A series of oil and gas investments led to a lawsuit between BV Energy Partners and Richard Cheatham, the managing member of their jointly owned company, Tsar Energy II, LLC. Although Cheatham was initially required to work exclusively for Tsar II, that exclusivity provision was eliminated after the company had languished with only one investment made in three years. Cheatham continued to bring oil and gas opportunities to BV, and also made his own acquisitions, but the parties made no further investments were made through Tsar II. Cheatham’s investments proved to be far more lucrative than BV’s, which led BV to sue Cheatham for breach of fiduciary duty. The jury rejected those claims, and the Court of Appeals affirmed. The Court held that there was no charge error in asking the jury to consider whether the parties had formed a partnership to invest in “all” deals (as opposed to “any”) that Cheatham had an opportunity to acquire in the Marcellus Shale. The Court held that was a proper instruction because the justice’s review of the evidence and arguments at trial showed that BV had tried the case on an all-or-nothing theory.
BV Energy Partners, LP v. Cheatham, No. 05-14-00373-CV