IN THE UNITED STATES COURT OF APPEALS

FOR THE FIFTH CIRCUIT

No. 17-10500

SEISMIC WELLS, L.L.C.,

 Plaintiff - Appellee

v.

SINCLAIR OIL AND GAS COMPANY,

 Defendant - Appellant

Appeal from the United States District Court

for the Northern District of Texas

USDC No. 5:15-CV-148

Before REAVLEY, GRAVES, and COSTA, Circuit Judges.

PER CURIAM:*

After the district court tossed out Seismic Wells, L.L.C.’s claims at trial, 

Sinclair Oil & Gas Co. sought attorneys’ fees under a contractual prevailing 

party provision. The district court denied that fee request. We AFFIRM.

I.

Years before these parties got together, Seismic agreed to a long term oil 

and gas lease that made it the sole operator on the Miller Ranch in west Texas. 

 

* 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

September 13, 2018

Lyle W. Cayce

Clerk

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Under that arrangement, Seismic could partner with oil companies to drill 

wells, but the right to operate would revert to Seismic when those companies 

stopped drilling. 

In 2005, Seismic signed a participation agreement with Sinclair Oil 

Corporation (a precursor to Sinclair Oil & Gas). Sinclair Corporation 

purchased a 37.5% stake in the Miller Ranch lease and had the option to 

assume operations; Seismic shared 3D seismic data for the lease with Sinclair; 

and the parties both agreed to fund the drilling of certain wells and split other 

expenses in proportion to their ownership interests. 

While the initial agreement was in effect, Sinclair Corporation conveyed 

its interest in the lease to Sinclair Oil & Gas through the conduit entity 

Sinclair Companies.1 In 2006, Seismic and Sinclair entered into a replacement 

participation agreement under which Sinclair assumed lease operations and

paid Seismic for an additional ownership interest of nearly 16%. At the same 

time Seismic and Sinclair finalized a Joint Operating Agreement (JOA) that 

provided additional detail regarding the responsibilities and liabilities of the 

parties in developing the lease.

After discovering that Sinclair was marketing its interest, including the 

right to operate wells on the lease, Seismic sought assurances that Sinclair 

would fulfill its obligations under the agreements. When those assurances 

were not forthcoming, Seismic and its principal Barry Tranckino filed suit 

against the three Sinclair entities and executive/director Ross Matthews. The 

first amended complaint alleged 17 counts, including claims of fraud, breach of 

contract, conspiracy, tortious interference, defamation/libel, and business 

disparagement.2 At the conclusion of the plaintiffs’ case at trial, the court 

 

1 Going forward, we refer to Sinclair Oil & Gas as Sinclair.

2 The district court dismissed with prejudice Seismic’s promissory estoppel claim 

(Count 9). And Sinclair did not seek to recover fees sustained defending against the tortious 

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granted defendants’ motion for judgment as a matter of law.

The Sinclair entities and Matthews then sought just over $1 million in 

attorneys’ fees incurred defending against Seismic’s claims. Defendants 

contended they were entitled to fees pursuant to the JOA’s prevailing party 

provision. That provision says, “In the event any party is required to bring 

legal proceedings to enforce any financial obligation of a party hereunder, the 

prevailing party in such action shall be entitled to recover . . . a reasonable 

attorney’s fee.”

The court denied the motion for three reasons: (1) the defendants failed 

to properly plead under Federal Rule of Civil Procedure 9(g); (2) the prevailing 

party provision does not apply because Seismic’s suit was not a legal 

proceeding brought to enforce a “financial obligation under the JOA”; and (3)

Sinclair did not adequately segregate its fee to isolate the work performed 

defending fee-eligible claims.

II.

Because we agree with the district court’s second reason—that the JOA’s 

prevailing party provision does not support an award of fees—it is the only one 

of the three issues we need to address. Of course, Sinclair prevailed when it 

obtained a full dismissal of Seismic’s claims, a decision our court has now 

affirmed. See Seismic Wells, L.L.C. v. Sinclair Cos., No. 17-10373, 2018 WL 

4191020, at *4–8 (5th Cir. Aug. 31, 2018) (upholding that judgment). But 

prevailing party status is not enough. The question it whether it prevailed in 

a lawsuit seeking “to enforce any financial obligation of a party” under the 

JOA. 

 

interference, defamation/libel, and business disparagement claims (Counts 13–16). So those 

claims are not relevant to this appeal.

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A.

We first address whether Seismic sued to “enforce” an obligation. Counts 

1–3, 5, 7–8, and 10–11 of the amended complaint alleged fraud that induced 

the plaintiffs to sign the replacement participation agreement and JOA.3 

Those claims sought to void the agreements, not enforce them. Because the 

fraud claims sought to render the contracts unenforceable, they do not come 

within the scope of the fee provision. Cf. Formosa Plastics Corp. USA v. 

Presidio Eng’rs & Contractors, Inc., 960 S.W.2d 41, 46 (Tex. 1998) (reaffirming 

“that the legal duty not to fraudulently procure a contract is separate and 

independent from the duties established by the contract itself”).

Seismic did allege, however, that Sinclair breached the initial 

participation agreement (Count 6) and its replacement (Count 12). And claims 

for breach of contract are the usual way parties look to enforce agreements in 

litigation. So those two claims at least clear the “enforce” hurdle to fee 

recovery.

B.

But the fee provision provides more obstacles. It does not apply unless 

the claims were brought to enforce the JOA. See Intercontinental Grp. P’ship 

v. KB Home Lone Star L.P., 295 S.W.3d 650, 661 (Tex. 2009) (recognizing that 

“hereunder” means under “this Contract”). That easily disposes of Count 6, 

which alleged breach of the initial participation agreement signed over a year 

before the JOA. See Fleet Oil & Gas, Ltd. v. EOG Res., Inc., 2014 WL 2159537, 

at *6 (Tex. App.—Waco May 22, 2014) (denying fees under a nearly identical 

provision because EOG asserted claims based on “an additional, separate 

 

3 There is no Count 4 in the first amended complaint, though Count 4 in the original 

complaint alleged fraudulent concealment, which we address and reject as a basis for fees 

like the other fraud counts.

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agreement,” never raising or prevailing on claims permitting recovery under 

the JOA). 

That same problem also applies to Count 12, as it alleged breach and 

anticipatory breach of the replacement participation agreement. Though 

Seismic’s complaint indicated that the JOA was “expressly incorporated into 

the Replacement Participation Agreement,” it was in reality attached to the 

contract as “Exhibit ‘C’ to that certain first agreement dated November 1, 

2006.” Exhibit “A,” by contrast, was “[a]ttached to and made part of that 

certain Participation Agreement.” (emphasis added). Moreover, Exhibit “A” 

lists the “[l]eases [s]ubject to the Participation Agreement and Joint Operating 

Agreement,” suggesting their separateness. (emphasis added). The 

replacement participation agreement and JOA are not one and the same. See 

Seismic Wells, 2018 WL 4191020, at *2 (recognizing that in addition to the 

replacement agreement the parties executed the JOA and an “Assignment and 

Bill of Sale” the same day).

It would seem then that Count 12, like all the others, cannot provide a 

basis for recovering fees. But one wrinkle remains. Count 12 also alleges that 

Sinclair breached the JOA by refusing to assign Seismic a leaky well or operate 

that well on its terms. As a result of the leak, water corroded the well’s inner 

casing. This portion of Count 12 thus did seek to enforce the JOA. 

C.

But that is not enough to get Sinclair across the finish line. The 

allegations must be seeking to enforce a “financial obligation.”4 

 

4 Seismic’s contention that Sinclair only sought fees incurred defending against the 

fraud claims is without merit. In its motion Sinclair did repeatedly ask for fees related to

the “fraud-based claims.” But in discussing those claims, Sinclair specifically pointed to 

Seismic’s allegation in Count 12 about the well assignment. Moreover, while Sinclair 

explicitly noted that it was not seeking fee recovery on the tortious interference or defamation 

claims, it did no such thing with respect to breach. 

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One court has evaluated “financial obligation,” which the JOA does not 

define, in the context of the same provision. It concluded that the term’s

ordinary meaning “requires some nexus to a monetary or pecuniary obligation 

of the party.” In re WBH Energy, LP, 2016 WL 3049666, at *12–13 (W.D. Tex. 

Bankr. May 20, 2016) (citing Black’s Law Dictionary). The defendant in that 

case had a financial obligation under the JOA to pay its share of joint interest 

billings as well as vendors and suppliers; if it had been sued for defaulting on 

those obligations and lost, its counterparty could have recovered fees. Id. at 

*13. But instead the primary remedy the plaintiff sought and the only one it 

obtained was injunctive (removing defendant as an operator). Id. at *14. The 

court held that preserving rights—including lien and operatorship ones—is a 

“far, far cry” from enforcing a financial obligation, so the plaintiff could not 

recover fees. Id. at *15; see also WBH Energy, L.P., 708 F. App’x 210, 211–12 

(5th Cir. 2018) (affirming the bankruptcy court and agreeing with its analysis).

Although Seismic sought monetary damages, that does not mean it was

enforcing a financial obligation. Damages are sought in lawsuits for various 

types of injuries. If, for example, water from a rainstorm damaged a 

homeowner’s property, she could seek damages from a contractor who had 

improperly fixed the leaky roof. But that does not make the contractor’s duty 

to fix the roof financial in nature. 

Seismic believed the leaky but still-productive well should be repaired, 

like many others in that area with casing leaks, whereas Sinclair thought that 

it should be plugged and abandoned. Seismic sued after it had elected to take 

over the well but Sinclair declined to reassign it. Turning over operatorship 

rights and running the well on Seismic’s preferred terms are not financial 

obligations. Sinclair did not refuse to make some payment specified in the 

agreement. Because the purported obligation to turn over the well was not 

financial, Sinclair cannot obtain fees on this remaining claim.

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* * *

We AFFIRM the district court’s denial of attorneys’ fees.

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