Black Bayou Operating, LLC and Intervenor Strata GP, LLC v. Strata Energy Holdings, LLC and Burtonvic Capital, LLC

• Court: Court of Appeals of Texas
• Decided: December 19, 2024
• Docket: 01-23-00880-CV
• Status: Published

Opinion

Opinion issued December 19, 2024

In The

Court of Appeals For The

First District of Texas ———————————— NO. 01-23-00880-CV ——————————— BLACK BAYOU OPERATING, LLC AND STRATA GP, LLC, Appellants V. STRATA ENERGY HOLDINGS, LLC AND BURTONVIC CAPITAL, LLC, Appellees

On Appeal from the 127th District Court Harris County, Texas Trial Court Case No. 2022-60547

MEMORANDUM OPINION

In this interlocutory appeal,1 appellants, Black Bayou Operating, LLC (“Black

Bayou”) and Strata GP, LLC (“Strata GP”), challenge the trial court’s order granting

1 See TEX. CIV. PRAC. & REM. CODE ANN. § 51.014(a)(7). the special appearance filed by appellees, Strata Energy Holdings, LLC (“Strata

Energy Holdings”) and Burtonvic Capital, LLC (“Burtonvic”), after Black Bayou

filed cross-claims and Strata GP filed a plea in intervention against appellees for

breach of contract, conspiracy, aiding and abetting, and for declaratory relief. In two

issues, Black Bayou and Strata GP, LLC contend that the trial court erred in granting

the special appearance.

We affirm.

Background

The primary lawsuit in this case was brought by PEL Exploration 2022, LLC

(“PEL”) against Black Bayou, which was the contract operator for certain oil and

gas properties acquired by PEL from Strata Energy Holdings and its affiliates. In its

first amended petition and application for temporary injunction, PEL added claims

against Strata Energy Holdings and Burtonvic.

PEL alleged that pursuant to a purchase and sale agreement dated February

18, 2022, and a first amendment to that purchase and sale agreement dated April 21,

2022 (collectively, the “purchase and sale agreement”), PEL acquired certain oil and

gas assets from Strata Energy Holdings and its affiliates. Before the transactions

“contemplated by the [purchase and sale agreement]” closed, Black Bayou was

responsible for operating the leases and wells as well as the accounting and land

administration for such operations. At the closing, PEL and Black Bayou executed

2 a transition services agreement, under which Black Bayou agreed to continue

providing certain services for an additional sixty-day period in exchange for a

$75,000 monthly service fee.

According to PEL, Black Bayou failed to fulfill its promises under the

transition services agreement, in that it failed to provide PEL with “its share of the

proceeds from the sale of hydrocarbons produced from the [a]cquired [a]ssets during

April 2022” as well as revenues due from “certain non-operating interests included

among the acquired assets—a sum that PEL believe[d] [to be in excess of]

$1 million.” PEL also alleged that Black Bayou “breached its obligation to assist in

good faith with the orderly transition and transfer of the [a]cquired [a]ssets by

refusing to turn over records that PEL need[ed] to operate its [a]cquired [a]ssets

going forward.”

Based on these allegations, PEL brought claims against Black Bayou for

breach of contract, violations of the Texas Theft Liability Act,2 and conversion. PEL

also sought a temporary injunction “to compel Black Bayou to deliver to PEL copies

of its [r]ecords.”3

2 See id. § 134.001– .005. 3 PEL also brought a breach-of-contract claim against Strata Energy Holdings and Burtonvic.

3 Black Bayou then filed an counterclaim and cross-claim and Strata GP filed

an original plea in intervention. In the original counterclaim and cross-claim and

plea in intervention, Strata GP explained that Strata Energy Holdings was “owned

98% by Strata LLC and 2% by Strata GP.” Its alleged interest in the PEL-Strata

Energy Holdings transaction was grounded in the Limited Liability Company

Agreement of Strata Energy Holdings (the “company agreement”), a copy of which

was attached to the pleading. According to Strata GP, the company agreement

“included both [d]rag-[a]long and [t]ag-[a]long rights that vested” in Strata GP

“when there was a sale of all or substantially all of the [c]ompany’s assets.” At the

same time the company agreement was executed, Strata Energy Holdings “entered

into a [m]anagement [s]ervices [a]greement with Black Bayou.” Thus, Strata GP

alleged, it was a party to the management services agreement with Black Bayou.

Black Bayou and Strata GP maintained that the management services

agreement, a copy of which was attached to the pleading, provided for Black Bayou

to manage the acquired assets for an initial term of five years and it “automatically

renew[ed] each year for a period of one year unless terminated by written notice at

least [thirty] days prior to its termination.” The management services agreement

defined certain events that would terminate the agreement before the end of the

initial five-year term, and Black Bayou and Strata GP alleged that “none of th[o]se

4 events [had] occurred,” so the management services agreement was still in effect

“until at least November 2024.”

Further, according to Strata GP and Black Bayou, the management services

agreement defined “[o]perator [o]wned [i]nformation,” and provided that such

information was “confidential” and “exclusively belong[ed] to the [o]perator.” At

the time of the counterclaim, cross-claim, and plea in intervention’s filing, “PEL

[wa]s in possession of the [o]perator [o]wned [i]nformation.” Black Bayou had

asked PEL to return such information, but “the information ha[d] not been returned.”

According to Strata GP, even though “[e]vents that triggered the tag-along

rights occurred,” Strata Energy Holdings, with Burtonvic’s and PEL’s “assistance,

structured the [purchase and sale agreement] so as to” “prevent Strata GP from being

able to exercise its [t]ag-[a]long rights” and “avoid paying Strata GP its additional

interest.” And “Burtonvic agreed to be jointly and severally liable to PEL for [Strata

Energy Holdings’] obligations under the [purchase and sale agreement].”

Based on these allegations, Strata GP brought a claim against Strata Energy

Holdings for breach of the company agreement and for declaratory relief. Black

Bayou brought a cross-claim against Strata Energy Holdings for breach of the

management services agreement and for declaratory relief. And Black Bayou and

Strata GP brought claims, cross-claims, and counterclaims for conspiracy, aiding

5 and abetting, and tortious interference with contract against PEL, Strata Energy

Holdings, and Burtonvic.

In response to Black Bayou’s and Strata GP’s pleading, Strata Energy

Holdings and Burtonvic filed a special appearance. In their amended special

appearance, Strata Energy Holdings and Burtonvic “challenge[d] the [trial court’s]

personal[] jurisdiction over them” as “to all claims that may be asserted against them

by other parties to this suit other than the breach of contract claim asserted by PEL.”

Pertinent here, Strata Energy Holdings and Burtonvic asserted that the trial court did

not have personal jurisdiction over them “with regard to the cross-claims asserted

by [Black Bayou] and the intervention claims asserted by [Strata GP].”

In support of their amended special appearance, Strata Energy Holdings and

Burtonvic observed that “[n]either Black Bayou nor Strata GP . . . [had] alleged any

specific jurisdictional facts to establish personal jurisdiction” in Texas “over [Strata

Energy Holdings] or Burtonvic as to their asserted claims.” Instead, Black Bayou

and Strata GP relied solely “on the [purchase and sale agreement] under which PEL”

brought suit. According to Strata Energy Holdings and Burtonvic, the purchase and

sale agreement contained “an agreement to jurisdiction in Harris County, Texas that

effectively waive[d] any personal jurisdiction challenge for a claim under [the

purchase and sale agreement],” but the purchase and sale agreement did “not apply

to the claims asserted by any other parties [in] th[e] suit.”

6 Strata Energy Holdings and Burtonvic further asserted that the conduct

alleged against them by Black Bayou and Strata GP “d[id] not justify specific

jurisdiction because none of it was directed towards Texas.” They attached to their

amended special appearance declarations executed by William Henrich, the manager

of both Strata Energy Holdings and Burtonvic, in which he stated that Strata Energy

Holdings and Burtonvic “ha[d] never done in business in Texas, ha[d] never owned

any property in Texas, and ha[d] never sought any business from Texas.”

Additionally, Strata Energy Holdings and Burtonvic pointed out that the

company agreement and the management services agreement—“the contracts that

form[ed] the basis for Black Bayou[’s] and Strata GP’s claims” and cross-claims

against Strata Energy Holdings and Burtonvic, which Black Bayou and Strata GP

had attached to their pleading—“involved performance related to mineral interests

in Louisiana” and expressly mandated “exclusive jurisdiction in Delaware.”4

Consistent with this assertion, Henrich stated in his declarations that:

4 Section 13.7(b) of the company agreement provided: The parties hereto irrevocably submit to the exclusive jurisdiction of the Delaware Chancery Courts located in Wilmington, Delaware, or, if such court shall not have jurisdiction, any federal court of the United States . . . or other Delaware state court located in Wilmington, Delaware, and appropriate appellate courts therefrom, over any claims . . . (1) arising out of or relating in any way to this Agreement . . . . And section 13.8 of the management services agreement provided: “Sections 13.7(a), (b), (c), and (e) of the [company agreement are] hereby incorporated by reference into this Agreement and shall apply as if fully set forth herein mutatis mutandis.”

7 There [was] a [management services agreement] between [Black Bayou] and [Strata Energy Holdings], but that [management services agreement] incorporated provisions from the [company agreement] that mandate[d] Delaware, not Texas, as the exclusive jurisdiction and forum for any disputes. [Strata GP was] a party to the [company agreement] that mandate[d] Delaware, not Texas, as the exclusive jurisdiction and forum for any disputes.

In its response, Black Bayou5 asserted that the Texas trial court had personal

jurisdiction over Strata Energy Holdings and Burtonvic based on the forum selection

clause in the first amended purchase and sales agreement entered into between PEL,

Strata Energy Holdings, and Burtonvic. The forum selection clause in the first

amended purchase and sales agreement provided, with certain exceptions, that:

“all [c]laims or causes of action that may be based upon, arise out of, or relate to this [a]mendment or the [p]urchase [a]greement or the negotiation, execution, or performance of this [a]mendment or the [p]urchase [a]greement shall be governed and construed in accordance with the internal laws of the State of Texas applicable to agreements made and to be performed entirely within such State, without regard to any choice-of-law or conflicts-of-law provision or rule that would cause the application of the [l]aws of any jurisdiction other than the State of Texas . . . .

Black Bayou maintained that “the relationship between Black Bayou, [Strata Energy

Holdings], and Burtonvic [wa]s close enough that Black Bayou’s enforcement of the

forum selection clause would be foreseeable to [Strata Energy Holdings] and

5 The record shows that Strata GP did not join in Black Bayou’s response to Strata Energy Holdings’ and Burtonvic’s amended special appearance, nor did it file a separate response.

8 Burtonvic” and “display[ed] [Strata Energy Holdings], PEL, and Burtonvic’s

intention to directly benefit Black Bayou.”

In their reply to Black Bayou’s response, Strata Energy Holdings and

Burtonvic observed that “generally, a forum-selection clause may be enforced only

by and against a party to the agreement containing the clause.” As non-signatories

to the purchase and sales agreement, the forum selection clause in that agreement

did not apply to them. Further, although the purchase and sales agreement

“mention[ed] Black Bayou,” it did not identify Black Bayou as a beneficiary.

“Instead, it merely ma[de] [Strata Energy Holdings] and Burtonvic separately liable

to [PEL] for Black Bayou’s performance of obligations under a separate contract

between [PEL] and Black Bayou. . . . And the [first amended purchase and sales

agreement] d[id] not even mention Strata GP.”

Strata Energy Holdings and Burtonvic also found it “notable that Black Bayou

and Strata GP’s claims [and cross-claims] against [them] [we]re not based on the

[first amended purchase and sales agreement] at all, but on separate contracts,”

which were attached to their pleading. And “Black Bayou and Strata GP ignore[d]

the fact” that both of those agreements “ha[d] a forum selection clause requiring

claims under those contracts to be brought exclusively in Delaware.”

The proposed order granting the special appearance of Strata Energy Holdings

and Burtonvic stated that all claims by Black Bayou and Strata GP against Strata

9 Energy Holdings and Burtonvic were “dismissed based on this [trial] [c]ourt’s lack

of personal jurisdiction over [Strata Energy Holdings] and [Burtonvic].” The trial

court added the following language to the order:

Further, the [p]arties have fully briefed the issue of the forum selection clause in this matter. The briefing has been included in the special appearance briefing. This Court dismisses on the basis of the forum selection clause as well.

The trial court also stated in the order that “[a]ll dismissals [were] without

prejudice,” and it signed the order.

Standard of Review

The existence of personal jurisdiction is a question of law, which must

sometimes be preceded by the resolution of underlying factual disputes. BMC

Software Belg., N.V. v. Marchand, 83 S.W.3d 789, 794 (Tex. 2002); Paul Gillrie

Inst., Inc. v. Universal Comput. Consulting, Ltd., 183 S.W.3d 755, 759 (Tex. App.—

Houston [1st Dist.] 2005, no pet.). When the underlying facts are undisputed or

otherwise established, we review a trial court’s denial of a special appearance de

novo. Paul Gillrie Inst., 183 S.W.3d at 759. Where, as here, a trial court does not

issue findings of fact or conclusions of law with its special-appearance ruling, all

fact findings necessary to support the judgment and that are supported by the

evidence are implied. Marchand, 83 S.W.3d at 795; Paul Gillrie Inst., 183 S.W.3d

at 759.

10 A trial court determines a “special appearance on the basis of the pleadings,

any stipulations made by and between the parties, such affidavits and attachments as

may be filed by the parties, the results of discovery processes, and any oral

testimony.” TEX. R. CIV. P. 120a(3). A single basis for personal jurisdiction is

sufficient to confer jurisdiction over a nonresident defendant. See Citrin Holdings,

LLC v. Minnis, 305 S.W.3d 269, 279 (Tex. App.—Houston [14th Dist.] 2009, no

pet.). The plaintiff bears the initial burden of pleading allegations sufficient to bring

a nonresident defendant within the provisions of the Texas long-arm statute. Am.

Type Culture Collection v. Coleman, 83 S.W.3d 801, 807 (Tex. 2002); Paul Gillrie

Inst., 183 S.W.3d at 759. The burden of proof then shifts to the nonresident

defendant to negate all the bases of jurisdiction alleged by the plaintiff. Kawasaki

Steel Corp. v. Middleton, 699 S.W.2d 199, 203 (Tex. 1985); see also Kelly v. Gen.

Interior Constr., Inc., 301 S.W.3d 653, 658 (Tex. 2010) (“Because the plaintiff

defines the scope and nature of the lawsuit, the defendant’s corresponding burden to

negate jurisdiction is tied to the allegations in the plaintiff’s pleading.”).

Appellate review of a ruling on a special appearance typically requires that

this Court analyze whether a defendant has purposefully established minimum

contacts with Texas, giving rise to either specific or general jurisdiction over the

defendant, and whether the exercising jurisdiction would comport with fair play and

substantial justice. Guam Indus. Servs., Inc. v. Dresser–Rand Co., 514 S.W.3d 828,

11 833 (Tex. App.—Houston [1st Dist.] 2017, no pet.). Here, though, Strata Energy

Holdings and Burtonvic asserted in their amended special appearance that the

agreements that formed the basis for the claims and cross-claims asserted by Black

Bayou and Strata GP against them “specifically call[ed] for exclusive jurisdiction in

Delaware.”

Our analysis, then, must include consideration of whether Black Bayou and

Strata GP contractually consented to jurisdiction in another forum. See Guam Indus.

Servs., 514 S.W.3d at 833. If they did, then the due-process and minimum-contacts

analysis is unnecessary. See In re Fisher, 433 S.W.3d 523, 532 (Tex. 2014) (“[A]

contractual ‘consent-to-jurisdiction clause’ subjects a party to personal jurisdiction,

making an analysis of that party’s contacts with the forum for personal jurisdiction

purposes unnecessary.”); Aggreko, LLC v. Bronxcare Health Sys., No.

01-22-00052-CV, 2024 WL 234409, at *4 (Tex. App.—Houston [1st Dist.] Jan. 23,

2024, no pet.) (mem. op.); Guam Indus. Servs., 514 S.W.3d at 833.

Special Appearance

In their first issue, Black Bayou and Strata GP argue that the trial court erred

in granting the special appearance because Strata Energy Holdings and Burtonvic

waived their special appearance by generally appearing when they answered PEL’s

claims against them. In their second issue, Black Bayou and Strata GP argue that

the trial court erred in granting the special appearance because the forum selection

12 clause in the purchase and sale agreement created personal jurisdiction over Black

Bayou’s cross-claims and Strata GP’s claims asserted by intervention.

Initially, we note that Strata GP failed to file or join in a response to Strata

Energy Holdings’ and Burtonvic’s special appearance in the trial court. To preserve

a complaint for appellate review, Texas Rule of Appellate Procedure 33.1 requires a

party to first make a complaint to the trial court by “a timely request, objection, or

motion.” TEX. R. APP. P. 33 .1(a)(1); see also Valdez v. Valdez, 930 S.W.2d 725,

728 (Tex. App.—Houston [1st Dist.] 1996, no writ) (because party never

complained to the trial court, he never gave trial court opportunity to correct alleged

error). If a party fails to do this, error is not preserved, and the complaint is waived.

Bushell v. Dean, 803 S.W.2d 711, 712 (Tex. 1991); see also Humble Surgical Hosp.,

LLC v. Davis, 542 S.W.3d 12, 21 (Tex. App.—Houston [14th Dist.] 2017, pet.

denied) (“Rule 33.1 requires the appealing party to adequately raise issues before

the trial court to give the trial court notice of [the party’s] complaint.”).

We also note that, in any event, Black Bayou and Strata GP do not challenge

the trial court’s dismissal of their claims and cross-claims against Strata Energy

Holdings and Burtonvic based on the forum selection clauses in the company

agreement and the management services agreement, respectively. Generally,

appellants must challenge all independent bases that fully support a complained-of

ruling or judgment. Britton v. Tex. Dep’t of Crim. Justice, 95 S.W.3d 676, 681 (Tex.

13 App.—Houston [1st Dist.] 2002, no pet.); see also Oliphant Fin. LLC v. Angiano,

295 S.W.3d 422, 423 (Tex. App.—Dallas 2009, no pet.) (“An appellant must attack

all independent bases or grounds that fully support a complained of ruling or

judgment.”). If they do not, then this Court must affirm the ruling or judgment.

Britton, 95 S.W.3d at 681; see also Akhtar v. Leawood HOA, Inc., 525 S.W.3d 814,

819 (Tex. App.—Houston [14th Dist.] 2017, no pet.) (claimed error in challenged

order is rendered harmless where unchallenged, alternate basis supports appealed

order). The reasoning is that if an independent ground fully supports the

complained-of ruling or judgment, but the appellants assign no error to that

independent ground, then we must accept the validity of that unchallenged

independent ground. City of Houston v. Waldhoff, No. 01-22-00825-CV, 2023 WL

5110981, at *4 (Tex. App.—Houston [1st Dist.] Aug. 10, 2023, no pet.) (mem. op.).

After Strata Energy Holdings and Burtonvic raised the forum selection clause

issue in their appellees’ brief, Black Bayou and Strata GP argued about its

applicability in their reply brief. But an issue raised for the first time in a reply brief

is ordinarily waived and need not be considered by this Court. McAlester Fuel Co.

v. Smith Int’l, Inc., 257 S.W.3d 732, 737 (Tex. App.—Houston [1st Dist.] 2007, pet.

denied); N.P. v. Methodist Hosp., 190 S.W.3d 217, 225 (Tex. App.—Houston [1st

Dist.] 2006, pet. denied); see also TEX. R. APP. P. 38.1(f), (i) (appellants’ brief must

14 state all issues or points presented for review and make clear and concise argument

for the contentions made).

Based on the foregoing, we conclude that Black Bayou and Strata GP failed

to challenge an independent ground supporting the trial court’s order dismissing

Black Bayou’s and Strata GP’s claims and cross-claims. Thus, we hold that the trial

court did not err in dismissing the claims and cross-claims against Strata Energy

Holdings and Burtonvic.

We overrule Black Bayou’s and Strata GP’s first and second issues.

Conclusion

We affirm the judgment of the trial court.

Julie Countiss Justice

Panel consists of Chief Justice Adams and Justices Hightower and Countiss.