BEAUMONT – A petition for a writ of mandumus was filed with the Texas Court of Appeals 9th District in a case involving BBX Operating and Geosouthern Energy Corp.

The filing came after a dispute about obligations under a Rule 11 Agreement, which had been created to resolve an underlying lawsuit between BBX and Geosouthern and American Fluorite.

On Jan. 24, 2017 a district court found that BBX breached the agreement. BBX was then ordered to pay production revenue for October, November and December 2016 as well as revenue payment to production each month on an ongoing basis.

On March 1, the district court postponed the effective date of the previous order, putting it back to March 16. They also granted “additional specific performance relief to Geosouthern.”

The court documents questioned whether the district court abused its discretion when it put Rule 11 Agreement into effect and whether the district court was correct in its treatment of BBX, claiming that the company was denied “the procedural and substantive protections afforded by the Texas Rules of Civil Procedure and the Texas Constitution by (a) failing to require Geosouthern to plead its cause of action for breach of contract; (b) failing to allow BBX to conduct discovery on Geosouthern’s unpleaded breach of contract claim; (c) failing to afford BBC at least 21 days’ notice of the hearing date on Geosouthern’s dispositive motion; and (d) disregarding BBX’s right to try substantive issued of material fact to a jury.”

BBX also questioned why they had to pay when Geosouthern had failed to pay “various agreed expenses.”

The companies have been involved in the oil and gas industry. BBX has leases in Jasper, Tyler and Polk counties while Geosouthern owns mineral leaseholds. The two companies had signed an agreement prior to the intial lawsuit, filed by Geosouthern.

In May 2016, Geosouthern gave BBX notice “that it would withhold payments for its joint interest billings to BBX for a matter unrelated to the Rule 11 Agreement.” By October the companies had come to an agreement, according to court documents, but Geosouthern failed to pay the money it owed to BBX. As a result, BBX notified Geosouthern that “it intended to apply Geosouthern revenue payments to the balance of the joint interest billings Geosouthern had previously withheld.”

As a result of the ongoing dispute BBX filed the writ, stating they “requests that the court grants this petition for writ of mandumus, and issue an order directing the district court to vacate its orders of Jan. 24, 2017 and March 1, 2017.”

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