Great Northern Energy, Inc. v. Circle Ridge Production, Inc.

• Court: Court of Criminal Appeals of Texas
• Decided: September 9, 2016
• Docket: 06-16-00015-CV
• Status: Published

Opinion

ACCEPTED 06-16-00015-CV SIXTH COURT OF APPEALS TEXARKANA, TEXAS 9/8/2016 10:57:21 PM DEBBIE AUTREY CLERK

IN THE SIXTH COURT OF

APPEALS TEXARKANA, TEXAS FILED IN 6th COURT OF APPEALS TEXARKANA, TEXAS GREAT NORTHERN ENERGY, INCORPORATED 9/9/2016 8:52:00 AM DEBBIE AUTREY APPELLANT Clerk No. 06-16-00015-CV

v. CIRCLE RIDGE PRODUCTION, INC.

APPELLEE

APPLELLANT GREAT NORTHERN

ENERGY, INC.

ORAL ARGUMENTS REQUESTED

APPELLANT’S BRIEF

WILLIA M J. GARDNER Texas Bar No. 07661000 422 N. Green St., P.O. Box l 746 Longview, Texas 75606-1 746 Tel. 903-236-7900 Fax 903-236-3367 wjg@wjg-law.com

ATTORNEY FOR APPELLANT GREAT NORTHERN ENERGY, INC.

Page 1 of 93 TABLE OF CONTENTS

IDENTITY OF PARTIES & COUNSEL .......................................... pg 3-6

INDEX OF AUTHORITIES ..............................................................pg 6-10

STATEMENT OF THE CASE ........................................................pg 11-15

REQUEST FOR ORAL ARGUMENT ........................................... pg 16

ISSUES PRESENTED ........................................................................ pg 17-28

STATEMENT OF FACTS ..................................................................pg 29-33

SUMMARY OF THE ARGUMENT .................................................pg 34-36.

ARGUMENT & AUTHORITIES........................................................pg 37-88

I, Standards of Review………………………………………………………………………pg 37

II. September 11, 2012 Note and Deed of Trust……………………………..pg 37-41

III. Improper Voir Dire……………………………………………………………………pg 41-43

IV. Exclusion of Practically All of Appellants Evidence………………….pg 43-58

V. Error in Either Granting Instructed Verdicts Against GNE and/or Refusing to Submit Issues to Jury for Decision ………………pg 58-67

VI. Error in Refusig to Grant Great Northern’s Motion for Mistrial ……………………………………………………………………………………pg 67-68

VII. Errors Related to Jury Submission & Argument …………………. pg 68-74

VIII. Cumulative Error………………………………………………………………. pg 74-76

IX. Error in Awarding Attorneys’’ Fees to Circle Ridges’ Attorneys…………………………………………………………………………………,pg 76-82 X. Error in Overruling Great Northern’s Motion for Judgment……….

Page 2 of 93 NOV that Circle Ridge taken nothing with regard to any liability of Great Northern on the $700K note…………………… pg 82-83

XI. Error Overruling Great Northen’s Motion for Judgment NOV on Circle Ridge’s Trespass to Try Title Claims………………pg 83-88

PRAYER ............................................................................................pg 89-90.

CERTIFICATE OF SERVICE ...........................................................pg 91-92.

CERTIFICATE OF COMPLIANCE………………………………………………….pg 93.

APPENDIX .........................................................................................pg 94-95.

Page 3 of 93 IN THE SIXTH COURT OF

APPEALS TEXARKANA, TEXAS

GREAT NORTHERN ENERGY, INCORPORATED

APPELLANT No. 06-16-00015-CV

v.

CIRCLE RIDGE PRODUCTION, INC.

DOCKETING STATEMENT

IDENTITY OF PARTIES &

COUNSEL

The following is a complete list of the parties, the attorneys, and any other person who has an interest in the outcome of this lawsuit:

CIRCLE RIDGE PRODUCTION, INC., Plaintiff, by serving its attorney: Dean Searle Ronan Searle SEARLE & SEARLE PC 305 W. Rusk Street, Suite 101 Marshall, Texas 75670 Tel. #:903-935-9772 Fax # 903-935-9790

Page 4 of 93 Michael T. Runyan 305 W. Rusk Street Marshall, Texas 75670 Tel.#:903-935- 7700 Fax #:903-935-9790

KEVIN STEPHENS, Third Party Defendant, Pro se: Kevin Stephens Hallsville, Texas kstephens@signal wellservice.com

Great Northern Energy, Incorporated, by serving its attorney:

William J. Gardner William J. Gardner, PC PO Box 1746 422 B N Green Street Longview, Texas 75606-1746 Tel. No. 903-236-7900 Fax No. 903-236-3367

Page 5 of 93 TABLE OF AUTHORIITES

CASES

A. J. Miller Trucking v. Wood, 474 S.W. 2d 763 (Tex. App. Tyler 1971, writ ref’d n.r.e.)……………………………………………………………..pg. 43 Allen v. Reidel, 425 S.W.2d, 665 (Tex.Civ.App.-Eastland, 1969, no writ)pg 74 Anderson Bartlett & East’s Texas Uniform Commercial Code Annotated (2007 Addition-West Publishing)………………………………………… pg 39 Anderson v Gilbert, 897 S.W.2d 783, 784-785, (Tex. 1995)………………pg 47

Amoco Production v. First Baptist Church, 611 S.W. 2d , 610(Tex. 80)..pg.67

Archer v. Griffin, 390 S.W. 2d, 735, 740, (Tex. App. 1964)……………….pg.

Bank One v. Stewart, 967 S.W. 2d, 419, 434, (Tex. App.-Houston [14th Dist.] 1998, pet. denied.)……………………………………………………………pg.66

Campbell v. Mortgage Electric Registrations System Inc., 2012 Tex. App. Pg.41 Case Corp. v. High Class Business Systems, 184 S.W. 3d 760, 770(Tex.App.- Dallas 2005 pet. denied.)……………………………………………………pg 67.

Chapman v. Moser, 532 F2d, 1358 (5th Cir. 1976)……………………………pg71

Cire v. Cummings, 134 S.W. 3d, 835, 838-39(Tex. 2004…………………….pg

Cortez v. HCCI-SAN ANTONIO INC. 159 S.W. 3d, 87 (Tex. 2005)……….pg.42

Crill v. Houston Ind., 124 S.W. 3d, 742m 753(Tex.App.-Houston [1st Dist.], 2003 no pet.)……………………………………………………………….pg.64

D.T. Carroll Corp. v Carroll, 256 S.W. 2d 429, 432 (Civ. App.—San Antonio 1953 ref. n.r.e.)……………………………………………………………………………….pg85

Dames v Strong, 659 S.W.2d 127, 129 (Tex. App.—Houston[14th Dist.] 1983, no writ)……………………………………………………………………………………pg 85

Page 6 of 93 Daves v. Lawyers Surety Corp. 459 S.W. 2d, 655, 657(Tex. Civ. App.-Amarillo 1970 writ ref’d n.r.e.)……………………………………………………… pg. Dewitt County Elec. Coop v. Parks, 1 S.W. 3d, 96105, (Tex 1999)………pg 65 Dillon v. Hodges, 804 F2d, 1384, (5th Cir. 1984)…………………… ... pg 71 Doria v Suchowolski, 531, S.W. 2d 360, 362 (Civ. App.—San Antonio 1975 ref. n.r.e.)…………………………………………………………………… pg 85

El Applel, LTD, v. Olivas, 370 S.W.3d, 757 Texas (2012)……………. Pg 77

Estate of Boren, 268 S.W. 3d 841,846(Tex.App.-Texarkana, 2008, pet denied……………………………………………………………….....pg.70

Everbank v. Seedergy Ventures, Inc., 2016, Tex.App. LEXIS 7319 (Tex.App.- Houston [14th Dist.] 2016, authority cite)………………………………..pg 38 Exxon Mobil Corp. v. Kinder Morgan Operating, LP, 192 S.W. 3d, 120,126- 127(Tex.App.-Houston [14th Dist.] 2006, no pet.)…………………………….pg.65 Exxon Corp. v. Gill, 221 S.W.3d, 841, 848(Tex.App.-Corpus Christi 2007) reversed on other grounds…... ………………………………………………………..…pg.65

Farah v. Mafrige & Cornmanik, PC, 927 S.W.2d, 663, 675(Tex.App.- Houston[1st Dist.] 1996 no writ……………………………………………pg.66 Federal Financial Co. v. Delgado, 1 S.W. 3d 181, 185….………….pg.40

Foley v. Daniel, 346, S.W.3d 687,690(Tex. App. –El Paso 2009, no pet.)………………………………………………………………………pg. 63

Foremost Plastics Corp, USA v. Presidio Engineering Contractors, Inc., 960 S.W. 2d, 41, 45(Tex. 1998)……………………………………………… .pg.65

Fritsche v Niechoy, 197 S.W. 1017, 1018-1019 (Civ. App.—Galveston 1917, dis…………………………………………………………………………..pg.85 Gray v Joyce, 485 S.W. 2d 311, 313 (Civ. App. –Tyler 1972, ref. n.r.e.)……pg 86 Hart v. Easton, 321 S.W.2d 574,159,Tex 375, (Texas 1959)……………….pg 72 Heil v Wirth, 161 Tex. 609, 343 S.W. 2d 226, 226-230 (1961)…………………pg 85

Page 7 of 93 Hicks v Southwestern Settlement & Devlop. Corp., 188 S.W. 2d 915, 929 (Tex. App. –Beaumont 1945, ref, w.o.m.)…………………………………………………pg 85 Jamail v. Anchor Mort. Services, Inc., 809 S.W. 2d 221, 223(Tex.1991)……pg. 56 Johnson v. Cox, 630 S.W. 2d 492 (Tex. App.-Corpus Christi, 1982, writ ref’d n.r.e.)…………………………………………………… ……………...pg.39 Landon v. Jean Paul Budinger, Inc., 724 S.W. 2d, 931,939 (Tex.App.-Austin 1987, no writ)…………………………………………………………….pg.

Lawson v. Finance America Private Brands, 537 S.W.2d 483, 485(Tex. Civ. App.-El Paso, 1976, no writ)…………………………………………………..pg.62 Leavings v. Mills, 175 S.W. 3d 301, 310 (Tex. App-Houston[1st Dist.] 2004, no Pet.)……………………………………………………………………..pg. 41 Lexis 4030, 2012 Westlaw 1839357*4 (Tex. App.-Austin May 18, 2012, Pet. denied)………………………………………………………………………..pg McCraw v. Maris, 828, S.W. 2d, 756, 758(Tex.1992)………………………pg 57 Mancorp, Inc. v. Culpepper, 802 S.W. 2d, 226, 230 (Tex. 1990)…………..pg 56 Mangess v. Guerra, 673 S.W. 180, 183 (Tex. 1984)……………………pg.67-68 Mapco Inc. v. Holt, 476, S.W.2d , 70 (Tex.Civ. App.-Amarillo, 1971, writ ref’d n.r.e…………………………………………………………………………….pg

Marquis Acquisitions, Inc, v Steadfast Ins., 409 S.W. 3d, 808, 813-14(Tex. App.- Dallas 2013, no pet.)(elements 1, 3-5)………………………………………pg.63 Marshall v Garcia, 514 S.W.2d 513, 518-519 (Civ. App.—Corpus Christi 1974, ref. n.r.e.)……………………………………………………………………………..pg 84 Modine Mfg.Co. the North E. Ind. School District, 503 S.W. 2d, 833(Tex.Civ.App-Beaumont 1973, writ ref’d n.r.e.)………………..……...….pg.57

Montgomery Ward & Co. v. Scharrenbeck, 204 S.W.2, 508, 510 (Tex.1947)pg 66 Ojeda v. Walmart Stores, 956 S.W. 2d 704, 706-707 (Tex. App.-San Antonio 1997, pet. denied)…………………………………………………………….pg.58

Page 8 of 93 Page Airways, Inc., v. the Associated Radio Service Co., 545 184, 189- 190(Tex.Civ. App.-San Antonio, 1976, writ ref’d n.r.e.)…………………….pg. 61 Peco Contruction Co. v.Quahardo, 919 S.W.2d, 736, 738 n.3.Tex. App. –San Antonio 1996, writ denied)………………………………………………... pg 65

Perry v. Breland, 16 S. W. 3d, 182, 187, (Tex. App. –Eastland, 2002 pet. denied)(element 2)………………………………………………………….....pg. 63

Ragsdale v. Griffin, 380 S.W.2d, 164 (Tex.Civ.App. 1964…………………pg 71 Reinhardt v North 507 S.W. 2d 589,591, (Civ. App.–Waco 1974, ref. n.r.e)pg 86 Southwestern Bell Telephone Co. v. DeLanney, 809 S.W. 2d , 493,494-95)Tex. 1991)…………………………………………………………………………pg.65

Standard Oil Co. of Tex. V Marshall, 265 F.2d 46,50 (5th Cir. 1959) cert denied 361 U.S. 915, 80 S. Ct. 259, 4 L.Ed.2d 185…………………………………….pg 84

Standolind Oil & Gas Co. v State, 136 Tex. 5, 133 S.W. 2d 767, 770 (1939) pg 84

Stewart Title Guaranty, Co. v. Sterling, 822 S.W.2d, 1 (Texas 2006)……...pg 82 .. Southern Pacific Co., v. Hubbard, 297 S.W.2d, 120, 156, Tex. 525, (Tex. 1956)……………………………………………………………………….pg 75

T.F.W. Management v. Westwood Shores Property Owners Assoc., 79 S.W. 3d 712, 719(Tex.App.-Houston[14th Dist.] 2002 pet. denied)………………….pg. 66

Texas Co. v Lee, 157 S.W. 2d, 628, 183 Tex. 167 (Texas 1942)……………pg 70

Tony Gullo Motors, v. Chapa, 212 S.W.3d, 299 (Texas 2006)……………. Pg 79

Traveler’s Ins. Co., v. Deleon, 456 S.W. 2d 544, 545,(Tex. Civ. App.- Amarillo 1970, writ ref’d n.r.e.)…………………………………………….pg.43

Walker v. Packer, 827 S.W. 2d 833, 839 (Tex.1992(, Orig Proceeding).pg.

Zuniga v. Wooster Ladder Co., 119 S.W.3d, 856, 862(Tex. App.- San Antonio 2003, no pet.) (element 2)……………………………………………………pg. 63

Page 9 of 93 STATUTES

26 USCS §7425(b)(1),(c)(1)………………………….................................... pg 86 Tex. Bus. & Com. Code Ann Section §3.3110 (West 2015)………………..pg 38

Tex. Bus. & Com. Code Ann. §3.3110 (d) (West 2015)……………………pg.38

Tex. Bus & Com. Code Ann. §3.201. (West 2015)…………………………pg.39

Tex. Bus. & Com. Code Ann §3.201(a)……………………………………...pg 62

Tex. Bus & Com. Code Ann. §3.201(c) Comment C………………………..pg

Tex. Bus. & Com. Code Ann §3.203(2013)…………………………………pg 40

Tex. Bus. & Com. Code Ann §3.203(b) (West 2015)………………………..pg

Tex. Bus. & Com. Code Subsection §3.203(d)………………………… pg.39,60

Tex. Bus. & Com. Code Ann Section §3.201, (LEXIS NEXIS 2016)……….pg.44

Tx. Prop. Code, 22.001-22.022………………………………………………pg 84

Tex Rules of Evidence 701-706………………………………………………pg 42

RULES

Texas Rules of Civil Procedure. 783-809…………………………………… pg 84 TREATISES Anderson Bartlett & East’s Texas Uniform Commercial Code Annotated (2007 Addition-West Publishing)………………………………………. Pg.39

Page 10 of 93 STATEMENT OF THE CASE

The Parties to this Appeal, and their respective designations are as follows, to wit:

1. Great Northern Energy, Inc.: Appellant, Defendant and Counter- Plaintiff in the trial court (hereinafter sometimes either “Appellant” or “Great Northern”) or: (“GNE”).

2. Circle Ridge Production, Inc.: Appellee herein, Plaintiff and Counter Defendant in the trial court action (hereinafter sometimes either “Appellee” or “Circle Ridge” or “C.R.P.”).

3. Kevin Stephens: Appellee herein, and Third Party Defendant in the court below (hereinafter “Appellee Stephens” or “Stephens”: or “K.S.”).

Collectively, hereinafter Circle Ridge and Stephens are referred to as “Appellee’s”. “Other parties to the court below, who are not parties to this appeal are as follows: 1. Joseph B. Loftis, Defendant below (hereinafter sometimes either “Loftis” or “Joe Loftis”).

2. Ronald J. Abercrombie, Defendant in the trial court (hereinafter sometimes either “Abercrombie” or “R.J.A.”).

Further, for reference, the reporter’s record of the proceedings is hereinafter

referred to as “R.R.” and the clerk’s record or transcript is “C.R.”.

This central beginning point of this case is a sale occurring on

September 11, 2012 in which Great Northern Energy, Inc., (“Appellant”)

purchased oil gas and mineral and lease hold interest from two parties, Circle

Ridge Production, Inc., and Kevin Stephens, (“Appellees”). The consideration

given was $200,000 cash and a $700,000 installment note (“$700K note”), and Page 11 of 93 Deed of Trust in which Circle Ridge Production, Inc. and Kevin Stephens were

named the beneficiaries. The interests which were the subject of the sale are called

the “OBENCO” leases, which cover approximately 1100 to 1200 acres in the

Waskom, Texas area in Harrison County, Texas. Shortly after Great Northern

Energy acquired these properties, it purposed to include them in a package to be

resold to a company called Rangeford Resources. Shortly after September 11,

2012, one of the payees, Kevin Stephens, determined to participate with his interest

in the transaction in the Rangeford Resources transfer. To that end, he transferred

and assigned his interest in the note and Deed of Trust to Great Northern Energy.

around December 1, 2012 and before the first installment on the purchase note was

due and payable. Subsequently, Circle Ridge Production, the remaining party of

“Circle Ridge Production and Kevin Stephens” attempted to collect on only the

“Circle Ridge” portion of the note, and determined to foreclose. It conducted a

foreclosure sale on November 5, 2013. On December 26, 2013, simultaneously

with recording the Trustees Deed from the November 5, 2013 sale, it claimed it

“acquired” the remaining interest in the $700K note through a purported

assignment from “Kevin Stephens”.

Following this muddled state of affairs, Great Northern filed suit in Dallas

County, Texas, in Cause No.14-04993, against Circle Ridge Production, Kevin

Stephens and Bill Briscoe, Circle Ridge Production’s President, and principal

Page 12 of 93 shareholder. It alleged, causes of action for slander of title, breach of contract,

unjust enrichment, and breach of implied covenant of good faith in fair dealing,

negligent misrepresentation, fraud, and torturous interference with contact with

claims for attorney’s fees. Circle Ridge Production and Bill Briscoe responded by

filing a Motion to Transfer Venue to Harrison County, and separately, filed suit in

Cause No. 2014-0460, alleging, that Great Northern had filed a notice of its

assignment from Kevin Stephens of his rights with respect to his interest in the

$700K note, and his liens and property rights with respect to the OBENCO leases.

(which it alleged to be a forgery). Circle Ridge claimed that that “forged”

assignment from Stephens to Great Northern clouded Circle Ridge’s title. The

venue in these actions was subsequently transferred to Harrison County, Texas,

and the causes consolidated into Cause No.14-0460.

By the time of trial in October, 2015, Circle Ridge had filed its Fifth

Amended Petition and Second Amended Answer, in which it asserted causes of

action against Defendant Great Northern for possession of property (under a

Trespass to Try Title) theory, removal of a cloud on title, (attributable to the note

assignment, (from Stephens), breach of contract, for non-payment of the $700K

note). The Fifth Amended Petition also included claims against Joe Loftis and

Ronald J. Abercrombie for alleged violations of the Texas Civil Conspiracy and

Violation of the Texas Theft Liability Act, and negligence. Great Northern had

Page 13 of 93 expanded the claims of which it presented in its trial petition as follows: against

Kevin Stephens for Breach of Contract, Unjust Enrichment, and failure to deliver

purchased equipment, Breach of the Implied Covenant of Good Faith and Fair

Dealing, negligent misrepresentation, fraud, and tortuous interference with

contract, to remove cloud on Great Northern’s title, and for wrongful foreclosure

against all Defendants including Briscoe, Circle Ridge and Kevin Stephens, for

attorney’s fees and costs.

After midnight on October 20th and on October 21, 2015, Circle Ridge

Production filed its Notice of Non-Suit in which non-suited all claims Joe Loftis

and Ronald J. Abercrombie individually, including its claims of civil conspiracy

and violation of the Texas Theft Liability Act.

Trial in this matter was conducted before a jury commencing October 19,

2015 after 3 ½ days of proceedings, the Court refused to allow Great Northern

Energy to submit any of its issues except wrongful foreclosure to the jury, granting

directed verdicts to Circle Ridge Production on all of Great Northern’s other

claims. The Court also ruled in favor of Circle Ridge with respect to removal of

claims as cloud of title, liability of Defendant Great Northern for Breach of

Contract, and for claims by third party Kevin Stephens for Breach of Contract by

Great Northern Energy. The Court further found that Great Northern owed Circle

Ridge Production the sum of $637,611.93 under terms of the $700K note. The only Page 14 of 93 issue submitted to the jury was with regard to Great Northern Energy’s claims that

Circle Ridge had wrongfully foreclosed the lien and the Deed of Trust sale on

November 5, 2013. The jury found adversely to Great Northern Energy with

respect to those issues submitted.

Based upon its directed verdict rulings, the Court entered Judgment for

Circle Ridge Production against Great Northern Energy on Circle Ridge

Productions claims against Great Northern Energy, and denied either liability or

recovery against Bill Briscoe, Kevin Stephens or Circle Ridge Production with

respect to all of Great Northern Energy’s claims. The Court entered its Judgment

on December 7, 2015. Further, on February 22, 2016, the Court overruled Great

Northern’s Motion for Judgment NOV and Motion for New Trial, presenting

many, if not all, of the issues presented by Appellants in this appeal.

From these preceding circumstances, Great Northern Energy brings this

appeal.

Page 15 of 93 REQUEST FOR ORAL ARGUMENT

Appellant Great Northern Energy, Inc., has previously filed its Notice of Appeal in the Court from the "Orders" of the said 71" District Court, Harrison County, Texas, dated March 30 & 31, 2016, which is pending herein as Cause #06-2016-15-CA, styled, Great Northern Energy, Incorporated, Appellant vs. Circle Ridge Production, Inc., Appellee.

The Court should grant oral argument for the following reasons:

a. Oral argument would give the Court a more complete understanding of the facts presented in this appeal. See Tex. R. App. P. 39.l (c).

b. Oral argument would significantly aid the Court in deciding this case. See Tex. R. App. P. 38.l (e), 39.i (d).

Page 16 of 93 ISSUES PRESENTED

From Voir Dire, through ruling on Defendants’ Motions for New Trial and

Motion for Directed Verdict, the record is filled with errors committed by the trial

court. Certain rulings by the trial court arise from and relate to its refusal to allow

Defendants to present factual evidence establishing the bases for their defenses,

counter-claims, and third party claims. All these erroneous rulings underlie, are

common to, and result in various reversible rulings by the trial court. These

evidentiary errors are presented as initial issues. Further they are incorporated into

the subsequent erroneous rulings of the Court in withdrawing Defendants’ rights to

obtain proper jury findings and rulings in this case. Specifically, subsequent

erroneous filings with respect to withdrawal of issues from the jury are specified,

many of which incorporate the evidentiary exclusions. From Appellants

perspective, the errors are so numerous and glaring that it is impossible to submit

them in conformance with the ideal Rule of Presentation of only (3) areas. For

purposes of clarity, and hopefully simplicity, the errors are organized within seven

eleven (11) groups or areas of wrongful conduct by the trial court; however, each

issue is specified separately within the various groups. These areas are organized

chronologically within the progress of the trial proceeding.

1. Errors in Voir Dire:

1-1. The Court erred in permitting counsel for 3d party Defendant

Page 17 of 93 Kevin Stephens to improperly attempt to bolster his evidentiary

contentions and prejudice Defendants through using his questions to

venire persons to support his contentions, over Defendants’

objections and to grant Defendants’ Motion for Mistrial following its

overruling of them.

2. Errors in Excluding Practically All of the Testimony and Evidence

offered by Defendants to support their defenses, counterclaims and

third party claims;

Errors in excluding Kevin Stephen’s testimony & exhibits:

2-1. The Court erred in excluding testimony of Kevin Stephens that he

“assigned and transferred” his interest in the September 11, 2012,

$700,000.00 note (“$700K note) to Great Northern Energy, Incorporated

in December, 2012;

2-2. The Court erred in refusing to allow Defendants’ to introduce

exhibit P-12, “the note assignment”, or to allow questioning of Kevin

Stephens regarding same, evidencing Kevin Stephens assignment of his

interest in the $700K note to GNE in December, 2012;

2-3. The Court erred in refusing to permit the cross-examination of

Kevin Stephens regarding the significance of the “Rojo Burro” contract,

Page 18 of 93 evidencing his participation with GNE in the Rangeford Resources

transaction;

2-4. The Court erred in refusing to admit the Rojo Burro contract

signed by Kevin Stephens into evidence (Exhibit GN #16);

2-5. The Court erred in refusing to admit the $700K note and lien

assignment dated December 1, 2012, from Kevin Stephens to Great

Northern Energy, Incorporated (Exhibit GN #18);

2-6. The Court erred in excluding the testimony of Kevin Stephens

regarding GNE’s payments of $10,000 to Mike Stephens and $50,000 to

Bobby Stephens in satisfaction of its consideration obligations

established in the December 1, 1012, note assignment (Exhibit GN #18);

2-7. The Court erred in excluding the admission of GNE’s exhibits

GN 20 and 21), evidencing payment of $60,000.00 in December, 2012, in

satisfaction of its consideration obligations in the December 1, 2012

assignment (Exhibit GN18);

2-8. The Court erred in excluding from the jury Kevin Stephens

testimony that he has sold his interest in the $700K note to Bill Briscoe

before February 1, 2013;

Page 19 of 93 2-9. The Court erred in excluding testimony that Kevin Stephens had

authorized Michael Stephens to act as his agent regarding collection and

assignment of note matters after December 1, 2012;

2-10. The Court erred in excluding testimony that the $135K paid by

Great Northern Energy to 15 Bar LLC was paid as consideration for the

$700K note assignment to the Stephens family;

2-11. The Court erred in excluding GNE exhibits #16, #17 and #18

from introduction into evidence; Exhibit #16 is Rojo Burro agreement,

Exhibit #17 is Rojo Burro agreement and Exhibit #18 is (Searle note

transfer) Kevin Stephens Affidavit of Forgery;

2-12. The Court erred in excluding the testimony of Kevin Stephens,

acknowledging execution of assignment interest to Great Northern as

offered in Kevin Stephens Bill of Exceptions;

2-13. The Court erred in excluding the testimony Kevin Stephens

acknowledging payments of $62,500 by Great Northern in consideration

of his assignment of his interest in the note; Exhibit #19 in excluding the

testimony of Kevin Stephens offered in the Bill of Exceptions

acknowledging assignment document assigning his interest in the note to

Great Northern;

Page 20 of 93 Errors in excluding Joe Loftis’ testimony & related exhibits:

2-14. The Court erred in excluding the testimony of Joe Loftis relating

to payments to Kevin Stephens in consideration of his transfer of his

interest into the September 11, 2012 note;

2-15. The Court erred in excluding the testimony of Joe Loftis

concerning the terms of assignment of Kevin Stephens interest in the

$700K note to Great Northern Energy, and GN#17, setting forth the

terms, and GN#18 concerning the terms of the transaction between Kevin

Stephens and Great Northern Energy relating to his transfer of his interest

in the $700K note;

2-16. The Court erred in excluding the evidence regarding the

payments by Great Northern to Michael Stephens and Bobby Stephens in

satisfaction of its obligations under the note;

2-17. The Court erred in excluding the testimony of Joe Loftis

regarding Great Northerns performance of its obligations under the notes.

Exhibits #20 and #21;

Errors in excluding Kayla Marrs’ testimony & related exhibits:

2-18. The Court erred in excluding the testimony of Kayla Marrs

regarding the execution of Kevin Stephens’ Exhibit GN#17 before her;

Page 21 of 93 Errors in excluding Nate Morans’ testimony & related exhibits:

2-19. The Court erred in excluding the testimony and exhibit offered

through Nate Moran, Exhibit #D12, and Exhibit #D15 regarding payment

by Great Northern Energy on the $700K note;

2-20. The Court erred in excluding Exhibits #GN16,#GN17, GN#18,

#2, #2A, and #12 from admission as offered by Nate Moran on Plaintiffs

Bill of Exceptions through Nate Moran, together with his explanation

thereof;

2-21. The Court erred in prohibiting the witness Michael Stephens

from testifying regarding the Rangeford Resources project and the role of

the assignment of the note therein;

Error in Michael Stephens’s testimony exclusions: The

Court erred in excluding from the jury the following items

from the Bill of Exceptions of Michael Stephens:

2-22. the Court erred in excluding Mr. Stephens’ explanation

of the transaction between Kevin Stephens and Great Northern Energy

regarding his assignment of the note;

2-23. the Court erred in excluding the testimony of Michael

Stephens in explanation with respect to their participation with Great

Northern in the Rangeford Resouces transactions;

Page 22 of 93 2-24. the Court erred in excluding the testimony of Michael

Stephens regarding Michael Stephens and Kevin Stephens appearance

before Kayla Marrs acknowledging Exhibit #GN17;

2-25. the Court erred in excluding the testimony of Michael Stephens

in explanation of the terms and performance of Great Northern with

respect to Exhibit #GN17;

2-26. the Court in excluding the testimony of Michael Stephens of the

specific notification he gave to Bill Briscoe, President of Circle Ridge

Productions, concerning the Stephens family’s participation with

Great Northern in the Rangeford Resources transaction and the

assignment of Michael Stephens interest in the $700K note all in

October, 2012;

2-27. the Court erred in excluding the testimony of Michael Stephens

regarding the terms of the Rojo Burro transaction outlined in Exhibits

#GN16 and #GN18, together with the exclusion of Exhibits #GN16,

#GN17, #GN18 and #GN20 as identified by Michael Stephens as

identified and authenticated by Michael Stephens;

2-28. the Court erred in excluding the testimony of Michael Stephens’

acknowledging Great Northerns payments of $10,000 and $50,000 to

Bobby Stephens in December 2012;

Page 23 of 93 2-29. the Court erred in excluding the testimony of Michael Stephens

regarding the financial and business relationship between Kevin Stephens

and Chad Hamilton;

2-30. the Court erred in excluding the testimony offered in the Bill of

Exceptions by Michael Stephens of Kevin Stephens role in the

disappearance of equipment sold to Great Northern for use on the leases;

2-31. the Court erred in refusing to admit Great Northern Exhibit #16,

letter of agreement between Kevin and Michael Stephens and OBENCO

and Rojo Burro; the Court erred in refusing to admit Great Northern

Exhibit #17, letter of agreement between Kevin and Michael Stephens

and Great Northern; the Court erred in refusing to admit Great

Northern Exhibit #18, purchase (or) note and financial interest Kevin

Stephens unto Great Northern Energy, OBENCO; the Court erred in

refusing to admit Great Northern Exhibit #20($10,000 check to

Michael Stephens) & #21, ($50,000 check to Bobby Stephens);

2-32. the Court erred in refusing to admit Exhibit #21A, demand

letter, Defendants Exhibit #12, (letter dated August 2, 2013), and

Exhibit #12, a schedule of payments to Circle Ridge.

3. The Court erred in granting instructed verdicts and or refusing to

submit the following matters to the jury:

Page 24 of 93 3-1. the Court order granting Circle Ridge’s Motion against Great

Northern for a Breach of Contract, liability on $700K note;

3-2. the Court erred in granting Kevin Stephens Breach of Contract

claims with regard to its dismissal of Great Northerns Breach of Contract

claims against Kevin Stephens;

3-3. the Court erred with regard to granting Kevin Stephens’ motion

for directed verdict against Great Northern with respect to Great

Northerns cause of action of fraud against Kevin Stephens;

3-4. the Court erred in granting Kevin Stephens’ and Bill Briscoe’s

instructed and directed verdict against Great Northern claims in

dismissing Great Northerns claims against them for unjust enrichment;

3-5. the Court erred in granting Briscoe and Stephens’ Motion for

Instructed Verdict against Great Northern with respect to Great

Northerns’ claims for breach of the implied covenant of good faith and

fair dealings;

3-6. the Court erred in so far as it granted Kevin Stephens and Bill

Briscoe’s for instructed or directed verdict that Great Northern take

nothing from Briscoe and Stephens with respect to its claims for

negligent misrepresentation;

Page 25 of 93 3-7. the Court erred in entering a directed verdict in favor of Briscoe,

Circle Ridge and Kevin Stephens with regard to Great Northerns claims

for interference with contract;

3-8. the Court erred in directing a verdict for Circle Ridge Production

with regards to its Trepass to Try Title claims;

3-9. the Court erred in awarding Circle Ridge Production attorney’s

fees against Great Northern for trial attorney’s fees in the amount of

$150, 873.37;

3-10. the Court erred in entering a directed verdict for Circle Ridge

against Great Northern for liability in the sum of $637,114.15 which

Circle Ridge asserted Great Northern owed it on the notes.

4. the Court erred in failing to grant Great Northern Energy, Inc.,

Abercrombie and Loftis’ Motion for Mistrial prior to submission of

any issues to the jury.

5. Errors with respect to Jury Questions and Answers:

5-1. the Court erred in improperly submitting the jury issues to the

jury as submitted because it improperly allocated the burden of proof.

5-2. the Court erred in awarding bases based upon the findings of the

jury that the Courts answers to questions 1 and 2 were immaterial

Page 26 of 93 because the evidence proves conclusively as a matter of law, that the

foreclosure sale on November 5, 2013 was improperly conducted.

6. the Court erred in awarding damages in the amount of

$637.114.15 to Circle Ridge, because there is no proper evidence

upon which to award such basis.

7. the Court erred in allowing counsel for Circle Ridge to make the

following improper jury arguments;

7-1. With respect to question number 1, insofar as counsel for Circle

Ridge asserts the burden of proof was on Defendant to disprove the that

the foreclosure sale of November 5, 2013, was properly conducted, the

burden was not upon Great Northern Energy, but rather upon Circle

Ridge.

7-2. the Court erred in allowing counsel for Circle Ridge Production

to make an improper and prejudicial argument, insofar as it allowed such

counsel to read a stipulation to the jury that Great Northern owed Circle

Ridge $637,114.15 under terms of the note when such representation was

in fact a misrepresentation known to all parties and submitted over Great

Northerns objections.

8. the Court erred in awarding attorney’s fees of $150, 873.37.

Page 27 of 93 9. the Court erred in all respects in this trial and its denial that a new

trial should be granted herein and all matters re-tried. This case

should be reversed and remanded for an entire new trial, because the

cumulative error of the Court was so great that that is the sole

remedy can effectively address the errors in the prior trial.

10. the Court erred in failing to grant Great Northern Energy an

instructed verdict with regard to its contentions that is has no

liability with regard to the Circle Ridge Production note, as asserted

by Circle Ridge Production in the trial, because there is neither now

or has there ever been any proper presentation of Circle Ridge’s

demands insofar as there is no proper assertion of Great Northerns

liability under the $700K note because Circle Ridge does not have

the authority, acting alone, to enforce, or even attempt enforcement

of liability on such note, nor has it ever attempted to enforce the note

in accordance with the law.

11. Great Northern is entitled to judgment that Circle Ridge take

nothing, with respect to its claims for Trespass to Try Title, because

there is no sufficient legal evidence which supports such

determination.

Page 28 of 93 STATEMENT OF FACTS

One of America’s great trial lawyers, Abraham Lincoln learned to read

in front of the fireplace in his log cabin. Among his early reading text was

AESOP’S Fables. Lincoln loved recounting the stories he first read there.

Among his favorites was that of the “Wolf in Sheep’s Clothing”, a story in

which a lamb, seeking the wisdom and protection of its mother bounded up a

hill to a figure apparently clad in a sheep’s skin. However, upon arrival, sadly

the lamb realized it encountered the wolf covered in its mother’s wool. Sadly

it was devoured. Unfortunately, Appellants would liken the lamb’s experience

to theirs in seeking justice and protection of the law in this case. Sadly, from

the commencement of voir dire through the Court’s ruling on Appellant’s Post

Judgment Motions, they felt deceived at every turn and ultimately devoured

by their trial court experience.

From the viewpoint of Appellant, Great Northern Energy, this lawsuit is the

effort of Appellees Circle Ridge Production and Kevin Stephens to avoid the

consequences of the unauthorized foreclosure of a Deed of Trust lien and its

attempt to enforce the liability of Appellant Great Northern Energy as first

established in a promissory note in the principal sum of $700,000.00 (“$700K

note”) on September 11, 2012 and a deed of trust given as security therefore on

that date. The payees in the note and beneficiaries in the deed of trust were “Circle

Page 29 of 93 Ridge Production and Kevin Stephens”. (CR: 3:134:9-136:15) Indeed, the Deed

of Trust, designating both as “Beneficiary” (Cr: 1085, RR: 3:99:1-100:25) (Ex. 8)

expressly provides the “Beneficiary” “… may request the Trustee to proceed with

foreclosure and other remedies.” Article 3, 3.1(c) CR: 1092. [page 8 of D.T.] As

specified the Uniform Commercial Code and in Texas case law ( as described in

Argument and Authorities section III below) the proper enforcement of rights

granted in both the $700K note and deed of trust must be enforced in the name of

both, ”Circle Ridge Production and Kevin Stephens” and neither of those parties

can act alone in enforcement. However, in this case joint action never existed in

connection with enforcement or foreclosure, and legally it never could have

existed. Nevertheless, Circle Ridge Production attempted to and did conduct a

purported foreclosure sale on November 5, 2013, (CR: 1085-1106), (RR: 3:134:9-

1316:15) and asserts it right to enforce the $700K note in this lawsuit. Circle

Ridge’s efforts began in its Original Petition filed on June 18, 2014, (CR: 10) with

its claim to own oil and gas interests in Harrison County, Texas. It further alleged

that the defendant Great Northern Energy had alleged it owned rights and titles

with respect to the liens, leases, and promissory note of September 11, 2012

through an “assignment and bill of sale of oil and gas leases OBENCO purportedly

signed by Kevin Stephens as grantor purporting to convey all of Kevin Stephens’

right title and interest to Great Northern.” (CR: 11) It further claimed that such

Page 30 of 93 assignment was a forgery, “thereby rendering said Assignment and Bill of Sale

invalid and in no force and affect.” (CR: 11, 12) Its requested relief was that the

Court declare the Assignment and Bill of Sale from Stephens to Great Northern

invalid and unenforceable and ordering it removed from the title of property of

subject litigation and quieting title. (CR:13) Simply stated, Circle Ridge centered

its claims upon the proposition that Great Northern had forged and assignment of

Kevin Stephens’ interest in and to $700K note from Kevin Stephens to Great

Northern Energy. Throughout the discovery and pretrial process Circle Ridge

Production maintained these positions, refining and expanding them through four

amendments to its Original Petition, including but not limited to its 5th Amended

Petition upon which it based its prosecution in this trial. (CR: 1066-1125)

Commencing in its First Amended Original Petition filed January 5, 2014, (CR:97)

Circle Ridge expanded its claims of forgery of the Assignment from Kevin

Stephens to Great Northern and claims the principals of Great Northern Energy,

Joe Loftis and R.J. Abercrombie has conspired to violate the Texas Civil

Conspiracy and Texas Theft Liability Acts in securing and recording the forged

Assignment and Bill of Sale from Kevin Stephens to great Northern Energy. (Cr:

101-102) These allegations continued throughout the pretrial period in successive

pleadings, Plaintiff 2nd Amended Petition filed on October 10, 2014 (CR: 680, 683-

685), Plaintiff’s 3rd Amended Petition filed August 28, 2015 (Cr: 839, 845-847),

Page 31 of 93 and in Plaintiff’s 5th Amended Petition, filed October 13, 2015 (CR: 1066, 1069-

1074). However, apparently realizing its inability to establish the “forgery”

allegations through competent evidence in trial, (see Statement of Facts, pages 29-

30 herein). Circle Ridge surreptitiously abandoned its claims of allegations of

forgery shortly after midnight, on the 2nd day of testimony, to-wit: around midnight

on October 20, 2015 at 12:32 a.m., (CR: 1237), in which it Non-suited all claims

regarding, Non-suiting all claims against Loftis and Abercrombie, individually for

violation of civil conspiracy or of the Texas Theft Liability Act, (CR: 1238) and

also any other claims against Loftis or Abercrombie individually. Thus, when it

came time to put up or shut up, concerning Circle Ridges allegations that the

Assignment of Kevin Stephens was a forged document, Circle Ridge tucked its tail

and ran from any effort to prove the veracity of those allegations through

competent evidence. Further, being unable to establish that the assignment of

Kevin Stephens’ interest in the $700K note and deed of trust to Great Northern in

December 2012 was not legitimate, (CR:1238), Circle Ridge proceeded to attempt

to cover its tracks for its unauthorized acts in conducting the foreclosure sale of

November 5, 2013 (Cr:1238), RR: 3:230:14-237:20) or attempting to enforce

collection on the $700K note (CR: 1066,1075-1077, 1078-1079) (RR: 3:99:1-

100:25), by enlisting the assistance of the trial Court. It’s assistance was in

excluding virtually all evidence tending to establish that neither it, nor its

Page 32 of 93 designated Trustee Dean Searle, failed to act with proper authority in foreclosing

on November 5, 2013 ( RR:3:145:17-146:9, 3:146:15-149:10), or filing suit to

enforce collection of the note.

Page 33 of 93 SUMMARY OF THE ARGUMENT

As stated in the statement of facts, the overarching and underlying legal

relationships in this cause arise through a note of September 11, 2012 and Deed of

Trust contemporaneously executed to secure its payment. The designated payee

and beneficiaries in both instruments are “Circle Ridge Production, Inc., and

Kevin Stephens”. Because of this designation, under law, the consent of both

parties, acting together, is necessary in any enforcement or collection efforts. All

arguments and authorities supporting those propositions are set forth in Section II

Argument and Authorities.

Because Circle Ridge had conducted a wrongful foreclosure sale, acting

without the proper authority of its remaining joint tenant Kevin Stephens, or his

successor in interest Great Northern Energy, Inc., Appellees initially attempted to

cover their omission by claiming that as assignment of Stephens’ interest in the

note and Deed of Trust to Great Northern Energy was “forged”. All evidence, both

documentary and testimony, that Kevin Stephens had assigned his interest to Great

Northern Energy before any foreclosure attempts or enforcement action by Circle

Ridge Production occurred. Notwithstanding that mountain of evidence, the court

improper allowed Kevin Stephens to testify that he gave permission to Circle

Ridge Production to foreclose on Great Northern, almost 10 to 11 months after he

Page 34 of 93 had assigned his interest away to Great Northern. That testimony was admitted and

presented to the jury although Great Northern Energy was not allowed to present

its rebuttal evidence. (See Section IV, Argument and Authorities). The testimony

excluded was not of a single witness, but rather that of 5 witnesses, including

admissions by Kevin Stephens to the effect that Great Northern had purchased

Kevin Stephens’ interest in the note long before any foreclosure was attempted.

(See Section IV, Argument and Authorities).

The court further compounded these errors by improperly overruling

Appellants counsels attempts to have the court declare a mistrial, both at the outset

during voir dire, when counsel for Kevin Stephens attempted to illegally inject

evidence into the minds of the jury pool, and at the conclusion because of the

massive evidentiary exclusions.

(See Sections 6 and 7 below Argument and Authorities )

The court further compounded its errors in excluding testimony, by ruling

against Great Northern Energy in numerous instances because it ruled that no

evidence appeared of record to support submission of issues to the jury. However,

the court had excluded that evidence which was offered on a bill. Both those

procedures are improper as outlined in Section_4__ below, Argument and

Authorities. The court further compounded it errors by improperly shifting the

burden of proof from Circle Ridge to Great Northern regarding the wrongful

Page 35 of 93 foreclosure issues insofar as they affected Appellees claims that Great Northern

was trespassing against its title. And avoiding the burden of proof on Great

Northern with respect to which party had responsibility to establish that the

foreclosure sale of November 5, 2013 was properly authorized. The court further

allow improper argument by counsel for Appellees in support of the answers to

jury issues. (All is more particularly specified in Section 7, Argument and

Authorities).

Finally, the court committed error in overruling Great Northern Energys

Motion for New Trial and Motion for Judgment NOV, insofar as it granted Circle

Ridges Trespass to Try Title judgment on the basis of a wholly insufficient legal

basis because evidence of title and third parties was introduced into the record and

negated and because Circle Ridge impleaded the parties into the cause who later

filed answers, to wit: the United States Government with an Internal Revenue

Service lien, without establishing a proper evidentiary basis to exclude that lien.

Finally, it improperly ruled that Circle Ridge had the right to collect the $700K

note proceeds from Great Northern Energy, when in fact, in law, there has never

been any proper enforcement of the note.

Page 36 of 93 ARGUMENT AND AUTHORITIES

I. STANDARDS OF REVIEW

Because different standards of review apply to the various issues presented as

errors in this brief, each standard is separately stated within the specific areas to

which it applies.

II.

September 11, 2012 Note and Deed of Trust

As previously described in the Statement of Facts, central events in this

dispute arise from the enforcement attempts and foreclosure by Circle Ridge

Production of a Promissory note in the original principal sum of $700,000.00,

together with a Deed of Trust securing same, and both made to “Circle Ridge

Production, Inc. and Kevin Stephens”, as payees in the note, (CR1107-1111)

and_(RR3:98:1-98:24) and beneficiaries in the Deed of Trust. (CR1084:1106) (RR

Ex.9). These designations, created a joint tenancy, and, in this case, requires that

both Circle Ridge Production, Inc., and Kevin Stephens must act to enforce the

note, §3.3110 (d), Tex. Bus. & Com. Code Ann. (2016), or authorize the trustee to

foreclose the deed of trust lien indeed, the Deed of Trust itself designates “Circle

Ridge Inc., and Kevin Stephens” as “Beneficiary”.(CR 1085)(RR Ex 9, page 1.)

Further, in article 3, “Defaults & Remedies”, the Deed of Trust provides at Page 37 of 93 paragraph 3.2 “remedies”…”Beneficiary may…do any one or more of the

following to the extent permitted by applicable law: (c)…Foreclosure…request the

trustee to proceed with foreclosure. (CR 1092, Ex 9, (Everbank v. Seedergy

Ventures, Inc., 2016 Tex.App. LEXIS 7319 (Tex. App.—Houston [14th Dist.]

2016), But, in this case, no such joint action occurred, nor was it ever possible at

any time after January 1, 2013, because in December, 2012, Kevin Stephens

assigned all of his right, title and interest in the note and liens to Great Northern

Energy, (RR3:98:1-98:24); and Great Northern Energy paid the consideration of

approximately $60,000.000, to Kevin Stephens’ family members, (RR3:227:8-

230:13), as directed by Kevin Stephens, (RR3:227:8-230:13). There is enormous

significance in the impact of the word “and” in this designation.

Article 3 of the Uniform Commercial Code, Texas Business and Commerce

Code adaption of the UCC, controls enforcement of rights arising pursuant to

promissory notes and negotiable instruments. The relevant statutory provision is

§3.110, “Identification of the Person to Who Instrument is Payable” Tex. Bus. &

Com. Code Ann.§3.3110 (West 2015). Specifically, subsection (d) of §3.3110

provides in relevant part, “…(i)f an instrument is payable to two or more persons

not alternatively, it is payable to all of them and may be negotiated, discharged,

or enforced only by all of them.” Id. at §3.3110(d). The Comment 4 attached to

(and part of) this Code section discusses subsection (d) with this explanation:

Page 38 of 93 “…If an instrument is payable to X and Y, neither X nor Y acting alone can be the holder of the instrument. The instrument is ‘payable to an identified person.’ The ‘identified person’ is X and Y acting jointly. Section 3-109(b) and 1-102(5)(a). Thus,…X or Y acting alone, cannot be the holder or person entitled to enforce or negotiate the instrument because either, acting alone, cannot be the holder or the person entitled to enforce, or negotiate the instrument because neither, acting alone, is the identified person stated in the instrument.”

Thus, Circle Ridge, acting alone does not have the power to enforce or

foreclose on the liens securing payment thereof. See Johnson v. Cox, 630 S.W.2d

492 (Tex.App.-Corpus Christi, 1982, writ ref’d n.r.e.).

Section 3.201 of the Texas UCC (Tex. Bus. & Com. Code Ann. §3.201

(West 2015), governs “Negotiation”. Although the specific statutory language of

that section does not squarely address the issue presented here, a statement in the

“Commentary” following that section does, see Comment 5 to §3.203, and

Commentary, “No Partial Negotiation or Transfer” and “Distinction between

right to enforce instrument and ownership of instrument, “Anderson, Bartlett &

East’s Texas Uniform Commercial Code Annotated(2007 Edition-West

Publishing)i.d. A paragraph of the Commentary section is entitled, “Effect of

attempted partial negotiation” states:

“Negotiation is all or nothing. Subsection 3.203(d) and Comment 5 make it clear that the cause of action on an instrument cannot be split. An indorsement and delivery purporting to transfer less than the entire Instrument cannot be a negotiation. It may, however, be a partial Assignment as recognized in the last sentence of §3.203(d). …”

Page 39 of 93 Further, Section 3.203. “Transfer of Instrument” (Tex. Bus. & Com. Code

Ann.§3.203 (West 2015), specifies in its subsection (b), “transfer of an instrument,

whether or not the transfer is a negotiation, vests in the transferee any right of the

transferor to enforce the instrument, including any right as a holder in due course.

“… Comment 5 to §3.203, provides in relevant part, “…(t)he cause of action to enforce an instrument cannot be split. Any indorsement which purports to convey to any party less than the entire amount of the instrument is not effective for negotiation. …An indorsement purporting to convey less than the entire instrument does, however, operate as a partial assignment of the cause of action….. A partial assignee of an instrument has rights only to the extent the applicable law give rights, either at law or in equity, to a partial assignee.”

Among the most recent declaration of those rights which may be assigned was set

forth in Federal Financial Co. v. Delgado, 1 S.W.3d 181, 185, where the Court

stated, “a transferee of an instrument receives whatever rights his transferor has.”

In this case, the relevant language in the transfer instrument from Stephens to GNE

states:

“IT IS HEREBY AGREED AND UNDERSTOOD, FOR AND IN CONSIDERATION OF ONE DOLLAR AND OTHER GOOD AND VALUABLE CONSIDERATION, IN HAND PAID BY THE PARTIES HERETO AND ACKNOWLEDGE BY THEM AS SUFFICIENT, that Kevin Stephens, Individually and as any or no portion of ownership in Circle Ridge Production, Inc., (hereinafter called KS) does hereby sell, transfer, bargain, let, provide possession and domain over and otherwise gives unto Great Northern Energy, Inc. (hereinafter GNE) all of KS right, title and interest in and to that certain debt instrument wherein KS is lender unto GNE under and note, and according to the herein state terms and conditions: to wit: KS does hereby, effective December 1st, 2013, sell and grant his undivided portion, whatever such portion may be, but not less than 50% of, that certain note due from GNE unto KS and Circle Ridge

Page 40 of 93 Production, Inc., jointly, and that certain Deed of Trust attached thereto, and subject in and to the OBENCO leases and wells, as shown ….”

…Kevin Stephens is assigning this debt in whole and as part of the original contract and debt instrument and …Kevin Stephen transfers (sic) his rights, in any form or manner, under those agreement…”(RR Ex GN 18,4:310-11- 311:22,4:325:20-25,3:210:3-213:25)

Further, the identified beneficiaries or beneficiary of the Deed of Trust as

stated on its face is Circle Production and Kevin Stephens. Texas is jurisdiction

in which the lien follows the note. In other words, enforcement of the lien must

comply with the terms of the note. There can be no greater or separate right for

enforcement of the lien beyond the authority of the note it secures. (Case

citation). Campbell v. Mortgage Electric Registrations System, Inc., 2012 Tex.

App. Lexis 4030, 2012 Westlaw 1839357 *4 (Tex. App.-Austin May 18, 2012,

Petition denied), Leavings v. Mills, 175 S.W. 3d 301, 310 (Tex. App.-Houston

[1st District] 2004, no Petition).

III.

IMPROPER VOIR DIRE

During the voir dire, examination by Josh Manass, Kevin Stephens’

attorney, over Defendants objections, (RR 2:127:1-128:1), and in overruling

Defendants request for mistrial to: (RR 2:128: 2-9), the Court allowed Manass to

inject wholly improper evidentiary matters into the trial, attempting to use

venireman as “experts”, to bolster his contentions by using voir dire with jurors

Page 41 of 93 having specialties such as being an attorney, or having oil field experience or

having psychological experience, to inject their opinions regarding the specialty

matters related to their occupations, into consideration before the whole panel, all

being in complete violation of the requirement for the proper presentation of expert

testimony pursuant to Texas Rules of Evidence (“T.R.E.”), Rules 701-706 T.R.E.

Specifically, Manass attempted to use the venire person Berry to bolster his case

concerning the requirements for notarization, and (RR 2:120: 12-124:12), and the

venire person Williams, over Defendants objections, (RR 2:121: 22-122:14) and

venire person Williams, concerning his knowledge of wells in the Waskom area

and the quality of wells concerning their productive capability of wells. (RR 2:124:

13-2:126-24, and specifically: asking about the quality of wells as being “only

stripper wells” (RR 2:128 17-129:24), again, over Defendants attorneys objection,

Manass also conducted improper voir dire with venire person Williams concerning

psychological tendencies of persons, aimed at discrediting Joe Loftis (RR 2:128

10-129-23). As stated, these questions were submitted with an idea to planting

preconceived opinions of the Defendants as can be further seen below.

It, impacted one of the jurors who was selected and deliberated. The test for the

Courts rulings on Defendants objections to voir dire is an abuse of discretion.

Cortez v. HCCI-SAN ANTONIO INC., 159 S.W. 3d, 87(Tex. 2005). An abuse of

discretion occurs when a trial court allows questioning in violation of law.

Page 42 of 93 (Travler’s Ins. Co. v Deaton, 456 S.W. 2d 544, 545 of Tex. Civ. App. Amarillo

1970, writ ref’d n.r.e.); A.J. Miller Trucking Co. v. Wood, 474 S.W. 2d, (Tex. App.

Tyler 1971, writ ref’d n.r.e).

IV.

EXCLUSION OF PRACTICALLY ALL OF

APPELLANTS EVIDENCE, BOTH TESTIMONY

AND DOCUMENTARY

As previously presented in (Section II), “September 11, 2012 Note and

Deed of Trust”, the proper resolution of issues in this case revolves around the

determination of whether Plaintiff Circle Ridge can properly prosecute an action

for enforcement of its right under the promissory $700K note of September 11,

2012 and foreclose the Deed of Trust lien given as security therefore when the

note is made payable to “Circle Ridge Production, Inc. and Kevin Stephens”

and the same parties are identically specified as “Beneficiary”

in the Deed of Trust.. (CR1085-1111)(RR3:99:1-100:25), (Ex.8)) In trial, Circle

Ridge attempted to convince the jury that is could proceed in its collection and

enforcement efforts, acting alone because it had been authorized to do so by

Kevin Stephens in behalf of Kevin Stephens and Circle Ridge Production, Inc.

Bill Briscoe testified Kevin Stephens gave him oral permission to foreclose in

November, 2013, (RR 3:104: 17-109:24). Kevin Stephens testified that he gave Page 43 of 93 Bill Briscoe permission to foreclose on his interest in the $700K note and Deed

of Trust, (RR3:200:19-202:19), Circle Ridge Production argued that fact to the

Court (RR 5:14”23-18:3) (RR 3:200:19-202:19). However, the Court wholly and

completely to refused to allow Defendants to offer testimony through either the

cross examination of Kevin Stephens (RR3:210:3-213:25), the direct testimony

of Joe Loftis (RR4:38:6-4:39:11), the direct testimony of Michael Stephens

(RR4:292:17-305:11), that Kevin Stephens had assigned his interest in the

promissory note, as permitted by Section 3:201, (TEX. BUS. & COM. CODE

ANN.) (LEXIS NEXIS 2016 ).

However, specific testimony as set forth below was offered by Joe Loftis,

of the negotiation, and execution and delivery of the note and Deed of Trust lien

assignment by Kevin Stephens (RR4:38:6-4:39:11,4:141:127-151:4), as well as

the payment of the sum of $10,000 to Michael Stephens (RR4:141:17-151:4) and

$50,000 Kevin Stephens father Bobby Stephens (RR4:141:17-151:4) at Kevin

Stephens direction, (Michael Stephens testimony)(RR4:303:13-305:11). That

testimony was supported by both Joe Loftis and Kevin Stephens, and the

admission of Kevin Stephens under oath in cross examination under Defendants

bill of exceptions, that he had executed contracts assigning such note and its

attached liens to Circle Ridge in December 2012, (RR3:210:3-213:25). Further,

Michael Stephens testified that he had personally informed Bill Briscoe,

Page 44 of 93 President of Circle Ridge Production, Inc., all of the Stephens family’s

assignments to Great Northern,(RR4:298:20-299:1), relevant and material to the

jury determination of the issues presented to it, namely: whether the foreclosure

of November 5, 2013 was properly conducted. It would not be properly

conducted if the trustee conducting that sale did not have proper authority to do

so. As set forth in Sec. II, page 35-39, above, it is axiomatic that Circle Ridge

acting alone, did not have the authority to enforce the note. (Subsection D),

(Section 3.3110, Tex. Bus. & Com. Code.) (West 2015).

The court erred in its refusal to allow the testimony of Lofts, that Kevin

Stephens sold and assigned his interest in the underlying note and liens to Circle

Ridge as (RR4:38:6-39:11-Bill of Exceptions) (and through Exhibits 16, 17, 18,

20, and 21) the testimony of Kevin Stephens acknowledging that he signed such

documents (and sold his interest) (RR3:210:3-213:25, and Exhibits 16,17,and 18)

the testimony of his brother Michael Stephens that such transaction occurred, and

the testimony of Kayla Marrs, impeaching Kevin Stephens insofar as he denied

executing one of the contracts (Kayla Marrs being the notary before whom he

appeared to acknowledge his execution) (RR3:216:9-219:5). Four separate

witnesses testified that Kevin Stephens assigned his rights in and to the $700K

note and its underlying liens to Great Northern Energy, yet the Court wholly

excluded, blocked and prevented the jury from having any knowledge

Page 45 of 93 whatsoever of such occurrence. The reason initially given by the Court for

excluding such evidence was that the assignment instrument offered by

Appellants, was excluded by the statute of frauds objections of Circle Ridge;

however, when Defendants counsel pointed out on the morning of the 2nd day of

trial, that statute of frauds did not apply because it did not apply to an assignment

of mortgage, and the contract was a performed contract, nevertheless, the Court

persisted in excluding Defendants attempts to offer defensive testimony as just

outlined, saying that “I just don’t think you can block a foreclosure by buying

1% of a note.” (RR4:311:24-322:17) That comment by the Court indicates three

areas of bias or prejudice and prejudgment of this case. First, it is not reflective

of any of the testimony of the case, because there is no evidence that anyone

bought or attempted to buy only 1% of a note to block a foreclosure. Rather, the

evidence in this case (albeit offered through the Bill of Exception) conclusively

establishes that the transaction to purchase Kevin Stephens interest occurred

December 2012, almost a year before the foreclosure.(RR3:210:3-213:25). There

was no discussion of foreclosure at the time the Defendant Great Northern

Energy purchased the note. Second, the Courts application of that ruling is

completely contrary to the applicable standards of both the uniform commercial

code, of the express language of the Deed of Trust, and of joint tenancy rules

which require the action of both parties who then own the note at the time of the

Page 46 of 93 foreclosure to proceed with enforcement. Through its exclusion of evidence, the

Court left the jury with the impression that Kevin Stephens owned an interest in

the note and had the right to grant his consent in November 2013, when he had

parted with his ownership interest in and to the note in December 2012. Finally,

the Court substitutes its preference for outcome i.e. that Appellants cannot

contest foreclosure actions without giving the jury the opportunity to fully weigh

all relevant evidence.

Insofar as the Court refused to admit Appellants Exhibits #16 (the Rojo

Burro contract wherein Kevin Stephens agrees to assign interest in and to the

note and liens to Great Northern), #17 (additional Rojo Burro contract

acknowledging before Kayla Marrs), #18 (note and lien assignment from Kevin

Stephens to Great Northern (#GN12, exhibit Defendant #12) as offered,

RR3:196:2-199:1, 3:200-19-209:18,3:220:1-223:1, GN Ex. 16 & 18, it prevented

Appellants from proving their defenses, rebutting Appellees testimony regarding

its authority to foreclose, and from proving their affirmative claims.

(RR:4:239:5-241:8). Clearly all of this testimony is relevant and material, as the

Texas Supreme Court indicated in its ruling in Anderson v. Gilbert, 897 S.W.2d,

783, 784-785, per curiam, overruling the 5th Court of Appeals in Dallas for its

failure to properly evaluate claims as to whether only one of the joint tenants in a

note in which …”Gilbert and Gideon” were joint payees of the note and joint

Page 47 of 93 beneficiaries of the Deed of Trust id. at 784 had properly acted through only one

of the joint tenants in causing a foreclosure sale to be executed and sue for a

deficiency. id.at 785. The Texas Supreme Court reversed the Dallas Court of

Appeals for failing to evaluate whether only one joint tenant (in an “and” note

and Deed of Trust situation) had received a proper assignment of the interest

from the remaining joint tenant of their rights under the note before conducting

the foreclosure or engaging in enforcement. id at 785. It ordered the Appellate

Court to consider and evaluate the claims of a note payee that no proper

assignment of the interest of Gideon or his widow had occurred before Gilbert

acted alone to…cause a foreclosure sale to be executed and sue Anderson for

deficiency. i.d. at 785. This analysis is precisely in point in this case. If a Court

of Appeals must evaluate whether one joint tenant has properly assignment

interest to a second joint tenant, before the second commences foreclosure or

note enforcement actions, clearly the trial court must allow the admission of such

evidence. Further, these facts were identified in the testimony of Nate Moran

(RR:220:9-222:1), documentary evidence of the contract by Kevin Stephens to

assign his interest in the note and liens, the actual assignment,(Exhibits GN 16,

17, 18, & RR 4:310:11-311:22, 4:325:225), and the testimony of Nate Moran,

that he had calculated payments to Circle Ridge Productions only, in calculating

the amounts due on the note (RR: 4:239:5-241:8). Thus, the only party with

Page 48 of 93 whom Mr. Moran dealt in representing Great Northern, was Dean Searle, who

acted in behalf of Circle Ridge Production, solely.

Similarly, the Court erred in excluding the testimony of Michael Stephens,

that the Rojo Burro transaction was a part of the sale and assignment of the

Kevin Stephens interest in the $700K note to Great Northern (RR:4:248:13-

250:251).

The Court systematically excluded either oral testimony and/or documentary

evidence offered through oral testimony, relating to any attempt by Great Northern

to establish before the jury that Kevin Stephens had assigned his interest in the

note and Deed of Trust of September 11, 2012, to Great Northern Energy before

the foreclosure on November 5, 2013. Further, it excluded evidence that the

President of Circle Ridge Production, Bill Briscoe, had notice of that assignment

before he attempted any foreclosure as did his attorney, Dean Searle, who was the

trustee conducting the foreclosure sale on November 5, 2013.(RR3:145:17-146:9)

The Court excluded the testimony of 5 separate witnesses regarding events

connected to the assignment, or collection or enforcement of the $700K note, as set

forth below. No testimony or exhibits relating to the assignment from Kevin

Stephens to Great Northern were admitted before the jury. The Court wholly

excluded and prohibited the jury from knowledge of any such relevant and material

evidence. However, all of such testimony was introduced in Bills of Exception by

Page 49 of 93 Appellants. Simply stated, the Court refused to allow Appellants to introduce

material and relevant evidence supporting their claims and defenses before the

jury, on a systematic and intentional basis. The following specific testimony which

Defendants attempted to offer through the individuals identified, was excluded and

appears on a Bill as hereafter indicated:

a. Errors in excluding Kevin Stephens’ testimony and exhibits:

b. Errors in excluding testimony and exhibits offered through Bill of

Exceptions testimony of Kevin Stephens:

The Court allowed Bill Briscoe to testify that he obtained “oral” permission to

foreclose his lien from Kevin Stephens, (RR 3:105: 17-109:24). He further claimed

that after the foreclosure sale he purchased Kevin Stephens’ interest in the note,

(CRP Ex 11, assignment from Kevin Stephens to Circle Ridge Production dated

December 11, 2013) (RR 3:112:10-113:24, CRP Ex 11). Bill Briscoe did

acknowledge that all documents including the promissory note and Deed of Trust

were made jointly payable to Circle Production and Kevin Stephens and that both

Circle Ridge Production and Kevin Stephens were the designated beneficiaries of

the Deed of Trust.(RR3:134:9-136:15). He further acknowledged that the

foreclosure demand (CRP Ex 15)(RR3:136:15-138:22), states it is only in behalf of

Circle Ridge Production interest in the note, (RR 3:138:20-140:10). Briscoe further

acknowledged that the demand letter of July 2013 and the October demand letter of

Page 50 of 93 foreclosure (CRP Ex 14), were in behalf of Circle Ridge Production (RR 3:143:10-

145:14). Briscoe further acknowledged that Kevin Stephens had told him he had

participated with Great Northern in the Rangeford Resources transaction, (RR

3:145:17-146:9). However, the Court refused to allow Great Northerns attorney to

cross examine Mr. Briscoe when he attempted to specifically obtain Mr. Briscoe’s

admission that it had prior notice before the foreclosure, (RR 3:146:15-149:10). It

further excluded evidence which Appellants counsel attempted to offer that Circle

Ridge Production did not own Kevin Stephens interest on November 5, 2013,

when it foreclosed, (RR 3:151:22-153:6). It further refused to allow the

introduction of correspondence with Nate Moran, (CRP Ex 20), establishing the

amount of $171, 000 as a payoff amount on Circle Ridges portion of the note in

correspondence between Dean Searle and Great Northern, a payoff sheet from

Dean Searle, acting as attorney for Circle Ridge (RR 3:158:4-162:9).

Notwithstanding these refusals to permit cross-examination by Great Northerns’

counsel, it allowed Kevin Stephens’ attorney to examine and introduce into

evidence through Bill Briscoe, Bill Briscoe’s claim that he had no notice that

Kevin Stephens had assigned his interest in the $700K note before he received his

assignment of Kevin Stephens’ interest on December 13, 2013.(RR 3:146:15-

149:10).

The Court allowed testimony from Kevin Stephens that he gave Bill Briscoe

Page 51 of 93 permission to foreclose his interest on the $700K note and Deed of Trust (RR

3:201:8-13, 200:19-202:19). Inexplicably, it refused to allow Great Northerns

attorney to cross-examine Kevin Stephens to dispute the fact that he had any

ownership interest in either the note or the Deed of Trust lien at the time he sold

his interest to Briscoe in December 2013.(RR3:210:3-213:25, 3:220:1-223:13)or

(RR 3:200:19-201:13, 3:203 25-209:18). Instead, the Court only allowed Great

Northern Energy’s attorney to present its cross-examination of Kevin Stephens in a

Bill of Exceptions: (RR 3:210:3-252:17 and 4:31:22). During the course of Kevin

Stephens’s testimony, taken during the Bill of Exceptions by Appellants attorney,

Kevin Stephens testified among other facts as follows:

1. That he admitted he signed the document introduced as GN Ex 16,

around December 1, 2012 (RR 3:210:3-213-:25), in which he assigned his interest

in the note and Deed of Trust and Lien (GN Ex 18)(RR3:210:3-213:25, 4:310:11-

311:22,325:20-25) accompanying the note to Great Northern in order to participate

proposed transaction wherein the “OBENCO” package would be included in the

Rangeford Resources transaction. He denied that he had signed a similar contract

(GN Ex 17) Rojo Burro to Great Northern Energy contract before an independent

notary, Kayla Marrs, around October 24, 2012, (RR3:215:4-216:25), and

equivocating as to whether his signature appeared on the document (RR 3:216:9-

219:25). Although he denied the validity or genuineness of his signature on GN 17

Page 52 of 93 before Kayla Marrs, an independent notary, he did acknowledge signing the

agreements which were (GN Ex 16 & 18), the original Rojo Burro contract he

admitted signing and the actual assignment of all of his right title and interest,

including (GN Ex 18), which is a purchase of note and financial instrument Kevin

Stephens into Great Northern Energy, Inc., “OBENCO” properties. Kevin

Stephens acknowledged executing that document on that date. Kevin Stephens

further acknowledged that Great Northern tendered the sum of $10,000 to his

brother Michael Stephens and $50,000 to his dad Bobby Stephens in satisfaction of

its obligations under Ex 16 and 18 in December, 2012 (RR 3:227:8-230-13).

B. The Court erred in refusing to allow Joe Loftis, President of Great Northern

Energy, Inc., to testify concerning Kevin Stephens assignments of his interests.

The Court erred in excluding the testimony of Joe Loftis, President of Great

Northern Energy, Inc., (offered on a Bill of Exceptions) (RR:4:141:17-151:4), that

Great Northern entered into a contract with Kevin Stephens and Michael Stephens

for the acquisition of Kevin Stephens interests in the $700K promissory note and

Deed of Trust, through (GN Ex 16, 17,) (RR4:141:17:144:11). It excluded

testimony explaining Kevin Stephens’ election to take $62,500 initially and

$62,500 on one year after December 1, 2012, to wit: December 1, 2013 (RR

4:144:2-17.) Further, Loftis testified on the Bill of Exceptions that Kevin Stephens

assigned the document to Great Northern in GN Ex 18(RR: 144:18-145:24). He

Page 53 of 93 further testified that the $62,500 was paid in the form of $10,000 to Michael

Stephens, $50,000 to Kevin Stephens’ father, Bobby Stephens, (RR 150:15). Loftis

further testified on the Bill of Exception that Bill Briscoe knew of the transactions

between Great Northern and Kevin Stephens by virtue of having come to Great

Northerns office to discuss those transactions (RR 4:150:19-151:5).

C. The Court erred in exclusion of Kayla Marrs testimonies as offered on the

Bill of Exceptions. Kayla Marrs, is a notary public who acknowledged GN Ex17

(RR 4:206 :22-207-15). She verified that her acknowledgement on GN Ex 17 was

valid and impeached Kevin Stephens testimony that he had executed and

acknowledged the same, as he did that before her and in her presence (RR

4:207:16-209:5).

D. The Court erred in excluding the testimony of Nathaniel Moran, as offered on

his Bill of Exceptions, (RR 4:239:5-241:8) to the effect that the only party against

whom Dean Searle represented he was attempting to enforce the $700K note was

in behalf Circle Ridge Production, and not Circle Ridge Productions and Kevin

Stephens, in the summer and fall of 2013. The Court further erred in failing to

admit GN Ex 12, tendered with that testimony and Ex D12(RR:4:220:9-221:1) and

Ex D15(RR:4:218:14-220:8) regarding payment by Great Northern on the $700K

note. (GN Ex 15, letter of October 11 from Dean Searle, Demand, (RR4:218:14-

220:8).

Page 54 of 93 Errors excluding Michael Stephens’ testimony:

E. The Court erred in refusing to admit GN Ex 15 offered with the testimony of

Michael Stephens explaining the substance of the Great Northern transaction

which included assignment of all interests in the $700K note formally owned by

Kevin Stephens (RR4: 296:1-298:4). The Court erred in excluding Michael

Stephens testimony that he personally delivered notice to Mr. Briscoe of the

Stephens families decision to participate with Great Northern in the Rangeford

Resources transaction and to assign its interest in the $700K note to Great Northern

together with all liens, in the fall of 2012 (RR 4: 298:5-299:1): The court erred in

excluding Michael Stephens identification of GN Ex 16 & 18 (the assignment) and

explaining the terms of payment and the payment of same: for $62,500 (RR4:299

9-302:3) and expressing (RR: 4:300:14-302:12). The Court erred in excluding the

testimony Michael Stephens acknowledging the receipt of the checks for $10,000

and $50,000 in December of 2012 in satisfaction of the obligations established in

the Rojo Burro contracts GN Ex16, 17 & 18 (RR 4:303:13-305:11). Further, the

Court erred in excluding the testimony of Michael Stephens, as offered in the Bill

of Exceptions regarding the financial and business relationships between Kevin

Stephens and Chad Hamilton (RR4:305:12-307:13). The Court erred in excluding

the testimony offered in the Bill of Exceptions of Michael Stephens regarding

Kevin Stephens role in the disappearance of equipment sold to Great Northern for

Page 55 of 93 use on the leases and that is(RR:4:307:25-309:2)

Standard of Review – Evidence Exclusion

Each and all of the evidentiary exclusions, standards for review and

restrictions on Appellants counsel’s ability to conduct cross-examination or present

their case, constitutes the greatest restrictions on the ability of parties to present

Appellants’ case. Approximately 80% of the evidentiary offers by Appellants were

excluded. While certain evidentiary exclusions or rulings may not be reversible

error, clearly these were. The improper exclusion of competent and relevant

evidence to material injury of the complaining party should result in reversal. See:

Anderson v. Gilbert, supra, Modine Mfg.Co. the North E. Ind. School District, 503

S.W. 2d, 833(Tex.Civ.App-Beaumont 1973, writ ref’d n.r.e.). Appellants recognize

that the standard of valuation of whether or not the trial court committed reversible

error is an abuse of discretion, by the trial Court. However, the Texas Supreme

Court has said that the harmfulness of evidentiary rulings is determined by

examining the entire record to see whether a judgment was controlled by the

testimony in question. Mancorp, Inc. v. Culpepper, 802 S.W. 2d, 226, 230 (Tex.

1990). Jamail v. Anchor Mort. Services, Inc., 809 S.W. 2d 221, 223(Tex.1991),

reh’g of writ of error overruled, June 19, 1991). However, no specific test for

Page 56 of 93 determining whether an improper exclusion of evidence was reasonably calculated

to cause and probably did cause the rendition of an improper judgment: McCraw v.

Maris, 828, S.W. 2d, 756, 758(Tex.1992). In fact, in response to Appellants

attorney’s objections regarding the exclusion of Appellants evidence, the Court

acknowledged understanding Appellants attorney’s objections, but responded, that

he did not believe that the Appellant could “block” a foreclosure by buying 1% of

the note. (RR4:316:25-317:8). Clearly, this comment indicates the Judge’s bias,

prejudice or pre-judgment of this case. Further, in the issues submitted to the jury

the specific inquiry into question number one was “requesting whether “Great

Northern Energy established a defect in the foreclosure sale of November 5, 2013.”

A defect would be a foreclosure sale (CR 1254) would be one that was conducted

without proper authorization. However, in all of the evidence recited above in

items the Court blocked Great Northerns attempts to introduce any evidence

substantiating its claims that there was never any proper authority to conduct such

sale in behalf of only Circle Ridge Production by Dean Searle. Instead, the

evidence before the jury was that “Kevin Stephens had authorized Bill Briscoe to

act for Kevin Stephens’ interest in the foreclosure sale in November 2013.”

(RR:3:200:19-202:19). Clearly the absence of this evidence affected the jury’s

decisions, and the Courts entry of judgment that Great Northern had not “proved”

its wrongful foreclosure allegations. This testimony was should be controlling on a

Page 57 of 93 material issue dispositive in this case.

COURT ERROR IN EITHER GRANTING INSTRUCTED VERDICTS AGAINST GNE AND/OR REFUSING TO SUBMIT THE FOLLOWING ISSUES TO THE JURY FOR DECISION.

1. Standard of review: insofar as Appellants present issues relating to the

trial courts granting Plaintiffs Motions for Directed Verdict or refusing to submit

Appellants issues, to the jury and granting an instructed verdict in favor of

Plaintiffs, the exclusion of the evidence as argued in Section IV, pages 43-58

above, becomes relevant and important. The evaluation standard for this Court in

determining the propriety of the trial court’s action in granting Motions for

Directed Verdict or removing matters from consideration from the jury to grant a

Directed Verdict, is whether the party opposing the granting of the Directed

Verdict or removal of issues from the jury has presented any evidence of probative

worth, raising a material fact issue and establishing a claim or defense, while

viewing such evidence in the light most favorable to, in the case Appellants. Ojeda

v. Walmart Stores, 956 S.W. 2d 704, 706-707 (Tex. App.-San Antonio 1997, pet.

denied). Further, insofar as the Appellant present issues regarding the trial Courts

exclusion of oral and documentary evidence, which would establish Appellants

Page 58 of 93 defenses and claims against Plaintiff Circle Ridge Production and Third Party

Defendant Kevin Stephens, Appellants submit that the standard is whether the

evidence excluded was calculated to and probably did cause the rendition of an

improper judgment as the Supreme Court has announced is prohibited in McCraw

v. Maris, 828, S.W. 2d, 756, 758(Tex.1992), supra, 758, and Anderson v. Gilbert,

supra, at 784-85

In evaluating whether Appellants submitted sufficient evidence of probative

worth, raising a material fact issue and establishing a claim or defense, the

evidence described in Section IV. 43-58 above, must be viewed in the light most

favorable to Appellants; however, the Court excluded that evidence, but it was

before the Court through the Bills of Exception recited previously and offered by

Appellants.

The prejudicial and apparently intentional nature and extent of the Courts

actions in excluding the evidence recited in Section IV 43-58 above, is apparent.

Simply stated, the Court refused to allow evidence in support of Appellees claims

and defenses as indicated below and then rendered its judgment because contrary

evidence did not appear on the record. Since these issues were never presented to

the jury, it is essentially immaterial whether the unsupporting evidentiary matters

were formally admitted into evidence.

The following issues are those which the Court erred in connection with the

Page 59 of 93 entry of a Directed Verdict or overruling Appellants claims, to wit:

5-1. The Court erred in granting Circle Ridges’ motion that Great Northern breached the $700K promissory note and owed the sum of $637,114.15 to Circle Ridge Production as liability on such note.

Many of the statutes and case authorities relating to this issue have been set

forth above in Section II of this Argument of Authorities portion. Those arguments

are incorporated into this section by reference as though set forth verbatim herein.

The central issue is determining liability on the note, is whether any liability

on the note at this point can be properly enforced. Extensive testimony was

offered to the effect that Bill Briscoe attempted to act alone. All demands (RR

4:222:18-223:6) were made by Searle in behalf of only the Circle Ridge portion of

the note. Nate Moran testified in the Bill of Exceptions that all his negotiations

with Dean Searle were conducted with Searle acting only in behalf of Circle Ridge

Production (RR4:213:9-218:13). Joe Loftis, Michael Stephens testified, and even

Kevin Stephens acknowledged through testimony offered in Bills of Exception that

in December, 2012, Kevin Stephens interest in the note was assigned to Great

Northern Energy. This lawsuit, including any actions to enforce liability on the

note by Circle Ridge Production was not filed until June 18, 2014 (CR:10-45).

Clearly, the assignment of Kevin Stephens’s interest in and to the 700K note to

Great Northern, occurred prior to June 18, 2014. As stated above, this evidence

Page 60 of 93 must be viewed in the light most favorable to Appellants. As specified in Leavings

v. Mills, supra, (310). Texas is a state were “enforcement follows the note”. It is

elementary that Kevin Stephens had the right to assign his interest in the note and

liens to Great Northern. (§3.203(d), comment 5, Tex. Bus. And Comm. Code

recognizing the effectiveness of partial assignments in note ownership. The Court

completely refused to recognize or honor Great Northern’s ownership interest in

the note, following Kevin Stephen’s assignment, or its failure to authorize Bill

Briscoe, President of Circle Ridge, to proceed with enforcement of the note. Those

admissions are errors by the Court. As the Texas Supreme Court stated the

considerations which were necessary in evaluating whether proper authority to

proceed in an, “x and y” foreclosure of deed of trust, and note enforcement,

existed, it should include factual evaluation of whether only one joint tenant acting

alone had received a proper assignment of rights from a successor interest owner.

Here there is no evidence of a proper assignment. Anderson v Gilbert, supra, 784-

785. If an instrument is payable to two or more persons and does not provide that it

is payable to them in alternative, it can only be enforced by all payees, and all co-

payees should be joined in the action. Page Airways, Inc., v. the Associated Radio

Service Co., 545 184, 189-190(Tex. Civ. App.-San Antonio, 1976, writ ref’d.

n.r.e.) Further, the fact that the interest of Kevin Stephens was assigned, to GNE

maybe be established by proving the transaction through which it acquired the

Page 61 of 93 interest of Stephens, Sections 3.201(c), comment C, Tex. Bus. & Com. Code. See

also Lawson v. Finance America Private Brands, 537 S.W.2d 483, 485(Tex. Civ.

App.-El Paso, 1976, no writ). Once the transactions established however, the

transferee acquires the same rights as the transferor had under the instrument (Tex.

Bus. & Com .Code Section 3.201(a)). Clearly, evidence exists that Great Northern

owned Kevin Stephens’ interest. The Court’s refusal to acknowledge this evidence

much less admit it, is construed, and constitutes a reversible error, because the

Court failed to consider the ocean of evidence supporting Appellants position. In

fact, there is not one scintilla of evidence in the trial that indicates or evidences the

fact that Briscoe acted with permission of the proper parties. Evidence of the fact

that he had no evidence or basis to establish that Kevin Stephens owned any

interest in the note or that he acted in his behalf. Clearly he did not act in behalf of

Great Northern Energy with respect to the subsequently acquire interest in the

September 11, 2012 note from Kevin Stephens. In short, the proper parties

Plaintiff, have never prosecuted this note, and no liability can exist,

notwithstanding the Court’s attempts to enter its Directed Judgment at the

conclusion of the trial, in the Final Judgment submitted.

Further, insofar as Appellees may argue that Appellants had stipulated to

any amount owed under terms of the note, any and all of such stipulations are

conditional, and apply only in the event that “Circle Ridge Production owns 100%

Page 62 of 93 of the note and GNE does not own undivided ½ interest as assignee of Kevin

Stephens. There is abundance evidence in the record to suggest the assignment of

interest from Kevin Stephens to GNE, it has been excluded by the Court, and is

contrary to the presumption that it should have been presented to the jury. Clearly

the granting of these Directed Verdicts was an error by the Court.

V-2. The Court erred in granting Kevin Stephens take nothing Judgment with

respect to Great Northern’s Breach of Contract claims against him.

The elements of a Breach of Contract claim are as follows:

1. there is a valid, enforceable contract;

2. Plaintiff is the proper party to sue for Breach of Contract;

3. Plaintiff tendered performance of its contractual obligations;

4. the Defendant breach the contract;

5. the Defendant breach caused Plaintiff injury.

The elements of a contract are specified in the following cases:

Foley v. Daniel, 346, S.W.3d, 687,690(Tex. App. –El Paso 2009, no pet.)(elements 1, 3-5), Marquis Acquisitions, Inc, v Steadfast Ins., 409 S.W. 3d, 808, 813-14(Tex. App. –Dallas 2013, no pet.)(elements 1, 3-5), Zuniga v. Wooster Ladder Co., 119 S.W.3d, 856, 862(Tex. App.-San Antonio 2003, no pet.) (element 2), Perry v. Breland, 16 S. W. 3d, 182, 187, (Tex. App. –

Page 63 of 93 Eastland, 2002 pet. denied)(element 2). The testimony of Joe Loftis offered on his Bill of Exceptions9/8/2016 5:29

PM:75:4-76:22,4:39:13-46:4, and Michael Stephens, (RR4:305:12-309:2,

establishes that there was a contract or agreement between Kevin Stephens and

Great Northern to furnish pipe and equipment, and that some of that equipment

was either neither furnished or removed, after Great Northern paid for it.

(RR:4:305:12-309:2). Further, Kevin Stephens acknowledged that he had a

contractual agreement to furnish pipe and supplies to Great Northern

(RR:4:305:12-309:2). This evidence establishes the existence of an agreement.

Further, the testimony of Joe Loftis that the equipment was removed, and

(RR:4:29:6-31:22), and that of Michael Stephens that he felt entitled to remove the

equipment (RR:4:39:13-46:4, establishes the basis for submission of a Breach of

Contract issued. Further, the testimony as to the amount of money paid establishes

the loss (RR:4:39:13-46:4). Thus, Great Northern has satisfied its requirements to

present testimony sufficient to meet his burden of proof for submission of the

Breach of Contract issued to the jury; however, the Court refused to present this

matter to the jury, ruling that no evidence existed. Of course no evidence existed,

the Court prevented the evidence from being introduced. The presumption exist

that this testimony, viewed most favorably in Great Northern Energy’s perspective,

should have been presented. The Court erred in failing to do so and Great Northern

is entitled to submit these issues to a proper trier of facts. Page 64 of 93 V.3 Great Northern submits the Court erred in granting the motions of Bill Briscoe and Kevin Stephens for Directed Verdict against Great Northern with respect to Great Northerns claims for Breach of the Implied Covenant of Good Faith and Fair Dealing.

In determining whether a cause of action can be characterized as a Breach of

Contract, a Tort or both, the Courts consider (1) the source of Defendants duty to

act and (2) the nature of the remedy or damages sought by the Plaintiff. See:

Foremost Plastics Corp, USA v. Presidio Engineering Contractors, Inc., 960 S.W.

2d, 41, 45(Tex. 1998); Southwestern Bell Telephone Co. v. DeLanney, 809 S.W. 2d

, 493,494-95)Tex. 1991); Exxon Corp. v. Gill, 221 S.W.3d, 841, 848(Tex.App.-

Corpus Christi 2007) reversed on other grounds, 299 S.W.3d 124,(Tex. 2009);

Crill v. Houston Ind., 124 S.W. 3d, 742m 753(Tex.App.-Houston [1st Dist.], 2003

no pet.) In order to determine whether any individual action, constitutes a breach of

contract or a breach of legal duty imposed by law, the Court must determine

whether the remedy lies in an action for breach of contract, or where general

damages are incurred and create an “independent injury”. DeWitt County Elec. Co-

op v. Parks, 1 S.W.3d, 96105(Tex. 1999), Exxon Mobil Corp. v. Kinder Morgan

Operating, LP, 192 S.W. 3d, 120,126-127(Tex.App.-Houston [14th Dist.] 2006, no

pet.). In ascertaining the distinction whether the remedy should lie in Tort or in

contract, (1) obligations imposed by law or Tort obligations. Delaney, supra at 495

note 2; Peco Contruction Co. v.Quahardo, 919 S.W.2d, 736, 738 n.3.Tex. App. –

San Antonio 1996, writ denied). Further, malfeasance are negligent affirmative

Page 65 of 93 contract in the performance of a promise generally subjects an actor to tort liability

as well as contract liability for physical harm and persons and tangible. Delaney,

809 S.W. 2d, 495, note 2; Peco Contruction, 19 S.W. 2d, 738, note 3.

Accompanying every contract is a duty to perform with care, skill and reasonable

expedience the things agreed to be done. The negligent failure to observe any of

these conditions is a tort as well as a breach of contract. Montgomery Ward & Co.

v. Scharrenbeck, 204 S.W.2, 508, 510 (Tex.1947). Further, although there is no

general duty of good faith and fair dealing in all contractual relationships, the duty

may arise when the contract creates or governs a special relationship between the

parties. See T.F.W. Management v. Westwood Shores Property Owners Assoc., 79

S.W. 3d 712, 719(Tex.App.-Houston[14th Dist.] 2002 pet. denied). To impose a

Tort duty on the parties to a contract, the Court must find a special relationship

between them. Farah v. Mafrige & Cornmanik, PC, 927 S.W.2d, 663,

675(Tex.App.-Houston[1st Dist.] 1996 no writ. A special relationship will

generally arise from the element of trust necessary to accomplish the goals of the

contract. Bank One v. Stewart, 967 S.W.2d, 419, 441(Tex.App.-[Houston 14th

Dist.]1998 pet denied). Certain relationships have been recognized as sufficient to

create a duty of good faith and fair dealing: within the oil and gas context, the

relationship of the executive-rights holder with the non-participating royality

interest owner. Mangess v. Guerra, 673 S.W. 180, 183 (Tex. 1984), working

Page 66 of 93 interest owner and royalty owner, Amoco Production v. First Baptist Church, 611

S.W. 2d, 610(Tex. 1980), further, Texas Courts have recognized a duty to

cooperate with every contract in which cooperation is necessary for performance,

and there is an implied duty in such instance. Case Corp. v. High Class Business

Systems, 184 S.W. 3d 760, 770(Tex.App.-Dallas 2005, pet. denied.) ,Bank One v.

Stewart, 967 S.W. 2d, 419, 434, (Tex. App.-Houston [14th Dist.] 1998, pet.

denied.) This duty requires a party to a contract not to interfere with the other

parties performance under the contract. Case Corp, supra. Specifically, the actions

of Stephens and Briscoe, interfered with Great Northerns ability to prosecute its

efforts in developing the subject property as testified by Loftis, (RR:4:53:13-87:5.

Briscoes’ claims to purchase the interest, which he already knew were sold, are

also an interference as further outlined below. Thus, and independent duty in Tort

arises, and violates the Covenant of Good Faith and Fair Dealing.

VI. Refusal to Grant Mistrial

The Court erred in failing to grant Great Northern Energy, Incorporated, Ronald J. Abercrombie, and Joseph B. Loftis’ Motion for Mistrial prior to the submission of this cause to the Jury.

Before this cause was submitted to the jury, counsel for appellants moved

the Court to grant and order a mistrial in this cause. (RR 5:11:14-21) It was the

second time such a motion had been presented. At the outset of the trial, during

the voir dire presentation of Kevin Stephens’ counsel, a similar Motion had also

Page 67 of 93 been presented. (RR2:128:2-9), see, “Improper Voir Dire” Section III, pages 41-

43 above, and now incorporated herein by reference). This subsequent Motion for

Mistrial was presented after the Court’s evidentiary rulings had excluded over 75%

of the evidence Appellants offered for their defenses and counter-claims, and over

80% of the documents they attempted to offer in support of their claims and

defenses. From appellants’ view, simply stated, they had been denied the

opportunity to fairly present their evidence of their well plead claims and defenses

because of wholly erroneous evidentiary rulings by the Court excluding that

evidence, and because of the prejudicial and improper conduct of voir dire, and

because, cumulatively, the error was so enormous it was impossible for any jury to

fairly evaluate the truth and credibility of their claims and defenses. The legal

authority supporting Appellants Motion for Mistrial are set forth in Section III,

pages 41-43 above, and in the authorities and arguments presented in Section III__,

pages 41-43 below, applicable to cumulative error, are applicable to the evaluation

of whether the trial court erred in failing to grant Appellants Motion for Mistrial

presented prior to jury submission.. All of such arguments and authorities are

incorporated into this Section 4, and re-urged here:

VII.- Errors Related to Jury Submission & Argument

A. Errors with respect to Jury Questions and Answers:

VII-1. the Court erred in improperly submitting the jury issues to the jury as submitted because it improperly shifted the burden of proof to Page 68 of 93 Great Northern. VII-2. the Court erred in awarding judgment based upon the findings of the jury that the Courts answers to questions 1 and 2 were immaterial because the evidence proves conclusively as a matter of law, that the foreclosure sale on November 5, 2013 was improperly conducted.

B. the Court erred in allowing counsel for Circle Ridge to make the following improper jury arguments;

VII-3. With respect to question number 1, insofar as counsel for Circle Ridge asserts the burden of proof was on Defendant to disprove the that the foreclosure sale of November 5, 2013, was properly conducted, the burden was not upon Great Northern Energy, but rather upon Circle Ridge. VII-4. the Court erred in allowing counsel for Circle Ridge Production to make an improper and prejudicial argument, insofar as it allowed such counsel to read a stipulation to the jury that Great Northern owed Circle Ridge $637,114.15 under terms of the note when such representation was in fact a misrepresentation known to all parties and submitted over Great Northerns objections.

Because the trial court’s errors relating to the submission of issues and

instructions to the jury, relating to arguments improperly allowed to be

presented to the jury by Circle Ridge’s and Third Party Defendant’s

counsel, and relating to the trial court’s entry of judgment for Appellees

based on the jury’s answers to the questions submitted, are related and

exemplify the “intertwined” totality of the trial court’s “errors” in this

cause, Appellant’s argument and authorities with respect to points of error

#VII-1-VIII-A above, are combined in this response. The standard for

review of the trial court’s rulings complained of is abuse of discretion; In re

Page 69 of 93 Estate of Boren, 268 S.W.3d 841, 846 (Tex.App.---Texarkana, 2008, pet. denied)

(citing Cire v. Cummings, 134 S.W.3d 835, 838-39 (Tex. 2004), Landon v. Jean-

Paul Budinger, Inc., 724 S.W.2d 931, 939 (Tex.App.—Austin 1987, no writ)

however, if a court’s ruling is contrary to clearly established law, it is an abuse of

discretion. In re Estate of Boren, 268 S.W.3d 841, 846 (Tex.App.---Texarkana,

2008, pet. denied) (citing Cire v. Cummings, 134 S.W.3d 835, 838-39 (Tex. 2004),

Landon v. Jean-Paul Budinger, Inc., 724 S.W.2d 931, 939 (Tex.App.—Austin

1987, no writ)

Further, even if there exists a contention that some factual evidence exists to

support the trial court’s ruling under attack, if such evidence is otherwise legally

insufficient, a “no evidence” resolution is required. Walker v. Packer, 827 S.W.2d

833, 839 (Tex. 1992) (orig. proceeding)..

In evaluating the trial court’s approach and submission of its charge

and questions to the jury, the only issues submitted to the jury were two

questions, (CR1254 and 1255), which inquired whether 1) that Great

Northern had “established” there was a defect in the foreclosure sale of

November 5, 2013, proceedings, as conducted by Dean Searle, Trustee.

(CR 1254); and the second was whether Great Northern had established

that there was a grossly inadequate sales price…in the foreclosure

sale…on November 5, 2013,(CR 1255). No issues were submitted

Page 70 of 93 placing the burden of proof upon Circle Ridge Production, Inc. to

establish the validity of the disputed foreclosure sale of November 5,

2013, through which it claimed to have derived its title.

This submission process completely miscasts the burden of proof. In a

trespass to try title case, the burden is always on the Plaintiff to establish

good title, is the Plaintiff’s responsibility, and a plaintiff cannot prevail

based on the failure of opposing parties to establish good title in the

opposing party. In this case, however, although the Trial Court did not

grant Circle Ridges Production’s request for Directed Verdict,

(RR5:14:23-18:04,5:19:19-25), implying that there were fact issues for

jury evaluation, it shifted the Proof of Burden to Great Northern. Dillon

v. Hodges, 804 F.2d 1384 (5thCir. 1984), Texas Co. v. Lee, 157 S.W.2d

628, 183 Tex. 167 (Tex. 1942), Chapman v. Moser, 532 F.2d 1358 (5th

Cir. 1976) (***-better pg. ref.), Ragsdale v. Griffin, 380 S.W.2d 164

(Tex. Civ. App ****-1964). Here, however, over the objections of

Appellants’ counsel, (CR 1240-1246, RR 5:137:3-24), the Court,

submitted the issues, miscasting the burden of proof upon Great Northern

Energy to prove that Circle Ridge had not conducted a proper

foreclosure. The burden of proof in a trespass to try title action does not

shift to the defendant, it remains with the Plaintiff, in this case Circle

Page 71 of 93 Ridge to establish the valid conduct of the foreclosure sale. Hart v.

Eason, 321 S.W.2d 574, 159 Tex.375 (Tex. 1959), get more specific

info) Appellants submitted a proper issue, (CR 1243), but the Court

refused to submit it, relying, instead on Circle Ridge’s insistence that the

burden rested on Defendants. That is an improper shifting of the burden

of proof, and an improper jury submission, contrary to established law;

and thus, an abuse of discretion.

Additionally, the Court permitted the counsel for Circle Ridge to

argue before the jury that Great Northern had stipulated that it owed

$637,114.15 (RR 5:22:4-30:4 ). In fact, Appellants attorney only

stipulated that such sum would be a proper calculation in the event Great

Northern had not purchased Kevin Stephen’s one half interest in the note

(RR 5:25:4-26:22, and in the event the note was properly enforced in the

name of “Circle Ridge Production, Inc. and Great Northern Energy,

Incorporated, successor in interest to Kevin Stephens”. (RR 5:22:3-

30:4). Of course, the court would not permit that stipulation, as stated, to

be used in jury argument, because it had excluded all evidence of such

assignment of interest (see, Section II & IV above). Appellant’s attorney

stipulated that Defendant’s counsel might argue same, subject however,

to Appellants objection, which the Court overruled. (RR 5:22:13-30:14).

Page 72 of 93 Thus, Circle Ridge’s counsel improperly argued to the jury that Great

Northern had stipulated it owed the sum of $637,114.15. That erroneous

statement of evidence was prejudicial and likely caused error in the jury’s

deliberations. (Add cite-prejudicial argument). Further, counsel for

both Circle Ridge and Kevin Stephens argued that the burden of proof

was on Great Northern to establish that Dean Searle had not properly

conducted the November 5, 2012, foreclosure sale. (CT 125_; RR

5:14:23-18:3, 5:28:10-29:16). Among other arguments, both counsel

recited that Kevin Stephens had given Circle Ridge the authorization to

foreclose, insofar as the Kevin Stephens ownership interest in the note

made payable to “Circle Ridge Production, Inc., and Kevin Stephens”

was concerned (RR5:14:23-18:3).

At no time, were Appellants allowed to argue before the jury that Kevin

Stephens had sold, assigned, and transferred his interest in the note

previous to the foreclosure sale to Great Northern, that Bill Briscoe had

prior notice of that assignment, or that Dean Searle acted without the

authority of anyone but Circle Ridge Production, Inc., in conducting the

foreclosure sale on November 5, 2012, because he did not have authority

from any other legal interest owner in the note on November 5, 2012.

(see Section II, above).

Page 73 of 93 Finally, counsel for Kevin Stephens argued that the value of the

leasehold interest was much less than experts (whose testimony was also

excluded) regarding the value of the interest foreclosed on versus the

purchase consideration established at the foreclosure sale of $150,000.00

(RR 5:098:15-105:13, 108:23-1218). Here, the adverse effect of Josh

Maness’s improper injection of evidence into voir dire, through his

questioning of venireman Williams becomes important because Mr.

Williams was selected as a juror, and Maness had represented that he

could use his prior experience as “common sense.” (RR 2:124:13-126:24

and 2:128:10-129:24). Thus Maness injected an improper basis for the

jury to use in evaluating the testimony in this case in deliberations. The

harm is manifest.

VIII.- Cumulative Error

The Court erred in all respects in this trial and its denial that a new trial should be granted herein and all matters re-tried. This case should be reversed and remanded for an entire new trial, because the cumulative error of the Court was so great that that is the sole remedy can effectively address the errors in the prior trial.

Few cases present a sufficient number and quality of errors to justify the

reversal of the trial court’s judgment because of cumulative errors.

However, Texas courts recognize that when all the errors are considered

together, in light of the whole record, an appellate court may find that the

Page 74 of 93 accumulation of those errors was reasonably calculated to and probably

did cause the rendition of an improper judgment, requiring a reversal of

the trial court’s judgment. See, Southern Pacific Co. v. Hubbbard, 297

S.W.2d 120, 156 Tex. 525 (Tex. 1956), Mapco, Inc. v. Holt, 476 S.W.2d

70 (Tex.Civ.App.—Amarillo 1971, writ ref’d. n.r.e.),, Allen v. Reidel,

425 S.W.2d 665 (tex.Civ.App.—Eastland 1969, no writ);

Appellants submit that the number and quality of errors committed by

the trial court in this case more than satisfy the standard required for

reversal for cumulative error. As recited above, by itemization, there are

a minimum of 54 erroneous rulings all against appellants in allowing

improper voir dire, in excluding virtually all of Appellants’ otherwise

admissible evidence in support of Appellants defenses and counterclaims,

in erroneously granting Appellees requests for directed verdicts on 3 of

Appellants claims, after excluding the supporting evidence offered by

Appellants, in overruling Appellants motion for mistrial at the conclusion

of evidence presentation, in erroneously submitting questions and a

charge to the jury which wrongly shifted the burden of proof on Circle

Ridge’s issue of proper foreclosure sale authorization, in failing to

require proper documentation and proof for awarding attorneys fees to

Appellees, in overruling Appellants Motion for New Trial 54 points of

Page 75 of 93 error), and in failing to grant Appellants Motion for Judgment NOV (3

issues). In the introduction to these arguments and authorities, Appellants

likened their experience to the Wolf in Sheep’s Clothing experience

described in the Aesop’s Fable story often recited by Abraham Lincoln.

Appellants submit that the foregoing argument and authorities more than

substantiates that analogy to this trial.

IX.

The Court erred in awarding Circle Ridge’s attorney’s fees against

Great Northern in the amount of $150,873.37

Following the conclusion of the jury portion of the trial, Appellee’s

attorneys submitted their claims for attorneys fees to the Court. In its “Judgment”

entered on December 7, 2015, the Court awarded $150,873.37 to Plaintiff’s

attorneys. However, as Appellants’ attorney asserted in his reply and opposition

(CT 1330-1337), the Court was incorrect in awarding any attorneys fees, or,

alternatively, awarding the sum of $150,873.37 for the following reasons:

IX-1. Appellant completely failed to sustain its burden of proof on any basis

authorizing the award of attorneys fees.

Page 76 of 93 All of the arguments by Circle Ridge in support of its Motion for Attorneys’

Fees are founded and based upon the legal position that it is authorized and

empowered to attempt collection and enforcement efforts because of its

attempts to collect, foreclose, etc. in behalf of the interest of Circle Ridge

production under the note of September 11, 2012, in the principal amount of

$700,000.00.(the “$700K note”); however, as was extensively argued during

the trial, any such collection attempts were, and are, wholly unauthorized

and illegal. Under §§3.201, 3.203, et seq., Tex. Bus. & Com. Code (2013),

any attempt to enforce or collect the note without the joinder of both parties,

i.e.¸ both Circle Ridge and Great Northern (the then legal owner and holder

of the rights formerly owned by Kevin Stephens) were wholly improper.

See, Comment 5 to §3.203, and Commentary, “No Partial Negotiation or

Transfer” and “Distinction between right to enforce instrument and

ownership of instrument,” Anderson, Bartlett & East’s Texas Uniform

Commercial Code Annotated (2007 Edition-West Publishing). At the time

the demands attached to Plaintiffs’ MfAF were prepared and served, the

record owners and holders of the note were Circle Ridge Production, Inc.

and Great Northern Energy, Inc., and Dean Searle, acting as agent for Circle

Ridge Production, was not authorized to so act for the holders thereof. Thus

his actions were completely improper, not properly submitted, nor properly

Page 77 of 93 conducted, and thus cannot form the basis for the award of any attorneys’

fees herein, nor can any award be made to any attorney representing only

Circle Ridge herein because such action seeks to enforce only the interest of

Circle Ridge in the note.

IX-2. Similarly, any efforts to collect attorneys fees for violations of

any of the provisions of, or pursuant to the terms of the Deed of Trust dated

September 11, 2012, are improper, and must fail because Appellee has

never properly conducted or attempted any proper enforcement of the Deed

of Trust, because it has always acted alone and never jointly with the

remaining interest owner “Great Northern Energy, Incorporated, as

successor to Kevin Stephens, in the Deed of Trust in which the originally

designated Beneficiaries or “Beneficiary” were “Circle Ridge Production,

Inc. and Kevin Stephens”. Again, the arguments set forth in Section II,

pages 37-40 are incorporated into this point of error as though set forth

verbatim.

IX-3: Texas Civil Remedies and Procedures, Code 18.001, requires that

applications for attorney’s fees must be submitted, at a minimum and based

upon a proper evidentiary affidavit, El Apple1, Ltd. V. Olivas, 370 S.W. 3d

757 (Texas 2012). He should properly identify and segregate claims which

allowed recovery for such fees. Stewart Title Guaranty Company v Sterling,

Page 78 of 93 822 S.W. 2d 1(Texas 1992), notwithstanding the ruling of Tony Gullo

Motors v Chapa, 212 S.W. 3d 299 (Texas 2006), the Texas Supreme Court

has still directed that applications for legal fees must focus on analysis of the

factors (facts) underlying multiple claims. Block billing may not support the

recovery of attorney’s fees. As the Plaintiff argues, this case involved not

only trespass to try title, breach of contract, wrongful foreclosure, forgery,

lack of sufficient acknowledgement in suit to quiet title.

1. The Affidavit of Ronan Searle in behalf of Searle and Searle is legally

insufficient to support the award of attorneys’ fees. Specifically, the

affidavit of Ronan Searle incorporates the “contemporaneous billing

records of the firm Searle and Searle. There is no independent Affidavit

of Dean Searle, who apparently performed many of the services for

which billing is attributable by virtue of the initials “DS” on many of the

billing records in Appendix “A”, stating that such services were

reasonable and necessary. Further, Ronan Searle, also a member of the

firm performed services; however, no segregation of services performed

by either Ronan or Dean Searle is specified, either in the Affidavit of

Ronan Searle, or in any portion of Appendix A.(CR1330-1337).

Among insufficiencies frowned upon in establishing the basis for

attorneys’ fees recovery are unnecessary duplication of billing for

Page 79 of 93 services by partners or associates. Here, Plaintiff specifies in its MFAF

that “(a) as shown on Appendix, two separate law firms had to be hired

by Plaintiff in order to take this case through trial.” (CR1330-1337). The

billing submitted in both Appendices “A” and “B” (CR1268, 1278-1301),

is so insufficient that it is impossible to determine what duplication

occurred. Courts do not and should not award attorneys” fees for hours

spent in duplicative activity or spent in a passive role of an observer

while other attorneys perform, and are generally not recoverable.

Chaves, Douglas E., “Attorney’s Fees Update, 36th State Bar of Tex.

Prof. Dev. Program, 36th Annual Advanced Civil Trial Course Chap. 26,

p 9 (2013 ). Neither can any such segregation be made based on the

Affidavit of Michael Runyan submitted. Neither is there any evidence

that any “billing judgment” has been exercised in this case, which

omission is also a serious flaw in applications for payment of attorneys’

fees.

2. The time records submitted in Appendices A & B (CR1278-1301) are

further insufficient insofar as they fail to specify which issues or claims

apply to any distinct issues. Issues relating to Plaintiffs “forgery” claims

were never submitted, and further, Plaintiff nonsuited its claims relating

Page 80 of 93 to recovery for alleged violations by the individual Defendants Loftis and

Abercrombie for Plaintiff’s originally plead claims of “negligence,”

“civil conspiracy” and violation of the “Texas Civil Theft Liability Act”-

thus legally abandoning such claims against all Defendants.

Nevertheless, Plaintiff’s claims for recovery of attorneys’ fees and costs

clearly include claims for service time and costs attributable to “forgery”

issues-specifically, as marked on Exhibit “4” to this Response (see page

4, “telephone conference with handwriting expert”, (CR1281),p.5,

“preparing documentation to expert”(CR1282), p,.7, $900 paid to

handwriting expert,(CR1299). Clearly there is no recovery for such

claims, and in fact, no proper basis for any recovery exists because of the

violations of the requirements of §§3.201 and 3.203, Tex.Bus.& Com.

Code (2013), as specified above in Response #1. Again, any claims of

admission of liability with respect to any performance, either payment of

sums due or any other obligation contained in the Deed of Trust, are

expressly denied by all Defendants, as any admission of any liability

whatsoever, is specifically conditioned on the language contained in the

stipulation “in the event Defendant Great Northern Energy in did not own

the interests of Kevin Stephens in the $700K note.” Any such stipulation

Page 81 of 93 is conditional only. In this connection, see, Steward Title Guaranty Co.

V. Sterling, 822 S.W.2d 1 (Texas 1992), Chaves, supra, at p.7.

X.

The Court erred in failing to grant Great Northern Energy’s Motion for Judgment NOV with regard to its contentions that is has no liability with regard to the Circle Ridge Production note, as asserted by Circle Ridge Production in the trial, because there is neither now or has there ever been any proper presentation of Circle Ridge’s demands insofar as there is no proper assertion of Great Northerns liability under the $700K note because Circle Ridge does not have the authority, acting alone, to enforce, or even attempt enforcement of liability on such note, nor has it ever attempted to enforce the note in accordance with the law, or in awarding any claim that Great Northern Energy pay any attorneys fees for the collection activities related to Circle Ridge Production’s collection efforts in such connection.

Appellants re-urge the argument and authorities set forth in pages 37-41

Section II above relating to the improper efforts to foreclose the Deed of Trust

lien, or to enforce collection of the September 11, 2012, $700K note, without

proper participation by both parties, and in the name of both parties jointly. In

this case, the Court should disregard all the jury findings and sign a judgment in

favor of Great Northern Energy, Inc. because no evidence was introduced by

Circle Ridge to establish that the proper party authorized, noticed, or conducted

the foreclosure sale in controversy on November 5, 2013. In fact, the only

evidence that both “X and Y” participated in or noticed or conducted the

foreclosure was the testimony of Bill Briscoe, President of Circle Ridge

Page 82 of 93 Production, that he got Kevin Stephen’s permission to foreclose before he

initiated the foreclosure proceedings in Circle Ridge’s name. However, that

testimony, even as taken to be wholly true and accurate in inadequate to meet the

burden of proof demanded of Circle Ridge. Specifically that testimony is

contradicted by Stephen’s admission against interest (offered in the Bill of

Exceptions) that he had sold his interest in the $700K note to Great Northern

Energy before January 1, 2013, and this foreclosure did not occur until

November 5, 2013. Further, the relevant foreclosure or note collection procedures

were not commenced by Circle Ridge until after February 1, 2013. Thus, Kevin

Stephens did not have any authority to “authorize” any foreclosure proceedings

or to transfer any interest in and to the $700K note or Deed of Trust lien after

December, 2012. Clearly, no proper entity ever authorized Circle Ridge to

proceed with any foreclosure or collection procedures of any kind or character.

Because there is no evidence that any foreclosure was properly conducted, Great

Northern is entitled to judgment as a matter of law

XI.

Great Northern is entitled to judgment that Circle Ridge take nothing, with respect to its claims for Trespass to Try Title, because there is no sufficient legal evidence which supports such determination.

An action in trespass to try title is a suit to recover the possession of land

Page 83 of 93 unlawfully withheld from an owner who has a right to immediate possession

Standard Oil Co. of Tex. V Marshall, 265 F.2d 46,50 (5th Cir. 1959) cert denied

361 U.S. 915, 80 S. Ct. 259, 4 L.Ed.2d 185. It embraces all character of litigation

affecting title to real estate. Standolind Oil & Gas Co. v State, 136 Tex. 5, 133

S.W. 2d 767, 770 (1939). The action is purely statutory Tx. Prop. Code, 22.001-

22.022 and is governed by the Texas Rules of Civil Procedure [T.R.C.P. 783-809].

To bring an action in trespass to try title, Circle Ridge Production is

required to file a formal petition in accordance with the Texas Rules of Civil

Procedure [T.R.C.P. 783-809]. The petition must state: the real names of the

parties and their residences, if known; (2) a legally sufficient description of the

premises; (3) the interest which the plaintiff claims in the premises; (4) that the

plaintiff was in possession of the premises or entitled to such possession; (5) that

the defendant unlawfully entered upon and dispossessed the plaintiff of the

premises and withholds possession; (6) facts showing rents, profits, or damages if

claimed; and (7) a prayer for the relief sought T.R.C.P. 783; see Marshall v

Garcia, 514 S.W.2d 513, 518-519 (Civ. App.—Corpus Christi 1974, ref. n.r.e.)

The petition must state the nature and extent of the interest which the

plaintiff claims in the premises, such as fee simple or other estate. If an undivided

interest is claimed, the petition must state the nature and amount of that interest

T.R.C.P. 783. The purpose of this rule is to put the defendant on notice of how

Page 84 of 93 much of the land or of the title to the land was in issue Hicks v Southwestern

Settlement & Devlop. Corp., 188 S.W. 2d 915, 929 (Tex. App. –Beaumont 1945,

ref, w.o.m.)

Since the plaintiff must recover out of the strength of his or her own title and

not on the weakness of the title of the adversary party, the burden of proof remains

on the plaintiff throughout the action Fritsche v Niechoy, 197 S.W. 1017, 1018-

1019 (Civ. App.—Galveston 1917, dis.); see Dames v Strong, 659 S.W.2d 127, 129

(Tex. App.—Houston[14th Dist.] 1983, no writ) – burden on plaintiff to prove

prima facie right of title and possession]. When the plaintiff’s title is controverted,

the burden of proof is on the plaintiff to establish a superior title by an affirmative

showing, regardless of whether the claim of title rests in law or in equity see Doria

v Suchowolski, 531, S.W. 2d 360, 362 (Civ. App.—San Antonio 1975 ref. n.r.e.).

The plaintiff’s case must be proven by a preponderance of the evidence see D.T.

Carroll Corp. v Carroll, 256 S.W. 2d 429, 432 (Civ. App.—San Antonio 1953 ref.

n.r.e.), and if the plaintiff fails to satisfy the burden of proof of superior title, the

defendant is entitled to judgment without proving any right of title or possession

see Heil v Wirth, 161 Tex. 609, 343 S.W. 2d 226, 226-230 (1961).

Circle Ridge Production wholly failed to satisfy its burden of proof in this

connection. First, in its petition, it has cited additional parties owning interests (an

admission against interest. (CR1066-1126). Further, it introduced into evidence

Page 85 of 93 itself, Circle Ridge claimed and attempts to claim through the judgment entered

herein ownership of 100% of the working interest in and to the OBENCO Leases

(CT:1068,1069,1497-1508). However, Circle Ridge itself introduced evidence of

outstanding ownership in third parties, to-wit: Wayne Johnson, WJ South Waskom

(RR:4:104:4-105:7), (Plaintiffs’ Exhibit 13). Further, it is clear that this

assignment, effective from its date of assignment by Great Northern, pre-dates the

date of the granting of the Deed of Trust and it is not foreclosed by any apparent

foreclosure of the Deed of Trust and is contrary to Circle Ridges claims of 100%

ownership. And therefore is not foreclosed under the Deed of Trust. (RR:3:210:3-

213:25). Thus, the lien interest of the United States, as evidenced by pleading of

the United States, (CR:1649) and the identification of these lien hold interests by

Circle Ridge in its Fifth Amended Petition prevent Circle Ridge from owning title.

Further, there was no evidence introduced by Circle Ridge in trial to evidence the

fact that it had properly excluded any Internal Revenue Service tax liens upon the

property as required by 26 U.S.C.§7425(b)(1)(c)(1)(Internal Revenue Code).

Simply stated, the record is filled with claims of title besides that of Circle Ridge,

pursuant to Circle Ridge’s own proof. As stated, the Plaintiff in an action in

trespass to try title must recover, if at all, on strength of his or her own title and

may not rely on the weakness of the defendant’s title see Reinhardt v North, 507

S.W. 2d 589,591, (Civ. App. –Waco 1974, ref. n.r.e). Gray v Joyce, 485 S.W. 2d

Page 86 of 93 311, 313 (Civ. App. –Tyler 1972, ref. n.r.e.).

In its Trespass to Try Title action, Circle Ridge Production sought confirmation

of its ownership, and rights to possession of an undivided 100% leasehold or

working interest in and to the OBENCO leases. Insofar as Circle Ridge claims

entitlement to a judgment of ownership of one hundred percent of the working

interest in and to the OBENCO leases, (described in Exhibit “A: attached thereto)

it failed to establish its claims “against all of the world” in the lawsuit. In fact, it

plead there were outstanding liens in favor of Topcat Well Service and the

Internal Revenue Service,(CR 1068, 1069-1072). Further, it itemized outstanding

working interest ownership of forty-two percent (42%) in WJ South

Waskom,(CR 1070-71, and RR:4:104:4-105:7, CRP Ex. 13), and introduced

evidence of that outstanding interest; however, it never introduced any evidence

of resolution of that claim lien as required by 26 USC, Section 7425(b)(1) and

(c)(1). In the event Circle Ridge attempts to claim that it can rely on the so-called

Abstract of Title which it filed only one week before trial, that document is not

timely filed. Additionally, Defendants did not demand that Plaintiff Circle Ridge

file any abstract pursuant to Rule 791, et seq., Texas Rules of Civil Procedure.

Clearly, as a matter of law, Plaintiff has failed to meet the required burden of

proof to establish its title against all other claims. Therefore, Circle Ridge

Production failed to establish its claims to the extent that it is entitled to a

Page 87 of 93 judgement granting it an undivided one hundred percent title to the working

interest in and to the OBENCO leases, even assuming arguendo¸ that it

established that its foreclosure sale on November 5, 2013 was legal. Of course,

as set forth in paragraphs 2-19, that sale was not legal. Further, neither the

Abstract, nor any instrument designated within it were introduced into evidence.

Page 88 of 93 PRAYER

Appellants pray that the court reverse the trial court and render judgment in

favor of Appellants that Appellant Great Northern Energy take nothing by virtue

of its claims with respect to any liability on the part of Appellees with respect to

any sums allegedly owed under the September 11, 2012 note, that its claims of

title under its Trespass to Try Title action be set aside and denied in all things, and

that it reverse the trial court’s rulings insofar as it denied Great Northern Energy

the opportunity for a new trial with regard to Great Northern Energy’s claims of

wrongful foreclosure, interference with contractual relations and breach of the

Covenant of Good Faith and Fair Dealing and Breach of Contractual obligations

with respect to the equipment sales from Kevin Stephens to Great Northern

Energy, and that it reverse the Courts award of attorney’s fees in favor of Circle

Ridge Production as against Great Northern Energy.

Alternatively, Great Northern Energy request that all matters tried before the

trial court be reversed and set aside, and that a new trial be ordered on all matters

pled in Circle Ridge Productions 5th Amended Original Petition and Great

Northern Energy’s 3rd Amended Original Answer and Counter-Claims.

Respectfully submitted, /s/William J. Gardner William J. Gardner Page 89 of 93 William J. Gardner, PC PO Box 1746 422 B N Green Street Longview, Texas 75606-1 746 Tel. No. 903-236-7900 Fax No. 903-236-3367 Email: wjg@w jg-law.com

Page 90 of 93 CERTIFICATE OF SERVICE

I certify that on September 8, 2016, I served a copy of Appellants Brief of Great Northern Energy, Incorporated on the parties listed below by electronic service and that the electronic transmission was reported as complete. My e- mail address is wjg@wjg-law.com.

/s/ William J. Gardner William J. Gardner, PC PO Box 1746 422 B N Green Street Longview,Texas 75606 Tel. No. 903-236- 7900 Fax No. 903-236-3367 wjg@wjg-law.com

Honorable J. Brad Morin, Respondent Judge of the 7pt District Court of Harrison County, Texas Harrison County Courthouse, 200 W. Houston Street, Room 219 Marshall, Texas 75670 Tel # 903-935-8407 Fax # 903-935-9963 leslie(a)co .harrison.tx. us

CIRCLE RIDGE PRODUCTION, INC., Plaintiff, by serving its attorney: Dean Searle Ronan Searle SEARLE & SEARLE PC 305 W. Rusk Street, Suite I 01 Marshall, Texas 75670 Tel. #:903-935-9772 Fax # 903-935-9790 Dean.searle@gmail.com

Page 91 of 93 Michael T. Runyan 305 W. Rusk Street Marshall, Texas 75670 Tel.#:903-935- 7700 Fax #:903-935-9790 Michael(a)runyanlaw .com

KEVIN STEPHENS, Third Party Defendant Hallsville, Texas kstephens@.si gnal wellservice.com

Brendan Roth 400 S. Alamo, Site I Marshall, Tx 75670 Tel.#903-472-4278 Fax# 888-482-9512 br@brendancroth.com

/s/William J. Gardner William J. Gardner

Page 92 of 93 CERTIFICATE OF COMPLIANCE I certify that this document was produced on a computer using Microsoft Word 2013 and contains Fourteen thousand, eight hundred seventy-nine words, (14,879) as determined by the computer software's word-count function, excluding the sections of the document listed in Texas Rule of Appellate Procedure 9.4(i)(1).

/s/ William J. Gardner WILLIAM J.GARDNER Texas Bar No. 07661000 422 N. Green St.; P.O. Box 1746 Longview, Texas 75606-1746

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