Court Opinion

ID: 4373049
Source: CourtListenerOpinion
Date Created: 2019-03-04 09:37:39.102558+00
Date Added: 2024-06-11T14:22:33.917649
License: Public Domain

COURT OF APPEALS
                                  EIGHTH DISTRICT OF TEXAS
                                       EL PASO, TEXAS

                                                 §
  FLAMINGO PERMIAN OIL & GAS,
  L.L.C., FLAMINGO OPERATING,                    §              No. 08-18-00027-CV
  L.L.C., and OMAR MINHAJ,
                                                 §                 Appeal from the
                    Appellants,
                                                 §                83rd District Court
  v.
                                                 §             of Pecos County, Texas
  STAR EXPLORATION, L.L.C,
                                                 §              (TC# P-7720-83-CV)
                    Appellee.
                                                 §

                                        OPINION

       In this interlocutory appeal, Flamingo Permian Oil & Gas, L.L.C.; Flamingo Operating,

L.L.C.; and Omar Minhaj (collectively Flamingo) challenge a temporary injunction issued in favor

of Star Exploration, L.L.C. We dismiss Flamingo’s first three appellate points and affirm the

judgment of the trial court.

                                       BACKGROUND

       Star Exploration and Flamingo are part of a joint operating agreement (JOA) with respect

to certain oil and gas leases located in Pecos County. Under the JOA, Flamingo served as operator

and Star Exploration was the majority non-operating interest holder.       The JOA gave Star

Exploration as the majority non-operating interest holder the ability to call a vote to remove an
operator for violating the JOA. The majority interest vote of non-operators determines whether an

operator is retained or removed. The operator may not participate in the vote.

       On January 24, 2018, Star Exploration called a meeting to vote on the removal of Flamingo

as operator. Omar Minhaj was in attendance at the meeting on behalf of Flamingo. The members

voted (1) to remove Flamingo as operator due to alleged violations of the JOA for, among other

things, allowing liens to be placed on the property, and (2) to install Star Exploration as operator.

       Thereafter, Flamingo sued Star Exploration and others. Star Exploration countersued the

Flamingo entities and Minhaj as a third-party defendant, then filed an application for injunctive

relief. Star Exploration asked for Flamingo to be enjoined and restrained from: (1) refusing to

join in the immediate execution and delivery of a proper joint Form P-4 designating Star

Exploration as the Operator for the leasehold; (2) interfering, opposing, preventing, or refusing to

cooperate with the efforts of Star Exploration to obtain approval from the Texas Railroad

Commission of Form P-4 designating Star Exploration as operator; (3) further operating or

performing operations on the leaseholds following execution and delivery of the joint Form P-4;

(4) interfering, opposing, preventing, or refusing to cooperate with Star Exploration’s operation of

the leasehold once Star Exploration secured Texas Railroad Commission approval of the Form P-

4; and (5) refusing to deliver to Star Exploration upon Texas Railroad Commission approval of

Form P-4 operator status of well files, records, data, and all other documentation relating to the

previous operation of or necessary to continue to operate the leasehold.

       At the temporary injunction hearing, Star Exploration called Howard Gaddis as a witness.

Gaddis testified generally as to the existence and terms of the joint operating agreement between

Flamingo and Star Exploration, as well as liens and judgments in Pecos, Harris, and Midland

counties that either encumbered the property outright or placed the property in jeopardy. Flamingo

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appeared through counsel and did not call any witnesses. Following the hearing, the trial court

issued an order of February 8, 2018, granting Star Exploration’s request for temporary injunctive

relief (the February 8 Order). The February 8 Order did not set a date for trial, nor did it require

Star Exploration to post a bond. Flamingo filed its notice of appeal of this order on February 20,

2018.

        While the interlocutory appeal of the February 8 Order was pending in this Court, the trial

court issued a corrected order on March 7, 2018, that set a $50,000 bond, but that did not set a date

for trial (the March 7 Order). After briefs for Flamingo and Star Exploration were filed in this

Court, the trial court issued a second corrected order on July 12, 2018, that granted the same

temporary injunctive relief previously requested, set a $50,000 bond, and set a date for trial (the

July 12 Order).

        We now address the merits of Flamingo’s interlocutory appeal.

                                          DISCUSSION

        In four issues on appeal, Flamingo attacks the various orders’ validity on formal and

substantive grounds. We will begin with Flamingo’s objections as to form.

                                          Formal Defects

        In Issues One and Two, Flamingo contends that the February 8, 2018, order granting

temporary injunctive relief was void because it (1) failed to include an order setting the cause for

trial on the merits, and (2) failed to fix the amount of the security to be paid by Star Exploration

as required by the Texas Rules of Civil Procedure. In Issue Three, Flamingo also contends that

the March 7, 2018, corrected order was void because it failed to include an order setting the cause

for trial on the merits.

        These issues are all moot.

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       The appellate record here shows that both the February 8 Order and the March 7 Order

were superseded by the July 12 Order. It is undisputed that the July 12 Order, which appears in

this appellate record and which was issued while this appeal was pending, sets a date for trial on

the merits and fixes the amount of security to be paid by Star Exploration. All complained of

formal defects have been corrected.

       Issues One, Two, and Three are dismissed as moot.

                           Probable, Imminent, and Irreparable Injury

       Although the July 12 Order mooted all of Flamingo’s challenges to the form of the

temporary injunction, the July 12 Order did not moot Flamingo’s challenge to the merits of the

February 8 and March 7 Orders, since the substantive relief granted by the original and two

subsequent corrected orders was the same. See TEX.R.APP.P. 27.3 (if trial court modifies order

that has been appealed, appellate court must treat appeal as from the subsequent order and may

treat actions relating to the appeal of the first order as relating to the appeal of the subsequent

order); see also Tex. Health & Human Servs. Comm’n v. Advocates for Patient Access, Inc., 399
S.W.3d 615, 625 (Tex.App.—Austin 2013, no pet.).

       In Issue Four, Flamingo argues that both the February 8 and March 7 Orders were improper

on the merits because Star Exploration did not show it would suffer a probable, imminent, and

irreparable injury. Specifically, Flamingo maintains that the injury Star Exploration alleges is not

“irreparable” because even if Star Exploration’s claims are true, any harm can be remedied by

money damages.

       We review the trial court’s decision to grant or deny an injunction for abuse of discretion.

Butnaru v. Ford Motor Co., 84 S.W.3d 198, 204 (Tex. 2002). A temporary injunction’s purpose

is to preserve the status quo of the litigation's subject matter pending a trial on the merits. Id. To

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obtain a temporary injunction, the applicant must plead and prove three specific elements: (1) a

cause of action against the defendant; (2) a probable right to the relief sought; and (3) a probable,

imminent, and irreparable injury in the interim. Id. An injury is irreparable if the injured party

cannot be adequately compensated in damages or if the damages cannot be measured by any

certain pecuniary standard. Id.

       Star Exploration asserts that injunctive relief is proper and that damages are an inadequate

remedy in the event the property is lost because the value of the minerals present on the leasehold

asset and the projected recovery in years to come is speculative. We are not sure this is enough to

meet the standard, and Star Exploration has not cited case law suggesting that the speculative

nature of mineral valuation definitively prevents quantification of damages such that injunctive

relief is warranted on that basis alone. Still, even if damages could be quantified, we believe that

Star Exploration has shown a likelihood that Star Exploration is unable to pay damages, which

would justify the grant of injunctive relief. See Bankler v. Vale, 75 S.W.3d 29, 39 (Tex.App.—

San Antonio 2001, no pet.)(no adequate remedy at law for plaintiff where defendant cannot pay

damages). Star Exploration presented evidence at the hearing that Flamingo repeatedly failed to

pay debts, allowed liens to accrue against the property in violation of the JOA, and did not

participate in legal proceedings such that several default judgments had been taken against

Flamingo. Flamingo did not offer any evidence to the contrary, nor did Flamingo challenge the

trial court’s fact-findings related to these issues. This evidence supports the rational inference that

Flamingo cannot pay damages. In light of this and the other evidence in the record, we cannot say

that the trial court abused its discretion in issuing the temporary injunction.

       Issue Four is overruled.

                                          CONCLUCION

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       Issues One through Three are dismissed as moot. Issue Four presents no reversible error.

The judgment of the trial court is affirmed.

February 28, 2019
                                               YVONNE T. RODRIGUEZ, Justice

Before McClure, C.J., Rodriguez, and Palafox, JJ.

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