Primexx Energy Opportunity Fund v. Primexx Energy Corporation, 2025 Tex. Bus. 9 (1st Div.)

2025 Tex. Bus. 9
The Business Court of Texas,
1st Division
PRIMEXX ENERGY
OPPORTUNITY FUND, LP and
PRIMEXX ENERGY
OPPORTUNITY FUND II, LP,
Plaintiffs,
v.
PRIMEXX ENERGY
CORPORATION, M.
CHRISTOPHER DOYLE,
ANGELO ACCONCIA,
BLACKSTONE INC.,
BLACKSTONE HOLDINGS III
LP, BLACKSTONE EMA II LLC,
BMA VII LLC, BLACKSTONE
ENERGY MANAGEMENT
ASSOCIATES II LLC,
BLACKSTONE ENERGY
PARTNERS II LP, BLACKSTONE
MANAGEMENT ASSOCIATES
VII LLC, BLACKSTONE
CAPITAL PARTNERS VII LP,
BCP VII/BEP II HOLDINGS
MANAGER LLS, BX PRIMEXX
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Cause No. 24-BC01B-0010
FILED IN
BUSINESS COURT OF TEXAS
BEVERLY CRUMLEY, CLERK
ENTERED
3/10/2025

O PINION AND ORDER, Page 2
TOPCO LLC, and BPP HOLDCO
LLC, Defendants
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O PINION AND ORDER
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Syllabus*
This opinion addresses the nature, scope, adaptability, and enforcement of a
partner’s statutory duties of loyalty and care and obligation to perform them in
(i) good faith and (ii) a manner it reasonably believes to be in the partnership’s
best interest when that partner exercised its drag-along rights and sold the
partnership’s business.
Texas’s freedom of contract principles give partners wide latitude to expand or
limit their conduct standards. 	But the loyalty and care duties and related
performance obligations cannot be eliminated. 	This partnership agreement
expressly limits those duties and obligations to the greatest extent permitted by
law. This case centers on the enforceability of those limits.
I. OPINION
[¶ 1] This is a drag-along sale case arising from a private equity
investment in a limited partnership. 	The controlling partner exercised its
partnership agreement drag-along sale rights to force an exit event sale, and
two minority owners complain that the sale was unlawful.
[¶ 2] Drag-along rights are a normal vehicle for majority owners to force
minority owners—potentially against their will—to sell their interests to a
* This syllabus is provided for the reader’s convenience; it is not part of the Court’s opinion;
and it is not legal authority.

O PINION AND ORDER, Page 3
third party on terms and conditions the majority owner decides. So, there may
be conflicts between the owners when the majority decides to sell at a price or
on terms the minority dislikes. The issues can be more acute where the parties
hold different equity positions. Thus, parties creating such agreements often
negotiate terms protecting themselves in a future drag-along sale.
[¶ 3] Two limited partners sued the controlling partner and managing
general partner alleging that they breached “fiduciary” and contract duties
and obligations by, among other things, (i) accepting too low a price; (ii) failing
to perform adequate due diligence, consider continuing the business as a viable
stand-alone business or other alternatives, consider whether the sale was fair
to the partnership and other partners; and (iii) not giving timely notice of the
sale. They also sued the managing partner’s chief executive for conspiracy and
other “derivative theory” causes of action.1
[¶ 4] Those defendants moved for traditional summary judgment.2 The
material facts are undisputed, and the result turns on the extent to which (i)
1 Plaintiffs sued numerous other parties, but they are not included in this summary
judgment motion.
2 Movants’ attacked plaintiffs’ original petition, which was their then live pleading.
Plaintiffs since filed their first amended petition (FAP), which adds an additional defendant
but no new causes of action. The parties agreed that the FAP would not moot the summary
judgment motion. So, this opinion and order is directed to the FAP.

O PINION AND ORDER, Page 4
the Texas Business Organizations Code (TBOC) displaces common law
partnership 	fiduciary 	duty 	law 	and 	(ii) 	partners 	may 	limit 	a 	partner’s
“fiduciary like” responsibilities to the partnership and other partners.
[¶ 5] The court denies the motion regarding plaintiffs’ claims that the
sales proceeds (i) were misapplied under the partnership agreement and (ii)
were unfairly allocated between the partnership and a “sidecar” business sold
in the same transaction.
[¶ 6] However, based on the partnership agreement’s plain text, the
court otherwise concludes that the controlling partner’s drag-along rights
meet minimum statutory requirements. 	Further, except as described in ¶ 5,
the 	evidence 	conclusively 	proves 	that 	the 	controlling 	partner 	and 	the
managing general partner met their modified statutory and contract duties and
obligations.
[¶ 7] Additionally, for the reasons discussed in ¶ 6, the court grants the
motion regarding “derivative liability” theories regarding the managing
partner and its chief executive to the same extent the court grants the
controlling partner’s motion.
[¶ 8] Moreover, the court directs the parties to provide additional
briefing regarding plaintiffs’ remaining derivative liability theories.

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[¶ 9] The summary judgment motion concerns only the duty and breach
elements of plaintiffs’ causes of action. Thus, the court expresses no opinion
regarding plaintiffs’ injury causation and resulting damages elements.
II. J URISDICTION AND VENUE
[¶ 10] This 	court 	has 	subject 	matter 	jurisdiction 	since 	this 	is 	a
partnership governance dispute and the amount in controversy exceeds $5
million. TEX. GOV’ T CODE § 25A.004(b)(2) and (4)–(6).
III. THE S UMMARY J UDGMENT R ECORD
[¶ 11] The court considered the parties’ summary judgment filings and
proper summary judgment evidence. 	It did not consider evidence movants
filed with their prior supplemental briefing because they did not seek leave to
supplement the record and plaintiffs in substance objected to that evidence.
Neither party objected to any other summary judgment evidence.
IV. F ACTS AND PEOF S’ CLAIMS
[¶ 12] The 	court 	derives 	these 	facts 	from 	the 	parties’ 	summary
judgment evidence and PEOFs’ FAP admissions.

O PINION AND ORDER, Page 6
A. 	The Parties and Related Entities
[¶ 13] Primexx Energy Partners, Ltd. (PEP) was a limited partnership.3
Its Third Amended and Restated Partnership Agreement (TAPA) is the
applicable agreement.4 PEP owned Primexx Resource Development, LLC
(PRD).5 PEP and PRD are not parties.
[¶ 14] Primexx Energy Opportunity Fund LP (PEOF I) and Primexx
Energy Opportunity Fund II (PEOF II) were PEP limited partners.6 PEOF I
signed the TAPA through its representative Whittier Management GP LLC, by
Steven A. Anderson as the Vice President of Whittier Holdings, Inc.7
[¶ 15] BPP HoldCo LLC (HoldCo or Blackstone) was a PEP limited
partner.8 HoldCo is a Blackstone Inc. affiliate.9
3 FAP ¶ 1.
4 FAP ¶ 1; Movants’ Ex. 2 (TAPA).
5 FAP ¶ 1.
6 FAP ¶s 42, 55.
7 TAPA at 73.
8 Movants’ Ex. 1 (PIPA); FAP ¶ 1.
9 FAP ¶ 20.

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[¶ 16] Primexx Energy Corporation (PEC) was PEP’s managing general
partner.10 PEC was formed in September 2000, and in 2021 was governed by
its July 2016, Second Amended and Restated Bylaws (Bylaws).11
[¶ 17] A nine-member board of directors controlled PEC.12 HoldCo
appointed five such directors, PEOF I appointed two, and Tom Fagadau
appointed two.13 Thus, at all relevant times HoldCo controlled PEC’s Board.14
[¶ 18] Angelo Acconcia and four others were HoldCo’s initial-appointed
directors.15 Jim Jeffs and Robert Holland were PEOF I’s appointed directors,
and Tom and Chip Fagadau were Fagadau’s appointed directors.16
[¶ 19] Under the Bylaws, Tom Fagadau was PEC’s President and Chief
Executive Officer.17 However, as of August 2, 2021, Christopher Doyle held
those positions.18
10 FAP ¶s 1, 42.
11 Movants’ Ex. 10 (Bylaws).
12 FAP ¶ 82.
13 Bylaws at Art. III, § 2; Schedule I. The Bylaws do not define “Blackstone,” however,
context 	shows 	that 	it 	means 	HoldCo. 	Both 	the 	TAPA 	and 	the 	PIPA, 	entered
contemporaneously with the Bylaws, define “Blackstone” to mean HoldCo. (TAPA at 1;
PIPA at 1). Furthermore, the Bylaws were signed by HoldCo. (Bylaws at 21).
14 FAP ¶ 53.
15 Movants’ Ex. 10 (Bylaws) at Schedule I.
16 Movants’ Ex. 10 (Bylaws) at Schedule I.
17 Movants’ Ex. 10 (Bylaws) at Schedule II.
18 FAP ¶ 33; Movants’ Ex. 3 (Aug. 2, 2021, Board Minutes).

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[¶ 20] PEOFs sued Doyle, PEC, HoldCo, Blackstone Inc., various
Blackstone Inc. affiliates19, and Angelo Acconcia. Acconcia, Blackstone Inc.,
and the Blackstone Inc. affiliates did not join this motion.
B. 	PEP’s Background
[¶ 21] PEP’s operating company, PRD, developed horizontal drilling
properties in the Permian Basin.20
[¶ 22] In 2016, PEP engaged firms to identify opportunities for reducing
its debt and raising capital.21 After considering several proposals and multiple
financing options, PEP chose “The Blackstone Group’s” offer as the most
attractive based on its valuation, capital commitment, and reputation.22
[¶ 23] Before signing the TAPA, “Blackstone,” certain members of
PEP’s management team, and PEP’s existing equity holders created a term
sheet outlining expected terms for “Blackstone’s” potential investment.23 Per
the term sheet, they expected a transaction whereby (i) “Blackstone” would
19 FAP ¶ 20 (“All of the other Blackstone Defendants are direct subsidiaries of Blackstone
Inc.”).
20 FAP ¶s 1, 37.
21 FAP ¶ 40.
22 FAP ¶ 41. In 2021, The Blackstone Group changed its name to Blackstone Inc. Id.
23 FAP ¶ 48; TAPA at Annex B. 	The court uses “Blackstone” throughout this opinion
where PEOFs are unclear regarding which Blackstone entity or related person they refer to.

O PINION AND ORDER, Page 9
invest up to $500 million; (ii) “Blackstone” would control a management
company with five of nine board members; (iii) with three exceptions not
relevant here, all “Board matters” would be decided by a majority vote; (iv)
“Blackstone” could at any time force an in -kind distribution of all Company
assets in a “Liquidity Event” in accordance with an agreed distributions
waterfall; and (v) “Blackstone” would have “customary drag-along rights”
regarding a potential sale of the partnership Units.24
[¶ 24] HoldCo and PEP signed a fifty-four-page Partnership Interest
Purchase Agreement (PIPA) stating terms whereby HoldCo would invest in
PEP.25
[¶ 25] HoldCo signed the TAPA as a limited partner (Unitholder).26
PEC 	remained 	PEP’s 	Managing 	General 	Partner27 and, 	at 	some 	point,
contributed $1,000 as a Managing General Partner Capital Contribution.28
24 FAP ¶ 48; TAPA at Annex B. 	The term sheet and other documents do not say which
“Blackstone” entities would provide the new equity or how “Blackstone” would internally
structure its investment.
25 PIPA; see also TAPA at 1.
26 FAP ¶ 42; TAPA at 1, 83.
27 FAP ¶ 42.
28 TAPA § 3.2.

O PINION AND ORDER, Page 10
C. 	Partners’ Duties to the Partnership and other Partners
[¶ 26] Per the TAPA, HoldCo and PEC owe PEP and its partners the
duty of good faith and fair dealing to the fullest extent Texas law requires:
Each Partner and the Managing General Partner shall, to the
fullest extent required by Texas Law, owe to the Partnership and
its Partners the duties of good faith and fair dealing, and in the
case of the Managing General Partner, the duty to not exceed in
such capacity the bounds of authority granted to any general
partner by this Agreement and Texas law (all such duties
collectively, the “Agreed Duties”).29
[¶ 27] But the TAPA then limits—to the extent the law permits—
HoldCo’s and PEC’s duties to the partnership and other partners, including
giving HoldCo and PEC the right to make partnership decisions in their sole
and absolute discretion and in their own sole interests.30 For example,
(ii) To the extent that, at law or in equity, a Partner owes any
duties (including fiduciary duties) to the Partnership, any other
Partner or any Assignee pursuant to the applicable law, any such
duty, other than the Agreed Duties, is hereby eliminated to the
fullest extent permitted pursuant to applicable law, it being the
intent of the Partners that to the extent permitted by law and
except to the extent set forth in this Section 5.9 or expressly
specified 	elsewhere 	in 	this 	Agreement, 	no 	Partner 	or 	the
Managing General Partner, in their capacities as such, shall owe
any duties of any nature whatsoever to the Partnership, the
other Partners or any Assignee, other than the Agreed Duties,
and each Partner, in its capacity as such, may decide or
29 TAPA § 5.9(a) (emphasis original).
30 TAPA §§ 5.9(b)–(c).

O PINION AND ORDER, Page 11
determine any matter in its sole and absolute discretion taking
into account solely its interests and those of its Affiliates
(excluding the Partnership and its Subsidiaries) subject to the
Agreed Duties. Each Partner further acknowledges and agrees
that it would not have become a Partner in the Partnership if this
agreement were not acceptable to it.31
D. 	HoldCo’s Drag-Along Sale Rights
[¶ 28] Next, TAPA Article VI describes the Unitholders’ rights, duties,
and obligations.32 In particular, § 6.7 gives HoldCo “drag-along” rights
authorizing it to negotiate and ultimately force the other Unitholders to
consummate a sale of PEP’s business to a third party—provided the sale
results from an arm’s-length transaction after July 12, 2018.33 That section
also provides for distributing the resulting proceeds pursuant to a TAPA
waterfall.34
E. 	PEOF II and BPP Sidecar
[¶ 29] PEOF II soon became a PEP Unitholder.35
31 TAPA § 5.9(c)(ii) (emphasis added). The emphasized parenthetical shows that even if
the partnership itself could be considered an affiliate of a partner, the partner is still free to
disregard the interests of the partnership. So, the TAPA establishes that partners may put
their interests above the partnership, to the extent allowed by applicable law.
32 TAPA at Art. VI.
33 	TAPA 	§ 	6.7(a); 	see 	What 	Is 	an 	Arm’s 	Length 	Transaction, 	Investopedia,
https://www.investopedia.com/terms/a/armslength.asp (last visited March 5, 2025).
34 TAPA § 6.7(b).
35 FAP ¶ 55.

O PINION AND ORDER, Page 12
[¶ 30] “Blackstone” later created a “sidecar vehicle,” BPP Acquisition
LLC (BPP), to buy additional acreage in PEP’s acreage footprint.36
F. 	The Callon Sale
[¶ 31] PEP’s valuations improved in 2020 and 2021.37 By June 2021,
PEOFs’ stakes were worth more than $200 million.38
[¶ 32] In early Spring 2021, Jim Jeffs learned that PEC’s management,
led by Doyle, was exploring a potential sale.39 At that time, Jeffs was a PEC
board 	member and received updates from PEC “management” and the
“Blackstone” board members about the sale process.40
[¶ 33] In early May, Callon Petroleum made an initial offer of interest to
purchase PEP and BPP for $375 million and 8.5 million Callon shares.41 Three
weeks later, it increased the cash portion to $425 million.42
36 FAP ¶ 58. See Sidecar, Investopedia, https://www.investopedia.com/terms/s/sidecar-
investment.asp (last visited March 5, 2025).
37 See FAP ¶s 62–64.
38 FAP ¶ 64.
39 PEOFs’ Ex. 3 (Jeffs Dec.) ¶ 3.
40 Jeffs Dec. ¶ 3.
41 FAP ¶ 69.
42 FAP ¶ 69.

O PINION AND ORDER, Page 13
[¶ 34] On June third, Doyle emailed PEC’s Board (including Jeffs) that
Callon’s enhanced offer was not nearly as compelling as continuing to operate
as a stand-alone entity.43
[¶ 35] It was reported during a PEC Board meeting a week later that (i)
PRD’s and BPP’s balance sheets had strengthened over the past six months
and remained healthy, (ii) they met forecast expectations through the first-
quarter 2021, and (iii) the efficient execution and capital acceleration with a
second rig expected to grow the companies meaningfully.44
[¶ 36] Throughout June and July 2021, Doyle told PEC’s Board that he
continued speaking with Callon, but it was unable to close the gap and had not
presented an attractive offer.45 During that same period, Callon increased its
offer to $440 million cash and 9.2 million shares; however, its share price also
decreased so the actual offer remained unimproved.46
[¶ 37] On July twenty-eighth, Jeffs and Doyle discussed the potential
Callon deal.47 By then, Callon’s stock price had decreased, making its offer
43 FAP ¶ 69; Jeffs Dec. ¶ 5.
44 FAP ¶ 70.
45 FAP ¶ 74.
46 FAP ¶ 75.
47 Jeffs Dec. ¶ 6.

O PINION AND ORDER, Page 14
worth $50 million less than the prior month.48 Doyle told Jeffs that Callon’s
offer was “too low” 	to 	be 	taken seriously and 	that Callon needed 	to
dramatically increase its offer before he would even consider it a realistic
offer.49
[¶ 38] Then, “without any warning or explanation,” on July thirtieth
“Blackstone” told the Board that it had accepted Callon’s offer at the same
price Doyle two days earlier told Jeffs was too low to even consider.50
[¶ 39] Based on information Doyle and the “Blackstone” directors
provided directly to Jeffs, he did not understand that a sale was close until
Doyle formally announced the sale at the end of July.51
[¶ 40] Once Jeffs heard from “Blackstone” about the final sale terms,
he spoke with Eric Derrington and Steve Anderson, PEOFs’ representatives
with Whittier Trust Company.52 They in no way suggested that PEOFs
supported the deal and expressed their belief that it was hastily put together
without sufficient opportunity to evaluate the sale.53
48 Jeffs Dec. ¶ 6.
49 Jeffs Dec. ¶ 6.
50 Jeffs Dec. ¶ 7.
51 Jeffs Dec. ¶ 4.
52 Jeffs Dec. ¶ 9.
53 Jeffs Dec. ¶ 9; PEOFs’ Ex. 4 (Derrington Dec.) ¶s 7–9.

O PINION AND ORDER, Page 15
[¶ 41] PEC’s board and BPP’s board of managers met on August 2,
2021, and after discussion unanimously approved the Callon deal.54 However,
Tom Fagadau said he did not personally support the sale but was voting for it
“only pursuant to drag-along obligations.”55 Steve Pully similarly voted for
the sale, expressing the same sentiment.”56 No other PEC director, including
Jeffs and Langdon, expressed that reservation.57
[¶ 42] The sale closed on October 1, 2021.58
[¶ 43] In a phone 	call around “the time of sale,” a “Blackstone”
executive 	told 	a 	“Primexx 	board 	member” 	that 	senior 	“Blackstone”
executives directed the exit although “he” knew it was a bad deal.59
G. 	Summary of Claims
[¶ 44] According to PEOFs:
85. By forcing the Board to vote on (and approve) the proposed
transaction over a weekend, Blackstone necessarily precluded
the Managing General Partner or the Board from engaging in a
reasoned 	and 	fully 	informed 	decision-making 	process 	or
satisfying 	their 	contractual 	and 	fiduciary 	duties. 	Yet 	all
54 Movants’ Ex. 3 (Aug. 2, 2021, Board Minutes).
55 Movants’ Ex. 3 (Aug. 2, 2021, Board Minutes) at 2.
56 Movants’ Ex. 3 (Aug. 2, 2021, Board Minutes) at 3. Chip Fagadau approved the deal for
BPP with the same reservation. Id.
57 Movants’ Ex. 3 (Aug. 2, 2021, Board Minutes) at 2–3.
58 FAP ¶ 94.
59 FAP ¶ 76.

O PINION AND ORDER, Page 16
Blackstone-controlled Board Members voted to approve the sale
without conducting any analysis or due diligence to fairly
evaluate the transaction and whether it would be fair to all
Primexx investors.
86. The final sale documents were executed on August 3, 2021.
***
87. 	In 	the 	weeks 	and 	months 	leading 	up 	to 	the 	Callon
transaction, Defendants did not hold regularly scheduled Board
meetings to discuss and consider whether a sale transaction
made sense from the point of view of the company and all of its
unitholders, engage in any non-cursory review or analysis of the
company’s intrinsic fair value or future prospects, or retain
experts to conduct thorough due diligence or review of the
fairness of the forced sale.60
[¶ 45] PEOFs further allege that (i) “Blackstone” structured the sale
terms, which included both PRD’s assets and “Blackstone’s” sidecar (BPP),
so “Blackstone” was the only entity to receive any significant sale proceeds61
and (ii) although PEOFs owned preferred shares, after the Callon sale closed,
“Blackstone” paid compensation to common Unitholders, who were behind
PEOFs in the payment waterfall.62
60 FAP ¶s 85–87.
61 FAP ¶s 96, 107.
62 FAP ¶ 98.

O PINION AND ORDER, Page 17
H. 	Procedural History
[¶ 46] PEOFs sued defendants, except Acconcia, in a state district
court.63 That court dismissed the case based on a forum-selection clause
requiring the suit to be brought in federal court.64
[¶ 47] PEOFs added Acconcia and refiled in federal court.65 That court
sua sponte dismissed the case before any defendant appeared.66
[¶ 48] PEOFs again sued in state court.67 Later, in May 2024, movants
filed a traditional summary judgment motion challenging the breach element
of PEOFs’ causes of action and moved to stay discovery.
[¶ 49] In September 2024, PEOFs removed the case to this court.68
Based on the parties’ agreement, the court dismissed the case without
prejudice.69 The parties filed a district court Rule 11 agreement providing that
63 FAP ¶ 6.
64 FAP ¶ 7.
65 FAP ¶ 8.
66 FAP ¶s 9–10; FAP Exs. 4, 5.
67 FAP ¶ 11.
68 FAP ¶ 12.
69 FAP ¶ 12.

O PINION AND ORDER, Page 18
earlier discovery could be used here and outlining the parties’ agreement
regarding dispositive motions.70 PEOFs then filed this action.71
[¶ 50] The 	court 	held 	arguments 	regarding 	movants’ 	motion 	and
requested supplemental briefing on certain issues. The parties responded with
additional briefing and evidence. The court considered the briefing but did not
consider the supplemental evidence because it was not properly submitted.
V. APPLICABLE LAW
A. 	Summary Judgment Standards
[¶ 51] At any time, a defendant may move with or without supporting
evidence for a summary judgment as to all or any part of any causes of action
asserted against it. TEX . R. CIV. P. 166a(b). The motion must state its specific
grounds. Id. at 166a(c).
[¶ 52] Thereafter, the court shall render judgment if the pleadings,
summary judgment filings, and properly filed evidence show that, except as to
the amount of damages, there is no genuine issue as to any material fact and
the movant is entitled to judgment as a matter of law on the issues stated in
70 FAP ¶ 13.
71 FAP ¶ 13.

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the motion or in an answer or any other response. Id.; JLB Builders, L.L. C. v.
Hernandez, 622 S.W.3d 860, 864 (Tex. 2021).
[¶ 53] A court can grant a defendant traditional summary judgment only
if the defendant’s evidence as a matter of law either proves all elements of its
defense or disproves at least one element of the nonmovant’s claim. See, e.g.,
Park Place Hosp. v. Estate of Milo, 909 S.W.2d 508, 511 (Tex. 1995) (causation
disproved as a matter of law).
[¶ 54] So, a summary judgment motion
. . . is 	essentially 	a 	motion 	for 	a 	pretrial 	directed
verdict. * * * Once such a motion is filed, the burden shifts to
the nonmoving party to present evidence raising an issue of
material 	fact 	as 	to 	the 	elements 	specified 	in 	the
motion. * * * [Courts] 	review the evidence presented by the
motion and response in the light most favorable to the party
against whom the summary judgment was rendered, crediting
evidence favorable to that party if reasonable jurors could, and
disregarding contrary evidence unless reasonable jurors could
not. * * *
Mack Trucks, Inc. v. Tamez, 206 S.W.3d 572, 581–82 (Tex. 2006) (citations
omitted).
[¶ 55] A genuine fact issue exists if more than a scintilla of evidence
supports the alleged fact. 	See Amazon.com Servs. LLC v. Grant, No. 05-23-
01306, 2024 WL 5053063, *2 (Tex. App.—Dallas Dec. 10, 2024, no pet.).

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Evidence is more than a scintilla when it “rises to a level that would enable
reasonable and fair-minded people to differ in their conclusions.” King Ranch
v. Chapman, 118 S.W.3d 742, 751 (Tex. 2003) (quoting Merrell Dow Pharms.,
Inc. v. Havner, 953 S.W.2d 706, 711 (Tex. 1997)). 	However, less than a
scintilla exists when the evidence is “so weak as to do no more than create a
mere surmise or suspicion” of a fact. 	Id. (quoting Kindred v. Con/Chem,
Inc., 650 S.W.2d 61, 63 (Tex. 1983)).
[¶ 56] When a partnership agreement’s terms are unambiguous and the
material facts are undisputed, compliance with those terms is a question of
law for the court. Hrdy v. Second St. Props., 649 S.W.3d 522, 554 (Tex. App.—
Houston [1st Dist.] 	2022, pet. denied).
[¶ 57] Accordingly, to decide this motion the court must apply contract
and statutory construction principles to the TAPA, movants’ motion, PEOFs’
response, and the summary judgment evidence.72
72 At common law, transactions between a partner and the partnership or other partners are
presumed unfair, and the partner seeking to justify the transaction must prove its fairness.
Hrdy, 649 S.W.3d at 539; Texas Bank & Tr. Co. v. Moore, 595 S.W.2d 502, 507 (Tex.
1980). 	However, the court need not address whether that burden allocation applies to
statutory causes of action at trial because movants must conclusively establish the Callon
sale’s fairness to negate the breach element of PEOFs’ “fiduciary” breach claims as a
matter of law. Hrdy, 649 S.W.3d at 539, 554.

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B. 	Contract Construction Rules
[¶ 58] Courts construe partnership agreements like contracts. 	Id. 	A
court’s primary objective when construing contracts “is to ascertain and give
effect to the parties’ intent as expressed in the instrument.” 	U.S. Polyco, Inc.
v. Texas Cent. Bus. Lines Corp., 681 S.W.3d 383, 387 (Tex. 2023) (quoting
URI, Inc. v. Kleberg Cty, 543 S.W.3d 755, 763 (Tex. 2018)).
[¶ 59] Usually, courts deem the contract alone to express the parties’
intent because it is objective, not subjective, intent that controls. Id.
[¶ 60] With unambiguous contracts, courts “can determine the parties’
rights and obligations under the agreement as a matter of law.” Inwood Nat’l
Bank v. Fagin, No. 24-0055, 2025 WL 349890, *4 (Tex. January 31, 2025)
(per curiam) (quoting ACS Invs., Inc. v. McLaughlin, 943 S.W.2d 426, 430
(Tex. 1997)).
[¶ 61] Additionally, context is a permissible indicator of meaning, and
courts are to harmonize and give effect to all contract terms by analyzing them
regarding the whole contract. Polyco, 681 S.W.3d at 390.
[¶ 62] Appropriate context includes the circumstances that existed
when the parties made their contract:

O PINION AND ORDER, Page 22
Context is 	not, however, confined 	to 	the two 	-dimensional
contractual environs in which the words exist but may also
encompass the circumstances present when the contract was
entered. This is so because words are the skin of a living
thought, and our quest is to determine, objectively, what an
ordinary person using those words under the circumstances in
which they are used would understand them to mean.
Board of Regents of the Univ. of Texas Sys. v. IDEXX Labs., Inc., 691 S.W.3d
438, 444 (Tex. 2024) (per curiam) (quoting URI, Inc., 543 S.W.3d at 764).
Stated differently, context includes the business context and realities the
words were meant to address. Id. at 445.
C. 	Statutory Construction Rules
[¶ 63] Statutory 	construction’s 	purpose 	is 	to 	implement 	the
Legislature’s intent by giving effect to every word, clause, and sentence.
Sunstate Equip. Co. v. Hegar, 601 S.W.3d 685, 689–90 (Tex. 2020). Indeed,
statutory text is the “first and foremost” indication of legislative intent.
Greater Hous. P’Ship v. Paxton, 468 S.W.3d 51, 58 (Tex. 2015). 	Thus, courts
apply the words’ common, ordinary meaning unless (i) the text supplies a
different meaning or (ii) the common meaning produces absurd results. 	Fort
Worth Transp. Auth. v. Rodriguez, 547 S.W.3d 830, 838 (Tex. 2018).
[¶ 64] Further, courts derive statutory meaning from the entire statute.
TEX . GOV’ T CODE § 311.021(2); Janvey v. Golf Channel, Inc., 487 S.W.3d 560,

O PINION AND ORDER, Page 23
572 (Tex. 2016). 	So, courts “presume the Legislature chose statutory
language deliberately and purposefully,” Crosstex Energy Servs., L.P. v. Pro
Plus, Inc., 430 S.W.3d 384, 390 (Tex. 2014), and that it likewise excluded
language deliberately and purposefully, Cameron v. Terrell & Garrett, Inc., 618
S.W.2d 535, 540 (Tex. 1981).
[¶ 65] Absent 	contrary 	text, 	courts 	assume 	the 	Legislature 	uses
statutory terms having a supreme-court-developed common law meaning to
convey a consistent statutory meaning. 	SandRidge Energy, Inc. v. Barfield,
642 S.W.3d 560, 566 (Tex. 2022). 	But a statutory provision inconsistent
with prior common law decisions “eliminates any instructive or persuasive
value those decisions may have once had.” 	American Star Energy and
Minerals Corp. v. Stowers, 457 S.W.3d 427, 434 (Tex. 2015).
[¶ 66] Finally, 	but 	critically, 	Texas 	upholds 	parties’ 	contractual
freedom to narrow general fiduciary duties consistent with statutory minimum
requirements:
Unless otherwise provided by statute or law, duties owed by an
agent to his or her principal may be altered by agreement.
Accordingly, factors which must be taken into consideration
when determining the scope of an agent’s fiduciary duty to his
or her principal include not only the nature and purpose of the
relationship, 	but 	also 	agreements 	between 	the 	agent 	and
principal.

O PINION AND ORDER, Page 24
National Plan Adm’rs, Inc. v. National Health Ins. Co., 235 S.W.3d 695, 700
(Tex. 	2007) (principal’s contract with third-party administrator 	limited
agent’s fiduciary duties to its principal according to agreed terms); Strebel v.
Wimberly, 371 S.W.3d 267, 284 (Tex. App.—Houston [1st Dist.] 	2012, pet.
denied) (partnership agreement may limit partners’ fiduciary duties).
[¶ 67] That is, “the substance of an agreement to act on behalf of a
principal 	must 	be 	considered 	in 	determining 	the 	exact 	nature 	of 	the
relationship.” National Plan, 235 S.W.3d at 702–03. Even more specifically,
parties may agree to limit an agent’s general duty to act solely for the
principal’s benefit in all matters connected with their relationship. Id. at 703.
[¶ 68] Thus, courts will not impose a general fiduciary duty when the
parties agreed that a partner can take actions that would otherwise violate it.
Id. at 703. This is especially so where the contract results from a transaction
between sophisticated parties represented by experienced representatives and
counsel. Id. at 702.
D. 	Interpretive Canons
[¶ 69] Further, the expressio unius est exclusio alterius canon, which
presumes that purposeful inclusion of specific terms implies the purposeful
exclusion of terms that do not appear, is a proper construction maxim absent a

O PINION AND ORDER, Page 25
valid alternative construction. City of Houston v. Williams, 353 S.W.3d 128,
145 (Tex. 2011); Antonin Scalia and Bryan A. Garner, R EADING LAW 107
(2012).
[¶ 70] Conversely, 	the 	noscitur a sociis canon—“it 	is 	known 	by 	its
associates”—provides that a word or phrase’s meaning, especially one in a list,
should be known by the words immediately surrounding it. 	Paxton, 468
S.W.3d at 61. Courts rely on this canon to avoid giving a word a meaning so
broad that it is incompatible with the statutory context. Id.
E. 	Intermediate Appellate Court Precedents
[¶ 71] This 	court 	began 	operating 	September 	1, 	2024, 	and 	the
simultaneously created Fifteenth Court of Appeals has exclusive intermediate
appellate jurisdiction over business court decisions. See Act of May 25, 2023,
88th Leg., R.S., ch. 380, §§ 8, 2023 TEX . S ESS. LAW SERV. 919, 929 (H.B. 19)
(business 	court 	creation); 	TEX . 	GOV’ T 	CODE 	§ 254.007 	(appellate
jurisdiction). And neither the Fifteenth Court nor this court has decided cases
addressing this case’s partnership issues. 	Thus, Texas Supreme Court
decisions are currently the only judicial precedents addressing these issues.
However, this court considers other intermediate appellate decisions for
whatever persuasive value they have.

O PINION AND ORDER, Page 26
F. 	Applicable Business Organizations Code Provisions
1. Introduction
[¶ 72] A limited partnership is a partnership formed by two or more
persons, with one or more general partners and one or more limited partners.
TBOC § 1.002(50); Byron F. Egan, EGAN ON ENTITIES 467 (4th Ed. 2023).
[¶ 73] TBOC Chapter 153 governs limited partnerships. However, Ch.
152’s general partnership laws and other rules of law and equity compatible
with Ch. 153 also apply to limited partnerships. TBOC § 153.003(a)–(b).
[¶ 74] Specifically, limited partnership managing partners are subject to
Ch. 	152’s 	general 	partner 	duties 	and 	obligations. 	Id. 	§§ 152.204(a),
153.152(a)(1)–(2), 153.153(1)–(2); EGAN ON ENTITIES 475. 	Thus, PEC was
subject to a partner’s Ch. 152 statutory responsibilities. Further, the parties
assume 	HoldCo 	exercised 	sufficient 	control 	over 	PEP 	such 	that 	rules
applicable to general partners also apply to HoldCo’s conduct.73
2. Chapter 152 Responsibilities
[¶ 75] PEOFs allege that HoldCo and PEC breached TBOC’s loyalty and
care duties and the related obligation to discharge them in good faith and in a
73 Movants’ Motion at 16, n.34; see also Strebel, 371 S.W.3d at 279 (fiduciary duties that
otherwise do not exist may arise when a limited partner exercises control over the
partnership).

O PINION AND ORDER, Page 27
manner the defendant reasonably believes to be in the partnership’s best
interests.74 The applicable statutes include:
General Conduct Standards
(a) A partner owes to the partnership [and] 	the other partners
. . .:
(1) a duty of loyalty; and
(2) a duty of care.
(b) 	A partner shall discharge the partner’s duties to the
partnership and the other partners under this code or under the
partnership agreement and exercise any rights and powers in the
conduct . . . of the partnership business:
(1) in good faith; and
(2) in a manner the partner reasonably believes to be in the
best interest of the partnership.
(c) 	A partner does not violate a duty or obligation under this
chapter or under the partnership agreement merely because the
partner’s conduct furthers the partner’s own interest.
(d) 	A partner, in the partner’s capacity as partner, is not a
trustee and is not held to the standards of a trustee.
TBOC § 152.204.
Duty of Loyalty
A partner’s duty of loyalty includes:
74 FAP ¶s 105–09, 112–114.

O PINION AND ORDER, Page 28
(1) 	accounting to and holding for the partnership property,
profit, or benefit derived by the partner:(A) in the conduct . . . of
the partnership business; or . . . ;
(2) refraining from dealing with the partnership on behalf of a
person who has an interest adverse to the partnership; and
(3) refraining from competing or dealing with the partnership
in a manner adverse to the partnership.
Id. § 152.205.
Duty of Care
(a) 	A partner’s duty of care to the partnership and the other
partners is to act in the conduct . . . of the partnership business
with the care an ordinarily prudent person would exercise in
similar circumstances.
(b) An error in judgment does not by itself constitute a breach
of the duty of care.
(c) 	A partner is presumed to satisfy the duty of care if the
partner acts on an informed basis and in compliance with
Section 152.204(b).
Id. § 152.206.
Effect of Partnership Agreement and Nonwaivable Provisions
(a) 	Except 	as 	provided 	by 	Subsection 	(b), 	a 	partnership
agreement governs the relations of the partners and between the
partners and the partnership. To the extent that the partnership
agreement does not otherwise provide, this chapter and the
other partnership provisions govern the relationship of the
partners and between the partners and the partnership.
(b) A partnership agreement or the partners may not:

O PINION AND ORDER, Page 29
(1) 	unreasonably restrict a partner’s or former partner’s
right of access to books and records under Section 152.212;
(2) 	eliminate the duty of loyalty under Section 152.205,
except that the partners by agreement may identify specific
types of activities or categories of activities that do not violate
the duty of loyalty if the types or categories are not manifestly
unreasonable;
(3) 	eliminate the duty of care under Section 152.206,
except that the partners by agreement may determine the
standards by which the performance of the obligation is to be
measured if the standards are not manifestly unreasonable;
(4) 	eliminate the obligation of good faith under Section
152.204(b), 	except 	that 	the 	partners 	by 	agreement 	may
determine the standards by which the performance of the
obligation is to be measured if the standards are not manifestly
unreasonable;
* * *
Id. § 152.002 (emphasis added).
Information Regarding Partnership
(a) On request and to the extent just and reasonable, each partner
and 	the 	partnership 	shall 	furnish 	complete 	and 	accurate
information concerning the partnership to:
(1) a partner; . . .
Id. § 152.213.
[¶ 76] In short, the partners’ agreement is the baseline for determining
their responsibilities to the partnership and each other—subject to TBOC’s
minimum requirements. TBOC § 152.002(a).

O PINION AND ORDER, Page 30
[¶ 77] Like 1994’s Texas Revised Partnership Act (TRPA) before it,
these statutes provide a more specific and explicit statement of a partner’s
duties to the partnership and other partners than existed under the common
law and the prior Texas Uniform Partnership Act (TUPA). See Miller, Partner
Duties Under the Common Law and the Texas Business Organizations Code, 68
The Advocate Ch. 18, § 1 (Miller, Partner Duties).
[¶ 78] However, because courts and commentators have been unclear
regarding the extent to which the TBOC and its predecessors 	modified
common law fiduciary principles, reviewing that statutory history aids their
proper construction and application.
G. 	Legislative Background
[¶ 79] Before 1961, the common law governed Texas partnership law,
Ingram v. Deere, 288 S.W.3d 886, 894–95 (Tex. 2009), and recognized
fiduciary duties between partners, Crim Truck & Tractor Co. v. Navistar Int’l
Transp. Corp., 823 S.W.2d 591, 593–94 (Tex. 1992) (citing Johnson v.
Peckham, 120 S.W.2d 786, 787 (Tex. 1938)).
[¶ 80] In 1961, Texas adopted the TUPA. Ingram, 288 S.W.3d at 894.
Without expressly defining partners as fiduciaries, the TUPA stated a partner’s
duty to account for partnership profits and hold them as “a trustee” and the

O PINION AND ORDER, Page 31
section governing partners’ duties was titled “Partner Accountable as a
Fiduciary.” TUPA § 21(1). Thus, TUPA comported with treating partners as
trustee-fiduciaries but did not unambiguously call them that.
[¶ 81] At common law and under TUPA, partners owed each other
fiduciary duties to: (i) fully disclose all matters affecting the partnership, (ii)
account for all partnership profits and property, (iii) refrain from self-dealing,
and (iv) refrain from competing with the partnership. 	Bohatch v. Butler &
Binion, 905 S.W.2d 597, 602 (Tex. App.—Houston [14th Dist.] 	1995, aff’d,
977 S.W.2d 543 (Tex. 1998)).
[¶ 82] 	For example, the common law imposed a strict duty on partners
to disclose material facts affecting the partnership or other partners—even if
the partners have strained relationships and adverse interests. 	See Johnson,
120 S.W.2d at 787 (duty to disclose negotiations with third parties to resell
partnership’s property); Erin Larkin, Comment, Partners’ Duties Without the
Word Fiduciary, 59 Baylor L. Rev. 895, 899 (2010).
[¶ 83] Nonetheless, TUPA’s text appeared to alter Johnson’s voluntary
disclosure requirement by imposing the disclosure duty on demand:
Partners shall render on demand true and full information of all
things affecting the partnership to any partner . . .

O PINION AND ORDER, Page 32
TUPA § 20.
[¶ 84] But § 20’s commentary said that § 20 should not be construed to
limit 	the 	disclosure 	duty 	to 	instances 	without 	demand 	when 	fiduciary
principles would require full disclosure. 	See Larkin at 900–12; Alan R.
Bromberg, The Proposed Texas Uniform Partnership Act, 14 Sw L. J. 437, 448
(1960) (comment to § 20, citing Byron D. Sher and Alan R. Bromberg, Texas
Partnership Law in the 20th Century – Why Texas Should Adopt the Uniform
Partnership Act, 12 Sw L.J. 263, 298–300 (1958)). And case law continued
to express the full disclosure duty. See Bohatch, 905 S.W.2d at 602.
[¶ 85] However, effective January 1, 1994, Texas adopted the TRPA.
Ingram, 288 S.W.2d at 894. TRPA § 4.03(c) provided that
. . . [e]ach partner and the partnership shall furnish, on request
and to the extent just and reasonable, to a partner complete and
accurate information regarding the partnership.
[¶ 86] Despite 	nearly 	identical 	language 	as 	TUPA 	§ 	20, 	the 	Bar
Committee Notes to TRPA § 4.03 (TRPA’s successor to TUPA § 20 and
predecessor to TBOC § 152.213) reached a different conclusion regarding the
disclosure duty:
Subsection (c) is based on TUPA § 20 and provides that partners
must 	be 	furnished, 	on 	demand, 	complete 	and 	accurate
information concerning the partnership to the extent just and

O PINION AND ORDER, Page 33
reasonable. 	This information right arises only on request; the
information need not be volunteered. * * *
Comment 	of 	Bar 	Committee—1993, 	Art. 	6132b-4.03 	(emphasis
added).
[¶ 87] Commentators and courts debated the extent to which the TRPA
changed the common law, including whether it eliminated Johnson’s voluntary
full-disclosure duty. 	See Elizabeth S. Miller, Overview of Fiduciary Duties,
Exculpation, and Indemnification in Texas Business Organizations, 49-SUM
Tex. J. Bus. L. 1, 36–47 (2020) (Miller, Overview); Larkin at 900–12.
[¶ 88] Although the Legislature derived TRPA from the Uniform Law
Commission’s Revised Uniform Partnership Act (RUPA), there are informative
differences. 	For example, RUPA § 404 describes its “General Standards of
Partner’s Conduct” as fiduciary duties, but TRPA does not. 	And TRPA
§ 4.04(f)’s added provision that a partner is not a trustee and is not held to the
standards 	of 	a 	trustee 	arguably 	further 	evidenced 	that 	TRPA 	replaced
partners’ common law fiduciary principles with specific statutory standards,
while leaving the common law as a gap-filler. 	Larkin at 900–12. 	That is,
unlike RUPA § 404, TRPA § 4.04 created ambiguity by providing that a
partner’s loyalty duty was not limited to only those duties stated in the text.

O PINION AND ORDER, Page 34
Compare RUPA § 404(b) (“A partner’s duty of loyalty to the partnership and
the other partners is limited to the following . . .” (emphasis added)) with TRPA
§ 4.04(b) (“A partner’s duty of loyalty includes . . .” (emphasis added)).
[¶ 89] Soon after TRPA’s enactment, the supreme court described a
partner’s statutory duties to the partnership and other partners as “in the
nature of a fiduciary duty in the conduct” of partnership business. 	M.R.
Champion, Inc. v. Mizell, 904 S.W.2d 617, 618 (Tex. 1995). 	However, that
statement’s effect on the TRPA is unclear because the prior TUPA and
common law governed that case. Id. at 618, n.1. And the court held that the
applicable 	principle—former 	partners 	have no 	duty 	to 	offer 	a 	business
opportunity to each other—is the same under the old and new laws. Id.
[¶ 90] So, the Fifth Circuit Court of Appeals commented on the lack of
clarity regarding TRPA’s effect on prior TUPA and common law principles. In
re Gupta, 394 F.3d 347, 351–52 (5th Cir. 2004).
[¶ 91] Moreover, it is hard to tell whether the fiduciary duty discussions
in Cruz v. Ghani, No. 05-17-0056-CV, 2018 WL 6566642, *6 (Tex. App.—
Dallas 2018, no pet); Shannon Medical Center v. Triad Holdings III, L.L.C.,
601 S.W.3d 904, 909–15 (Tex. App.—Houston [14th Dist.] 	2019, no pet.);
and Red Sea Gaming, Inc. v. Block Invs. (Nevada) Co., 338 S.W.3d 562, 568

O PINION AND ORDER, Page 35
(Tex. App.—El Paso 2010, pet. denied) (and similar cases) state the applicable
law because they involve unobjected to jury charges.75
[¶ 92] In sum, the extent to which the TRPA and the TBOC replaced
common law principles—and especially the disclosure duty—is unclear. It is
with that background that the court discusses the TBOC’s application here.
H. 	The Nature and Scope of HoldCo’s and PEC’s Duties and Obligations
1. Introduction
[¶ 93] PEOFs posit ten causes of action. 	All but one allege direct or
indirect (conspiracy, aiding and abetting, and knowing participation in)
fiduciary breach claims without delineating between common law or TBOC
duties.76 PEOFs’ 	summary 	judgment 	response 	is 	equally 	non-
differentiating.77 Therefore, the court begins by discussing the current status
of TBOC partnership “fiduciary duties.”
2. Applicable Loyalty and Care Duties and Discharge Obligations
[¶ 94] It is axiomatic that the court must identify the nature and scope
of HoldCo’s duties and obligations to PEP and its partners before it can
75 Where an appellant did not object to the jury charge, evidentiary sufficiency issues are
measured against the charge as written and not necessarily the correctly stated law. Cruz,
2018 WL 6566642, at *6. Red Sea Gaming, 338 S.W.3d at 566.
76 FAP ¶s 104–68.
77 See PEOFs’ MSJ Resp. at 11–30 (combining common law and statutory principles).

O PINION AND ORDER, Page 36
address whether HoldCo conclusively established that it did not breach those
responsibilities as PEOFs claim.78 (The court collectively refers to a partner’s
“fiduciary” duties and obligations as “responsibilities.”) The existence of a
legal duty is a threshold legal question for the court to decide. 	Humble Sand
& Gravel, Inc. v. Gomez, 146 S.W.3d 171, 181, n.20 (Tex. 2004).
[¶ 95] Where, as here, determining the nature and scope of a partner’s
duties and obligations is a matter of statutory and contract construction, that
process begins with the TAPA:
[A] partnership agreement governs the relations of the partners
and between the partners and the partnership. 	To the extent
that the partnership agreement does not otherwise provide, this
chapter 	and 	the 	other 	partnership 	provisions 	govern 	the
relationship of the partners and between the partners and the
partnership.
TBOC § 152.002(a)
[¶ 96] Because here, the partners agreed that they would have the
“duties of good faith and fair dealing” to the fullest extent required by Texas
law (TAPA § 5.9(a)) but otherwise disclaimed any “fiduciary duties” to the
78 For clarity, “causes of action” are legal theories supporting a right to relief such as
negligence or contract breach. “Claims,” when used as a noun, are assertions a party
makes to describe the factual basis supporting a cause of action or affirmative defense. For
example, “Defendant breached the contract by . . .” “Grounds” are legal bases underlying
a party’s request for court action. For example, “the court should grant summary judgment
because . . .” 	Parties should be careful to properly use these terms.

O PINION AND ORDER, Page 37
fullest extent permitted by law (TAPA §§ 5.9(b)–(c)), we turn to applicable
TBOC sections to determine what duties and obligations remained. 	That
analysis produces these results:
a. Affirmative Responsibilities
[¶ 97] At common law, a trustee is held to strict fiduciary standards:
Many forms of conduct permissible in a workaday world for
those acting at arm’s length, are forbidden to those bound by
fiduciary ties. A trustee is held to something stricter than the
morals of the market place. Not honesty alone, but the punctilio
of an honor the most sensitive, is then the standard of behavior.
As to this there has developed a tradition that is unbending and
inveterate. 	Uncompromising rigidity has been the attitude of
courts of equity when petitioned to undermine the rule of
undivided loyalty by the ʻdisintegrating erosion’ of particular
exceptions. *** Only thus has the level of conduct for fiduciaries
been kept at a level higher than that trodden by the crowd.
Meinhard v. Salmon, 249 N.Y. 458, 464, 164 N.E. 545, 546 (1928) (citation
omitted) (trustee standards applied to joint venturer).
[¶ 98] However, TBOC § 152.204(d) provides that partners are not held
to a trustee’s standards. 	And TBOC, like its predecessor TRPA, omits the
word “fiduciary” when prescribing partners’ duties to the partnership and
other partners. So, based on plain text, traditional trustee-fiduciary duties, as
such, do not apply to partners except (i) as TBOC imposes analogous statutory

O PINION AND ORDER, Page 38
duties and obligations; (ii) the TBOC incorporates compatible common law
principles; or (iii) partners agree to impose them on themselves.
[¶ 99] Loyalty and care duties and the obligations to perform them (i) in
good faith and (ii) in a manner the partner reasonably believes to be in the
partnership’s best interest are among the responsibilities TBOC imposes. Id.
§ 152.204(a)–(b).
[¶ 100] TBOC’s 	list 	of 	loyalty 	duties 	is 	not 	exclusive 	because
“includes” precedes 	that list. 	Id. § 152.205. 	So, common law loyalty
principles apply if compatible with Ch. 152 and the partnership agreement. Id.
§ 152.003. And, under the noscitur a sociis canon, any supplemental common
law loyalty duties must be of the type listed in § 152.205 and consistent with
other partnership statutes and permitted TAPA terms. 	See Paxton, 468
S.W.3d at 61.
[¶ 101] However, TBOC’s duty of care definition is exclusive because it
omits expansive language.79 See TBOC § 152.206; City of Houston, 353
S.W.3d at 145. That is,
79 § 152.206(c)’s statement that a partner is presumed to satisfy its duty of care if it acts on
an informed basis and in compliance with its § 152.206 obligations is an evidentiary
presumption, not a separate statutory responsibility. Id.

O PINION AND ORDER, Page 39
Nothing is to be added to what the text states or reasonably
implies (casus omissus pro omisso habendus est).
R EADING LAW 93.
[¶ 102] And, 	unless modified, the TBOC retains the common law
obligations to act in good faith and in a manner the partner reasonably believes
to be in the partnership’s best interest. TBOC § 152.204(b).
[¶ 103] The TBOC also imposes a duty upon request and to the extent
just and reasonable to provide partners with accurate information concerning
the partnership. Id. § 152.213.
b. Modifications to Responsibilities
[¶ 104] One of the principal trustee duties the TBOC removes from
partners’ duties is a trustee’s duty to place its beneficiary’s interest above the
trustee’s interest. 	See TBOC §152.204(d) (elimination of trustee status and
duties); BOGERT’ S THE LAW OF TRUSTS AND TRUSTEES § 543 (Trustee’s duty of
loyalty to the beneficiaries).
[¶ 105] Further, partners do not violate their responsibilities merely
because the partner acts in its own interest. Id. § 152.204(c).
[¶ 106] Although 	partners 	may 	not 	completely 	eliminate 	their
responsibilities, they may define specific conduct that does not violate them

O PINION AND ORDER, Page 40
provided those terms are not manifestly unreasonable. Id. § 152.002(b). The
TBOC does not state any “magic words” that are required to implement these
contractual carveouts to the statutory responsibilities.
[¶ 107] However, partners may eliminate the obligation to perform their
duties and exercise any rights and powers under the partnership agreement in
a manner the partner reasonably believes to be in the partnership’s best
interest 	if 	such 	terms 	are 	not 	manifestly 	unreasonable. 	See 	id.
§ 152.002(b)(4). 	That 	is 	because 	§ 152.002(b)’s 	list 	of 	unwaivable
responsibilities mentions a partner’s obligation to perform its duties in good
faith under § 152.204(b)(1) without also listing a partner’s obligation to
discharge 	its 	duties 	in 	a 	manner 	it 	reasonably 	believes 	to 	be 	in 	the
partnership’s best interest under § 152.204(b)(2). Id. § 152.002(b)(4).
[¶ 108] That partners may waive the obligation to act in a manner the
partner reasonably believes to be in the partnership’s best interest comports
with §§ 152.204(c), (d).
[¶ 109] Moreover, 	the 	expressio unius est exclusion alterius 	canon
further supports that result because § 152.002(b)(4) mentions the good faith
obligation while not mentioning the separate obligation to perform those

O PINION AND ORDER, Page 41
obligations in a manner the partner reasonably believes is in the partnership’s
best interest. City of Houston, 353 S.W.3d at 145.
3. Good Faith and Fair Dealing
[¶ 110] Although TBOC § 152.204(b)(1) requires partners to discharge
their contract rights and duties and TBOC loyalty and care duties in good faith,
that obligation does not rise to the level of a separate “fiduciary” duty as such:
Though courts may be tempted to elevate this language to an
independent duty, this obligation is not stated as a separate
duty, but merely as a standard for discharging a partner’s
statutory or contractual duties.
Elizabeth S. Miller, Fiduciary Duties, Exculpation, and Indemnification in
Texas Business Organizations, State Bar of Texas Advanced Business Law
Course 	30 	(2023) 	(Miller, 	Fiduciary 	Duties); 	see 	Comment 	of 	Bar
Committee—1993, Art. 6132b-4.04 (good faith obligation “is not a separate
duty” it is “merely a statement of how any duty . . . must be discharged”).
[¶ 111] Unlike loyalty and care duties, the TBOC does not define the
“good faith” discharge obligation. 	See TBOC § 152.204(b)(1). Thus, courts
refer to the common law for that meaning. 	Id. § 152.003; SandRidge, 642
S.W.3d at 566.

O PINION AND ORDER, Page 42
[¶ 112] Fitz-Gerald v. Hull, holds that partners owe each other the
“utmost good faith and the most scrupulous honesty.” 237 S.W.2d 256, 265
(Tex. 1951). Bohatch v. Butler & Binion, subsequently reiterated that principle
but concluded that terminating a partner for reporting alleged overbilling did
not violate the principle. 977 S.W.2d 543, 545–47 (Tex. 1998).
[¶ 113] Later, the supreme court clarified that, although a partner’s
common law fiduciary duty includes a duty of good faith and fair dealing, that
duty requires only that the parties “deal fairly” with each other and does not
include the more onerous fiduciary duty to place the other party’s interests
before its own:
Although a fiduciary duty encompasses at the very minimum a
duty of good faith and fair dealing, the converse is not true. The
duty of good faith and fair dealing merely requires the parties to
“deal fairly” with one another and does not encompass the
often more onerous burden that requires a party to place the
interest of the other party before his own, often attributed to a
fiduciary duty.
Crim, 823 S.W.2d at 594. 	However, the court did not further define “deal
fairly.” Nor has it since done so.
[¶ 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, 603 S.W.3d at 912–915 (partner misled partners regarding

O PINION AND ORDER, Page 43
permitted affiliate business); Cruz, 2018 WL 6566642, *10–16 (partner
misrepresented reasons for closing one business and misled partner regarding
permitted competing business); Red Sea Gaming, 338 S.W.3d at 568–69
(failure to disclose resale opportunity while negotiating buyout).
[¶ 115] However, one does not act in bad faith by exercising its lawful
rights:
Improper 	motives 	cannot 	transform 	lawful 	actions 	into
actionable torts. “Whatever a man has a legal right to do, he
may do with impunity, regardless of motive, and if in exercising
his legal right in a legal way damage results to another, no cause
of 	action 	arises 	against 	him 	because 	of 	a 	bad 	motive 	in
exercising the right.”
Texas Beef Cattle Co. v. Green, 921 S.W.2d 203, 211 (Tex. 1996) (quoting
Montgomery v. Phillips Petroleum Co., 49 S.W.2d 967, 972 (Tex. Civ. App.—
Amarillo 1932, writ ref’d) (quoting 1 R.C.L. § 6 at 319)).
[¶ 116] Thus, one does not lack good faith by exercising lawful contract
rights. 	See Exxon Corp. v. Atlantic Richfield Co., 678 S.W.2d 944, 947 (Tex.
1984) (“There can be no implied covenant as to a matter specifically covered
by the written terms of the contract.”); English v. Fischer, 660 S.W.2d 521,
523 (Tex. 1983) (No implied covenant of good faith and fair dealing required
mortgagee to disburse insurance proceeds contrary to contract terms.); John

O PINION AND ORDER, Page 44
Masek Corp. v. Davis, 848 S.W.2d 170, 174 (Tex. App.—Houston [1st Dist.]
1992, writ denied) (approved jury instruction that a “fiduciary duty [] 	does
not extend so far as to create duties in derogation of the express terms of the
partnership agreement”).
[¶ 117] Further, good faith is often best described as not in bad faith.
Good 	faith, 	as 	judges 	generally 	use 	the 	term 	in 	matters
contractual, is best understood as an “excluder” – a phrase with
no general meaning or meanings of its own. Instead, it functions
to rule out many different forms of bad faith. It is hard to get this
point across to persons used to thinking that every word must
have one or more general meanings of its own – must be either
univocal or ambiguous.
See Robert S. Summers, “Good Faith” in General Contract Law and the Sales
Provisions of the Uniform Commercial Code, 54 Va. L. Rev. 195, 262 (1968).
4. Duties of Candor and Mandatory Disclosures
a. Introduction
[¶ 118] Some courts have recently held that partners owe a fiduciary
duty (i) to make full disclosure of all matters affecting the partnership,
including a duty to account for all partnership profits and property and (ii) a
strict duty of good faith and candor. 	See Zinda v. McCann Street, Ltd., 178
S.W.3d 883, 890–91 (Tex. App.—Texarkana 2005, pet. denied); Houle v.
Casillas, 594 S.W.3d 524, 552 (Tex. App.—El Paso 2019, no pet.).

O PINION AND ORDER, Page 45
[¶ 119] Such 	rulings 	concern 	two 	issues: 	(i) 	does 	the 	good 	faith
obligation encompass the honesty requirement; and (ii) does the Johnson v.
Peckham mandatory duty to disclose all facts that could materially affect the
partnership, 	or 	other 	partners, 	continue 	after 	TRPA 	§ 4.03 	and 	TBOC
§ 152.213. 	“Yes” is the answer to the former, and “it depends on the
circumstances” is the answer to the second.
b. Good Faith and Candor
[¶ 120] To begin, Zinda for example equates good faith and candor. 178
S.W.3d at 890–91. 	Because “candor” means “[t]he quality of being open,
honest, 	and 	sincere; 	frankness; 	outspokenness,” 	Candor, 	BLACK’ S 	LAW
DICTIONARY (12th ed. 2024), the TBOC effectively incorporates the candor
duty to be honest in § 152.204(b)(1)’s good faith obligation.
c. Voluntary Disclosure
[¶ 121] Although Zinda cited TRPA § 4.04 as authority for a broad duty
to disclose all information affecting the partnership, that court did not address
whether § 4.03 retained the prior Johnson v. Peckham duty to voluntarily
disclose, even without request, all material information. 	178 S.W.3d at 890–
91.

O PINION AND ORDER, Page 46
[¶ 122] Like TRPA § 4.03, the TBOC requires partners to provide
information on reasonable request. TBOC § 152.213. So, the debate regarding
the Johnson rule after TRPA § 4.03 applies to TBOC § 152.213 too. However,
although the TBOC does not expressly so state, the common law good faith
obligation 	also 	applies 	to 	§ 152.213. 	See 	id. 	§ 152.003 	(common 	law
supplement to TBOC). However, those concepts are limited to (i) the common
law definition of “good faith” to mean “deal fairly,” Crim, 823 S.W.2d at 593–
94, and (ii) statutory constraints that §§ 152.204(c), (d), and 152.213 and any
applicable partnership agreement terms impose.
[¶ 123] Since Texas adopted TRPA § 4.03, the Texas Supreme Court has
provided little guidance regarding a partner’s duty to voluntarily provide
information affecting the partnership. For example, in American Star Energy
and Minerals Corp. v. Stowers, the Supreme Court suggested in dicta that there
are circumstances when the duty of care may require a partner to disclose
material information affecting the partnership’s operation. 	457 S.W.3d at
434–35.
[¶ 124] That statement is dicta because the issue there was when do
limitations begin to run in a suit to enforce a partnership’s contract liability
against a partner. The Supreme Court held that, based on the partnership as

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an entity theory, partners were not individually liable until the partnership’s
liability was finally established at which time limitations began running
against the individual partner. Id. at 428–30, 435.
[¶ 125] Responding to the partners’ argument that due process required
that they be joined in the suit against the partnership, the court explained that
(i) as a matter of law the partners had notice of their potential liability when
they became partners; (ii) citing Zinda, the court stated that the duty of care
“may” 	require 	partner 	to 	inform 	other 	partners 	of 	a 	suit 	against 	the
partnership; and (iii) partners can agree in their partnership agreement for a
partner 	served 	with 	a 	lawsuit 	against 	the 	partnership 	to 	provide 	that
information to the other partners. Stowers, 457 S.W.3d at 434–35.
[¶ 126] Regarding the second point, the court did not discuss TRPA
§ 4.03 or TBOC 152.213. 	Id. Nor did it explain what circumstances “may”
require disclosures. Id. Finally, the court did not explain why such a duty falls
under the care duty instead of the good faith obligation. Id. So, Stowers does
not guide as to when partners must voluntarily disclose information to other
partners. And that statement may be construed as a “suggestion” that such
an obligation survives after TRPA § 4.03 and TBOC § 152.213. 	Miller,
Fiduciary Duties 30.

O PINION AND ORDER, Page 48
[¶ 127] Additionally, “[a]s a general rule, silence may be equivalent to a
false representation only when the particular circumstances impose a duty on
the party to speak and he deliberately remains silent.”80 Bradford v. Vento, 48
S.W.3d 749, 755 (Tex. 2001). And, in an arm’s-length transaction, a duty to
disclose facts does not exist absent a misleading statement about facts and the
complaining party lacked an equal opportunity to discover the facts. 	See id.
756.
[¶ 128] Without firm rules concerning when a partner must volunteer
information regarding circumstances not expressly mentioned in § 152.213,
the court applies these standards in this case:
• 	A partnership agreement may address the issue either directly or
indirectly by omission. 	See TBOC §§ 152.002(a) (partnership agreement
governs the relations among partners and the partnership), 152.002(b)(2)–(4)
(ability to modify loyalty and care duties and good faith obligation); Nafta
Traders, Inc. v. Quinn, 339 S.W.3d 84, 95–96 (Tex. 2011) (contract freedom);
80 For example, fraud by omission may occur where a person discovers new information that
makes an earlier material representation false or misleading, Dewayne Rogers Logging, Inc.
v. Propac, Ltd., 299 S.W.3d 374, 391 (Tex. App.—Tyler 2009, pet. denied); or a person
makes a partial disclosure that leaves a false impression, Mercedes-Benz USA, LLC v.
Cardusco, Inc., 583 S.W.3d 553, 561–62 (Tex. 2019).

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FPL Energy, LLC v. TXU Portfolio Mgmt. Co., L.P., 426 S.W.3d 59, 68 (Tex.
2014) (omissions may be read as intentional).
• 	Absent 	a 	partnership 	agreement 	standard, 	partners 	must 	disclose
material information affecting the partnership or other partners that ordinarily
would not be expected to be covered by a partnership agreement. For example,
a partner must tell at least partnership management when the partner is served
with a suit against the partnership. See Stowers, 457 S.W.3d at 434–35.
• 	A partner may not mislead the partnership or other partners where fraud
by omission principles would apply absent the partnership relationship. 	See
¶s 114, 127.
• 	That a partner is acting in its self-interest does not by itself create a duty
to voluntarily disclose information regarding its conduct if the partnership
agreement lawfully permits that conduct. See TBOC § 152.204(c), (d).
• 	A partner need not disclose facts that would be immaterial under the
circumstances, including circumstances contemplated by the partnership
agreement.
5. Separate Analysis Required
[¶ 129] TBOC’s text divides partners’ loyalty and care duties on one
hand from their obligation to discharge them in good faith (and when applicable

O PINION AND ORDER, Page 50
in a manner the partner reasonably believes to be in the partnership’s best
interest) on the other hand. See TBOC § 152.204.
[¶ 130] For example, one can perform its loyalty duty according to the
partnership agreement’s terms but discharge that duty in bad faith by lying to
or misleading its partners while doing so. 	See, e.g., Shannon Medical, 603
S.W.3d at 912–915; Cruz, 2018 WL 6566642, *10–16; Red Sea Gaming, 338
S.W.3d at 568–69. On the other hand, the good faith obligation is irrelevant
for liability purposes if the partner breached the duty by engaging in prohibited
conduct.
[¶ 131] So, courts should analyze whether a duty is breached before
considering whether the defendant acted in good faith and, when applicable,
in a manner it reasonably believed was in the partnership’s best interest.
VI. APPLICATION
A. 	Introduction
[¶ 132] Movants basically argue that PEOFs’ claims fail in their entirety
because (i) the TAPA authorized HoldCo to exercise its drag-along rights and
force the other partners to participate in selling PRD’s assets in an Exit Event;
(ii) HoldCo complied with its TAPA conditions to wait two years and conduct
the sale in an arm’s-length transaction; and (iii) its contract rights and conduct

O PINION AND ORDER, Page 51
satisfied Texas law’s minimum requirements since TAPA defines conduct that
meets the minimum requirements of loyalty and care and it acted in good faith.
[¶ 133] Conversely, PEOFs primarily argue that “Blackstone” breached
its contract good faith duty and statutory responsibilities in several ways—
including by failing to act in the partnership’s best interest regarding the
consideration received and the processes HoldCo used to analyze the deal.
[¶ 134] In short, the analysis converges on whether HoldCo acted in
good faith when it exercised its drag-along rights and forced the sale of PRD’s
assets to Callon on terms HoldCo selected. Because movants seek complete
dismissal of all claims against them, the court addresses all claims PEOFs
assert against movants regardless of whether movants expressly addressed
every such claim.
B. 	PEOFs’ Claims by Category
[¶ 135] PEOFs’ petition and the parties’ submissions do not divide their
arguments 	between 	distinct 	breach 	of 	loyalty, 	care, 	or 	good 	faith

O PINION AND ORDER, Page 52
responsibilities. And several of PEOFs’ claims are variations of the same idea.
Nonetheless, PEOFs’ claims include these categories:81
• 	Loyalty: 	(i) 	failing 	to 	act 	in 	the 	partnership’s 	best 	interest; 	(ii)
structuring the deal to benefit “Blackstone;” (iii) prioritizing “Blackstone’s”
interest in fossil fuel divestment over acting in Primexx’s best interests; (iv)
acting in “Blackstone’s” sole interest; (v) structuring a deal that would
provide no return for PEOFs but would generate a substantial recovery for
Blackstone; (vi) accepting an unfair sales proceeds’ allocation; (vii) directing
the sale to proceed despite knowing it was a bad deal; (viii) failing to maximize
the value and return for PEP or other Unitholders aside from furthering
“Blackstone’s” interests; and (ix) failing to ensure “Blackstone” had no
conflicts of interest.
• 	Care: (i) failing to keep PEOFs informed about the potential sale leading
up to the sale; (ii) failing to conduct regular board meetings to discuss whether
the sale made sense from the company’s perspective; (iii) forcing a rushed sale;
(iv) forcing the sale with only one business days’ notice of the final terms; (v)
81 Any claims not mentioned here are variations of what is discussed and are treated in the
same manner. If the court calls a loyalty claim a care claim or vice-versa, it is regarded as
such.

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failing to take steps to maximize the value for PEP or the Unitholders; (vi)
inadequate due diligence and marketing; (vii) preventing the board or other
Unitholders from analyzing the terms; (viii) failing to professionally market
the business or its assets; (ix) failing to analyze whether it was more profitable
to run the business as a stand-alone operation than to sell it; (x) failing to
consider alternatives; (xi) failing to consider whether a rushed sale would be
fair to PEP or its partners, including PEOFs; and (xii) failing to properly
distribute proceeds according to the waterfall.
• 	Good faith: All the above.
C. 	Overall Considerations
[¶ 136] The court must analyze PEOFs’ claims under the TAPA subject
to TBOC minimum standards. That is, Texas recognizes these sophisticated
parties’ freedom to contract within TBOC’s minimum standards. 	See, e.g.,
TBOC § 152.002(a); Royston, Rayzor, Vickery, & Williams, LLP v. Lopez, 467
S.W.3d 494, 504 (Tex. 2015). 	Indeed, Texas regards parties’ freedom to
contract as they wish (within public policy) a sacred right:
As a fundamental matter, Texas law recognizes and protects a
broad freedom of contract. We have repeatedly said that “if
there is one thing which more than another public policy
requires it is that men of full age and competent understanding
shall have the utmost liberty of contracting, and that their

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contracts when entered into freely and voluntarily shall be held
sacred and shall be enforced by Courts of justice.”
Nafta Traders, 339 S.W.3d at 95–96 (quoting Fairfield Ins. Co. v. Stephens
Martin Paving, LP, 246 S.W.3d 653, 664 (Tex. 2008)).
[¶ 137] Moreover, freedom of contract principles require courts to
“recognize that ʻsophisticated parties have broad latitude in defining the terms
of their business relationship,’ and courts are obliged to enforce the parties’
bargain according to its terms.” 	Sundown Energy LP v. HJSA No. 3 P’ship,
622 S.W.3d 884, 889 (Tex. 2021) (quoting FPL Energy, 426 S.W.3d at 67).
Therefore, courts may not rewrite a contract under the guise of interpretation.
Id.
[¶ 138] Here, the parties agreed to minimize HoldCo’s and PEC’s
loyalty and care duties to the extent Texas law permits and agreed that HoldCo
would discharge the remaining duties in good faith to the fullest extent Texas
law requires.
[¶ 139] The court’s analysis is also informed by these undisputed facts:
• 	These are sophisticated parties represented by counsel.
• 	Drag-along rights are established vehicles used to facilitate equity
investments.

O PINION AND ORDER, Page 55
• 	PEOFs empowered HoldCo and PEC to exercise HoldCo’s drag-along
rights in their sole interest and discretion and in a manner that served
HoldCo’s (and by extension its affiliates’) and PEC’s interests—if it waited
two years, completed an arm’s-length transaction, and dealt fairly in doing so.
• 	PEOFs 	agreed 	that 	PEP’s 	Unitholders 	must 	follow 	HoldCo’s
instructions when it exercised its drag-along rights.
• 	That is, PEOFs agreed to a structure that gave Blackstone, Inc.—acting
through HoldCo—a majority of PEC’s board seats; required all Unitholders to
fulfill HoldCo’s directions regarding the sale, thereby requiring all partner
appointed directors and, thus, PEC to approve the sale at HoldCo’s direction;
and removed any discretionary PEC power to disobey HoldCo’s directions
regarding the Callon sale.82
[¶ 140] In short, that is the deal PEOFs made and the deal the court is
to enforce to the full extent Texas law permits.
82 See TAPA § 6.7 (Unitholders must instruct their directors to approve the sale).

O PINION AND ORDER, Page 56
D. 	Breach of Statutory Responsibilities
1. Introduction
[¶ 141] Although 	PEOFs’ “fiduciary” 	breach causes of action are
properly TBOC breach causes of action, the court uses the elements of a
common law fiduciary breach claim to frame a TBOC cause of action’s
elements as: (i) a statutorily recognized relationship between the plaintiff and
defendant, (ii) the defendant’s breach of a statutory responsibility to the
plaintiff, and (iii) the defendant’s breach caused an injury to the plaintiff or a
benefit to the defendant.83 See McLeod v. McLeod, 644 S.W.3d 792, 804 (Tex.
App.—Eastland 2022, no pet.) (fiduciary breach elements).
[¶ 142] It is undisputed that HoldCo and PEC were PEP partners and
owed PEOFs statutory loyalty and care duties and an obligation to discharge
them 	in 	good 	faith 	regarding 	the 	Callon 	sale—subject 	to 	their 	agreed
modifications to those responsibilities.84 And PEOFs do not claim that any
TAPA modifications to those responsibilities is manifestly unreasonable. See
TBOC §§ 152.002(b)(2)–(4); Cruz, 2018 WL 6566642, *14.
83 There are not two separate breach of fiduciary duty causes of action: one under the statute
and one under the common law. Rather, there is only a cause of action based on the code
that may incorporate certain common law aspects that are compatible with the code.
84 See ¶ 74.

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[¶ 143] Accordingly, the court must (i) define the nature and scope of the
applicable responsibilities and (ii) decide whether PEOFs raised a genuine
issue of material fact regarding their alleged breach regarding the Callon sale.
2. 	First Cause of Action: “Fiduciary” Breach (HoldCo)
a. Preface
[¶ 144] The Callon sale resulted from agreements the parties created
five years earlier. Their term sheet shows that “Blackstone” expected, among
other things, (i) control over PEC’s board with five of nine directors and (ii)
“customary drag-along rights” regarding a proposed sale of 100% of the
partners’ interests.85 The TAPA embodies those points.
[¶ 145] The parties implemented this arrangement through the PIPA;86
the TAPA;87 and PEC Bylaws.88 PEOFs do not claim those contracts were
signed under duress or they did not understand their risks.
[¶ 146] Whittier Trust Co., by Steven Anderson, signed the TAPA as
PEOF I’s general partner.89 PEC’s Bylaws identified Jim Jeffs and Robert
85 TAPA at Annex B (Summary of Proposed Terms, Term Sheet-Royalties Vehicle).
86 PIPA.
87 TAPA.
88 Movants’ Ex. 10 (Bylaws).
89 TAPA.

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Holland as PEOF I’s “Fund Directors” and Holland as PEC’s General Counsel
and Secretary.90 Jeffs’ declaration confirms that he was appointed to serve as
a PEC director.91 Whittier’s professional financial managers represented
PEOFs.92
[¶ 147] PEOF I, PEC, and HoldCo made that deal, which PEOF II
accepted.
b. Loyalty and HoldCo’s Drag-Along Rights
i. 	Introduction
[¶ 148] At a high level, the loyalty duty concerns a transaction’s
substance and whether a partner acted with conflicts of interest. 	See TBOC
§ 152.205 (loyalty includes refraining from (i) acting on behalf of a conflicted
person, 	(ii) 	competing 	with 	the 	partnership, 	or 	(iii) 	dealing 	with 	the
partnership in a manner adverse to the partnership).
[¶ 149] Thus, the court begins with those requirements and considers
the extent to which the TAPA lawfully limits those duties. In sum, the TAPA
and TBOC combine to produce these Callon sale results: (i) HoldCo must give
90 Movants’ Ex. 10 (Bylaws).
91 Jeffs Dec. ¶ 2.
92 See Derrington Dec. ¶s 3, 6.

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PEOFs reasonable access to books and records, including a duty to account for
and distribute Callon sale profits according to the waterfall; (ii) HoldCo need
not conduct the sale in a manner it reasonably believed was in PEP’s or
PEOFs’ interests; (iii) HoldCo could negotiate the sale terms in its sole
discretion and in its own sole interest (including PEC’s and “Blackstone’s”
interests) without subordinating its interests to PEP’s or the other partners’
interests—if it waited two years and conducted an arm’s-length transaction;
and (iv) HoldCo had to comply with the TAPA’s terms and “deal fairly” with
PEP and its partners while exercising its drag-along rights.
ii. 	Accounting for Proceeds
[¶ 150] PEOFs allege that HoldCo did not properly distribute Callon
sale proceeds according to the TAPA waterfall.93 Movants’ motion asserts that
“[t]he sale proceeds were [] 	distributed to the partners pursuant to the agreed
waterfall in the Limited Partnership Agreement” and includes some evidence
93 FAP ¶ 98.

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to that effect.94 PEOFs did not respond to movants’ argument or provide any
corresponding evidence.95
[¶ 151] However, a summary judgment motion itself is not evidence.
Americana Motel, Inc. v. Johnson, 610 S.W.2d 143 (Tex. 1980). And movants’
evidence does not conclusively negate PEOFs’ improper payment claim. Frost
Nat. Bank v. Fernandez, 315 S.W.3d 494, 508 (Tex. 2010). So, PEOFs “ha[d]
no burden to respond to [the] 	summary judgment motion” on this issue. M.D.
Anderson Hosp. & Tumor Inst. v. Willrich, 28 S.W.3d 22, 23 (Tex. 2000).
[¶ 152] Movants’ evidence tends to show that PEOF II (but not PEOF
I) received money and Callon shares and the value of those shares.96 However,
that does not disprove PEOFs’ claim that common Unitholders may have been
paid ahead of preferred Unitholders contrary to the waterfall. 	So, the court
denies movants’ motion to the extent it seeks dismissal of PEOFs’ claim that
94 Movants’ MSJ at 3; Movant’s Exs. 7, 8, 11.
95 See PEOFs’ Resp. at 8. PEOFs’ only reference to the waterfall payment structure in their
response was that “Blackstone was the only investor to receive any significant proceeds
from the sale,” citing to a different portion of their petition than where this allegation
appears. Id. Accordingly, the court understands this statement was offered in support of
PEOFs’ allegation that the Callon sale was fundamentally unfair to the non-HoldCo
investors, not that the waterfall was distributed improperly.
96 Movant’s Exs. 7 (PEOF II Distribution Letter), 8 (AST Callon Petroleum Share
Registration Statement), 11 (NASDAQ Historical Data for CPE).

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HoldCo failed to properly account for and distribute the Callon sale profits
according to the waterfall.
iii. 	Allocation of Proceeds between PEP and BPP
[¶ 153] PEOFs allege that HoldCo unfairly structured the allocation of
sales proceeds between PEP and BPP (the sidecar business) to advantage
BPP’s owners and disadvantage PEP’s owners.97 Movants’ motion did not
address that claim. Thus, the court denies summary judgment regarding it.
iv. 	Remaining Loyalty Claims
[¶ 154] TAPA § 6.7 addresses the nature and scope of HoldCo’s Callon
loyalty duty by defining permitted conduct. And, reading § 6.7 together with
§ 5.9 and the circumstances surrounding HoldCo’s private equity investment
in PEP further inform the parties’ objective understanding regarding the
nature and scope of HoldCo’s Callon sale responsibilities. Polyco, 681 S.W.3d
at 391 (construe contracts as a whole giving effect to all contract terms).
[¶ 155] That is, the parties broadly met TBOC § 152.002(b)(2) contract-
created loyalty standards by framing specific activities that do not violate the
loyalty duty. For example, TAPA §§ 5.4 through 5.9 and 5.11 span more than
97 FAP ¶s 96, 107, and 108.

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three pages discussing “arm’s-length” or fair market value requirements and
fairness standards for potential conflicted transactions that might otherwise
breach loyalty duties.98 So, the partners identified those circumstances,
considered their risks, and negotiated protections. 	Thus, they knew how to
identify and negotiate regarding risks.
[¶ 156] More specifically, TAPA § 5.9 defines conduct that would not
violate loyalty duties, including granting all partners—including PEC—the
ability to
. . . decide or determine any matter in its sole and absolute
discretion taking into account solely its interest and those of its
Affiliates 	(excluding 	the 	Partnership 	and 	its 	Subsidiaries)
subject 	to 	the 	Agreed 	Duties. 	Each 	Partner 	further
acknowledges and agrees that it would not have become a
Partner 	in 	the 	Partnership 	if 	this 	arrangement 	were 	not
acceptable to it.
[¶ 157] They further defined Agreed Duties to mean “to the fullest
extent required by Texas law, . . . the duties of good faith and fair dealing . . .,”
which means the duty to “deal fairly.” Crim, 823 S.W.2d at 593–94.
98 TAPA § 5.4 Gas Purchasing Lines; § 5.05 Farmouts; § 5.6 Sales of Properties to
Partnership; § 5.7 Purchases Properties from Partnership; § 5.8 Fair Market Value; and
§ 5.11 Competitive Activities and AMI.

O PINION AND ORDER, Page 63
[¶ 158] Those agreements extend to HoldCo’s § 6.7 drag-along rights
involving an “Exit Event,” which includes “(i) the consummation of a sale of
the Partnership substantially as a whole in one transaction or a series of
closely related transactions or a sale of all or substantially all of the assets of
the Partnership.” 	In short, TAPA §§ 5.9(c) and 6.7 authorized HoldCo to
negotiate and complete the Callon sale in its sole discretion and interest if it
waited at least two years and conducted an arm’s-length transaction.
[¶ 159] However, TAPA § 6.7 provides more deferential standards for
HoldCo’s drag-along rights. The differences between HoldCo’s sole discretion
and sole interest standards that do not require a fair market value, and the
TAPA Article V standards for those potentially conflicted transactions that do
require a fair market value shows that the parties knowingly negotiated for and
accepted the risks that § 6.7 created. 	Thus, they met TBOC § 152.205’s
minimum standards, and it is undisputed that HoldCo waited roughly five
years and the Callon sale was an arm’s-length sale.99
99 FAP ¶s 2 (referring to “third party” Callon), 42 (TAPA signed July 12, 2016), 94 (Callon
sale closed October 1, 2021); Nov. 21, 2024, Hrg. Tr. at 8:2–22, 22:11–25:12, 26:16–
27:18.

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[¶ 160] So, except as to the sale proceeds’ allocation and distribution,
HoldCo conclusively met its loyalty duty regarding the Callon sale.
[¶ 161] But HoldCo (and PEC) had to conduct the sale in good faith.
c. Care and HoldCo’s Drag-Along Rights
[¶ 162] In contrast to the loyalty duty, the care duty concerns the
conduct or process a partner used while operating the business or deciding
whether to do a third-party deal. 	See TBOC § 152.206 (care requires acting
without negligence in conducting the partnership’s business). 	That is, the
TBOC adopts a form of business judgment rule as its care duty standard. See
id.; Miller, Fiduciary Duties 27.
[¶ 163] Here, the parties’ arm’s-length sale standard as a matter of law
satisfied TBOC § 152.206(a)’s care duty regarding the Callon sale by adopting
an 	alternative 	minimum 	sale 	process 	procedure. 	See Cruz, 	2018 	WL
6566642, *14. 	It is undisputed that the Callon sale was an arm’s-length
transaction.100 Thus, HoldCo satisfied its care duty with the Callon sale.
[¶ 164] But, HoldCo still had to discharge that obligation in good faith.
100 FAP ¶s 2 (“third party” Callon), 42 (TAPA signed July 12, 2016), 94 (Callon sale closed
October 1, 2021); Nov. 21, 2024, Hrg. Tr. at 8:2–22, 22:11–25:12, 26:16–27:18.

O PINION AND ORDER, Page 65
d. Good Faith
i. 	Introduction
[¶ 165] Texas courts have not drawn clear distinctions between the
loyalty, care, good faith, and candor responsibilities. See, e.g., Zinda, Ltd., 178
S.W.3d at 890–91 (analyzed duties of full disclosure, candor, and good faith
as a single fiduciary duty); Cruz, 2018 WL 6566642, *10–11 (combined
loyalty and good faith analysis). Nor has the court found Texas cases applying
those principles to drag-along sales.
[¶ 166] However, the risks inherent with drag-along rights are well
known. 	See, e.g., Evan Tarver, What are Drag-Along Rights? Meaning,
Benefits, 	and 	Example, 	Investopedia 	June 	11, 	2024,
https://www.investopedia.com/terms/d/dragalongrights.asp. Thus, they are
typically negotiated at the beginning of a relationship and are recognized as
one of the best ways for a majority owner to maintain control over future
transactions that may involve minority owners. Soren Lindstrom and Lindsey
Reighard, 	II. How to Deal with Minority Shareholder Investments, 2016
TXCLE Advanced Bus. L. 14.II (2016).
[¶ 167] Indeed:
Drag-Along rights, or drag rights, which give the majority
owner the right to force minority owners to participate in a sale

O PINION AND ORDER, Page 66
of the company, can be a fiercely negotiated provision in a
company’s governing documents.
* * *
In negotiating these provisions, the minority owner seeks to
ensure that such a sale will not disadvantage the minority. 	In
light of what is at stake and the inherent uncertainty drag rights
engender, 	parties 	are 	understandably 	cautious 	when
approaching the negotiating table.
Robert B. Little & Joseph A. Orien, Issues and Best Practices in Drafting Drag-
Along Provisions, Harvard Law School Forum on Corporate Governance
(2016) (Little and Orien).
[¶ 168] With PEOFs having accepted those risks and HoldCo having
met the TAPA’s minimized standards, PEOFs rely on good faith-based
arguments to support their claims.101 The court addresses PEOFs’ arguments
as follows:
ii. 	Fair Price and Process
[¶ 169] Many 	of 	PEOFs’ 	claims 	share 	the 	core 	premise 	that 	the
consideration HoldCo negotiated and the process used to value and negotiate
the sale was unfair because the consideration was too low and produced too
little return for PEOFs.102 Central to that premise is the notion that HoldCo
101 See, e.g., FAP ¶s 52, 53, 105; PEOF Resp. at 3–6, 11–20.
102 See, e.g., FAP ¶s 2, 80–81, 84, 100–103, 107; PEOF Resp. at 8–9, 27–30, 35.

O PINION AND ORDER, Page 67
had to conduct different processes and negotiate a fair price for the partnership
as a whole, including PEOFs, instead of a price that suited HoldCo as decided
in its sole discretion.103 Yet HoldCo’s freedom to do exactly that is what TAPA
§§ 5.9 and 6.7 provide for and what PEOFs agreed to five years earlier when
they wanted “Blackstone’s” money.
[¶ 170] Nonetheless, PEOFs ask the court to alter the risk allocation
equation and imply non-existent § 6.7 fair price and required process terms.104
But no such terms exist in the TAPA, and imposing them would violate Texas’s
sacred contract freedom rights. 	See Nafta Traders, 339 S.W.3d at 95–96.
Instead, 	PEOFs 	negotiated 	away 	those 	potential 	protections 	for
“Blackstone’s” promised at least two-year capital infusion.105
[¶ 171] Furthermore, PEOFs presuppose that HoldCo had to act “in a
manner the partner reasonably believes to be in the best interest of the
103 See, e.g., FAP ¶s 85, 92, 99; PEOF Resp. at 28.
104 See PEOF Resp. at 26–30.
105 TAPA § 6.7.

O PINION AND ORDER, Page 68
partnership.” See TBOC § 152.204(b)(2).106 Not so. As discussed in ¶s 107–
09 and 149, the parties disclaimed that obligation.107
[¶ 172] Moreover, as a matter of law HoldCo and PEC did not act in bad
faith by exercising their contract rights to discharge HoldCo’s drag-along
rights as they did. E.g., Texas Beef Cattle, 921 S.W.2d at 211 (Tex. 1996); John
Masek, 848 S.W.2d at 174.
[¶ 173] PEOFs’ argue that applying the TAPA as written could lead to
absurd results such as HoldCo selling the business for a dollar.108 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.
106 See, e.g., FAP ¶ 92 (“Blackstone prioritized its own corporate interest … over acting in
the best interest of Primexx.”).
107 See TAPA §§ 5.9(b)–(c). 	PEOFs’ reliance on Houle v. Casillas for the premise that
HoldCo had to consider their interests is misplaced because there was no written agreement
in that case excluding that responsibility. PEOFs’ Resp. at 14; see 594 S.W.3d at 547.
108 PEOFs’ Resp. at 25.

O PINION AND ORDER, Page 69
[¶ 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.”109 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 parties’ agreement that they
would not have entered into the TAPA if its terms were not acceptable to them.
[¶ 176] Had these results not been the product of risks PEOFs accepted
at 	the 	outset, 	they 	would 	have 	negotiated 	different 	standards 	as 	they
repeatedly did in §§ 5.4–5.8. Or they would have rejected what they deemed
to be their best option at the time. 	But they did none of those things.
Accordingly, the court (i) declines to retroactively add diligence standards or
109 Fairfield cites Combs v. Health Care Servs. Corp., 401 S.W.3d 623, 630 (Tex. 2013), for
support. Although Combs is a statutory construction case, the same principles apply here.

O PINION AND ORDER, Page 70
a fair price requirement and (ii) and dismisses all PEOFs’ claims regarding
HoldCo’s pre-sale process or negotiated consideration.
iii. 	Information Disclosures
[¶ a] Drag-sale Notice Provisions
[¶ 177] The 	nature 	of 	HoldCo’s 	disclosure 	and 	good 	faith
responsibilities requires blending common law and statutory principles with
contract terms.110
[¶ 178] And the amount of notice a majority owner must give the
minority owners before invoking drag rights is a common issue parties may
address. Little and Orien. For example, in Halpin v. Riverstone Nat’l, Inc., the
court refused to enforce drag-along rights where the majority owners did not
comply with a pre-merger notice requirement. 	C.A. No. 9796, 2015 WL
854724, *5–7 (Del. Ch. February 26, 2015).
[¶ 179] Furthermore, the TAPA refers to “notice” over one hundred
times.111 That is, PEOFs could have negotiated for an advance notice
protection as they did elsewhere in the TAPA but did not do so in § 6.7.
110 See ¶s 110–28.
111 See, e.g., TAPA §§ 3.6(b)(v) (in certain circumstances the partnership must give ten days’
notice to Series A Preferred Unitholders prior to a liquidation event).

O PINION AND ORDER, Page 71
[¶ b] Voluntary Advance Notice
[¶ 180] The PEP partnership agreement is silent on whether HoldCo or
PEC had to give PEP, PEOFs, or any other partners advance notice regarding
the Callon Sale. For these reasons, the court declines to rewrite the TAPA to
include that requirement:
• 	To begin, as discussed in ¶ 178, advance notice requirements are
common with drag-along rights. 	Yet, the parties did not include an advance
notice requirement.
• 	Further, given HoldCo’s unambiguous authority to conduct the sale in
its sole discretion in its sole interests (including its affiliates and PEC’s sole
discretion and interests), advance notice to PEOFs was not material to that
deal. 	That is, the Unitholders, and thus a majority of the directors had to
follow HoldCo’s directions.
[¶ 181] Accordingly, the court declines to inject notice provisions into
§ 6.7’s drag-along rights that the parties omitted. See FPL Energy, 426 S.W.3d
at 68 (Tex. 2014) (omissions intentional where parties negotiated for similar
terms elsewhere in the contract).

O PINION AND ORDER, Page 72
iv. 	Sales Proceeds Allocation and Distribution
[¶ 182] For the reasons the court denies HoldCo’s motion regarding
whether it breached its loyalty duty regarding the allocation and distribution
Callon sale proceeds, HoldCo did not conclusively negate the good faith
obligation regarding those claims.
v. 	Requested or Misleading Information
[¶ 183] PEOFs do not allege that HoldCo, PEC, or Doyle failed to
provide any information PEOFs requested regarding the Callon sale. 	Thus,
TBOC § 152.213’s duty to provide requested information is not implicated.
[¶ 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.
vi. 	Regular Board Meetings
[¶ 185] PEOFs say that in the weeks and months before the Callon sale,
HoldCo failed to hold regularly scheduled board meetings to discuss whether

O PINION AND ORDER, Page 73
a sale made sense from the company’s or partners’ viewpoints.112 Central to
that claim is that there were missed regularly scheduled board meetings.
However, PEC’s Bylaws do not say when such meetings were to occur.113 And
PEOFs did not respond with evidence on that issue. Since HoldCo submitted
evidence that there were no regularly scheduled meetings to be missed, and
PEOFs not having submitted contrary evidence, the court grants HoldCo’s
motion regarding the claim that it failed to hold regularly scheduled PEC board
meetings to discuss the Callon sale.
e. Conclusion
[¶ 186] Excluding 	PEOFs’ 	claims 	directed 	to 	the 	allocation 	and
distribution Callon sale proceeds, as a matter of law HoldCo did not breach its
duties of loyalty or care or its obligation of good faith in the execution of Callon
sale pursuant to its drag right.
3. Second Cause of Action: “Fiduciary Breach” (PEC)
[¶ 187] With limited exception, PEOFs’ arguments regarding PEC are
the same as for HoldCo. Thus, the court’s conclusions regarding HoldCo are
at least the same as for PEC.
112 FAP ¶ 87.
113 See Movants’ Ex. 10 (Bylaws at Art. III).

O PINION AND ORDER, Page 74
[¶ 188] Additionally, TAPA § 5.9 provides PEC additional support. For
example, § 5.9(b) provides that PEC, as the Managing General Partner,
. . . shall not owe any fiduciary or similar duty or obligation
whatsoever to the Partnership, any Partner or Assignee, except
as required by any provision of applicable law that cannot be
waived, and
(B) to the extent that, at law or in equity, the Managing General
Partner owes any duties (including fiduciary duties) to the
Partnership, 	any 	other 	Partner 	or 	assignee 	pursuant 	to
applicable law, any such duty other than the Agreed Duties is
hereby eliminated to the fullest extent permitted pursuant to the
applicable law.
[¶ 189] PEOFs 	argue 	that 	PEC 	breached 	its 	responsibilities 	by
participating in the sale because no provisions in the TAPA required PEC to
comply with “Blackstone’s” drag-along instructions. 	Although the TAPA
does not expressly require PEC to follow HoldCo’s direct instructions, PEOFs’
argument ignores reality. The reality is that HoldCo controlled PEC’s board.
And TAPA § 6.7 required all Unitholders to consent to the sale and take all
steps needed to complete the sale—including instructing any Existing Limited
Partner Directors to approve the drag-along sale. Indeed, PEC had no choice
but to do what its directors voted to do, and they all voted to approve the sale
and the Transaction Resolutions authorizing PEC’s officers to take actions

O PINION AND ORDER, Page 75
necessary to complete the sale.114 Notably, PEOF appointed directors Jeffs
and Langdon voted for the sale without reservation.115
[¶ 190] Additionally, FAP ¶ 85 concedes that forcing the Callon sale by
using its drag-along rights was under HoldCo’s sole control:
By forcing the Board to vote on (and approve) the proposed
transaction over a weekend, Blackstone necessarily precluded
the Managing General Partner or the Board from engaging in a
reasoned 	and 	fully 	informed 	decision-making 	process 	or
satisfying 	their 	contractual 	and 	fiduciary 	duties. 	Yet 	all
Blackstone-controlled Board members voted to approve the sale
without conducting any analysis or due diligence to fairly
evaluate the transaction and whether it would be fair to all of
Primexx’s investors.
[¶ 191] So, the court resolves PEOFs’ Second Cause of Action as it does
their First.
E. 	Third Cause of Action: Breach of Contract (HoldCo)
[¶ 192] The elements of a contract breach claim are: (i) a valid contract
exists; (ii) the plaintiff performed; ( iii) the defendant breached the contract;
and (iv) the plaintiff was damaged as a result. E.g., Williams v. First Tenn. Nat.
114 Movants’ Ex. 3 (Aug. 2, 2021, Board Minutes at Ex. A).
115 Movants’ Ex. 3 (August 2, 2021, Board Minutes). PEOFs deny that they controlled Jeffs
and Langdon as of August 2, 2021. However, PEOFs was entitled to control two seats on
the board. 	Whether PEOFs chose to abandon that right is not material to this motion
because board approval was a non-discretionary function since all Unitholders had to
cooperate in closing the deal, including the § 6.7 requirement that they direct their
appointed directors to approve the deal. And HoldCo controlled five of nine seats.

O PINION AND ORDER, Page 76
Corp., 97 S.W.3d 798, 802 (Tex. App.—Dallas, 2003, no pet). Here, the third
element is the only one before the court.
[¶ 193] It is undisputed that HoldCo waited the required two years and
it conducted the Callon deal in an arm’s-length sale.116 Nonetheless, PEOFs’
Third Cause of Action posits that HoldCo breached the TAPA based on the
same alleged good faith breaches they say support their First Cause of Action.
[¶ 194] Because HoldCo’s “fiduciary” duties required it to perform in
good faith, its contract duty to perform in good faith is no greater than its
TBOC-based responsibilities. 	Accordingly, the court resolves PEOFs’ Third
Cause of Action same as it disposes of their First.
F. 	Fourth, Fifth, Sixth, Seventh, and Eighth Causes of Action: Derivative
Liability Causes of Action (Holdco, PEC, and Doyle)
1. Introduction
[¶ 195] PEOFs’ Fourth, Fifth, Sixth, Seventh, and Eighth Causes of
Action assert civil conspiracy, aiding and abetting fiduciary breach, and
knowing participation in fiduciary breach causes of action against Holdco,
PEC, and Doyle.117 These are derivative liability torts because they involve a
116 FAP ¶s 2 (referring to “third party” Callon), 42 (TAPA signed July 12, 2016), 94
(Callon sale closed October 1, 2021); Nov. 21, 2024, Hrg. Tr. at 8:2–22, 22:11–25:12,
26:16–27:18.
117 FAP ¶s 136–154.

O PINION AND ORDER, Page 77
defendant’s participation in another person’s torts where the defendant
otherwise would not be liable for the tort. 	See Agar Corp., Inc. v. Electro
Circuits Int’l, LLC, 580 S.W.3d 136, 140–42 (Tex. 2019) (civil conspiracy a
vicarious—not direct—liability tort); Grant Thornton LLP v. Prospect High
Income Fund, 314 S.W.3d 913, 930 (Tex. 2010) (aiding abetting claim failed
for same reason civil conspiracy failed, but noted that the Texas Supreme
Court has not recognized an independent aiding and abetting claim); Kinzbach
Tool Co v. Corbett-Wallace Corp., 160 S.W.2d 509, 514 (Tex. 1942) ( joint and
several liability for knowingly participating in agent’s fiduciary breach to
principal).
2. Aiding and Abetting (HoldCo and Doyle)
[¶ 196] Neither the supreme court nor the Fifteenth Court of Appeals
have recognized aiding and abetting as a separate liability theory apart from
civil conspiracy. 	See First United Pentecostal Church of Beaumont v. Parker,
514 S.W.3d 214, 224 (Tex. 2017); Palliative Plus LLC v. A Assure Hospice,
Inc., No. 03-23-00770-CV, 2025 WL 284920, *10 (Tex. App.—Beaumont
January 24, 2025, no pet. h.). 	So, subject to those courts later recognizing
this theory, the court dismisses PEOFs’ aiding and abetting cause of action
against Holdco and Doyle. See TEX . R. CIV. P. 166(g), (p).

O PINION AND ORDER, Page 78
3. Civil Conspiracy and Knowing Participation (Holdco, PEC, and Doyle)
[¶ 197] PEOFs’ civil conspiracy and Kinzbach claims depend on the
viability of their fiduciary breach claims. 	Thus, at a minimum, the court’s
rulings regarding PEOFs’ fiduciary breach claims apply equally to these
causes of action; and the court incorporates those prior rulings here.
[¶ 198] The following discussion concerns issues that movants’ motions
implicate but that the parties did not previously discuss. 	So, the court does
not rule on them now. However, pursuant to Rules 166(g), (p) the court directs
the parties to brief these issues:
• 	To 	what 	extent 	were 	PEC 	or 	Doyle 	legally 	capable 	of 	the 	civil
conspiracies alleged against them (consider the various combinations alleged
against them)?
• 	Is knowing participation in a fiduciary breach a viable cause of action
where HoldCo controlled the Board, the Unitholders, and Doyle regarding the
Callon sale?
[¶ 199] For causes of action concerning them, PEC and Doyle are to
submit their briefs within ten days of this opinion’s signature date. PEOFs are
to submit their responses, if any, within ten days of the later submission by

O PINION AND ORDER, Page 79
PEC or Doyle. The briefs are to be no more than ten pages excluding the style,
caption, and preliminary tables.
VII. CONCLUSION
[¶ 200] Accordingly, 	the 	court 	denies 	movants’ 	motion 	regarding
causes of action asserted against them based on claims that (i) the Callon sale
proceeds were not properly distributed according to the TAPA waterfall and
(ii) 	the 	consideration 	was 	not 	fairly 	allocated 	between 	PEP 	and 	BPP.
Otherwise, the court grants movants’ motion and dismisses the causes of
action against them as described above.
It is, S O O RDERED.
BILL WHITEHILL
Judge, Texas Business Court-
First Division
SIGNED: March 10, 2025

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