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Austin Oil and Gas Attorney Comments on Recent Texas Supreme Court Royalty Case

The Texas Supreme Court recently issued its opinion in Shell v. Ross, ruling that an oil and gas company did not have to reimburse a royalty owner for incorrect payments, because the statute of limitations had lapsed.  The decision overturned a jury verdict of $72,000 in favor of the royalty owner.

“This case is a wake-up call for all royalty owners,” said Gregory D. Jordan, an Austin oil and gas attorney.  “Even though Ross was in the right, the court ruled that he waited too long to act even if he was allegedly misled by the oil company.  I hope that all royalty owners will pay attention to this significant case,” noted Jordan.

Ralph Ross’s family first entered into a lease with Shell Oil Company in 1961, which required that Shell pay royalties on gas according to the “amount realized” by the company.  However, from 1988 to 1994, the royalties Shell paid were based on an average price, rather than the amount the company actually received.  In addition, from 1994 to 1997, the company paid royalties to Ross based on an internal figure that the company admitted it could not explain.  The company’s sole defense was that the four-year-long statute of limitations had passed.

Ross filed suit against Shell in 2002, outside of Texas’ four-year-long statute of limitations for contract claims.  The plaintiff sought to avoid the limitation through the fraudulent concealment doctrine which provides in part that the statute of limitations is tolled if the defendant has misled the plaintiff.  A jury agreed that Shell had fraudulently concealed its underpayment of royalties and that Ross could not have discovered the underpayment through reasonable diligence until 2002.  In overruling the jury’s decision, the Texas Supreme Court found that Ross could have discovered the underpayment through readily accessible public records, and should not have relied on a statement from Shell.

“Disputes over oil and gas royalty payments are common, and what this case shows is that royalty owners need to be vigilant,” said Jordan.  “If a royalty owner has any question about the royalty payments he has been receiving, that royalty owner should consult with a qualified oil and gas attorney at that time.  Further, it might be a good idea for royalty owners to have their royalty payments reviewed at least every three years to be sure that they are accurate.”

To learn more about the Austin oil and gas attorney, Austin Texas oil and gas litigation lawyer, Austin business lawyer and Austin business litigation attorney Gregory D. Jordan, visit, http://www.theaustintriallawyer.com.

Austin Employment Attorney Comments on Recent Disability Discrimination Lawsuit

Stevens Transport, a refrigerated transport company based in the Dallas area, will pay $50,000 to settle a disability lawsuit filed in federal court, according to the U.S. Equal Employment Opportunity Commission (EEOC).  The lawsuit alleged that the company refused to hire a paraplegic man because of his disability.  The man had applied for positions in management.

“The EEOC only files lawsuits against employers in a very small percentage of the matters in which employees file charges of discrimination,” said Gregory D. Jordan, an Austin employment lawyer.  “The pursuit of this disability lawsuit suggests the EEOC may be becoming more involved in disability claims now that the 2009 amendments to the Americans with Disabilities Act have become better understood.”

Andrew Scott became a paraplegic after an automobile collision in 2003.  According to the lawsuit, filed in the Northern District of Texas, he was turned down for two positions in management at Stevens Transport because of his disability.

The lawsuit alleges that Scott was contacted by the company after he posted his resume on a website for job applicants.  Scott has an economics degree and an M.B.A.  After a successful telephone interview, Stevens Transport asked Scott to come in for an in-person interview, and the company then learned of his disability.

The company’s management informed Scott during the interview that operations moved at a quick pace, and they were concerned he would not be able to keep up.  According to the EEOC, after much communication between Scott and the company, he was told that he would not be hired for either of two open management positions.

The EEOC argued that Stevens Transport was in violation of the Americans with Disabilities Act (ADA), which prohibits employers from refusing to hire a qualified applicant because of a disability.  After trying to reach a voluntary settlement, the EEOC filed the lawsuit in federal court.  The EEOC said that the company’s actions clearly violated the law, and were also counter-productive for the company.

In 2009, the Americans with Disabilities Act Amendments Act (ADAAA) took effect, extending ADA coverage.  In 2011, the EEOC received more than 25,000 ADA charges, a 21 percent increase from 2009.

To learn more visit, http://www.theaustintriallawyer.com.   Gregory D. Jordan is an Austin employment attorney, Austin business lawyer, Austin wrongful termination attorney and Austin discrimination lawyer.

Dallas Oil and Gas Company Wins $162 Million Verdict

Longview Energy Company, a Dallas-based oil and gas company, has been awarded a $162 million verdict by a South Texas jury that determined that two of the corporation’s directors had been unjustly enriched through the abuse of their authority over the firm’s operations in the Eagle Ford Shale.

The case, decided in Zavala County, in the District Court for the 365th Judicial District, is Longview Energy Company v. The Huff Energy L.P., Riley-Huff Energy Group LLC, William R. “Bill” Huff and Rick D’Angelo.

The jury found that the defendants abused their positions as directors of the company, breaching their fiduciary duties and misusing proprietary and confidential information.

The Eagle Ford Shale, in South Texas, is an oil and natural gas field in at least 24 counties. Wells in the northern portions of the Eagle Ford often produce more oil while those in the southern sections generally produce more gas.

Whether the plaintiff will be able to collect the full $162 million is a matter of dispute. The jury found that assets worth $42 million were wrongly obtained by Riley-Huff Energy Group, and that the company also received past revenues of $120 million due to the failure of the two directors to act within their fiduciary duty. The defendants’ attorneys have noted that the jury found the company spent $24.5 million in exchange for certain assets, and spent $127 million developing them.

Longview Energy Company is incorporated in Delaware, and the issue of whether the laws of that state allow the offset of funds used to obtain or develop assets, when a jury finds they were acquired through breach of fiduciary duty, was disputed by both sides in the case.

The lawsuit moved through the courts quickly, reaching a jury verdict just nine months after the case was filed. The suit alleged that directors Huff and D’Angelo breached their duties to Longview, taking corporate opportunites for themselves, to gain hundreds of millions of dollars. The two were also accused of misusing corporate information, and fraud.

The lawsuit further accused The Huff Energy Fund – a shareholder in Longview – and competitor Riley-Huff, of conspiring with D’Angelo and Huff to obtain assets for themselves, using their positions as Longview directors to gain information about the assets.

The lawsuit states that after directing Longview to look into purchasing assets in the Eagle Ford Shale, D’Angelo, Huff, and others founded Riley-Huff with the intention of acquiring the corporation’s opportunities for themselves.

The jury’s verdict finds that the two directors breached their duty to the company when they obtained the assets for themselves, and that Riley-Huff and Huff Energy participated knowingly in the directors’ actions.

Gregory D. Jordan is an Austin oil and gas attorney, Austin oil and gas litigation attorney, and Austin business litigation lawyer. To learn more, visit Theaustintriallawyer.com.

Disability Discrimination Lawsuit Settled by Dallas Company

A Dallas refrigerated transport company will pay $50,000 to settle a discrimination lawsuit brought by the Equal Employment Opportunity Commission (EEOC) on behalf of a paraplegic man who applied for two management positions at the company.

According to the lawsuit, Stevens Transport refused to hire Andrew Scott once the company learned of his disability.  Scott became a paraplegic after a car crash in 2003.

Scott, who has a degree in economics and an M.B.A., posted his resume on a job-search site.  After Stevens Transport contacted him, he completed a successful telephone interview.  Upon coming in for an in-person interview, the company learned that he was disabled.  According to the lawsuit, company management said they were concerned that Scott would not be able to keep up with the pace of the work, and he was ultimately not hired for either position.

Under the Americans with Disabilities Act, employers are generally prohibited from refusing to hire an otherwise qualified applicant because of a disability.

The EEOC claimed that the company was in violation of the Act.  After attempting to reach a voluntary settlement, the lawsuit was filed in federal court.  EEOC officials said that the action by Stevens Transport violated the law and was unjust for the individual discriminated against.  The EEOC suggested that such discrimination is actually damaging to the company as well since it excludes qualified applicants.

Gregory D. Jordan is an Austin employment attorney, Austin employment lawyer, Austin wrongful termination lawyer, Austin discrimination attorney and Austin business attorney.  To learn more, visit http://www.theaustintriallawyer.com.

Austin Oil and Gas Attorney Comments on Recent Texas Supreme Court Royalty Case

The Texas Supreme Court recently issued its opinion in Shell v. Ross, ruling that an oil and gas company did not have to reimburse a royalty owner for incorrect payments, because the statute of limitations had lapsed. The decision overturned a jury verdict of $72,000 in favor of the royalty owner.

“This case is a wake-up call for all royalty owners,” said Gregory D. Jordan, an Austin oil and gas attorney. “Even though Ross was in the right, the court ruled that he waited too long to act even if he was allegedly misled by the oil company. I hope that all royalty owners will pay attention to this significant case,” noted Jordan.

Ralph Ross’s family first entered into a lease with Shell Oil Company in 1961, which required that Shell pay royalties on gas according to the “amount realized” by the company. However, from 1988 to 1994, the royalties Shell paid were based on an average price, rather than the amount the company actually received. In addition, from 1994 to 1997, the company paid royalties to Ross based on an internal figure that the company admitted it could not explain. The company’s sole defense was that the four-year-long statute of limitations had passed.

Ross filed suit against Shell in 2002, outside of Texas’ four-year-long statute of limitations for contract claims. The plaintiff sought to avoid the limitation through the fraudulent concealment doctrine which provides in part that the statute of limitations is tolled if the defendant has misled the plaintiff. A jury agreed that Shell had fraudulently concealed its underpayment of royalties and that Ross could not have discovered the underpayment through reasonable diligence until 2002. In overruling the jury’s decision, the Texas Supreme Court found that Ross could have discovered the underpayment through readily accessible public records, and should not have relied on a statement from Shell.

“Disputes over oil and gas royalty payments are common, and what this case shows is that royalty owners need to be vigilant,” said Jordan. “If a royalty owner has any question about the royalty payments he has been receiving, that royalty owner should consult with a qualified oil and gas attorney at that time. Further, it might be a good idea for royalty owners to have their royalty payments reviewed at least every three years to be sure that they are accurate.”

To learn more about the Austin oil and gas attorney, Austin Texas oil and gas litigation lawyer, Austin business lawyer and Austin business litigation attorney Gregory D. Jordan, visit, http://www.theaustintriallawyer.com.

Renewable Energy Company Files Breach of Contract Lawsuit

A renewable energy firm has filed a lawsuit against a German company in a dispute over the formation of a Texas-based partnership. Forestech Energy claims that German Pellets breached a contract to create a company that would export wood pellets to Europe as a renewable bio fuel. The lawsuit was filed in Jefferson County District Court on May 24.

The suit claims that Forestech invested a significant amount of time and money in selecting a Woodville-Beaumont location for the project, and believed that German Pellets, an established European manufacturer of wood pellets, would be its partner.

Forestech had planned for the project to include a mill in Woodville and a Beaumont shipping site. The company claims that German Pellets expressed a desire to create a partnership, and represented that it could help with the financing of the enterprise. According to the lawsuit, German Pellets was in a better position to secure financing due to the size of the company and its greater equity.

The lawsuit alleges that German Pellets issued a letter of intent to Forestech proposing the formation of Texas German Pellets, a limited liability company. Forestech would receive an equity interest and a management fee. The suit claims that Forestech and German Pellets met several times to move the project forward and that the two companies proceeded as if a partnership had been formed.

The suit claims that Forestech developed a financial model, obtained permits for a plant site, researched sources of wood, and obtained shipping rights and a contract for natural gas. Meanwhile, according to the complaint, German Pellets engineered the facility for wood pellet manufacturing, purchased the property for the site, and paid for equipment, engineering, and demolition.

Forestech claims that German Pellets has not recorded Forestech’s interest in the new firm and has not paid the required management fee. In addition, the suit claims that the German company has not finished construction or begun operations, preventing Forestech from proceeding with the project.

German Pellets is Europe’s largest manufacturer of wood pellets, with 14 plants across the continent. According to Forestech Energy, the joint project would have produced 500,000 tons per year of white wood pellets.

The lawsuit claims breach of contract, misappropriation of trade secrets, fraud, and unjust enrichment. Forestech is seeking money damages, attorneys’ fees, and other relief. The case was filed in 60th District Court and will be heard by Judge Gary Sanderson.

Gregory D. Jordan is an Austin business attorney, and Austin business litigation lawyer, and Austin patent litigation attorney. To learn more, visit Theaustintriallawyer.com.

Renewable Energy Firm Sues German Wood Pellet Manufacturer

A renewable energy company has filed a lawsuit in a Texas court, accusing a German firm of breach of contract.  Forestech Energy claimed in the suit that it had invested considerable time and money into a partnership with the German pellets company.  According to the lawsuit, the two entities were to work together to develop an East Texas facility to mill and export wood pellets to Europe.

The lawsuit, filed May 24 in Jefferson County District Court, states that the two companies had agreed to establish a mill in Woodville and a shipping facility in Beaumont.  According to the complaint, German Pellets had issued a letter of intent to the American firm, proposing the formation of a limited liability company, Texas German Pellets.  The suit claims that Forestech was to receive an equity interest and a management fee, while the German company would secure financing.

The suit claims that representatives of the two companies met on several occasions to advance the project, that Forestech invested money into obtaining permits and contracts, and that German Pellets purchased the property for the site and did engineering and demolition work.

Forestech is now claiming that the German company failed to record Forestech’s interest in the new firm and has not paid management fees.  The complaint further alleges that Forestech has been prevented from proceeding with the project because German Pellets has failed to finish construction or begin operations.

The lawsuit was filed in 60th District Court, and the case will be heard by Judge Gary Sanderson.

Gregory D. Jordan is an Austin business litigation attorney and Austin business lawyer.  To learn more, visit http://www.theaustintriallawyer.com.

Gas Royalty Owner Learns Hard Lesson in Texas Supreme Court Case

The Texas Supreme Court has ruled against a gas royalty owner who filed suit against the Shell Oil Company for underpayment.  The case, Shell v. Ross, decided in December, 2011, demonstrates that royalty owners must be vigilant in protecting their interests.

Ralph Ross, whose family had contracted with Shell for gas drilling beginning in 1961, claimed that Shell had underpaid royalties for some time.  The company had agreed to pay royalties based on the “amount realized” from the gas.  However, from 1988 to 1994, Shell paid based on a “weighted average,” and from 1994 to 1997, the company admitted that it paid royalties based on an internally-created figure for which it allegedly had no explanation.

Ross sued Shell in 2002, and the company’s sole defense was that the four-year statute of limitations for contract actions had passed.  A Texas jury disagreed, awarding Ross $72,000.  The jury found that the “fraudulent concealment” doctrine applied, allowing Ross to avoid the statute of limitations.

The Texas Supreme Court overruled the jury’s verdict.  The Court found that Ross could have learned of the underpayment within the limitations period by accessing records available to the public, and should not have relied on a statement provided by Shell.

The state’s high court has in effect issued a warning to oil and gas royalty owners: it is your responsibility to ensure that you are being paid what you are entitled to.  As a consequence, if you have any question about royalties you are receiving, it would be a good idea to have royalty contracts and payments reviewed by an experienced oil and gas attorney at least every three years.

Gregory D. Jordan is an Austin oil and gas attorney and Texas oil and gas litigation lawyer.  To learn more, visit http://www.theaustintriallawyer.com.

South Texas Jury Awards Dallas Oil and Gas Company $162 Million Verdict

In a lawsuit claiming that two directors breached their fiduciary duties to wrongfully obtain hundreds of millions of dollars, a Dallas oil company has been awarded a jury verdict of $162 million.

The firm, Longview Energy Company, claimed that two directors had abused their authority in obtaining information about company resources and opportunities in the Eagle Ford Shale.  According to the lawsuit, the two received hundreds of millions of dollars from fraud and misuse of proprietary information.

The Eagle Ford Shale spans under more than 24 Texas counties and produces oil and natural gas, as well as natural gas liquids.

The case moved along at a quick pace, with just nine months passing between the lawsuit being filed and the jury handing down a verdict.

Delaware law became an issue in the case, as Longview Energy is incorporated there, and the defendants claimed that the laws of that state allowed them to offset money they had spent to obtain and develop the assets against the amount of the jury award.

The jury found that the two directors, Bill D’Angelo and William Huff, used their positions as directors to obtain proprietary information about opportunities in the Eagle Ford Shale, and then set up the Riley-Huff Energy Group to exploit those resources for their own benefit, thus breaching their fiduciary duty to Longview Energy.

Gregory D. Jordan is an Austin oil and gas attorney, Texas oil and gas litigation lawyer and Austin business attorney.  To learn more, visit http://www.theaustintriallawyer.com.

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