HOUSTON (Legal Newsline) - A Texas appeals court panel has ruled that an oil company doesn’t have to put down a $2 million deposit while it appeals a jury verdict related to technology royalties.
The case involves Warrior Energy Services Inc. and two former employees, Don Umphries and Gabe Williger.
Umphries and Williger created a technology called WIPR and licensed it to Warrior. Warrior agreed to pay 25 percent of the gross revenue from WIPR to a company formed by Umphries and Williger called Oilfield.
There was a disagreement over whether the 25 percent was the total amount to be paid by Warrior or whether the company owed 25 percent each to Umphries and Williger.
Oilfield sued suit in 2018 and won a judgment for more than $11 million for past royalties. Warrior appealed.
Then Oilfield filed a separate suit for future royalties and also asked the court to require Warrior to deposit money into the court registry while litigation is pending.
Oilfield cited Warrior’s “precarious financial situation” as the reason for the deposit. Last December, a trial judge ordered Warrior to deposit $2 million plus 50 percent of future revenues from WIPR into the court registry. A Texas Court of Appeals court panel earlier ordered that Warrior did not have to deposit 50 percent of future WIPR revenues into the registry. On April 7, the appeals court also ordered that Warrior’s $2 million deposit is not required, either.
The court cited a previous court ruling that required a evidence that the revenues in question were at risk of being “lost or depleted,” before a court could order registry deposits.
“Because Oilfield presented no legally sufficient evidence to demonstrate that the ‘disputed funds were in danger of being “lost or depleted,” the trial court’s order was improper and an abuse of discretion,” the appeals court held.
In Warrior Energy Services Corp, Relator, Fourteenth Court of Texas Appeals, 14-19-01010-CVIN