Primexx Energy Opportunity Fund v. Primexx Energy Corporation, 2025 Tex. Bus. 13 (1st Div.) (mem. op.)

2025 Tex. Bus. 13
The Business Court of Texas,
1st Division
PRIMEXX ENERGY
OPPORTUNITY FUND, LP et al.
Plaintiffs,
v.
PRIMEXX ENERGY
CORPORATION, et al.,
Defendants
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Cause No. 24-BC01B-0010
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MEMORANDUM O PINION AND O RDER
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[¶ 1] By order signed April 10, 2025, the court denied 	Plaintiffs’
(PEOFs) Motion for Reconsideration (Mot.) of the court’s Opinion and Order
granting in part BPP HoldCo LLC, Primexx Energy Corporation, and M.
Christopher Doyle’s Motion for Summary Judgment (MSJ).1
1 Primexx Energy Opportunity Fund, LP v. Primexx Energy Corp., 2025 Tex. Bus. 9, —
S.W.3d — (Tex. Bus. Ct. 2025) (MSJ Opinion).
FILED IN
BUSINESS COURT OF TEXAS
BEVERLY CRUMLEY, CLERK
ENTERED
4/15/2025

MEMORANDUM O PINION AND O RDER , Page 2
I.
[¶ 2] “After a court grants a summary judgment motion, the court
generally 	has 	no 	obligation 	to 	consider 	further 	motions 	on 	the 	issues
adjudicated by the summary judgment.” Macy v. Waste Mgmt., Inc., 294
S.W.3d 638, 651 (Tex. App.—Houston [1st Dist.] 2009, pet. denied) (quoting
Kelly v. Gaines, 181 S.W.3d 394, 416 (Tex. App.—Waco 2005), rev’d on other
grounds, 235 S.W.3d 179 (Tex. 2007)). 	Nonetheless, the court addresses
PEOFs’ arguments.2
II.
[¶ 3] The court’s MSJ Opinion did not conclude, as PEOFs contend, that
HoldCo was “allow[ed] to act in bad faith” so long as it “rel[ies] on a
contractual provision purportedly permitting its conduct.”3
[¶ 4] Instead, as the court stated, movants’ summary judgment motion
distilled to whether there was a genuine issue of material fact regarding
whether they failed to act in good faith (that is, acted in bad faith) regarding
the Callon sale. 2025 Tex. Bus. 9, ¶ 134.
2 	This 	memorandum 	opinion 	does 	not 	expressly 	address 	every 	argument 	PEOFs’
reconsideration motion 	asserts. 	Nonetheless, 	the 	court 	considered 	all 	of 	PEOFs’
arguments and rejects them.
3 Mot at 1, 17.

MEMORANDUM O PINION AND O RDER , Page 3
[¶ 5] PEOFs’ motion concedes as much:
As is required by the text of the Partnership Agreement, the
Court found in its Opinion that PEC and BPP HoldCo owed the
duty of good faith to Plaintiffs, including with respect to the
execution of the drag-along provision. 	See Op. at ¶ 161 (“But
HoldCo (and PEC) had to conduct the sale in good faith.”); ¶
[1]64 (“But, HoldCo still had to discharge that obligation in
good faith.”); ¶ 194 (“HoldCo’s ʻfiduciary’ duties required it to
perform in good faith”). In fact, the Opinion recognizes that the
“analysis converges on whether HoldCo acted in good faith
when it exercised its drag-along rights and forced the sale . . .”
Id. at ¶ 134.4
[¶ 6] The court’s analysis considered PEOFs’ causes of action, claims
(which allege several ways in which they posit movants failed to act in good
faith regarding the Callon sale), arguments, and all proper summary judgment
evidence. 	That evidence includes movants’ summary judgment evidence,
PEOFs’ responsive evidence, and PEOFs’ FAP admissions.
[¶ 7] After 	considering 	the 	parties’ 	arguments 	and 	all 	the 	proper
summary judgment evidence, the court concluded that, except for instances
described in the court’s opinion (see id. ¶ 200), PEOFs failed as a matter of law
to raise a genuine issue of material fact supporting liability based on their
claims of bad faith. See id. ¶ 172.
4 Mot. at 18–19 (emphasis original).

MEMORANDUM O PINION AND O RDER , Page 4
III.
A. 	Arguments PEOFs Previously Made
[¶ 8] PEOFs’ reconsideration motion repeats these rejected arguments:
• 	Texas Beef Cattle Co. v. Green, 921 S.W.2d 203 (Tex. 1996) does not
apply in cases involving fiduciary duties.5 PEOFs raised this argument
during the November 21, 2024, hearing6 and specifically referred to
Spethmann v. Anderson.7 PEOFs argued the same in their supplemental
reply brief.8
• 	Cases discussed at ¶s 116 and 172 of the MSJ Opinion address only
implied fiduciary duties, not an explicit duty written into the contract.9
PEOFs made this argument in their opposition10 and at the November
21, 2024, hearing.11
• 	Defendants adduced no evidence establishing that they acted in good
faith.12 PEOFs’ opposition made this argument.13
• 	Section § 152.002 explicitly prohibits a partnership agreement from
entirely eliminating the duties of loyalty, care, or good faith.14 PEOFs
made this argument throughout their briefing and at the November 21,
2024, hearing.15
5 Mot. at 11 (citing Spethmann v. Anderson, 171 S.W.3d 680, 695–96 (Tex. App.—Dallas
2005, no pet.); see also id. at 2, 11–15.
6 Nov. 21, 2024, Hrg. Tr. at 77:17–82:11.
7 Nov. 21, 2024, Hrg. Tr. at 81:16–82:11.
8 PEOFs’ Jan. 3, 2025, Suppl. Reply. at 25–26.
9 Mot. at 16; see also at 3, 12, 16–17.
10 PEOFs’ Nov. 1, 2024, Opp. at 15–16.
11 Nov. 21, 2024, Hrg. Tr. at 67:25–68:22.
12 Mot. at 19; see also at 1–2, 18–21.
13 PEOFs’ Nov. 1, 2024, Opp. at 4, 6, 17, 23.
14 Mot. 22; see also at 3–4, 22–26.
15 PEOFs’ Nov. 1, 2024, Opp. at 18, 21–23; PEOFs’ Dec. 13, 2024, Suppl. Br. at 7, 25;
PEOFs’ Jan. 3, 2025, Suppl. Reply at 8, 27; Nov. 21, 2024, Hrg. Tr. at 89:24–92:21.

MEMORANDUM O PINION AND O RDER , Page 5
• 	Defendants’ proposed interpretation would render “Agreed Duties”
meaningless and therefore makes the contract ambiguous.16 The court
asked PEOFs at the November 21, 2024, hearing if the contract was
ambiguous.17 PEOFs said “no” under their interpretation of the
contract, which they argued was the only way to read the contract.18
• 	Plaintiffs allege breaches by Defendants well before invoking the drag -
along provision.19 PEOFs’ briefing made this argument.20
[¶ 9] The court rejects those arguments for the reasons expressly stated
in or impliedly covered by its prior MSJ Opinion.
B. 	PEOFs’ Additional Arguments
[¶ 10] PEOFs motion makes these additional arguments or expands
prior arguments that the court also rejects:
1. 	Texas Beef Cattle
[¶ 11] PEOFs argue that Texas Beef Cattle is inapplicable because (i) it
does not apply to cases involving fiduciaries; (ii) it predated the Business and
16 Mot. at 26; see also 4–5, 30–34.
17 Nov. 21, 2024, Hrg. Tr. At 64:20–21.
18 Nov. 21, 2024, Hrg. Tr. At 64:22–25 (“No. We think it’s perfectly consistent, and we
think it can be enforced as written. 	And in fact, our reading is the only one that does
work.”).
19 Mot. at 21; see also at 8, 20–22.
20 PEOFs’ Nov. 1, 2024, Opp. at 5; PEOFs’ Dec. 13, 2024, Suppl. Br. at 16, 19; PEOFs’
Jan. 3, 2025, Suppl. Reply at 33.

MEMORANDUM O PINION AND O RDER , Page 6
Organizations Code; and (iii) it and its progeny apply to only implied duties.21
PEOFs read too much into the court’s reference to that case.
[¶ 12] To 	begin, 	the 	MSJ 	Opinion 	concludes 	only 	that 	lawfully
exercising contract rights is not acting in bad faith. 2025 Tex. Bus. 9, ¶s 115–
16, 	172. 	Specifically, 	the 	court’s 	Texas 	Beef 	Cattle 	reference 	quotes
Montgomery v. Phillips Petroleum Co., 49 S.W.2d 967, 972 (Tex. App.—
Amarillo 1932, writ ref’d) (which has the same precedential value as a
supreme court opinion) for the point that one does not act in bad faith by
exercising its lawful rights provided one does so “in a legal way.” 2025 Tex.
Bus. 9, ¶ 115. That is, Texas Beef Cattle and the court’s opinion require that
the exercised contract right be (i) a lawful right and (ii) exercised “in a legal
way.” 	Id. 	So, the court did not conclude that Texas Beef Cattle permitted
HoldCo to exercise its drag-along rights in bad faith or in an otherwise illegal
manner.22
21 Mot. at 11–18.
22 For instance, the court concluded that “at a minimum” HoldCo could not have lied or
misled its partners in executing its rights. See 2025 Tex. Bus. 9, ¶ 114:
Case law indicates that the statutory good faith obligation includes, at a
minimum, not lying to or misleading other partners. 	See, e.g., Shannon
Medical, 601 S.W.3d at 912–915 (partner misled partners regarding permitted
affiliate business); Cruz, 2018 WL 6566642, *10–16 (partner misrepresented
reasons for closing one business and misled partner regarding permitted

MEMORANDUM O PINION AND O RDER , Page 7
[¶ 13] Accordingly, the MSJ Opinion agrees with Spethmann that how a
fiduciary performs their contract rights is important. See 171 S.W.3d at 696.
To that point, the court emphasized that HoldCo had to satisfy its TBOC
responsibilities and exercise its drag-along rights in good faith. See 2025 Tex.
Bus. 9, ¶s 138, 142, 161, 164, 194.
[¶ 14] Furthermore, nothing in the Business Organizations Code nor its
predecessors preclude applying Texas Beef Cattle’s general principle to a
partner’s applicable legal responsibilities.
2. 	PEOFs’ “Manifestly Unreasonable” Argument
[¶ 15] PEOFs 	argue 	that 	the 	court 	did 	not 	consider 	whether 	any
purported modifications to movants’ statutory responsibilities are “manifestly
unreasonable.”23 They are wrong.
competing business); Red Sea Gaming, 338 S.W.3d at 568–69 (failure to
disclose resale opportunity while negotiating buyout).
But in reviewing the evidence, the court did not find that there was a genuine issue of
material fact as to whether PEOFs were misled. See, e.g., id. ¶ 184:
Similarly, PEOFs do not allege that HoldCo, PEC, or Doyle gave them[] or the
board false or misleading information regarding the deal. Indeed, those
persons could not have provided misleading information to PEOFs if (i) none
of those persons communicated with PEOFs and (ii) Jeffs and Langdon were
not, as PEOFs posit, their agents on the board. So, the court need not consider
whether any such bad faith breach occurred.
23 Mot. at 32.

MEMORANDUM O PINION AND O RDER , Page 8
[¶ 16] The TBOC does not define “manifestly unreasonable.” However,
PEOFs argued that HoldCo’s interpretation of the TAPA produced “absurd
results,” and they used the absurd results doctrine as a proxy.24 Regardless of
the label used for PEOFs’ argument, the court considered and rejected it:
[¶ 173] PEOFs[] argue that applying the TAPA as written could
lead to absurd results such as HoldCo selling the business for a
dollar. The court rejects that argument because, although
courts will not enforce unambiguous terms that lead to absurd
results, that safety valve is reserved for only truly exceptional
cases where it is unthinkable, unfathomable, or quite impossible
that a rational person could have intended it. 	Fairfield Indus.,
Inc. v. EP Energy E&P Co., L.P., 531 S.W.3d 234, 248–49 (Tex.
App.—Houston 	[14th 	Dist.] 	2017, 	pet. 	denied). 	Here, 	the
consideration was far greater than a dollar.
[¶ 174] Furthermore, it is not the court ’s role “to question the
wisdom of the parties’ agreement or to rewrite its provisions
under the guise of interpreting it.” Id. at 242.
[¶ 175] Accordingly, based on the undisputed facts, the parties’
business 	purposes 	when 	they 	signed 	the 	TAPA, 	its
unambiguous 	terms, 	and 	TBOC’s 	unambiguous 	provisions
applicable to this case, as a matter of law HoldCo’s drag-along
rights were not so unthinkable, unfathomable, or impossible
that a reasonable person in the parties’ positions could not have
rationally agreed to their application when they created the
TAPA. Indeed, TAPA § 5.9(c)(ii) unambiguously records the
24 See PEOFs’ Nov. 1, 2024, Opp. at 25 (“Defendants’ argument that they could invoke the
drag-along provision at any time without owing any duty of loyalty or care whatsoever
would lead to absurd results. . . . That interpretation is absurd, contrary to Texas law and
the Partnership Agreement, and (to use the language from Section 152.002) ʻmanifestly
unreasonable.’”).

MEMORANDUM O PINION AND O RDER , Page 9
parties’ agreement that they would not have entered into the
TAPA if its terms were not acceptable to them.25
2025 Tex. Bus. 9, ¶s 173–75 (footnotes omitted). Indeed, MSJ Opinion ¶ 173,
footnote 108 cited to PEOFs’ specific argument.
IV.
[¶ 17] In sum, as a matter of law the record negated every instance of a
lack of good faith (that is, bad faith) PEOFs alleged, and PEOFs failed to
adduce evidence of other facts constituting a lack of good faith. So, on March
10, 2025, the court granted in part the MSJ and on April 10, 2025, the court
denied PEOFs’ Motion for Reconsideration for the reasons described in this
opinion.
V.
[¶ 18] Accordingly, the court vacates in part its March 14, 2025, Order
to Stay and Amend Scheduling Order except as to its briefing deadlines, which
remain in place. It is, SO ORDERED.
25 Having previously concluded that TAPA’s relevant terms are unambiguous, the court
also rejects PEOFs’ reconsideration argument that “the inherent tension between the
Agreed Duties provision and other provisions of the Partnership Agreement renders the
contract ambiguous, which precludes summary judgment and requires the parties to engage
in discovery.” Mot. at 27.

MEMORANDUM O PINION AND O RDER , Page 10
BILL WHITEHILL
Judge, Texas Business Court-
First Division
SIGNED: April 15, 2025

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