Preview
FILED
DALLAS COUNTY
11/23/2016 12:34:16 PM
FELICIA PITRE
DISTRICT CLERK
NO. DC-16-01439
TRO-X, L.P. § IN THE DISTRICT COURT
§
V. § OF DALLAS COUNTY, TEXAS
§
EAGLE OIL & GAS CO. § 116TH JUDICIAL DISTRICT
PLAINTIFF’S APPENDIX TO
SUMMARY JUDGMENT EVIDENCE
Tab # Description
1. TRO-X’s Motion for Rehearing in the Court of Appeals.
2. Eastland Court of Appeal’s Opinion on TRO-X’s Motion for Rehearing.
3. Reporter’s Record Excerpts from First Trial.
4. Eagle’s Response to TRO-X’s Petition for Discretionary Review.
5. Eagle’s Principal Brief in the Eastland Court of Appeals.
6. Eagle’s Motion for Judgment NOV.
7. Eagle’s Response to TRO-X’s Motion for Rehearing in the Eastland Court of
Appeals.
8. Affidavit of Greg McCabe.
9. Affidavit of Rick Strange.
10. Affidavit of Elizabeth Black.
11. Affidavit of Victoria Morales.
Midland\011788\000001\1872827.1
TRO-X's MSJ Response App., Page 1
Respectfully submitted,
COTTON, BLEDSOE, TIGHE & DAWSON, P.C.
P. O. Box 2776
Midland, Texas 79702-2776
Telephone: (432) 684-5782
Facsimile: (432) 682-3672
By: /s/ Rick G. Strange
Rick G. Strange
State Bar No. 19356700
rstrange@cbtd.com
Samuel J. Stennis
State Bar No. 24079395
sstennis@cbtd.com
/s/ W. Clark Lea
W. Clark Lea
State Bar No. 12069690
1608 Gulf Avenue
Midland, Texas 79705
(432) 559-3683
(432) 257-3759 (fax)
wclarklea@yahoo.com
ATTORNEYS FOR TRO-X, L.P.
Midland\011788\000001\1872827.1 -2-
TRO-X's MSJ Response App., Page 2
CERTIFICATE OF SERVICE
I hereby certify that on the 23rd day of November, 2016, a true and correct copy of the
foregoing document was forwarded to the attorney(s) of record through the Court’s e-filing
system.
/s/ Rick G. Strange
Rick G. Strange
Midland\011788\000001\1872827.1 -3-
TRO-X's MSJ Response App., Page 3
Tab I
\\\,
TRO-X's MSJ Response App., Page 4
ACCEPTED
11-11-290-CV
ELEVENTH COURT OF APPEALS
EASTLAND, TEXAS
SHERRY WLLIAMSON
CLERK
NO. 1l-11-290-CV
In The
@ourt of ØppÊnld
EI-EVENTH DISTRICT OF TEXAS
EAGLE OIL & GAS CO.
Appellant,
VS
TRO-X, L,P,
Appellee
On Appealfrom the 238'h District Court
of Midland County, Texas
TrÃal Court No. CV-46,196
]'RO-X, L.P.'s MOTION FOR REFIEARING
TO THE HONORABLE COURT OF APPEALS:
TRO-X, L.P, ("TRO-""), reaffirms each of the issues it has previously
raised and briefed with this Court and, without waiving those, asks this Court to
correct its opinion and to modiff its judgment.
I Page I
M idta nd\011788\000001\13¿0500.
TRO-X's MSJ Response App., Page 5
The Court's October 31,2013 Majority Opinion contains a factual error that
has consequence. The Court wrote on page seven that:
TRO-X never designated a New Prospect Participation
Percentage. There was never any production on properties covered by
the New Prospects Agreement, and the leases were not otherwise kept
alive and, ultimatelY, exPired.
The Court is correct that TRO-X did not design ale a New Prospect Participation
Percentage. But, as will be explained below, the Court incorrectly concludes that
all of the leases in the New Prospect Acreage have expired for lack of production.
This is important because on page eighteen of the Majority Opinion the Court
states
Because TRO-X always held equitable title to those interests, Eagle
Oil could not, as a matter of law, deprive TRO-X of them. Further,
for the same reason, the evidence conclusively establishes that Eagle
Oil did not deprive TRO-X of the interests,
TRO-X respectfully disagrees with the Majority's decision to reverse and render.
But if that decision is correct, and if Eagle Co, is holding legal title to TRO-X's
equitable interest, the judgment should be modified to reflect and account for this
interest,
TRO-X believes the factual confusion stems fiom testimony that TRO-X
made an election to pursue monetary damages after a lease, the Balmorhea Ranch
Lease, was allowed to expire, For example, Greg McCabe testified:
1\X3 20500,1
Page2
M ldl and \01 1788\00000
TRO-X's MSJ Response App., Page 6
a. And in making your election, is it your understanding that we
have a right to elect the remedies that we are seeking from the
jury?
A. Yes, we can elect to either demand for properties or demand for
the cash value of those properties.
a. And you have elected the latter?
A. Yes. As of August 17, 2010, I officially decided that I would
not accept properfies as a remedY'
a, why?
A. Weil, if you look at the date of August I7'h, 2010, that is two
weeks after the Balmorhea Ranch 11,3QQ-acre lease expired'
That was a third of the properties in dispute, and it was expired,
And it was - itdamaged these properties, so I didn't want them
anymore. And it was expired at the - our request for them to,
keôp it alive and *t *orid pay our way on it.r
Similarly, Ed McCabe testified:
a. What occurred prior to August 17,20i0, that led you to make
the election for monetarY damages?
A, Just about two weeks before that date was when Eagle let the
Balmorhea Lease expire. And when that occurred, it so
^
severely darnaged the value,'
The Balmorhea Ranch Lease is a large one - 11,300 acres. But there was much
more to the New Prospects Acreage,
The New Prospects Acreage consisted of 70,000 net mineral acres.3 It was
divided into the Gomez West and Balmorhea Ranch Prospects.a The Balmorhea
Ranch Prospect consisted of approxirnately 32,000 net mineral acres.s It was
' 7 RR
2
too;25 - to1:12
t4 RR 66:14.
'4 RR 5021,
a
4 RR 2l:3,
'4 RR 24:t3,
M id la n d\01 1788\000001\ 1320500.1
I'agc3
TRO-X's MSJ Response App., Page 7
further subdivided into the Collier East, Collier West, and Balmorhea Ranch.6
Consequently, even though an 11,300 acre lease was allowed to expire, and even
though TRO-X believed that this expiration significantly impacted the value of the
total package, it is incorrect to assume that all other leases were allowed to expire
as well
TRO-X's election to pursue monetary damages made it unnecessary to
clefine TRO-X's beneficial ownership interests at trial, Nonetheless, there was
eviclence that a portion of the New Prospects Acreage was being maintained by
drilling and production, Rich Masterson was shown the Collier Leases.T He then
testified that there had been sorte drilling activity on those leases and that it was
done to satis$, 180-day continuous development obligations's
The Court notes on page seven of the Majority Opinion that Eagle Oil
retained an overriding royalty interest and a back-in working interest in the sale to
Chesapeake for TRO-X. That transaction occurred after the lawsuit was filed.' Pat
Bolin testified at trial that they kept a back-in and override in this sale for the
benefìt of TRO-X and Eagle.'o He also testified that if Chesapeake had established
any production, which by definition would have occurred after suit was filed,
6
t 412RRRR21:9,
95. The leases are PX 8,1 through 8.6
8 rz RR 96:12.
'10 RR 190-91
'o l0 RR 191-92.
Page 4
Midland\011788\000001U320500.1
TRO-X's MSJ Response App., Page 8
Eagle Co. was always willing to assign TRO-X an override and back-in.rr If the
majority is correct then TRO-X is entitled to receive record title from Eagle Oil for
its beneficial interests. The Court's judgment fails to recognize this right by
entering judgment that TRO-X take nothing from Eagle Oil and in its statement
that all leases had expired,
TRO-X respectfully prays that the Court grant this motion for rehearing and
grant all relief previously requested by TRO-X in its briefs on the merits'
Alternatively, TRO-X respectfully prays that the Court grant this motion and
correct the majority opinion to reflect that not all of the New Prospects Acreage
Leases were allowed to expire, and to correct the judgment to reflect that TRO-X is
entitled to receive record title to its beneficial interests held in trust by Eagle Co, in
the New Prospects Acreage. In the further altemative, TRO-X respectfully prays
that the Court remand this case to the trial court for such further proceedings as
might be necessary to defrne the assignment Eagle Oil is required to make. TRO-
X prays further for general relief.
"11RRll1
20500' Page 5
Mid nd\011788\000001\13
la 1
TRO-X's MSJ Response App., Page 9
Respectful ly submitted,
CottoN, Btnnsoe, Ttcue & DewsoN, P.C.
P. O.Box2776
Midland, Texas 79702
(432) 684-s782
(432) 682-3672 (Fax)
/s/ Rick G. Strange
By
Rrcx G. SrnaNcn
stare Bar No, 19356700
W. Cl,,lnx Lnn
State Bar No, 12069690
W. Bnucn Wllueus
State Bar No. 21588900
ATTORNEYS FOR APPELLANT
TRO-X, L.P.
Mldland\011788\000001u320500,1 Page 6
TRO-X's MSJ Response App., Page 10
CERTIFICATP OF SERVIçE
I hereby certify that on this the !2'h day of Decemb er,20l3 a true and correct copy
of the above and forðgoing instrurnent has been forwarded by hand delivery or Certifred
Mail, Return Receipt Requested, to the following counsel of record:
Deborah G, Hankinson
Hankinson Levinger LLP
750 North St. Paul Street, Suite 1800
Dallas, "fexas 75201
John A, o'Jad" Davis
Jacob M, Davidson
Davis, Gerald & Cremer
A Professional Corporation
P. O, Box 2796
Midland, Texas 79702
/s/ Rick G, Strange
Rick G. Strange
I Page 7
1\1320500,
Mid rand\01 1788\00000
TRO-X's MSJ Response App., Page 11
Tab 2
\\\.
TRO-X's MSJ Response App., Page 12
Opinion filed April 24, 2014
In The
@ÃtbÈtttl)@ourtotØBnÊdd
No. 11-11-00290-CV
EAGLE OIL & GAS CO.o Appellant
V.
TRO-X, L.P., Appellee
AI{D
TRO-X, L.P., Cross-Appellant
V.
EAGLE OIL & GAS PARTNERS, LLC, Cross-Appellee
On Appeal from the 238th District Court
Midland County, Texas
Trial Court Cause No. CV-461196
OPINIOI{ ON MOTIOI{ FOR REHEARING
TRO-X, L.P. has filed a motion for rehearing in this court. In its motion,
TRO-X reaffîrms its previous issues and also requests that we correct the opinion
and modif, the judgment issued in this cause on October 31,2013. TRO-X takes
TRO-X's MSJ Response App., Page 13
issue with the following statement from this court's original opinion: "There was
never any production on properties covered by the New Prospects Agreement, and
the leases were not otherwise kept alive and, ultimately, expired." We agree with
TRO-X that the record does not reflect that all of the leases expired, and we issue
this opinion to note that correction.
TRO-X additionally requests that this court modi$ the judgment to reflect
that TRO-X is entitled to receive record title to TRO-X's beneficial interests held
in trust by Eagle Oil & Gas Co. or, alternatively, that this court remand the cause to
the trial court for further proceedings. We decline these requests. The record
reflects that, at trial, TRO-X did not seek record title of these interests and that
TRO-X's pleadings would not support such a judgment. A judgment must be
supported by the pleadings. Cunningham v. Parkdale Bank,660 S.W.2d 810, 813
(Tex. 1983); see Ropa Exploration Corp. v. Barash Energ/, Zrd., No. 02'll'
00258-CV,2013 WL2631164, at *13 (Tex. App.-Fort V/orth June 13,2013, pet.
denied) (mem. op.).
The motion for rehearing is denied.
PER CUzuAM
April 24,2014
Panel consists of:'Wright, C.J.,
Bailey, J., and McCall.r
Willson, J., not participating.
rTerry McCall, Retired Justice, Court of Appeals, l lth Districtof Texas at Eastland, sitting by
assignment.
2
TRO-X's MSJ Response App., Page 14
Tab 3
\\\.
TRO-X's MSJ Response App., Page 15
4RR
TRO-X's MSJ Response App., Page 16
86
1 facts of the case until the jury has returned jts
2 verd i ct .
3 So unl ess Counsel , i f you'1 I excuse
4 your witnesses, those that are not about to testify.
5 |VlR. DAVIS: Your Honor, the defendant, 01 :36PM
6 Eagl e 0i I & Gas Company, desì gnates Stan Laukhuf as 'i ts
1 corporate representat'i ve ,
I THE COURT: Yes , si r.
9 14R. DAVIS: Present in the courtroom 'i s
10 Mr. Ti m Smj th, who i s an expert wj tness i n the case; 01:37PM
11 but, of course, under the 1aw, someone whose attendance
L2 i s necessary to assì st counsel wi th cross-exami natj on
13 and matters of that sort, i t's appropri ate for hi m to
t4 stay in the room.
15 MR. t^/ILLIAl'4S: Your Honor, we may have our 01:37PM
16 expert here from tjme to time also, so we don't have any
t7 objectjon to that, 14r. Greg McCabe, who is the
18 pres j dent of the genera'l partner, is our corporate
19 representati ve,
20 MR. DAVIS: Thank you, Your Honor. 01:37PM
2L THE COURT: 0ther than the expert
22 designated experts and the designated representatives of
23 the parti es, al I wi tnesses pl ease reti re to the hal'lway
24 unt'i 1 your name is calIed,
25 Al I ri ght. Fj rst wi tness , p1 ease. 01 :37PM
LILLY COURT REPORTING SERVICES
(432) 897-1020 * (432) 897-1,021 - fax
TRO-X's MSJ Response App., Page 17
87
1 MR. WI LLIAl4S: Your Honor, at this time,
2 we woul d cal I Greg McCabe,
3 THE C0URT: Mr, McCabe, woul d you come UP
'
4 p'l ease? |,4r. McCabe, come right up this wây, p1 ease, and
5 be seated ri ght over here. Pl ease be seated, s1r. 01,:3BPM
6 Mr. McCabe, for the record, you have been
7 sworn 'i n as a wi tness, have you not?
I THE I,IITNESS: Yes, sir.
9 THE COURT: Al I rj ght , Mr, l^Jj Il'iams .
10 GREG MCCABE 01:38PM
11 having been first duly sworn, test'i fied as follows:
t2 DIRECT EXAMINATION
13 BY 14R, WI LLIAMS:
L4 A, Mr, McCabe, boy, it seems ljke you are a long
15 way away from me, We' re havi ng to kj nd of shout , 01:38PM
L6 If you have trouble hearing me at some
L7 tjme, oF jf I have trouble hearìng you jf I have
18 trouble hearìng you, then I know the jury's going to
19 have trouble hearìng Vou, so I may ask you to speak uP,
20 or not. How you f eel.i ng? 01:38PM
2t A. Well, a little bit frustrated, but ready to go
22 A, Frus you taki ng j t personal , I i ke l\4r , Dav'i s
23 sai d?
24 A You bet I'm taki ng 'i t personal . Thi s i s day
25 after duy, week after week, month after month, I've had 01:39PM
LILLY COURT REPORTING SERVICES
(432) 897 -1020 * (432) 897 -1021 - fax
TRO-X's MSJ Response App., Page 18
LØ2
1 someth'i ng that they coul d ref er to?
2 A. Yes, pretty much gìves you the gross outline of
3 where thi ngs I ay,
4 A. All right. f,le'll talk about those jn a minute.
5 Go ahead and oh, ño, I et's -- I et's I ook real qui ck1 y 01:56PM
6 on the map rìght behjnd that. I'm goìng to let Diane do
7 i t so I'm not knocki ng thi ngs off,
I MR, l,,/I LLIA]'lS: Can we mark that as an
9 exh'i b'i t, pi ease? Di ane, woul d you mark that f j rst map
10 as an exhibit? 01:56PM
11 l4S. BRUCE: Yes, I wjll. I just need to
1,2 get my stickers,
13 MR. l,'JILLIAMS : What exhi bi t number wi I l
t4 that be?
15 |vls, BRUCE: It will be 198, 0l:56PM
L6 MR ,{I LLIAMS : Exhi b'i t 198, Your Honor,
L1 we have ma rked that 1 98, and we woul d offer that AS
18 Exh'i bit 198.
19 (P1ai nti f f 's Exhi b'i t 198 of f ered)
20 f"lR, DAVIS: No obj ectj on, Your Honor. 01:56PM
2L THE COURT: Exhi bi t 1 98 i s admi tted.
22 (Pl a'i nt'i f f 's Exh j b'i t 198 recei ved)
23 a. (BY l4R. WILLIAMS) This is a little more
24 preci se of a map that we're looking at now. It was put
25 together by by whom? 01:57PM
LILLY COURT REPORTING SERVICES
(432) 897 -1020 * (432) 897 -1021 - fax
TRO-X's MSJ Response App., Page 19
166
1 A. Well, I djdn't know that jt had been sold yet.
2 I had learned through Rich Masterson that he had gone
3 and shown the deal to the EnCap partners, and he came
4 back and sa'i d the meetìng went very well, But I djd not
5 know'i t had been sold for somet'i me till the lawsuit was 03:24PM
6 fi I ed.
7 A. Okay. Lawsujt was filed 'i n October. At that
I time, did you know that there was an Eagle Partners and
9 that j t had been sol d to Eagl e Partners?
10 A. I had heard of thi s i dea of an Eagl e Partners 03:24PM
11 through one of the cost recovery summaries. In June of
t2 ' 07 , we got i t , We had no 'i dea what 'it was . Ed had
13 made some inqujrjes about it through the'i r accounting
L4 people, and we couldn't find out anything on the Eagle
15 Partners. We had no i dea who Eagl e Partners was , what 03:24PM
L6 i t was,
11 A. Okay. So when we f i l ed su1 t i n October of
18 2007, what was the what was the event that had
19 'i nci ted that I awsui t?
20 A. Wel I , 'i t was the washout etter,
'l
bas j ca11y 03:25PM
2L when we got a demand for gìve us $2,0 million within
22 10 days or you' re out of deal compl etel y.
23 A, Okay. So when they sây, oh, gee in your
24 i ni tj al p1 eadi ngs, you dj dn't say anythì ng about the
25 EnCap deal , êt cetera, et cetera. Dj d we know anythì ng 03:25PM
LILLY COURT REPORTING SERVICES
(432) 897 -1020 * (432) 897 -102t - fax
TRO-X's MSJ Response App., Page 20
167
1 about the EnCap deal ?
2 A. No, we had no j dea that there was an EnCap
3 deal.
4 A. Did we know anything about Eagle Partners?
5 A. No. 03:25PM
6 A. Djd we know that they that it had been sold
7 to Eag'l e Partners?
I A. We had a cl ue that i t had been sol d but we had
9 none of the deta'i I s. The cl ue was there was thi s
10 mysterious entry on the cost recovery summary with no 03:25PM
11 explanation, We didn't know how many acres or how much
L2 was sold for how much. We djdn't know a thìng about it.
13 A. Okay. And af ter we f i I ed the I awsu'i t, we had a
t4 hearìng 'i n December of 2007. Was that the fjrst time
15 that you got any j nf ormati on w'i th regard to Eagl e 03 :2 6PM
L6 Partners?
t1 A. Yes, 'i t was,
18 A. Okay, And at that time, when 14r, Bolin took
19 the stand , d'i d he say di d he test'i fy that he was the
20 president of Eagle Partners? 03:26PM
2L A. Yes.
22 A. Okay, Are you sure that he said that?
23 A. No
24 A. Okay,
25 A. Presi dent of Eagl e Co. ? 03:26PM
LILLY COURT REPORTING SERVICES
(432) 897 -1020 x (432) 897 -1021 - fax
TRO-X's MSJ Response App., Page 21
L68
1 A. Eagl e Co. , yeah,
2 A. Yes, he's the president of Eagle Co.
3 A. Did he tell us at that tjme that he was the
4 Presi dent of Eag'l e Partners?
5 A. No. 03:26PM
6 A. 0r did he say that it was a thjrd-party entìty?
7 A. 0h, I 'm sorry. I mi sunderstood you, No, on
I the Eagle Partners, ño, he sa'i d it was a third-party
9 transacti on,
10 A. Okay. So TRO-X f i l ed su j t, There i s a 03:26PM
11 j udgment that i s entered , correct?
L2 A. Correct.
13 A. There has been a countersui t by Eag'l e; i s that
L4 co r rect ?
15 A. Correct. 03:2'1PM
16 A, And after the I awsuì t was was fi I ed, i t
\7 was had you recei ved any of the EnCap documents
18 before that time?
19 A. No, we hadn't recei ved a thi ng.
20 A. 0kay. After the I awsui t was f i I ed, after the 03:27PM
2L December hearing, was that the first time that you had
22 ever seen any of the transactjon documents?
23 A. Yes, i t was through di scovery that they gave us
24 the documents and that's the first time we had the
25 s'l ì ghtest cl ue about the deal they'd made. O3z21PM
LILLY COURT REPORTING SERVICES
(432) 897-1020 * (432) 897-1021 - fax
TRO-X's MSJ Response App., Page 22
169
1 A. The 0ctober 15, 2007, w€tshout letter, you were
2 present at the deposition of l\4r, Lundberg, correct?
3 A. Yes.
4 A. And what term did he use for the October 15,
'ì
5 2007, etter? 03 :21 PM
6 A, That's where we got the term "washout. " He
1 descri bed 'i t as tryi ng to wash us out of the deal
Preview
FILED DALLAS COUNTY 11/23/2016 12:34:16 PM FELICIA PITRE DISTRICT CLERK NO. DC-16-01439 TRO-X, L.P. § IN THE DISTRICT COURT § V. § OF DALLAS COUNTY, TEXAS § EAGLE OIL & GAS CO. § 116TH JUDICIAL DISTRICT PLAINTIFF’S APPENDIX TO SUMMARY JUDGMENT EVIDENCE Tab # Description 1. TRO-X’s Motion for Rehearing in the Court of Appeals. 2. Eastland Court of Appeal’s Opinion on TRO-X’s Motion for Rehearing. 3. Reporter’s Record Excerpts from First Trial. 4. Eagle’s Response to TRO-X’s Petition for Discretionary Review. 5. Eagle’s Principal Brief in the Eastland Court of Appeals. 6. Eagle’s Motion for Judgment NOV. 7. Eagle’s Response to TRO-X’s Motion for Rehearing in the Eastland Court of Appeals. 8. Affidavit of Greg McCabe. 9. Affidavit of Rick Strange. 10. Affidavit of Elizabeth Black. 11. Affidavit of Victoria Morales. Midland\011788\000001\1872827.1 TRO-X's MSJ Response App., Page 1 Respectfully submitted, COTTON, BLEDSOE, TIGHE & DAWSON, P.C. P. O. Box 2776 Midland, Texas 79702-2776 Telephone: (432) 684-5782 Facsimile: (432) 682-3672 By: /s/ Rick G. Strange Rick G. Strange State Bar No. 19356700 rstrange@cbtd.com Samuel J. Stennis State Bar No. 24079395 sstennis@cbtd.com /s/ W. Clark Lea W. Clark Lea State Bar No. 12069690 1608 Gulf Avenue Midland, Texas 79705 (432) 559-3683 (432) 257-3759 (fax) wclarklea@yahoo.com ATTORNEYS FOR TRO-X, L.P. Midland\011788\000001\1872827.1 -2- TRO-X's MSJ Response App., Page 2 CERTIFICATE OF SERVICE I hereby certify that on the 23rd day of November, 2016, a true and correct copy of the foregoing document was forwarded to the attorney(s) of record through the Court’s e-filing system. /s/ Rick G. Strange Rick G. Strange Midland\011788\000001\1872827.1 -3- TRO-X's MSJ Response App., Page 3 Tab I \\\, TRO-X's MSJ Response App., Page 4 ACCEPTED 11-11-290-CV ELEVENTH COURT OF APPEALS EASTLAND, TEXAS SHERRY WLLIAMSON CLERK NO. 1l-11-290-CV In The @ourt of ØppÊnld EI-EVENTH DISTRICT OF TEXAS EAGLE OIL & GAS CO. Appellant, VS TRO-X, L,P, Appellee On Appealfrom the 238'h District Court of Midland County, Texas TrÃal Court No. CV-46,196 ]'RO-X, L.P.'s MOTION FOR REFIEARING TO THE HONORABLE COURT OF APPEALS: TRO-X, L.P, ("TRO-""), reaffirms each of the issues it has previously raised and briefed with this Court and, without waiving those, asks this Court to correct its opinion and to modiff its judgment. I Page I M idta nd\011788\000001\13¿0500. TRO-X's MSJ Response App., Page 5 The Court's October 31,2013 Majority Opinion contains a factual error that has consequence. The Court wrote on page seven that: TRO-X never designated a New Prospect Participation Percentage. There was never any production on properties covered by the New Prospects Agreement, and the leases were not otherwise kept alive and, ultimatelY, exPired. The Court is correct that TRO-X did not design ale a New Prospect Participation Percentage. But, as will be explained below, the Court incorrectly concludes that all of the leases in the New Prospect Acreage have expired for lack of production. This is important because on page eighteen of the Majority Opinion the Court states Because TRO-X always held equitable title to those interests, Eagle Oil could not, as a matter of law, deprive TRO-X of them. Further, for the same reason, the evidence conclusively establishes that Eagle Oil did not deprive TRO-X of the interests, TRO-X respectfully disagrees with the Majority's decision to reverse and render. But if that decision is correct, and if Eagle Co, is holding legal title to TRO-X's equitable interest, the judgment should be modified to reflect and account for this interest, TRO-X believes the factual confusion stems fiom testimony that TRO-X made an election to pursue monetary damages after a lease, the Balmorhea Ranch Lease, was allowed to expire, For example, Greg McCabe testified: 1\X3 20500,1 Page2 M ldl and \01 1788\00000 TRO-X's MSJ Response App., Page 6 a. And in making your election, is it your understanding that we have a right to elect the remedies that we are seeking from the jury? A. Yes, we can elect to either demand for properties or demand for the cash value of those properties. a. And you have elected the latter? A. Yes. As of August 17, 2010, I officially decided that I would not accept properfies as a remedY' a, why? A. Weil, if you look at the date of August I7'h, 2010, that is two weeks after the Balmorhea Ranch 11,3QQ-acre lease expired' That was a third of the properties in dispute, and it was expired, And it was - itdamaged these properties, so I didn't want them anymore. And it was expired at the - our request for them to, keôp it alive and *t *orid pay our way on it.r Similarly, Ed McCabe testified: a. What occurred prior to August 17,20i0, that led you to make the election for monetarY damages? A, Just about two weeks before that date was when Eagle let the Balmorhea Lease expire. And when that occurred, it so ^ severely darnaged the value,' The Balmorhea Ranch Lease is a large one - 11,300 acres. But there was much more to the New Prospects Acreage, The New Prospects Acreage consisted of 70,000 net mineral acres.3 It was divided into the Gomez West and Balmorhea Ranch Prospects.a The Balmorhea Ranch Prospect consisted of approxirnately 32,000 net mineral acres.s It was ' 7 RR 2 too;25 - to1:12 t4 RR 66:14. '4 RR 5021, a 4 RR 2l:3, '4 RR 24:t3, M id la n d\01 1788\000001\ 1320500.1 I'agc3 TRO-X's MSJ Response App., Page 7 further subdivided into the Collier East, Collier West, and Balmorhea Ranch.6 Consequently, even though an 11,300 acre lease was allowed to expire, and even though TRO-X believed that this expiration significantly impacted the value of the total package, it is incorrect to assume that all other leases were allowed to expire as well TRO-X's election to pursue monetary damages made it unnecessary to clefine TRO-X's beneficial ownership interests at trial, Nonetheless, there was eviclence that a portion of the New Prospects Acreage was being maintained by drilling and production, Rich Masterson was shown the Collier Leases.T He then testified that there had been sorte drilling activity on those leases and that it was done to satis$, 180-day continuous development obligations's The Court notes on page seven of the Majority Opinion that Eagle Oil retained an overriding royalty interest and a back-in working interest in the sale to Chesapeake for TRO-X. That transaction occurred after the lawsuit was filed.' Pat Bolin testified at trial that they kept a back-in and override in this sale for the benefìt of TRO-X and Eagle.'o He also testified that if Chesapeake had established any production, which by definition would have occurred after suit was filed, 6 t 412RRRR21:9, 95. The leases are PX 8,1 through 8.6 8 rz RR 96:12. '10 RR 190-91 'o l0 RR 191-92. Page 4 Midland\011788\000001U320500.1 TRO-X's MSJ Response App., Page 8 Eagle Co. was always willing to assign TRO-X an override and back-in.rr If the majority is correct then TRO-X is entitled to receive record title from Eagle Oil for its beneficial interests. The Court's judgment fails to recognize this right by entering judgment that TRO-X take nothing from Eagle Oil and in its statement that all leases had expired, TRO-X respectfully prays that the Court grant this motion for rehearing and grant all relief previously requested by TRO-X in its briefs on the merits' Alternatively, TRO-X respectfully prays that the Court grant this motion and correct the majority opinion to reflect that not all of the New Prospects Acreage Leases were allowed to expire, and to correct the judgment to reflect that TRO-X is entitled to receive record title to its beneficial interests held in trust by Eagle Co, in the New Prospects Acreage. In the further altemative, TRO-X respectfully prays that the Court remand this case to the trial court for such further proceedings as might be necessary to defrne the assignment Eagle Oil is required to make. TRO- X prays further for general relief. "11RRll1 20500' Page 5 Mid nd\011788\000001\13 la 1 TRO-X's MSJ Response App., Page 9 Respectful ly submitted, CottoN, Btnnsoe, Ttcue & DewsoN, P.C. P. O.Box2776 Midland, Texas 79702 (432) 684-s782 (432) 682-3672 (Fax) /s/ Rick G. Strange By Rrcx G. SrnaNcn stare Bar No, 19356700 W. Cl,,lnx Lnn State Bar No, 12069690 W. Bnucn Wllueus State Bar No. 21588900 ATTORNEYS FOR APPELLANT TRO-X, L.P. Mldland\011788\000001u320500,1 Page 6 TRO-X's MSJ Response App., Page 10 CERTIFICATP OF SERVIçE I hereby certify that on this the !2'h day of Decemb er,20l3 a true and correct copy of the above and forðgoing instrurnent has been forwarded by hand delivery or Certifred Mail, Return Receipt Requested, to the following counsel of record: Deborah G, Hankinson Hankinson Levinger LLP 750 North St. Paul Street, Suite 1800 Dallas, "fexas 75201 John A, o'Jad" Davis Jacob M, Davidson Davis, Gerald & Cremer A Professional Corporation P. O, Box 2796 Midland, Texas 79702 /s/ Rick G, Strange Rick G. Strange I Page 7 1\1320500, Mid rand\01 1788\00000 TRO-X's MSJ Response App., Page 11 Tab 2 \\\. TRO-X's MSJ Response App., Page 12 Opinion filed April 24, 2014 In The @ÃtbÈtttl)@ourtotØBnÊdd No. 11-11-00290-CV EAGLE OIL & GAS CO.o Appellant V. TRO-X, L.P., Appellee AI{D TRO-X, L.P., Cross-Appellant V. EAGLE OIL & GAS PARTNERS, LLC, Cross-Appellee On Appeal from the 238th District Court Midland County, Texas Trial Court Cause No. CV-461196 OPINIOI{ ON MOTIOI{ FOR REHEARING TRO-X, L.P. has filed a motion for rehearing in this court. In its motion, TRO-X reaffîrms its previous issues and also requests that we correct the opinion and modif, the judgment issued in this cause on October 31,2013. TRO-X takes TRO-X's MSJ Response App., Page 13 issue with the following statement from this court's original opinion: "There was never any production on properties covered by the New Prospects Agreement, and the leases were not otherwise kept alive and, ultimately, expired." We agree with TRO-X that the record does not reflect that all of the leases expired, and we issue this opinion to note that correction. TRO-X additionally requests that this court modi$ the judgment to reflect that TRO-X is entitled to receive record title to TRO-X's beneficial interests held in trust by Eagle Oil & Gas Co. or, alternatively, that this court remand the cause to the trial court for further proceedings. We decline these requests. The record reflects that, at trial, TRO-X did not seek record title of these interests and that TRO-X's pleadings would not support such a judgment. A judgment must be supported by the pleadings. Cunningham v. Parkdale Bank,660 S.W.2d 810, 813 (Tex. 1983); see Ropa Exploration Corp. v. Barash Energ/, Zrd., No. 02'll' 00258-CV,2013 WL2631164, at *13 (Tex. App.-Fort V/orth June 13,2013, pet. denied) (mem. op.). The motion for rehearing is denied. PER CUzuAM April 24,2014 Panel consists of:'Wright, C.J., Bailey, J., and McCall.r Willson, J., not participating. rTerry McCall, Retired Justice, Court of Appeals, l lth Districtof Texas at Eastland, sitting by assignment. 2 TRO-X's MSJ Response App., Page 14 Tab 3 \\\. TRO-X's MSJ Response App., Page 15 4RR TRO-X's MSJ Response App., Page 16 86 1 facts of the case until the jury has returned jts 2 verd i ct . 3 So unl ess Counsel , i f you'1 I excuse 4 your witnesses, those that are not about to testify. 5 |VlR. DAVIS: Your Honor, the defendant, 01 :36PM 6 Eagl e 0i I & Gas Company, desì gnates Stan Laukhuf as 'i ts 1 corporate representat'i ve , I THE COURT: Yes , si r. 9 14R. DAVIS: Present in the courtroom 'i s 10 Mr. Ti m Smj th, who i s an expert wj tness i n the case; 01:37PM 11 but, of course, under the 1aw, someone whose attendance L2 i s necessary to assì st counsel wi th cross-exami natj on 13 and matters of that sort, i t's appropri ate for hi m to t4 stay in the room. 15 MR. t^/ILLIAl'4S: Your Honor, we may have our 01:37PM 16 expert here from tjme to time also, so we don't have any t7 objectjon to that, 14r. Greg McCabe, who is the 18 pres j dent of the genera'l partner, is our corporate 19 representati ve, 20 MR. DAVIS: Thank you, Your Honor. 01:37PM 2L THE COURT: 0ther than the expert 22 designated experts and the designated representatives of 23 the parti es, al I wi tnesses pl ease reti re to the hal'lway 24 unt'i 1 your name is calIed, 25 Al I ri ght. Fj rst wi tness , p1 ease. 01 :37PM LILLY COURT REPORTING SERVICES (432) 897-1020 * (432) 897-1,021 - fax TRO-X's MSJ Response App., Page 17 87 1 MR. WI LLIAl4S: Your Honor, at this time, 2 we woul d cal I Greg McCabe, 3 THE C0URT: Mr, McCabe, woul d you come UP ' 4 p'l ease? |,4r. McCabe, come right up this wây, p1 ease, and 5 be seated ri ght over here. Pl ease be seated, s1r. 01,:3BPM 6 Mr. McCabe, for the record, you have been 7 sworn 'i n as a wi tness, have you not? I THE I,IITNESS: Yes, sir. 9 THE COURT: Al I rj ght , Mr, l^Jj Il'iams . 10 GREG MCCABE 01:38PM 11 having been first duly sworn, test'i fied as follows: t2 DIRECT EXAMINATION 13 BY 14R, WI LLIAMS: L4 A, Mr, McCabe, boy, it seems ljke you are a long 15 way away from me, We' re havi ng to kj nd of shout , 01:38PM L6 If you have trouble hearing me at some L7 tjme, oF jf I have trouble hearìng you jf I have 18 trouble hearìng you, then I know the jury's going to 19 have trouble hearìng Vou, so I may ask you to speak uP, 20 or not. How you f eel.i ng? 01:38PM 2t A. Well, a little bit frustrated, but ready to go 22 A, Frus you taki ng j t personal , I i ke l\4r , Dav'i s 23 sai d? 24 A You bet I'm taki ng 'i t personal . Thi s i s day 25 after duy, week after week, month after month, I've had 01:39PM LILLY COURT REPORTING SERVICES (432) 897 -1020 * (432) 897 -1021 - fax TRO-X's MSJ Response App., Page 18 LØ2 1 someth'i ng that they coul d ref er to? 2 A. Yes, pretty much gìves you the gross outline of 3 where thi ngs I ay, 4 A. All right. f,le'll talk about those jn a minute. 5 Go ahead and oh, ño, I et's -- I et's I ook real qui ck1 y 01:56PM 6 on the map rìght behjnd that. I'm goìng to let Diane do 7 i t so I'm not knocki ng thi ngs off, I MR, l,,/I LLIA]'lS: Can we mark that as an 9 exh'i b'i t, pi ease? Di ane, woul d you mark that f j rst map 10 as an exhibit? 01:56PM 11 l4S. BRUCE: Yes, I wjll. I just need to 1,2 get my stickers, 13 MR. l,'JILLIAMS : What exhi bi t number wi I l t4 that be? 15 |vls, BRUCE: It will be 198, 0l:56PM L6 MR ,{I LLIAMS : Exhi b'i t 198, Your Honor, L1 we have ma rked that 1 98, and we woul d offer that AS 18 Exh'i bit 198. 19 (P1ai nti f f 's Exhi b'i t 198 of f ered) 20 f"lR, DAVIS: No obj ectj on, Your Honor. 01:56PM 2L THE COURT: Exhi bi t 1 98 i s admi tted. 22 (Pl a'i nt'i f f 's Exh j b'i t 198 recei ved) 23 a. (BY l4R. WILLIAMS) This is a little more 24 preci se of a map that we're looking at now. It was put 25 together by by whom? 01:57PM LILLY COURT REPORTING SERVICES (432) 897 -1020 * (432) 897 -1021 - fax TRO-X's MSJ Response App., Page 19 166 1 A. Well, I djdn't know that jt had been sold yet. 2 I had learned through Rich Masterson that he had gone 3 and shown the deal to the EnCap partners, and he came 4 back and sa'i d the meetìng went very well, But I djd not 5 know'i t had been sold for somet'i me till the lawsuit was 03:24PM 6 fi I ed. 7 A. Okay. Lawsujt was filed 'i n October. At that I time, did you know that there was an Eagle Partners and 9 that j t had been sol d to Eagl e Partners? 10 A. I had heard of thi s i dea of an Eagl e Partners 03:24PM 11 through one of the cost recovery summaries. In June of t2 ' 07 , we got i t , We had no 'i dea what 'it was . Ed had 13 made some inqujrjes about it through the'i r accounting L4 people, and we couldn't find out anything on the Eagle 15 Partners. We had no i dea who Eagl e Partners was , what 03:24PM L6 i t was, 11 A. Okay. So when we f i l ed su1 t i n October of 18 2007, what was the what was the event that had 19 'i nci ted that I awsui t? 20 A. Wel I , 'i t was the washout etter, 'l bas j ca11y 03:25PM 2L when we got a demand for gìve us $2,0 million within 22 10 days or you' re out of deal compl etel y. 23 A, Okay. So when they sây, oh, gee in your 24 i ni tj al p1 eadi ngs, you dj dn't say anythì ng about the 25 EnCap deal , êt cetera, et cetera. Dj d we know anythì ng 03:25PM LILLY COURT REPORTING SERVICES (432) 897 -1020 * (432) 897 -102t - fax TRO-X's MSJ Response App., Page 20 167 1 about the EnCap deal ? 2 A. No, we had no j dea that there was an EnCap 3 deal. 4 A. Did we know anything about Eagle Partners? 5 A. No. 03:25PM 6 A. Djd we know that they that it had been sold 7 to Eag'l e Partners? I A. We had a cl ue that i t had been sol d but we had 9 none of the deta'i I s. The cl ue was there was thi s 10 mysterious entry on the cost recovery summary with no 03:25PM 11 explanation, We didn't know how many acres or how much L2 was sold for how much. We djdn't know a thìng about it. 13 A. Okay. And af ter we f i I ed the I awsu'i t, we had a t4 hearìng 'i n December of 2007. Was that the fjrst time 15 that you got any j nf ormati on w'i th regard to Eagl e 03 :2 6PM L6 Partners? t1 A. Yes, 'i t was, 18 A. Okay, And at that time, when 14r, Bolin took 19 the stand , d'i d he say di d he test'i fy that he was the 20 president of Eagle Partners? 03:26PM 2L A. Yes. 22 A. Okay, Are you sure that he said that? 23 A. No 24 A. Okay, 25 A. Presi dent of Eagl e Co. ? 03:26PM LILLY COURT REPORTING SERVICES (432) 897 -1020 x (432) 897 -1021 - fax TRO-X's MSJ Response App., Page 21 L68 1 A. Eagl e Co. , yeah, 2 A. Yes, he's the president of Eagle Co. 3 A. Did he tell us at that tjme that he was the 4 Presi dent of Eag'l e Partners? 5 A. No. 03:26PM 6 A. 0r did he say that it was a thjrd-party entìty? 7 A. 0h, I 'm sorry. I mi sunderstood you, No, on I the Eagle Partners, ño, he sa'i d it was a third-party 9 transacti on, 10 A. Okay. So TRO-X f i l ed su j t, There i s a 03:26PM 11 j udgment that i s entered , correct? L2 A. Correct. 13 A. There has been a countersui t by Eag'l e; i s that L4 co r rect ? 15 A. Correct. 03:2'1PM 16 A, And after the I awsuì t was was fi I ed, i t \7 was had you recei ved any of the EnCap documents 18 before that time? 19 A. No, we hadn't recei ved a thi ng. 20 A. 0kay. After the I awsui t was f i I ed, after the 03:27PM 2L December hearing, was that the first time that you had 22 ever seen any of the transactjon documents? 23 A. Yes, i t was through di scovery that they gave us 24 the documents and that's the first time we had the 25 s'l ì ghtest cl ue about the deal they'd made. O3z21PM LILLY COURT REPORTING SERVICES (432) 897-1020 * (432) 897-1021 - fax TRO-X's MSJ Response App., Page 22 169 1 A. The 0ctober 15, 2007, w€tshout letter, you were 2 present at the deposition of l\4r, Lundberg, correct? 3 A. Yes. 4 A. And what term did he use for the October 15, 'ì 5 2007, etter? 03 :21 PM 6 A, That's where we got the term "washout. " He 1 descri bed 'i t as tryi ng to wash us out of the deal