Court Opinion

ID: 70163
Source: CourtListenerOpinion
Date Created: 2010-04-26 06:56:52+00
Date Added: 2024-06-11T17:17:53.698940
License: Public Domain

IN THE UNITED STATES COURT OF APPEALS
                    FOR THE FIFTH CIRCUIT  United States Court of Appeals
                                                    Fifth Circuit

                                                 FILED
                                                                         December 14, 2009

                                     No. 09-40227                      Charles R. Fulbruge III
                                   Summary Calendar                            Clerk

RANDALL P CRANE; TONI CRANE,

                                                   Plaintiffs - Appellants
v.

SAMSON RESOURCES COMPANY,

                                                   Defendant - Appellee

                   Appeal from the United States District Court
                        for the Southern District of Texas
                              USDC No. 1:07-CV-64

Before REAVLEY, DAVIS, and HAYNES, Circuit Judges.
PER CURIAM:*
       This is an appeal without arguable merit from the district court's take-
nothing judgment. We AFFIRM.
                                              I.
       Samson Lone Star ("SLS") is a limited partnership that performed a
seismic survey on Appellants' property in Texas in anticipation of drilling for
minerals beneath the property. SLS never ended up drilling on the property, but

       *
         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 R. 47.5, the court has determined that this opinion should not
be published and is not precedent except under the limited circumstances set forth in 5TH CIR .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.
                                  No. 09-40227

it allegedly damaged the surface roads and vegetation while conducting the
survey. SLS is not and has never been a party to this suit. However, at the time
of the survey, Appellee was a general partner of SLS. Appellants seek to recover
damages allegedly caused by Appellee and SLS to the surface property during
the survey. Appellants' direct claims against SLS based on Appellants' status
as surface landowners failed in a separate state court action. Subsequently, all
independent and derivative claims against Appellee failed in this action.
                                       II.
      1. Appellee's liability on the contract.
      Appellants argue that they are entitled to damages for breach of contract.
The contract in question governed the mining of mineral rights under
Appellants' property between SLS and the mineral-right lessors.          Neither
Appellants nor Appellee in its individual capacity are parties to this contract.
Appellants purchased the right to sue on the contract from the mineral-right
lessors after SLS conducted the survey. The district court denied Appellants all
relief for its claims based on the contract, holding that the contract contains a
condition precedent which had to occur before the lessors could seek damages to
the surface property.    Specifically, the district court held that the contract
required SLS to actually start drilling for minerals before it incurred a duty to
repair or a duty to pay for damages to the surface property. Because SLS never
drilled, the district court held that Appellee could not be liable for breach of
contract. Appellants argue on appeal that the district court's interpretation of
the contract is incorrect.
      We do not need to interpret the contract to resolve this dispute.
Appellants' breach-of-contract claim is an action against Appellee's assets to
satisfy an obligation of the partnership. However, under Texas law, Appellants
may only seek relief from a general partner for actions taken by the partnership

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                                        No. 09-40227

when they have also obtained an unsatisfied judgment against the partnership.
Having failed to do this, Appellants' claims fail as a matter of law.
       As a general partner of SLS, Appellee's liability is governed by the Texas
Revised Partnership Act ("TRPA") and the Texas Revised Limited Partnership
Act ("TRLPA"). See T EX. R EV. C IV. S TAT. A NN. § 6132b-1.01 et seq. (Vernon 1994)
(TRPA); art. 6132a-1, § 1.01 et seq. (TRLPA); see also art. 6132a-1, § 4.03
(applying the TRPA to general partners of a limited partnership). Under the
TRPA, "[a]n action may be brought against a partnership and any or all of the
partners in the same action or in separate actions." § 6132b-3.05(b). Moreover,
"all partners are liable jointly and severally for all debts and obligations of the
partnership unless otherwise agreed by the claimant or provided by law."
§ 6132b-3.04.
       Nevertheless, a partnership remains "an entity distinct from its partners."
§ 6132b–2.01. As a distinct entity, "a partnership has the same powers as an
individual or corporation to do all things necessary or convenient to carry out its
business and affairs, including the power to . . . sue and be sued [and] make
contracts and guarantees [and] incur liabilities[.]"             § 6132b–3.01. Therefore,
"[a] judgment against a partnership is not by itself a judgment against a
partner . . . ." § 6132b–3.05(c); see also Kao Holdings, L.P. v. Young, 261 S.W.3d
60, 64 (Tex. App. 2008). One may seek judgment from a partner for actions that
partner took on behalf of the partnership without first seeking judgment from
the partnership if that partner is individually liable on the claim.                         See
§ 6132b-3.05(e);1 Reagan v. Lyberger, 156 S.W.3d 925, 928-29 (Tex. App. 2005).
However, a claimant cannot seek damages from a general partner's assets for

       1
        A claimant may proceed "directly against one or more partners or their property
without first seeking satisfaction from partnership property if: . . . (4) liability is imposed on
the partner by law independently of the person's status as a partner." § 6132b-3.05(e).

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                                        No. 09-40227

liabilities incurred solely by the partnership without also obtaining a judgment
against the partnership. See § 6132b-3.05(d).2
       In the instant case, Appellants assert that their breach-of-contract claim
against Appellee is "not against a 'partner'" but is really "against the
partnership." 3 In addition, Appellants state they have sued Appellee as "general
partner in its partnership capacity." Indeed, this is the only type of breach-of-
contract claim available in this case, as Appellee is not a party to the contract
and thus cannot be liable on the contract except in its capacity as general
partner. Because Appellants are only suing Appellee in its capacity as general
partner for SLS's breach of contract, and because SLS is not a party to this suit,
we must construe Appellant's breach-of-contract claim as an action against
Appellee's assets to satisfy an obligation of the partnership. However, there is
no judgment against SLS for breach of contract which a judgment against
Appellee could satisfy. Accordingly, Appellants' breach-of-contract claim against
Appellee as a general partner for SLS's obligations on the contract fails as a
matter of law.

       2
           § 6132b-3.05(d) states in relevant part:

       a creditor may proceed against one or more partners or their property to satisfy
       a judgment based on a claim that could have been successfully asserted against
       the partnership only if:
               (1) a judgment is also obtained against the partner; and
               (2) a judgment based on the same claim is obtained against the
               partnership that:
               (A) has not been reversed or vacated; and
               (B) remains unsatisfied for 90 days after:
               (i) the date of entry of the judgment; or
               (ii) the date of expiration or termination of the stay, if the judgment is
               contested by appropriate proceedings and execution on the judgment has
               been stayed.
       3
          Appellants later argue in their brief that this case is against both Appellee and SLS.
However, this is factually impossible, as SLS is not and never has been a party to this suit.
Inexplicably, Appellants also repeatedly refer to SLS as a limited partner of Appellee. This,
too, is factually impossible, as Appellee is a corporation.

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                                 No. 09-40227

            2. Appellee's individual liability.
      In addition to their breach-of-contract claim, Appellants argue that a
question of fact remains as to whether Appellee is independently liable for the
manner in which the survey was conducted. While not stated specifically, this
argument appears to be an attempt to resuscitate Appellants' claim for trespass
or for negligence. However, inasmuch as Appellee was involved in the actual
survey, it was acting in its role as agent for SLS. Indeed, under Texas law, a
limited partnership may act only through its general partner.          See Nw.
Otolaryngology Assocs. v. Mobilease, Inc., 786 S.W.2d 399, 404 (Tex. App. 1990).
No evidence has been presented that Appellee was acting independent of its role
as agent for SLS. Moreover, a state court has already found, and the district
court has confirmed, that no claims for negligence or trespass survive against
SLS for trespass or negligence. Accordingly, no liability can derivatively exist
for Appellee. See Shaw v. Kennedy, Ltd., 879 S.W.2d 240, 247-48 (Tex. 1994)
(take-nothing judgment against partnership extinguishes derivative liability
against general partners).
                                       III.
      Appellants have failed to demonstrate how the district court erred in
dismissing its claims.   The district court's take-nothing judgment against
Appellants is AFFIRMED.

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