Account Statement for May 2014, with “Duplicate Copy to LL&E Trust ATTN Roger Parsons” (Plaintiff’s Trial Exhibit 0953). BBOP also calculated on a monthly basis the Net Profits Interest due the Partnership (the “LL&E Interest” as Breitburn Parties call it), and sent those statements to Parsons before he filed suit, and then through his counsel after Parsons sued the Breitburn Parties. In addition, Breitburn Parties’ counsel sent correspondence to the Partnership on April 12, 2021, April 26, 2021, and as late as September 13, 2023, regarding the disposition of funds related to the Partnership Jay Field Net Profits Interest (see Exhibits C and D), and regarding corrections to the Net Profits Interest calculation (Exhibit E). In particular, the April 2021 letters (Exhibits C and D), both refer to “the LL&E Partnership” as “the current Assignee” under the Conveyance of Overriding Royalty Interests (“Conveyance”) to which BBOP was also a party (emphasis added). In his Eighth Amended -4- Answer, Parsons alleges as affirmative defenses, among others, both unclean hands and estoppel and quasi-estoppel. The Breitburn Parties have for years after the claimed termination of the Trust and Partnership calculated the Partnership’s Net Profits Interest, treated Parsons as the Trustee of the Trust, and has acknowledge the existence of the Partnership over 14 years after it claims the Partnership terminated. The Breitburn Parties are now estopped from asserting the Trust’s and Partnership’s termination. CONCLUSION The Breitburn Parties cannot be allowed on the eve of trial to ignore its years-long treatment of the Trust and Partnership as viable entities, and to suddenly proclaim neither have existence when it continues to calculate and provide to the Trust the Partnership’s Net Profits Interest in the Jay Field, and to address the Partnership on the disposition and handling of funds under a Conveyance which the Breitburn Parties’ concede the Partnership is currently a party to. Respectfully submitted, THE KIM LAW FIRM /s/ John H. Kim John H. Kim State Bar No. 00784393 4309 Yoakum, Suite 2000 Houston, Texas 77006 Telephone: (713) 522-1177 Facsimile: (888) 809-6793 jhk@thekimlawfirm.com ATTORNEYS FOR DEFENDANT /COUNTER- PLAINTIFF/THIRD-PARTY PLAINTIFF, ROGER D. PARSONS, IN HIS CAPACITY AS TRUSTEE OF THE LL&E ROYALTY TRUST, WHICH IS A GENERAL PARTNER IN THE LL&E ROYALTY PARTNERSHIP -5- CERTIFICATE OF SERVICE I hereby certify that a true and correct copy of the above and foregoing instrument was forwarded to all known counsel of record in the manner required by the Rules, on this the 24th day of November 2023. Joseph Y. Ahmad Ryan Hackney Emily Merritt Ahmad, Zavitsanos, Anaipakos, Alavi & Mensing, P.C. 1221 McKinney, Suite 2500 Houston, Texas 77010 joeahmad@azalaw.com rhackney@azalaw.com emerritt@azalaw.com Geoff A. Gannaway Joe W. Redden, Jr. Allison Standish Miller Mary Kate Raffetto Beck Redden LLP 1221 McKinney Street, Suite 4500 Houston, Texas 77010 ggannaway@beckredden.com jredden@beckredden.com amiller@beckredden.com mkraffetto@beckredden.com ATTORNEYS FOR PLAINTIFF/COUNTER-DEFENDANT BREITBURN OPERATING LP, successor-in-interest to QRE OPERATING, LLC AND THIRD-PARTY DEFENDANTS BREITBURN MANAGEMENT COMPANY, LLC, BREITBURN ENERGY PARTNERS, LP, QR ENERGY, LP, AND MAVERICK NATURAL RESOURCES, LLC Joseph G. Thompson, III Andrew Raber Porter Hedges LLP 1000 Main Street, 36th Floor Houston, Texas 77002 joe.thompson@porterhedges.com araber@porterhedges.com ATTORNEYS FOR THIRD-PARTY DEFENDANTS CONOCOPHILLIPS -6- COMPANY, THE LOUISIANA LAND AND EXPLORATION COMPANY, LLC and BURLINGTON RESOURCES TRADING LLC ____________________________ JOHN H. KIM -7-