IN THE UNITED STATES COURT OF APPEALS

FOR THE FIFTH CIRCUIT

No. 15-20320

DERRICK PETROLEUM SERVICES, 

 Plaintiff - Appellee

v.

PLS, INCORPORATED, 

 Defendant - Appellant

Appeal from the United States District Court

for the Southern District Of Texas

USDC No. 4:14-CV-1520

Before KING, JOLLY, and ELROD, Circuit Judges.

PER CURIAM:*

After their business relationship deteriorated, Plaintiff–Appellee 

Derrick Petroleum Services and Defendant–Appellant PLS, Inc., disputed the 

nature of their relationship and which of them owned a jointly branded 

database of oil and gas transactions. After a four-day bench trial, the district 

court concluded that the parties did not form a partnership and that Derrick 

was the sole owner of the jointly branded database. We AFFIRM the judgment 

of the district court. 

 

* Pursuant to 5TH CIR. R. 47.5, the court has determined that this opinion should not 

be published and is not precedent except under the limited circumstances set forth in 5TH 

CIR. R. 47.5.4.

United States Court of Appeals

Fifth Circuit

FILED

August 4, 2016

Lyle W. Cayce

Clerk

 Case: 15-20320 Document: 00513624279 Page: 1 Date Filed: 08/04/2016
No. 15-20320

2

I. FACTUAL AND PROCEDURAL BACKGROUND

This appeal involves a dispute between Plaintiff–Appellee Derrick 

Petroleum Services (Derrick) and Defendant–Appellant PLS, Inc. (PLS) over 

which party owns the jointly branded Derrick/PLS Oil & Gas Mergers & 

Acquisitions Database (Derrick/PLS Database). The Derrick/PLS Database—

compiled from thousands of sources—contains data on over 16,000 past deals 

and over 3,000 current deals in the oil and gas industry. Prior to the formation 

of the relationship at issue here, Derrick had created a database (Derrick 

Database) that formed the basis of the jointly branded Derrick/PLS Database. 

In a Memorandum of Understanding (MOU) dated October 3, 2009, 

Derrick and PLS agreed to work together in a joint venture to develop and 

market database products for North America. Derrick’s primary role was 

developing and maintaining the Derrick/PLS Database, while PLS’s primary 

role was marketing and selling subscriptions to the database. In the MOU, 

Derrick and PLS each agreed to provide certain resources toward the joint 

venture, but the MOU failed to expressly specify which party owned the jointly 

branded Derrick/PLS Database. The parties agreed that the MOU represented 

their intent to form a long-term relationship and to form a separate limited 

liability company once the revenues from the joint venture met a specific 

threshold. By 2013, however, the parties’ business relationship had 

deteriorated substantially. They failed to negotiate successfully the formation 

of an LLC, and each party claimed that the other had breached the MOU, 

potentially triggering penalties that affected who owned the Derrick/PLS

Database.

On June 2, 2014, Derrick sued PLS, seeking a declaratory judgment that 

it owned the jointly branded Derrick/PLS Database, that the parties had no 

further obligations under the MOU, and that it was entitled to sell the 

database in the North American market. PLS disagreed and asserted that the 

 Case: 15-20320 Document: 00513624279 Page: 2 Date Filed: 08/04/2016
No. 15-20320

3

parties had formed a partnership, that PLS had a 50% ownership interest in 

the Derrick/PLS Database, and that Derrick had exited the partnership

prematurely, giving PLS certain unrestricted rights to the database. The 

parties agreed to bifurcate the litigation, with the first phase constituting a 

bench trial on two issues: (1) ownership of the Derrick/PLS Database and 

(2) whether the MOU was terminated when its initial term expired.1 The 

district court conducted a four-day bench trial in which it heard testimony from 

several witnesses and considered numerous exhibits. After the trial, the 

district court concluded that, inter alia, Derrick and PLS did not form a 

partnership, that Derrick was the sole owner of the Derrick/PLS Database, and 

that the MOU ended when its initial term expired. See generally Derrick 

Petroleum Servs. v. PLS, Inc., No. H-14-1520, 2014 WL 7447229 (S.D. Tex. Dec. 

31, 2014).

Relevant to this appeal, the district court first concluded that the parties 

did not form a partnership under Texas law. Considering five factors 

indicating the existence of a partnership, the district court found limited 

support for only two of the factors: the expressions of intent to form a 

partnership and parties’ contribution of property. However, because of “[t]he 

limited extent to which the two factors are present, and the absence of the 

other factors,” the district court concluded that Derrick and PLS did not enter 

into a partnership. Furthermore, the court found that the MOU did not 

explicitly address ownership of the Derrick/PLS Database and that the MOU’s

language was consistent with credible witness testimony and other evidence 

indicating that Derrick did not intend to transfer any ownership interest in the

database. The court therefore concluded “that Derrick retained exclusive 

 

1 The MOU contained an initial term of five years, but the parties disputed whether 

the provision regarding the formation of a separate LLC after surpassing a revenue threshold 

extended that term. 

 Case: 15-20320 Document: 00513624279 Page: 3 Date Filed: 08/04/2016
No. 15-20320

4

ownership of the Derrick Database, expanded and marketed as the jointly 

branded Derrick/PLS Database.” 

The district court entered a partial final judgment on May 12, 2015. PLS 

filed several motions challenging the district court’s findings of fact and 

conclusions of law, and the district court denied those motions, essentially for 

the reasons presented in its opinion. See generally Derrick Petroleum Servs. v. 

PLS, Inc., No. H-14-1520, 2015 WL 4715071 (S.D. Tex. Aug. 7, 2015). PLS 

timely appeals. 

II. STANDARD OF REVIEW

“The standard of review for a bench trial is well established: findings of 

fact are reviewed for clear error and legal issues are reviewed de novo.” Becker 

v. Tidewater, Inc., 586 F.3d 358, 365 (5th Cir. 2009) (quoting In re Mid-South 

Towing Co., 418 F.3d 526, 531 (5th Cir. 2005)). “A finding is clearly erroneous 

if it is without substantial evidence to support it, the court misinterpreted the 

effect of the evidence, or this court is convinced that the findings are against 

the preponderance of credible testimony.” Bd. of Trs. New Orleans Emp’rs Int’l 

Longshoremen’s Ass’n v. Gabriel, Roeder, Smith & Co., 529 F.3d 506, 509 (5th 

Cir. 2008). Accordingly, a factfinder’s choice between two permissible views of 

the evidence cannot be clearly erroneous. Guzman v. Hacienda Records & 

Recording Studio, Inc., 808 F.3d 1031, 1036 (5th Cir. 2015). However, 

“[d]espite this court’s typical deference to a district court’s factual findings, ‘a 

judgment based on a factual finding derived from an incorrect understanding 

of substantive law must be reversed.’” Barto v. Shore Const., L.L.C., 801 F.3d 

465, 471 (5th Cir. 2015) (quoting Mobil Expl. & Producing U.S., Inc. v. Cajun 

Const. Servs., Inc., 45 F.3d 96, 99 (5th Cir. 1995)). 

 Case: 15-20320 Document: 00513624279 Page: 4 Date Filed: 08/04/2016
No. 15-20320

5

III. EXISTENCE OF A PARTNERSHIP 

PLS first argues that the district court erred in concluding that Derrick 

and PLS did not form a partnership. Whether a partnership exists under 

Texas law is a question of fact. Allison v. Campbell, 298 S.W. 523, 525 (Tex. 

1927); accord 57 Tex. Jur. 3d Partnership § 143 (2016). Under Texas law, a 

court considers five factors to determine whether a partnership exists:

(1) receipt or right to receive a share of profits of the business;

(2) expression of an intent to be partners in the business;

(3) participation or right to participate in control of the business;

(4) agreement to share or sharing:

(A) losses of the business; or

(B) liability for claims by third parties against the 

business; and

(5) agreement to contribute or contributing money or property to 

the business.

Tex. Bus. Org. Code Ann. § 152.052(a). Proof of all factors is not required, but 

there must be sufficient evidence showing that, based on the totality of the 

circumstances, the factors indicate that a partnership was created. See Ingram 

v. Deere, 288 S.W.3d 886, 896–98 (Tex. 2009). Reviewing the record on appeal 

and the relevant Texas caselaw, we find that the district court correctly applied 

Texas law and did not clearly err in making material fact findings when it 

concluded that only two of the five factors—expression of an intent to form a 

partnership and contribution of property—were present to only a limited 

extent. See Guzman, 808 F.3d at 1036 (stating that the factfinder’s choice 

between two permissible views of the evidence cannot be clearly erroneous). 

Because the district court found that only two of the five factors provided 

limited indications of a partnership, the district court did not clearly err in 

concluding that Derrick and PLS did not enter into a partnership. See id. at 

898 (“Even conclusive evidence of only one factor normally will be insufficient 

to establish the existence of a partnership.”).

 Case: 15-20320 Document: 00513624279 Page: 5 Date Filed: 08/04/2016
No. 15-20320

6

IV. OWNERSHIP OF THE DATABASE

PLS also argues that the district court erred in concluding that Derrick 

had exclusive ownership of the jointly branded Derrick/PLS Database. 

Because the district court found that Derrick possessed the Derrick Database 

prior to the joint venture, the jointly branded Derrick/PLS Database is 

presumed to be Derrick’s property, “regardless of whether the property is used 

for partnership purposes.” Tex. Bus. Org. Code Ann. § 152.102(c); see also 

Chapman Custom Homes, Inc. v. Dall. Plumbing Co., 446 S.W.3d 29, 34 (Tex. 

App.—Dallas 2013, pet. granted), overruled on other grounds, 445 S.W.3d 716 

(Tex. 2014) (“[S]uch property is presumed to be the property of the partner that 

purchased the property with its own funds.”). Moreover, only Derrick had 

ultimate control over the content of the Derrick/PLS Database. See Rex-Tech 

Int’l, Inc., v. Rollings (In re Rollings), 451 F. App’x 340, 346 (5th Cir. 2011) (per 

curiam) (unpublished) (“Under Texas law, ‘[o]ne in possession (or control) of 

property is presumed to be the owner of it.’” (quoting Smith v. Briggs, 168 

S.W.2d 528, 531 (Tex. App.—San Antonio 1943, writ ref’d w.o.m.))).

PLS contends that the MOU established that PLS had an ownership 

interest in the jointly branded Derrick/PLS Database and that the district 

court erred by considering parol evidence to determine the parties’ intent. In 

construing a written agreement, a court must examine the entire agreement

to “ascertain the true intentions of the parties as expressed in the instrument.” 

J.M. Davidson, Inc. v. Webster, 128 S.W.3d 223, 229 (Tex. 2003). “A[n 

agreement] is unambiguous if it can be given a definite or certain legal 

meaning.” Id. “But if the agreement is susceptible to more than one reasonable 

interpretation, the agreement is ambiguous, creating a fact issue on the 

parties’ intent.” Milner v. Milner, 361 S.W.3d 615, 619 (Tex. 2012). 

In the present matter, the MOU does not contain any provision expressly

describing ownership of the jointly branded Derrick/PLS Database or expressly 

 Case: 15-20320 Document: 00513624279 Page: 6 Date Filed: 08/04/2016
No. 15-20320

7

stating that Derrick transferred ownership of the Derrick Database to the joint 

venture. The MOU only states that Derrick would “provide” the Derrick 

Database to the joint venture. See Provide, American Heritage Dictionary (4th 

ed. 2000) (defining “provide” as “to furnish; supply,” but not as to transfer). 

And the parties promised to “provide” other services in the MOU that are 

incompatible with a transfer of an ownership interest. Moreover, while PLS 

contends that the MOU clearly articulates the parties’ intent “to develop and 

market . . . database products,” the MOU lacks any language clearly indicating 

the parties’ intent to transfer the ownership of the database to the joint venture 

or PLS. Thus, the district court did not err in considering other evidence 

showing that the parties did not intend to convey ownership of the database. 

See Lenape Res. Corp. v. Tenn. Gas Pipeline Co., 925 S.W.2d 565, 574 (Tex. 

1996) (“If the written instrument is ambiguous, the trier of fact may look to 

parol evidence to determine the parties’ intent.”).

Alternatively, PLS contends that numerous documents—including the 

MOU, subscription contracts approved by Derrick, and several emails—

showed that Derrick transferred at least part ownership of the jointly branded 

Derrick/PLS Database to PLS. However, the district court, in concluding that 

Derrick did not intend to convey all or part ownership of the database and that 

Derrick was the sole owner of the database, relied on its credibility 

determinations regarding the testimony of several witnesses. See Canal Barge 

Co., Inc. v. Torco Oil Co., 220 F.3d 370, 375 (5th Cir. 2000) (“We cannot second 

guess the district court’s decision to believe one witness’ testimony over 

another’s or to discount a witness’ testimony.”). Furthermore, the district court 

relied on unrebutted expert witness testimony that explained that the jointly 

branded Derrick/PLS Database was only a continuation and expansion of the 

original Derrick Database and that Derrick had added content to the database 

based on suggestions from PLS and other companies. PLS has, at most,

 Case: 15-20320 Document: 00513624279 Page: 7 Date Filed: 08/04/2016
No. 15-20320

8

presented an alternative view of the evidence in the record and has failed to 

show any clear error by the district court. See Guzman, 808 F.3d at 1036. The 

district court therefore did not clearly err in concluding that Derrick never 

intended to transfer ownership of the database and that Derrick retained 

exclusive ownership of the jointly branded Derrick/PLS Database.2 

V. CONCLUSION

For the foregoing reasons, we AFFIRM the judgment of the district court.

 

2 PLS’s “joint work” claim similarly fails because of the district court’s factual finding 

that Derrick did not intend to convey the database to the joint venture or PLS. See Batiste 

v. Island Records, Inc., 179 F.3d 217, 222 n.7 (5th Cir. 1999) (noting that a “joint work” under 

17 U.S.C. § 101 “requires that each author intended the merger at the time the author 

prepares his or her contribution” (emphasis added)); Thomson v. Larson, 147 F.3d 195, 199–

200 (2d Cir. 1998) (stating that all alleged co-authors must fully intend to become co-authors 

when the joint work was prepared). 

 Case: 15-20320 Document: 00513624279 Page: 8 Date Filed: 08/04/2016