In 1987, Geodyne acquires a share of a non-operating working interest in a state offshore oil and gas lease. In 1996, during the lease's secondary term, the well ceases production in paying quantities. After attempts to regain production fail, the General Land Office notifies the operator to plug the well. In December 1997, Geodyne, using a third-party auctioneeer, sells its working interest to Newton for $300. Newton agrees to take the interest and any equipment "as is." In August 1998, the operator plugs the well and sends both Geodyne and Newton a bill for their share of the plugging costs. Neither party voluntarily pays leading to a suit by the operator against both for their pro rata share of the plugging costs which amout to around $72,000. A jury assesses the plugging costs against Geodyne, finds that Geodyne violated the Texas Securities Act when it conveyed its working interest share to newton and further awards attorney's fees to Newton. Geodyne settls with the operator but then appeals the remainder of the judgment. The Court of Appeals affirms in part, reverses and remands in part. 97 S.W.3d 779, 157 0.&G.R. 805 (Tex. App.—Dallas 2003). The Court of Appeals concludes that the sale of the working interest share is covered by the Texas Securities Act. Tex.Rev.Civ.Stat. art. 581-41a. It also finds that there were misrepresentations of a material fact relating to the existence of a valid lease at the time of the transfer. The Court of Appeals, reverses the award of attorney's fees because Newton had not adequately segregated the fees between the portion of the litigation where it prevailed and the portion where it did not. Held: reversed in part, judgment rendered in part and remanded in part.
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