Court Opinion

ID: 9555809
Source: CourtListenerOpinion
Date Created: 2023-08-15 13:08:44.486853+00
Date Added: 2024-06-11T15:34:13.558977
License: Public Domain

Fourth Court of Appeals
                                      San Antonio, Texas
                                 MEMORANDUM OPINION

                                         No. 04-23-00385-CV

            Dean DAVENPORT, Individually and as Trustee of the CRD 2017 Trust, and
                                    Jana Davenport,
                                       Appellants

                                                  v.

                                     EOG RESOURCES, INC.,
                                           Appellee

                     From the 111th Judicial District Court, Webb County, Texas
                               Trial Court No. 2023-CVG-00491-D2
                           Honorable Monica Z. Notzon, Judge Presiding

Opinion by:       Patricia O. Alvarez, Justice

Sitting:          Rebeca C. Martinez, Chief Justice
                  Patricia O. Alvarez, Justice
                  Irene Rios, Justice

Delivered and Filed: August 9, 2023

AFFIRMED

           This is an interlocutory appeal from temporary injunction orders. Ranch owners sued the

mineral estate leaseholder to restrict its access to their ranch to a specific entry gate and road. The

leaseholder balked, and both sides sought temporary injunctions. The trial court denied the ranch

owners’ application and granted the leaseholder’s application. Having reviewed the record, we

cannot conclude that the trial court abused its discretion. We affirm the trial court’s orders.
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                                                  BACKGROUND

         We recite the relevant alleged facts from the parties’ pleadings and the appellate record. 1

A.       Ranch Purchase, Garner Lease

         In 2020, Dean R. Davenport, his wife Jana, and the CRD 2017 Trust (collectively the

Davenports) purchased four adjacent tracts in Webb County, comprising about 5,000 acres, to form

a single ranch. The Davenport’s ranch, as they knew when they purchased the tracts, was

originally part of a larger tract burdened by a 1967 oil and gas lease (the Garner lease).

         The Garner lease burdens tracts in northern Webb County; the burdened tracts are mostly

east of U.S. Highway 83, north of State Highway 44, and miles west of Interstate Highway 35.

The Garner lease has been operated since 1999 by EOG Resources, Inc. EOG’s chief point of

entry to the burdened tracts has been from U.S. Highway 83, but EOG was not conducting any oil

or gas operations on the ranch’s tracts when the Davenports purchased them.

B.       Water Purchase Agreement

         In January 2022, the Davenports 2 and EOG negotiated a Water Purchase Agreement. The

Agreement calls for the parties to build a “Frac Pond” capable of holding at least 1,000,000 barrels

of water, and for EOG to purchase fresh water from the Davenports for use in EOG’s oil and gas

operations on or off the ranch. The Agreement includes the following language:

             This Non Exclusive Take Or Pay Water Purchase Agreement (the
         “Agreement”) sets forth terms and conditions, whereby [the Davenports] hereby
         grant [to EOG] for adequate consideration . . . the right of ingress and egress on
         designated roads for the purpose of producing, operating, and obtaining water from
         Grantor’s Frac Pond . . . or designated water wells on [the ranch] . . . .
             For and in consideration of the sum of TEN AND NO/100 DOLLARS ($10.00)
         and other good and valuable consideration, the receipt and sufficiency of which are
         hereby acknowledged, Grantor and EOG agree as follows:

1
  We express no opinion about the truth of the parties’ pleaded facts, witness testimony, or other evidence presented
in the underlying case. Further, “[w]e limit the scope of our review to the validity of the order[s], without reviewing
or deciding the underlying merits.” See Henry v. Cox, 520 S.W.3d 28, 33–34 (Tex. 2017).
2
  The Agreement identifies the Davenports and two LLCs managed by Dean R. Davenport as the grantor.

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           ...
           8. EOG shall also have the right of vehicular and pedestrian access on
           Designated Roads reasonably necessary for the operation, use, and maintenance
           of the related facilities operated pursuant to this Agreement.
           9. EOG shall enter and exit the Grantor’s Lands through the Krueger Rd. gate.
           EOG agrees to use existing roads that will be designated by Grantor
           (“Designated Roads”) over Grantor’s Lands covered hereby for ingress and
           egress to the Frac Pond and/or designated water wells and agrees to maintain
           such roads in good condition at all times. EOG shall promptly repair any
           damage or ruts caused by EOG’s use of Designated Roads.
           ...
           20. EOG agrees to extend and incorporate herein all terms and provisions
           relating to assignments, releases, insurance, roads, surface and environmental
           issues set forth in the Lease; however, if the terms and provisions of this
           Agreement conflict with any other agreement, including the Lease, the terms
           and conditions of this Agreement shall control.

C.     EOG Traffic on the Ranch

       In April 2022, the frac pond was completed. To access the water, EOG’s vehicles began

entering and leaving the ranch from Kreuger Road, which is not paved, and they used only the

Kreuger Road entrance, which is on the ranch’s east side.

       In late 2022, EOG informed the Davenports of its plans to begin production from their

ranch. EOG’s plan was to site new wells and a production facility on the Davenports’ ranch, to

access the sites from the west via a new gate, and to reach the sites using a new road across the

northern portion of the ranch.

       The Davenports objected to EOG’s plans.

D.     Litigation Begins

       When EOG cut through the ranch’s perimeter fence to create the new entrance, the

Davenports sued to limit EOG’s entry point to the Kreuger Road entrance. They argued that EOG

already has access to the proposed sites and facility locations via Krueger Road; if a new road on

their ranch is needed, there is a better route than the one EOG plans; and the new road is

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unnecessarily close to the Davenports’ home and will place their family and friends at greater risk

of accident, injury, or death.

       EOG counterclaimed; it alleged that the Davenports were interfering with its dominant

estate rights under the Garner lease, and it sought a declaratory judgment to determine its rights

under the lease. EOG asserted that Kreuger Road, in its current condition, was not capable of

accommodating EOG’s heavy equipment, restricting its ranch access to the Kreuger Road entrance

would result in an indefinite delay in constructing the oil terminal—which would cause

incalculable losses from delayed production and potential reservoir damage—and the new road

that EOG would construct across the ranch would not interfere with any existing surface use.

       Each side asked the trial court to grant a temporary injunction in its favor.

E.     Hearing on Temporary Injunction Applications

       On April 11, 2023, the trial court held an evidentiary hearing on the applications.

       1.      EOG’s Witnesses

       EOG’s witnesses testified to the following facts.

               a.      Kreuger Road Issues

       Kreuger Road cannot support the heavy equipment they need to move onto the ranch to

drill and operate the planned pad sites, wells, and production facility. Specifically, there are four

wooden bridges on Kreuger Road, and the bridges cannot safely support the 340,000-pound coil

tubing rig needed for each well site. Kreuger Road has some below-grade low water crossings to

get to the lease. In case of heavy rain, the road may become impassable, which would leave its

people and equipment at the site stranded, and others unable to reach the site. EOG is working

with the county to upgrade Kreuger Road to handle heavy loads, the upgrade should be complete

in two years, and EOG will then use Kreuger Road to access the ranch.

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              b.      New Wells, Pads, Facility

       EOG plans to create nine twelve-well pads and an associated production facility on the

ranch. The pads will be located just south of an existing east-west oil pipeline with the pads

positioned as close to the pipeline as possible to minimize the surface impact. The production

facility location was selected to minimize the pressure drop for the development of the presently

planned and future wells.

              c.      New Road

       EOG has been accessing its Garner lease wells on an adjacent ranch, which is north and

west of the Davenport ranch, from the west using roads connected to U.S. Highway 83.

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       To access the new pads and production facility on the Davenport ranch, EOG planned to

create a new entrance through a perimeter fence that runs along the northern boundary of the ranch

and build a new road that runs primarily east-west across the northern portion of the ranch. EOG’s

vehicles would arrive from U.S. Highway 83, travel east across the adjacent ranch’s roads, enter

the Davenport ranch from the northwest via a new gate, and traverse the planned east-west road to

access the locations for the new pad sites, wells, and production facility.

       EOG’s planned new road will be located south of the new pad sites to avoid crossing the

forty-five pipelines that will extend northward from the pad sites. The planned new road is

designed to safely support all the heavy equipment, and it is needed now to avoid irreparable injury.

               d.      Irreparable Injury

       The irreparable injury EOG seeks to avoid is an unrecoverable loss of hydrocarbons based

on a delay in offsetting production beyond one year. Here, the initial wells were drilled in April

2022. After between one and two years, production from subsequent wells will be harmed, and

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by two years, “the damage has pretty much been done,” and there will be hydrocarbons that are

irretrievably lost.

          2.     Davenports’ Witness

          Dean Davenport was the Davenports’ only witness; he testified to the following facts.

                 a.      Kreuger Road Issues

          He drove Kreuger Road with EOG representatives, and they did not express any concerns

about using Kreuger Road for their equipment. He has seen drilling rigs, vacuum trucks, and coil

tubing rigs using Kreuger Road, and he has seen heavy equipment use the wooden bridges. He

acknowledged that EOG raised safety concerns about using Kreuger Road in case of heavy rains,

and EOG asked about exiting his ranch to the west using his roads that lead to Highway 83.

                 b.      New Gate, New Road Issues

          Davenport opposes EOG’s planned route for its new road across his ranch for several

reasons: it will cross a new asphalt road he had built; it will damage existing water lines running

across his property; and the new entrance is near to, and visible from, his home. He is worried for

the safety of his young son, relatives, friends, and employees because of the number of vehicles

that will be transiting near his home and barns.

F.        Temporary Injunction Orders

          After the parties rested and closed, the trial court found that Kreuger Road was not “capable

of sustaining the operations for EOG.” The trial court stated its intent to grant EOG’s requested

relief.

          On April 12, 2023, the trial court signed an order which denied the Davenports’ application

for a temporary injunction.       The same day, it signed another order which granted EOG’s

application: it found certain facts, and it enjoined the Davenports from interfering with EOG’s

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access to the ranch. But the order included a finding that the trial court had expressly stated should

not be included.

        After the Davenports pointed out the error, on May 15, 2023, the trial court signed an

amended order: it omitted the proscribed finding and replaced the earlier order granting EOG’s

application.

G.      Parties’ Arguments

        The Davenports assert that under the Agreement, EOG agreed to enter the ranch through

only the Kreuger Road gate, and when EOG created a new entrance and began accessing the ranch

through it, EOG breached the Agreement and disrupted the status quo.               According to the

Davenports, the applicable status quo ante was EOG accessing the ranch exclusively through the

Kreuger Road entrance, and the trial court erred by failing to preserve that status quo when it

denied their application and granted EOG’s application.

        EOG argues the Agreement pertains only to its activities to produce, operate, and get water

from the Frac Pond. It insists that the Agreement does not restrict its preexisting rights of access

under the Garner lease, and the status quo ante was its previously unhindered access to the ranch

for its oil and gas operations.

        We begin with the trial court’s order granting EOG’s application for a temporary

injunction.

                       EOG’S APPLICATION FOR TEMPORARY INJUNCTION

        Before we address the parties’ arguments, we briefly recite the applicable law and standard

of review.

A.      Temporary Injunction Requirements

        The purpose of a temporary injunction “is to preserve the status quo of the litigation’s

subject matter pending a trial on the merits.” Butnaru v. Ford Motor Co., 84 S.W.3d 198, 204

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(Tex. 2002); accord Camp Mystic, Inc. v. Eastland, 399 S.W.3d 266, 272 (Tex. App.—San

Antonio 2012, no pet.).

       Ordinarily, “[t]he party applying for a temporary injunction ‘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.’” Abbott v. Anti-

Defamation League Austin, Sw., & Texoma Regions, 610 S.W.3d 911, 916 (Tex. 2020) (per

curiam) (quoting Butnaru, 84 S.W.3d at 204).

B.     Standard of Review

       “Whether to grant or deny a temporary injunction is within the trial court’s sound

discretion.” Butnaru, 84 S.W.3d at 204; see Anti-Defamation League, 610 S.W.3d at 916.

       On appeal, “the court of appeals cannot overrule the trial court’s decision unless the trial

court acted unreasonably or in an arbitrary manner, without reference to guiding rules or

principles.” Butnaru, 84 S.W.3d at 211; see Argo Group US, Inc. v. Levinson, 468 S.W.3d 698,

700 (Tex. App.—San Antonio 2015, no pet.) (op. on reh’g). “The reviewing court must not

substitute its judgment for the trial court’s judgment unless the trial court’s action was so arbitrary

that it exceeded the bounds of reasonable discretion.” Butnaru, 84 S.W.3d at 204; accord

Washington v. Associated Builders & Contractors of S. Tex. Inc., 621 S.W.3d 305, 311 (Tex.

App.—San Antonio 2021, no pet.).

       “We review the evidence in the light most favorable to the trial court’s order and indulge

all reasonable inferences in favor of the decision.” Argo Group, 468 S.W.3d at 700; accord

Washington, 621 S.W.3d at 311. “In resolving evidentiary matters, a trial court does not abuse its

discretion ‘if some evidence reasonably supports the court’s ruling.’” Anti-Defamation League,

610 S.W.3d at 916 (quoting Henry v. Cox, 520 S.W.3d 28, 34 (Tex. 2017)); accord Davis v. Huey,

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571 S.W.2d 859, 862 (Tex. 1978) (“An abuse of discretion does not exist where the trial court

bases its decisions on conflicting evidence.”).

C.     Cause of Action

       The first element EOG had to plead and prove was a cause of action against the Davenports.

See Butnaru, 84 S.W.3d at 204. In its original petition, EOG sued the Davenports and asked the

trial court to determine the parties’ respective rights under the Garner lease. EOG attached a copy

of the Garner lease, which grants the lessee the right to explore, develop, and produce oil and gas

from the subject tracts. It also attached other documents purporting to show that EOG was the

present leaseholder, and Davenport acknowledged that all of the Davenport ranch was subject to

the Garner lease. EOG presented its request as a declaratory judgment action, which is a statutory

cause of action. See Brennan v. City of Willow Park, 376 S.W.3d 910, 922 (Tex. App.—Fort

Worth 2012, pet. denied) (citing TEX. CIV. PRAC. & REM. CODE ANN. § 37.004) (recognizing a

declaratory judgment action as a statutory cause of action); Tex. Mun. Power Agency v. Pub. Util.

Comm’n, 100 S.W.3d 510, 515 (Tex. App.—Austin 2003, pet. denied) (same).

       Reviewing the evidence in the light most favorable to the trial court’s order, and making

all reasonable inferences in its favor, we conclude there was some evidence to reasonably support

the trial court’s finding that EOG pled and proved a cause of action against the Davenports. See

Anti-Defamation League, 610 S.W.3d at 916 (some evidence); Washington, 621 S.W.3d at 311

(favorable light, reasonable inferences).

D.     Probable Right to Recover

       The second element EOG had to plead and prove was its probable right to the relief sought.

See Butnaru, 84 S.W.3d at 204. “[T]o show a probable right of recovery, the applicant must plead

a cause of action and present some evidence that tends to sustain it.” Intercontinental Terminals

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Co., LLC v. Vopak N. Am., Inc., 354 S.W.3d 887, 897 (Tex. App.—Houston [1st Dist.] 2011, no

pet.); see Butnaru, 84 S.W.3d at 211.

       The Davenports acknowledged that their ranch is subject to the Garner lease, but they

argued that the Water Purchase Agreement restricts EOG’s access to the Kreuger Road gate, and

this limited access from Kreuger Road was reasonable. Davenport testified that he had seen

drilling rigs, vacuum trucks, and coil tubing rigs using Kreuger Road, including the wooden

bridges. He acknowledged he did not know what the maximum safe weight rating was for the

bridges, but trucks could bypass the bridges by driving on the dirt paths that skirt around the

bridges.

       EOG argued that, as the leaseholder, it was entitled to create a new entrance and road

because each was reasonably necessary for it to access the planned sites, construct the production

facility, drill the wells, and produce the oil and gas as planned. See Lightning Oil Co. v. Anadarko

E&P Onshore, LLC, 520 S.W.3d 39, 48 (Tex. 2017) (recognizing that the mineral estate owner

“has the right to use as much of the surface ‘as is reasonably necessary to produce and remove the

minerals’ encompassed by the lease” (quoting Getty Oil Co. v. Jones, 470 S.W.2d 618, 621 (Tex.

1971))).

       EOG’s witnesses testified that Kreuger Road’s four wooden bridges cannot safely support

the 340,000-pound coil tubing rig needed for each well site. The road has some below-grade low

water crossings to get to the lease, and in case of heavy rain, the road may become impassable. In

that case, its people and equipment at the site could be stranded and others could be prevented

from reaching the site.

       As the factfinder, the trial court could choose to give greater weight and credibility to

EOG’s evidence. See City of Keller v. Wilson, 168 S.W.3d 802, 819 (Tex. 2005); Montgomery

Indep. Sch. Dist. v. Davis, 34 S.W.3d 559, 567 (Tex. 2000). It could have credited EOG’s evidence

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showing why access through the Kreuger Road gate is not feasible and its new gate and road are

reasonably necessary to produce and remove its oil and gas. See City of Keller, 168 S.W.3d at

819; see also Anti-Defamation League, 610 S.W.3d at 916 (“In resolving evidentiary matters, a

trial court does not abuse its discretion ‘if some evidence reasonably supports the court’s ruling.’”

(quoting Henry, 520 S.W.3d at 34)); Frey v. CST Props., LLC, No. 04-13-00450-CV, 2014 WL

783324, at *5 (Tex. App.—San Antonio Feb. 26, 2014, no pet.) (mem. op.) (citing Butnaru, 84

S.W.3d at 211) (“The trial court does not abuse its discretion . . . if [it] bases its decision on the

probable right of recovery on conflicting evidence.”).

        Reviewing the evidence in the light most favorable to the trial court’s order, and making

all reasonable inferences in its favor, we conclude there was some evidence to reasonably support

the trial court’s finding that EOG demonstrated its probable right to the relief sought. See Anti-

Defamation League, 610 S.W.3d at 916 (some evidence); Butnaru, 84 S.W.3d at 211 (probable

right); Washington, 621 S.W.3d at 311 (favorable light, reasonable inferences).

E.      Irreparable Injury

        The third element EOG had to plead and prove to obtain a temporary injunction was “a

probable, imminent, and irreparable injury in the interim.” See Butnaru, 84 S.W.3d at 204. EOG

pled and its witnesses testified that it needed to timely develop the planned facilities and forcing it

to access the ranch through the Kreuger Road gate would delay or deny its necessary development.

Its reservoir engineer testified that the adjacent wells were drilled in April 2022, and delaying

development of the planned wells and production facility would harm future production. He added

that after two years, the damage to the wells and the reservoir could be permanent, and some

hydrocarbons would be irretrievably lost. EOG insisted that the damages it would incur “would

be difficult, if not impossible, to calculate.”

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       1.      Applicable Law

       “An injury is irreparable . . . if the damages cannot be measured by any certain pecuniary

standard.” Id.; accord Washington, 621 S.W.3d at 311. “[The temporary injunction order must]

give the reasons why injury will be suffered if the interlocutory relief is not ordered.” Grounds v.

First GroundRock Royalties, LLC, 629 S.W.3d 674, 676 (Tex. App.—San Antonio 2021, no pet.)

(quoting State v. Cook United, Inc., 464 S.W.2d 105, 106 (Tex. 1971)); accord Hoist Liftruck Mfg.

v. Carruth-Doggett, Inc., 485 S.W.3d 120, 122–23 (Tex. App.—Houston [14th Dist.] 2016, pet.

withdrawn)).

       2.      Injunction Order

       The trial court’s order granting EOG’s application, in compliance with Rule 683, identified

the irreparable injury. Cf. Grounds, 629 S.W.3d at 676 (citing TEX. R. CIV. P. 683); Hoist Liftruck

Mfg., 485 S.W.3d at 122–23. It expressly found that if the injunction did not issue, EOG would

suffer an indefinite delay in constructing the new facilities which would cause a loss of production,

lost revenue, and potential permanent reservoir damage to existing and new wells, and the resulting

loss could not be readily calculated.

       Reviewing the evidence in the light most favorable to the trial court’s order, and making

all reasonable inferences in its favor, we conclude there was some evidence to reasonably support

the trial court’s finding that EOG demonstrated probable, imminent, and irreparable injury if the

injunction did not issue. See Anti-Defamation League, 610 S.W.3d at 916 (some evidence);

Butnaru, 84 S.W.3d at 204 (irreparable injury); Washington, 621 S.W.3d at 311 (favorable light,

reasonable inferences).

F.     Temporary Injunction Elements

       As we have discussed, there was some evidence that reasonably supports the trial court’s

findings that EOG pled and proved each essential element to be entitled to a temporary injunction:

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

irreparable injury if the injunction did not issue. See Anti-Defamation League, 610 S.W.3d at 916

(some evidence); Butnaru, 84 S.W.3d at 204 (temporary injunction elements). Accordingly, we

cannot conclude that the trial court abused its discretion in granting EOG’s application for a

temporary injunction. See Anti-Defamation League, 610 S.W.3d at 916; Butnaru, 84 S.W.3d at

211.

        We turn now to the trial court’s order denying the Davenports’ application.

                   DAVENPORTS’ APPLICATION FOR TEMPORARY INJUNCTION

        In their amended petition, the Davenports presented three claims against EOG: (1) trespass

to real property, (2) violation of the reasonably necessary requirement, and (3) breach of contract.

They also sought a temporary injunction to enjoin EOG from (1) entering or exiting their ranch by

any other gate than the Kreuger Road gate, (2) accessing the proposed new sites using any road

other than the one they designated, (3) creating a new gate or constructing a new road, and (4)

clearing land for a new road. They argued that they pled and proved a cause of action, a probable

right of recovery, and an irreparable injury, and they asked the trial court to grant their application.

See Butnaru, 84 S.W.3d at 204 (temporary injunction elements).

        But the trial court denied the Davenports’ application, and we have already concluded it

did not abuse its discretion in granting EOG’s application. Therefore, the trial court necessarily

found that the Davenports had not pled and proved each essential element of a temporary

injunction. See id. For example, the trial court may have concluded that the Water Purchase

Agreement applied only to EOG’s water production activities, and the Agreement’s terms did not

control over EOG’s right to its reasonably necessary use of the ranch to produce and remove its

oil and gas.

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       Without addressing the merits of the parties’ respective causes of action, we conclude “that

at least some basis exists upon which the trial court could have properly held that the [Davenports]

were not entitled to a temporary injunction pending the final hearing.” See Davis, 571 S.W.2d at

863; Intercontinental Terminals, 354 S.W.3d at 892 (“Our review of the trial court’s decision is

limited to the validity of its temporary injunction order; we do not consider the merits of the

underlying case.”).

       Reviewing the evidence in the light most favorable to the trial court’s order—which denied

the Davenports’ application—and making all reasonable inferences in favor of the order, we

cannot conclude the trial court abused its discretion in denying the Davenports’ application for a

temporary injunction. See Anti-Defamation League, 610 S.W.3d at 916; Butnaru, 84 S.W.3d at

211.

                                           CONCLUSION

       Having reviewed the evidence in the light most favorable to the trial court’s orders and

having made all reasonable inferences in favor of its rulings, we cannot conclude that the trial court

abused its discretion in granting EOG’s application for a temporary injunction or in denying the

Davenports’ application for a temporary injunction.

       Accordingly, we affirm the trial court’s orders.

                                                   Patricia O. Alvarez, Justice

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