Anderson v. Heartland Oil & Gas, Inc.

819 P.2d 1192, 249 Kan. 458, 1991 Kan. LEXIS 161
CourtSupreme Court of Kansas
DecidedOctober 25, 1991
Docket65,605
StatusPublished
Cited by26 cases

This text of 819 P.2d 1192 (Anderson v. Heartland Oil & Gas, Inc.) is published on Counsel Stack Legal Research, covering Supreme Court of Kansas primary law. Counsel Stack provides free access to over 12 million legal documents including statutes, case law, regulations, and constitutions.

Bluebook
Anderson v. Heartland Oil & Gas, Inc., 819 P.2d 1192, 249 Kan. 458, 1991 Kan. LEXIS 161 (kan 1991).

Opinion

The opinion of the court was delivered by

LOCKETT, J.:

This was an action brought by eight plaintiffs, five of whom were not residents of Kansas, to recover the purchase monies paid for units in an Oklahoma oil and gas well and to rescind certain agreements executed in Colorado. Plaintiffs claimed they were fraudulently induced to enter into the agreements by nonresident officers of the Kansas corporation. At the conclusion of the trial, the trial court instructed the jury on an additional theory of fraud not raised in the plaintiffs’ petition or at pretrial, i.e., fraudulent promise of future events. The jury found that the defendants had committed fraud. The trial court rescinded the contracts, granted money judgments for the purchase money, and awarded prejudgment and postjudgment interest. Defendants appeal, claiming: (1) The trial court did not have personal jurisdiction over nonresident corporate officers of a Kansas corporation; (2) there was insufficient evidence for the corporation to be held liable for the actions of its corporate officers; (3) the trial court erred in instructing the jury on fraudulent promise of future events; (4) the trial court erred in refusing to separate the theories of fraud in the verdict form to show which theory the jury applied to each defendant; and (5) the trial court erred in failing to grant the defendants’ motions for directed verdicts after the evidence had been submitted.

Appellants’ and appellees’ statements of facts consist of disjointed facts rather than a concise and complete statement of facts as required by Supreme Court Rule 6.02(d) (1990 Kan. Ct. R. Annot. 25) and Rule 6.03(c) (1990 Kan. Ct. R. Annot. 26). The facts we recite are sufficient to determine the issues present in the appeal.

The action by the eight plaintiffs arose after Douglas Stewart purchased one unit of the production interest in the Earl Trenton No. 1 oil and gas well, located in Grant County, Oklahoma for *460 $5,700 from Heartland Oil & Gas, Inc., in June of 1988. It is necessary to set out the plaintiffs, the defendants, the relationship between the parties, and how Stewart’s original purchase resulted in this action.

Plaintiffs Douglas Stewart, Gary Anderson, and Jim Thomas worked for the same company. Donna Stewart and Douglas Stewart are mother and son. Gary and Barbara Anderson are husband and wife. Barbara Anderson and Mike Tetley are brother and sister. Mike Tetley and Pam Tetley are husband and wife. Jim Thomas was Jeannie Larkins’ boyfriend. Douglas Stewart, Jim Thomas, and Jeannie Larkins were residents of Colorado at the time of their purchases. Donna Stewart and the Andersons were residents of Kansas. The Tetleys were residents of New Jersey.

Defendant Heartland Oil and Gas, Inc., is a Kansas corporation with Gypsum, Saline County, Kansas, designated as the location of its principal office and registered agent. Defendant George Jones was Chairman of the Board of Directors, Chief Executive Officer, and Vice-President of Marketing for Heartland Oil and Gas, Inc. Jones owns, controls, or has an interest in 57V2% of the corporation’s stock, is a resident of Colorado, and lists his home in Colorado as an out-of-state office of the Kansas corporation. Defendant Robert Young is Vice-President of Marketing for Heartland Oil and Gas, Inc., and owns or controls approximately 7V2% of the corporate stock. Young is also a resident of Colorado, and lists his home in Colorado as an out-of-state office of the Kansas corporation.

After Douglas Stewart purchased his original unit from the corporation in June of 1988, he sold V2 of the unit to the Andersons for $2,850. The original purchase by Stewart and the sale to the Andersons started a chain of purchases of the production interests in the Earl Trenton No. 1 well when Douglas Stewart and the Andersons were informed that their original investment would reap them a fortune. By this time, because the well had been completed, was being tested, and was producing, the purchase price had risen to $7,500 per V2 unit. The plaintiffs were informed that in the near future production interest in the well would increase to $10,000 per V2 unit. Based on information provided by Young, the Andersons purchased an additional V2 unit; Donna Stewart purchased V2 unit; Douglas Stewart pur *461 chased V2 unit; the Tetleys purchased V2 unit; and Jim Thomas and Jeannie Larkins purchased IV2 units in the oil well together. Jim Thomas’ name, however, did not appear on the agreements.

The .trial transcript in this case is 800 pages. The appellants and appellees failed to adequately identify which statements by Young were misrepresentations and how these statements differed from the facts existing at the time of the statements. Neither the appellants’ nor the appellees’ brief properly identifies the testimony relating to the alleged misrepresentations made by Young to each of the various plaintiffs. The following summarizes the testimony of the plaintiffs as to statements made by Young.

Young informed the plaintiffs the oil was there and they were buying oil that had already been “hit.” Young advised the plaintiffs that the pipe was set, there was an 18-foot Misc.er zone, and oil was flowing and the well was producing in excess of 1,000 barrels a day. The oil well was going to produce 800-1,000 barrels of oil per day for 5-7 years and contained over a million cubic feet of natural gas. The risk for those who invested was over. Young supplied figures from initial production maps of other wells in the area which indicated that up to 1,572 barrels of oil were being produced by other wells in the area each day. Young did not inform the plaintiffs there were limitations to production of oil from wells in Oklahoma. (In fact, there is a 250 barrel per day per well limit.) Young stated the well was worth millions of dollars. Young informed the plaintiffs there was no risk, absolutely nothing could go wrong, their initial investment would be returned within 60 days, their fortune was reconfirmed, and they could add a million dollars to their financiál statements. Thomas testified Young ran the figures on his calculator at the Colorado meeting three of the plaintiffs attended. Before the well was plugged, its highest production was 42 barrels of oil per day.

Defendant Young testified he did not solicit any of the plaintiffs as investors in the well. At a meeting in Denver he told Douglas Stewart, Jim Thomas, and Jeannie Larkins that there was less risk now than at the beginning of the well project. Young gave Douglas Stewart, Thomas, and Larkins a prospectus at the meeting in Denver, and they received the well log from Jones at the meeting on the 9th of August. Young denied telling the plaintiffs the well was an 800-1,000 barrel producer or that there was an *462 18-foot Misc.er zone. Young testified oil actually spewed over the top of the derrick during the drill stem test on August 4, 1988. Young denied making the statements the Tetleys and Thomas alleged or telling Donna Stewart the well was in production or the number of barrels of oil the well was producing. Young testified that, when he talked with each of the plaintiffs, they understood he was a salesperson who represented Heartland Oil. Young testified the plaintiffs had contacted him about buying into the well.

Free access — add to your briefcase to read the full text and ask questions with AI

Related

Pantoja v. BNSF Railway Co.
Court of Appeals of Kansas, 2016
Frickey v. Thompson
136 F. Supp. 3d 1300 (D. Kansas, 2015)
Lloyd Ward, Lloyd Ward, PC. v. Hawkins, Kelly
418 S.W.3d 815 (Court of Appeals of Texas, 2013)
Midwest Manufacturing, Inc. v. Ausland
273 P.3d 804 (Court of Appeals of Kansas, 2012)
Blair-Naughton, L.L.C. v. Diner Concepts, Inc.
568 F. Supp. 2d 1249 (D. Kansas, 2008)
Wenrich v. Employers Mutual Insurance Companies
132 P.3d 790 (Court of Appeals of Kansas, 2006)
Karstetter v. Voss
184 S.W.3d 396 (Court of Appeals of Texas, 2006)
Four B Corp. v. Ueno Fine Chemicals Industry, Ltd.
241 F. Supp. 2d 1258 (D. Kansas, 2003)
Caldwell-Baker Co. v. Southern Illinois Railcar Co.
183 F. Supp. 2d 1301 (D. Kansas, 2001)
St. Francis Mercantile Equity Exchange, Inc. v. Newton
996 P.2d 365 (Court of Appeals of Kansas, 2000)
Bergstrom v. Noah
974 P.2d 531 (Supreme Court of Kansas, 1999)
Trendel v. Rogers
955 P.2d 150 (Court of Appeals of Kansas, 1998)
Davsko v. Golden Harvest Products, Inc.
965 F. Supp. 1467 (D. Kansas, 1997)
Kreekside Partners v. Nord Bitumi U.S., Inc.
963 F. Supp. 959 (D. Kansas, 1997)
Hollingsworth v. Iwerks Entertainment, Inc.
947 F. Supp. 473 (M.D. Florida, 1996)
Wayman v. Amoco Oil Co.
923 F. Supp. 1322 (D. Kansas, 1996)
Miller v. Botwin
899 P.2d 1004 (Supreme Court of Kansas, 1995)

Cite This Page — Counsel Stack

Bluebook (online)
819 P.2d 1192, 249 Kan. 458, 1991 Kan. LEXIS 161, Counsel Stack Legal Research, https://law.counselstack.com/opinion/anderson-v-heartland-oil-gas-inc-kan-1991.