Appeal from the United States District Court for the Northern District of Texas.
For HARVEY LEON MORTON, Trustee, Appellant: Scott Mark DeWolf, Esq., Julian Preston Vasek, Rochelle McCullough, L.L.P., Dallas, TX.
For JOHN YONKERS, JUDY YONKERS, S. FRANK CULBERSON, TOM KIEVIT, KYLE KIEVIT, KERRY BURLESON, DAVID ESPOSITO, KATHLEEN ESPOSITO, STEPHEN MURDOCH, J. L. BRADSHAW TRUST, LYNETTE ESCH, ESCH FAMILY TRUST, ROLAND MURPHY, LEWIS P. LANE, LYNN C. LANE, GRAHAM HADDOCK, R. DAVE ADAMS, CONNIE ADAMS, JUDITH ARMOGIDA, ROBERT E. AND ROSALIE T. DETTLE LIVING TRUST, DANIEL MANCHA, DICKINSON FAMILY REVOCABLE LIVING TRUST, JOHN WOLZ, MILTON DIGREGORIO, BEVERLY DIGREGORIO, ET AL, Appellees: Thomas Dwain Powers, Russell Rhea Barton, Tennessee W. Walker, Attorney, Harris, Finley & Bogle, P.C., Fort Worth, TX.
RAY KOREN, Appellee, Ray Koren, Pro se, Chesterland, OH.
Before JOLLY and JONES, Circuit Judges, and AFRICK[*], District Judge.
E. GRADY JOLLY, Circuit Judge:
Appellant Harvey Leon Morton (" Morton" ), the trustee of the Vallecito Gas, L.L.C. (" Vallecito" ) bankruptcy estate, appeals the district court's judgment affirming the bankruptcy court's judgment in favor of various owners of overriding royalty interests (collectively, the " Appellees" ) to a lease that Morton seeks to sell on behalf of the bankruptcy estate. For the following reasons, we AFFIRM the judgment of the district court.
In March 2006, Vallecito purchased a gas lease called the " Hogback Lease," located on Navajo Nation land in New Mexico, from Tiffany Gas Co., LLC. Vallecito subsequently made various assignments of the Hogback Lease. Issues stemming from those assignments form the basis of this appeal. Vallecito's assignments of portions of the Hogback Lease to John Burle, and to a number of other parties, led to litigation (the " Burle litigation" ) in New Mexico in September 2006 over the title to the Hogback Lease. The plaintiffs in the Burle litigation filed a notice of lis pendens in San Juan County, New Mexico. The parties purported to settle the case in November 2006, but Michael Briggs, one of the defendants, did not perform under the settlement agreement. The case was resolved on September 28, 2007, when the court held that the settlement agreement was enforceable, and the decision was never appealed.
Vallecito recorded an assignment of the Hogback Lease to Briggs-Cockerham, LLC, on April 27, 2007, after the Burle litigation had purportedly settled, but before the settlement had been enforced. Between June 2007 and January 2009, the Appellees purchased the overriding royalty interests at issue in this appeal from Briggs-Cockerham. No approval of the transfers was sought from the Navajo Nation.
On November 14, 2007, Vallecito filed for Chapter 11 bankruptcy. Morton was appointed as trustee of the Vallecito estate on January 14, 2008. The Hogback Lease is apparently Vallecito's only significant asset, and Morton has sought to sell the Hogback Lease, subject only to the Navajo Nation's royalty, to Vision Energy, LLC, for the benefit of Vallecito's creditors. Under the bankruptcy plan, Briggs-Cockerham and Briggs apparently disclaimed any interest in the Hogback Lease. Morton did not consult the San Juan County, New Mexico, records, however, ...