Shah v. Maple Energy Holdings, LLC
| Docket Number | 08-22-00198-CV |
| Decision Date | 31 July 2023 |
| Parties | PETER I. SHAH, Appellant v. MAPLE ENERGY HOLDINGS, LLC, Appellee |
| Court | Texas Court of Appeals |
Appeal from the 143rd Judicial District Court of Reeves County Texas (TC# 22-03-24342-CVR)
Before Rodriguez, C.J., Palafox, and Soto, JJ.
This is an appeal from an order granting summary judgment in favor of Appellee Maple Energy Holdings, LLC (Maple Energy) for (1) a declaratory judgment that it had the right to the reasonable use of a property's surface estate as a mineral lessee and (2) an injunction prohibiting Appellant Peter Shah, the surface-estate owner, from interfering with such reasonable use. The trial court also entered a $95,154.50 money judgment against Shah consisting of two attorney's fees awards to Maple Energy-one pursuant to Rule 91a in the amount of $9,738.00 and one pursuant to the Uniform Declaratory Judgment Act (UDJA) in the amount of $85,416.50.
On appeal, Shah contends the trial court erred in granting Maple Energy's summary judgment, denying his cross-motion for summary judgment, and awarding Maple Energy attorney's fees. We affirm the court's summary judgment rulings. And although we affirm the trial court's award of UDJA-based attorney's fees in the amount of $85,416.50, we conclude the trial court erred in awarding Rule 91a-based attorney's fees in the amount of $9,738.00 as part of the judgment for "monetary relief." We therefore suggest a remittitur to Maple Energy pursuant to Tex.R.App.P. 46.3 allowing it to accept a total money award of $85,416.50. If Maple Energy does not accept the remittitur, we reverse the trial court's judgment for monetary relief and remand for a new hearing solely on the appropriate amount of attorney's fees to be awarded under the UDJA.
Shah is the surface-estate owner of 20.04 acres of land in Reeves County consisting of four tracts of land of approximately five acres each, identified as Section 8, Block C-18 PSL (). Teresa Bell acquired the mineral estate under the surface of the Property through a quitclaim deed on July 15, 2003, and subsequently signed a mineral lease with an oil and gas operator, San Saba Resources, in January 2011 (the Bell Lease).[1]In June 2015, Maple Energy's predecessor in interest, MDC Energy Holdings LLC (MDC Energy), a Delaware corporation, was assigned all interests in that lease, together with several other mineral leases in Reeves County covering approximately 400 acres.
In late October 2019, MDC Energy filed for Chapter 11 bankruptcy in a Delaware bankruptcy court. In November 2019, MDC Energy notified Shah it intended to construct a tank battery and pipe networks on the Property. After Shah objected, MDC Energy offered Shah compensation for agreeing to the construction, but Shah rejected the offer. In February 2020, Shah filed a complaint in the bankruptcy court, acting pro se, claiming MDC Energy had no right to access the Property's surface and seeking an injunction prohibiting MDC Energy from entering the Property and conducting its oil and gas operations thereon. After the bankruptcy court informed Shah he had not properly filed his injunction request, Shah filed an administrative claim in that court in May 2020, seeking damages for MDC Energy's construction of the tank battery on the Property. The bankruptcy court denied the claim in June 2020, finding that MDC Energy, as the mineral lessee, had the right to the reasonable use of the Property's surface to effectuate the purpose of its leases. It further found installing the tank battery was within MDC Energy's rights as the mineral lessee. The court held that Shah had not presented any evidence to support a finding that Maple Energy's use of the Property was substantially impairing Shah's use of the surface, or that Maple Energy had caused any compensable damage to the Property. Thereafter, Shah filed a similar administrative claim regarding MDC Energy's construction of a pipe network on the Property, which the bankruptcy court denied in a July 2020 order, finding Shah was estopped from bringing the claim based on the doctrines of claim and issue preclusion.
As part of the court's confirmed bankruptcy plan, Maple Energy purchased MDC Energy's leases through an Asset Purchase Agreement (APA) in June 2021, which included the purchase of the Bell Lease. Maintaining it was entitled to use the Property surface as reasonably necessary to facilitate its mineral operations pursuant to its mineral leases, Maple Energy asked Shah if he wished to sell the Property or enter a surface lease agreement in which it would pay Shah for its use. Shah declined and began making demands that Maple Energy cease using the Property surface. In a November 12, 2021 letter, Shah demanded that Maple Energy remove its equipment within 30 days or it would lock Maple Energy out of the Property or take legal action. Shah informed Maple Energy that he was negotiating with a "solar energy installer to install a 5MW solar farm" and needed the Property Maple Energy was using for its operations. Shah posted a "no trespassing" sign and placed a lock on the Property. With help from the sheriff's office, the lock was removed. During this time, Shah wrote letters to the sheriff and the Railroad Commission of Texas contending Maple Energy had no right to be on the Property and was conducting an "unpermitted gas flaring" and/or an "unpermitted gas flaring and venting operation" there. He also filed an affidavit with the Reeves County Clerk stating he had sent Maple Energy cease-and-desist letters.
In January 2022, Shah filed a federal lawsuit, acting pro se, in New Jersey where he resides, naming Maple Energy Holdings, LLC, Riverstone Holdings, LLC (which Shah identified as Maple Energy's parent company), and the Railroad Commission of Texas as defendants. Shah sought an injunction staying Maple Energy's operations on the Property and $600,000 in damages for Maple Energy's alleged "unauthorized oil and gas operations." In March 2022, Maple Energy filed a motion to dismiss Shah's lawsuit on several grounds, including lack of personal jurisdiction and failure to state a claim for relief. The district court granted the motion.
In March 2022, Maple Energy filed its original petition in the current lawsuit in Reeves County seeking: (1) a declaratory judgment that it had the right to use the surface estate as necessary to conduct its oil and gas operations under its mineral leases; (2) an injunction to prevent Shah from continuing to interfere with its rights under the leases; and (3) an attorney's fees award. The petition itself was 13 pages, but Maple Energy included 321 pages of exhibits.
(1) Shah's motion to dismiss and the trial court's first award of attorney's fees
Shah did not file a response to Maple Energy's petition and instead filed a motion to dismiss the lawsuit, again acting pro se. Shah primarily argued that the lawsuit should be dismissed because: Maple Energy was not the real party in interest and therefore lacked standing to bring the lawsuit; the same issues were pending in the New Jersey court; Shah was not properly served; and portions of Maple Energy's petition were "vague" and "unreadable." [2] The trial court denied the motion, and at Maple Energy's request, awarded it $9,738.00 in attorney's fees as the prevailing party pursuant to Texas Rule of Civil Procedure 91a. Shah attempted to appeal the trial court's order, but this Court dismissed the appeal for lack of jurisdiction, as it was not a final, appealable order.
(2) Maple Energy's summary judgment motion
In July 2022, Maple Energy filed a summary judgment motion seeking a final judgment on its request for declaratory and injunctive relief, together with an award of attorney's fees under the Uniform Declaratory Judgment Act. Maple Energy argued (1) as the mineral lessee, it had the right under Texas law to go on the Property to conduct operations reasonably necessary for producing oil, gas, and other minerals; (2) Shah was unreasonably restricting its use of the surface estate; and (3) the bankruptcy court already determined that Maple Energy's predecessor-in-interest had the right to reasonable use of the Property.
In support of its motion, Maple Energy filed documents from the bankruptcy court and the New Jersey district court proceedings. It also filed an affidavit of its managing director, Christopher Abbate, who attached a copy of the APA through which Maple Energy had purchased the mineral leases at issue in the bankruptcy court. Maple Energy provided documentation of Shah's above-described efforts to keep Maple Energy off the Property. Maple Energy also attached a copy of a June 2020 "notice of property for sale" of the Property, which Shah had previously filed with the court, representing that there were no oil and gas leases on the Property and the buyer would be entitled to "keep and operate" Maple Energy's tank battery and "other oil and gas operations" as part of the sale.
The trial court notified the parties of an August 5, 2022 hearing setting on Maple Energy's summary judgment motion. Shah did not file a response to the motion and did not appear at the hearing. After hearing argument from Maple Energy's counsel and noting Shah had been duly notified of the hearing but failed to appear, the trial court granted summary judgment on both of Maple Energy's claims for relief. The court further ruled that it would award Maple Energy its reasonable attorney's fees pursuant to the Uniform...
To continue reading
Request your trial