SE Texas Record

Friday, December 6, 2019

Mesa Southern loses appeal to recover payment from Deep Energy Explorations

By William Sassani | Nov 27, 2019

Justice Kevin Jewell | Texas 14th Court of Appeals

Houston-The Texas 14th Court of Appeals has upheld a lower court ruling in favor of Deep Energy Explorations and against Mesa Southern, saying that Mesa cannot recover monies owed to it by Deep Energy because Mesa signed a waiver.

Writing for the Court’s 11-page ruling, Justice Kevin Jewell said that Mesa had signed a master service agreement with Deep Energy to provide work on several Deep Energy Wells. The Court described the master service agreement as saying that Mesa waived the right to sue Deep Energy, and could only look to Deep Energy as the source of payment for work completed by Mesa. 

The Court ruled that because Mesa had signed the waiver with Deep Energy, that precluded it from recovering monies for payment. Jewell wrote that the waiver between the two parties was “unambiguous” and that it said that Mesa “shall look solely and exclusively to [Deep Operating] for payment” for work completed by Mesa.  

Since Mesa signed the agreement, which said that it could only receive payment for work it completed for Deep Energy by Deep Energy, Mesa could not then seek recovery for payment from the courts. The Court said that “in contractually limiting its recourse for payment solely to Deep Operating, Mesa cannot obtain satisfaction of the alleged debt from Deep Energy either by direct money judgment or through foreclosure and sale based on purported lien rights.”

According to Mesa, Deep Energy did not fully pay for work completed in 2016 and 2017. However, on June 8, 2017, Deep Energy filed for bankruptcy protection. After which, Mesa filed liens on three wells owned by Deep Energy.  It also filed a lawsuit, arguing a “breach of duty” by Deep Energy, requesting a “recovery of ‘trapped funds,” and asking for “declaratory relief and a request for an order of sale for foreclosure of the three lien claims.”

The Texas Fourteenth Court of Appeals issued its ruling on November 21, 2019.

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