Black Rush Mining, LLC v. Black Panther Mining

840 F. Supp. 2d 1085, 2012 WL 104925, 2012 U.S. Dist. LEXIS 3692
CourtDistrict Court, N.D. Illinois
DecidedJanuary 11, 2012
DocketNo. 11 C 03257
StatusPublished
Cited by2 cases

This text of 840 F. Supp. 2d 1085 (Black Rush Mining, LLC v. Black Panther Mining) is published on Counsel Stack Legal Research, covering District Court, N.D. Illinois primary law. Counsel Stack provides free access to over 12 million legal documents including statutes, case law, regulations, and constitutions.

Bluebook
Black Rush Mining, LLC v. Black Panther Mining, 840 F. Supp. 2d 1085, 2012 WL 104925, 2012 U.S. Dist. LEXIS 3692 (N.D. Ill. 2012).

Opinion

MEMORANDUM OPINION AND ORDER

RUBEN CASTILLO, District Judge.

Black Rush Mining, LLC (“Black Rush”), Indiana Farms, Inc. (“Indiana Farms”), Lafayette Energy Company (“Lafayette”), and John A. Brandt (“Brandt”) (collectively, “Plaintiffs”) bring this action against Black Panther Mining, LLC (“Black Panther”), Five Star Mining, Inc. (“Five Star”), BB Mining, Inc. (“BB Mining”), Patrick Blankenberger, David M. Blankenberger, and Donald Blankenberger (collectively, “Defendants”) for breach of an oral partnership agreement (the “Partnership Agreement”). (R. 1, Compl.) Presently before the Court is Plaintiffs’ motion to disqualify attorney Terry G. Farmer (“Farmer”) and the law firm of Bamberger, Foreman, Oswald, & Hahn LLP (the “Bamberger Firm”) from representing Defendants in this matter. (R. 16, Pis.’ Mot.) For the reasons stated below, the motion is denied.

RELEVANT FACTS1

This dispute centers upon the alleged breach of a Partnership Agreement by the Defendants as it relates to Oaktown Mine No. 1 (“Oaktown Mine”), a mine property located in Southern Indiana. (R. 1, Compl. ¶¶ 21, 28-30.) Brandt is President of both Lafayette and Indiana Farms, as well as the sole member of Black Rush. (Id. ¶ 4; R. 16-2, Brandt Decl. ¶ 1.) Patrick Blankenberger, David M. Blankenberger, and Donald Blankenberger (collectively, the “Blankenbergers”), are members of Black Panther, and Officers of both Five Star and BB Mining. (R. 1, Compl. ¶ 11.) Brandt alleges that since at least 1998, when he and the Blankenbergers entered into the Partnership Agreement, they have worked together in the coal business, sharing the risks and rewards as equal partners. (Id. ¶ 17.) Under the terms of the Partnership Agreement, Brandt or an entity controlled by him undertook primary responsibility for the sales-end of the oper[1087]*1087ations and the Blankenbergers or an entity controlled by them undertook primary responsibility for the mining-end of the operations. . (Id. ¶ 18.)

Pursuant to the Partnership Agreement, Brandt and the Blankenbergers have worked together to develop, operate, and enter into contracts for the sale of coal from at least two mining properties, including Prosperity Mining [sic] Southern Indiana (“Prosperity Mine”), and Hazleton Mine. (Id. ¶¶ 18-20.) Although Prosperity Mine is owned by Vectren Fuels (“Vectren”), Brandt and the Blankenbergers continue to operate, manage, and sell coal from Prosperity Mine and share risks and rewards on a fifty/fifty basis. (Id. ¶ 19.) Upon the sale of Hazleton Mine, Brandt and the Blankenbergers shared liabilities and proceeds from the sale on a fifty/fifty basis. (Id. ¶ 20.) According to the Complaint, Brandt and the Blankenbergers agreed to continue their Partnership Agreement with respect to Oaktown Mine, a mine property owned by Oaktown Fuels Mine No. 1, LLC (“Oaktown Fuels”), a subsidiary of Vectren. (Id.)

Brandt avers that, since at least 2007, he worked with the Blankenbergers, Black Panther, Five Star, and BB Mining, as a partner in pursuit of a deal with Vectren, and later Oaktown Fuels, for contract mining, management, and representing coal for sale from Oaktown Mine (the “Oaktown Transaction”). (R. 16-2, Brandt Decl. ¶ 2.) According to Brandt, he and the Blankenbergers proceeded with -these contract negotiations with the understanding that a deal with Vectren or Oaktown Fuels would proceed consistent with the Partnership Agreement, such that profits and losses from the Oaktown Mine operations would be shared on a fifty/fifty basis. (R. 1, Compl ¶ 20.) Brandt and the Blankenbergers performed the mining operations and sale of coal from Oaktown Mine consistent with the terms of the Partnership Agreement until the end of 2009, when the Blankenbergers sought to modify the Partnership Agreement and proposed that rather than splitting the profits on a fifty/fifty basis, the Blankenbergers instead retain an eighty percent share. (Id. ¶ 24; R. 21-1, Ex. 5, Weiner Letter.) Brandt rejected the Blankenbergers’ proposed modification to the Partnership Agreement and informed the Blankenbergers that he intended to continue the Partnership Agreement under the original terms. (R. 1, Compl. ¶ 25.) In the current dispute, Brandt alleges that Defendants have refused to honor the Partnership Agreement by failing to pay Plaintiffs at least $400,000 in profits from the mining and management of Oaktown Mine. (Id. ¶ 26.)

Since at least June 2009, and throughout the process of negotiating the Oaktown Transaction, Brandt states that Farmer, a partner at the Bamberger Firm, acted as the attorney representing Brandt, the Blankenbergers, their respective entities, and the partnership’s interests in the Oak-town Mine Transaction. (R. T6-2, Brandt Decl. ¶ 8.) Specifically, Brandt states that Farmer acted as counsel “in connection with the negotiating and drafting [of] the Oaktown No. 1 Contract Mining Agreement (CMA).” (Id. ¶ 4.) According to Brandt, Farmer “participated in meetings with [him] and one or more of the Blankenbergers[,]” helped prepare “discussion points to use in negotiations with Vectren,” and advised Brandt and the Blankenbergers “collectively, on recommended changes to be made to the draft CMA for the mutual benefit of the Brandt/Blankenberger partnership.” (Id.) The CMA was executed on November 23, 2009. (Id.; R. 21-1, Farmer Decl. ¶ 14.) Brandt estimates that throughout the negotiation period, he was present at “90% of the CMA related meetings with Terry Farmer, either in Terry Farmer’s office or in the [1088]*1088offices of Vectren.” (R. 16-2, Brandt Decl. ¶ 4.)

Farmer disputes these allegations. Based upon a review of the Bamberger Firm’s records and his personal knowledge, Farmer states that “at no time has [he or the Bamberger Firm] been engaged or has [sic] undertaken to represent any of the Plaintiffs in connection with any matter whatsoever.” (R. 21-1, Farmer Decl. ¶ 6.) According to Farmer, the Bamberger Firm does not have an “engagement letter with any of the named Plaintiffs,” has not billed Plaintiffs for “attorneys’ fees or expenses in connection with any matter,” and has not given Plaintiffs any legal advice. (Id. ¶¶ 7-9.) The first record Farmer has of performing work for Defendants in connection with the CMA for Oaktown Mine is from a March 13, 2008 meeting held at the Bamberger Firm offices. (Id. ¶ 10.) Farmer recalls that Brandt was present at that meeting and was introduced as a consultant to Black Panther. (Id.) At that meeting, Brandt informed Farmer that he would be represented by Geoffrey Bryce (“Bryce”) of Bryce Downey, LLC, in connection with the Oaktown Transaction. (Id.) At this time, Brandt also provided Farmer with a January 3, 2008 letter from Bryce to Brandt (the “Bryce Letter”). (Id.; R. 21-1, Ex. 1, Bryce Letter.) The Bryce Letter contains Bryce’s comments and observations regarding the Oaktown Transaction. (R. 21-1, Ex. 1, Bryce Letter.)

Other than meetings with representatives of Oaktown Fuels, Farmer’s records reflect only two other meetings held exclusively with representatives of Defendants during the Oaktown Transaction negotiations. (R. 21-1, Farmer Decl. ¶ 11.) According to Farmer, “[w]hile it is possible that Mr. Brandt was at one or the other of these meetings, [his] records do not reflect [Brandt’s] attendance. Mr. Brandt was present at meetings with Oaktown [Fuels] representatives and its counsel.” (Id.)

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840 F. Supp. 2d 1085, 2012 WL 104925, 2012 U.S. Dist. LEXIS 3692, Counsel Stack Legal Research, https://law.counselstack.com/opinion/black-rush-mining-llc-v-black-panther-mining-ilnd-2012.