In re Anloc, LLC

487 B.R. 825, 2013 WL 244033, 2013 Bankr. LEXIS 257, 57 Bankr. Ct. Dec. (CRR) 149
CourtUnited States Bankruptcy Court, S.D. Texas
DecidedJanuary 22, 2013
DocketNo. 12-31267
StatusPublished
Cited by3 cases

This text of 487 B.R. 825 (In re Anloc, LLC) is published on Counsel Stack Legal Research, covering United States Bankruptcy Court, S.D. Texas primary law. Counsel Stack provides free access to over 12 million legal documents including statutes, case law, regulations, and constitutions.

Bluebook
In re Anloc, LLC, 487 B.R. 825, 2013 WL 244033, 2013 Bankr. LEXIS 257, 57 Bankr. Ct. Dec. (CRR) 149 (Tex. 2013).

Opinion

MEMORANDUM OPINION

MARVIN ISGUR, Bankruptcy Judge.

Edward Talone Trust No. l’s Claim # 22 is disallowed in its entirety. Edward Talone’s Claim #23 is disallowed in its entirety. As set forth in more detail below, the claims are disallowed because they seek compensation for engineering services performed by unlicensed persons in violation of the Texas Engineering Practices Act.

Introduction

This Memorandum Opinion concerns a dispute between Anloc, LLC (the Debtor) and Edward R. Talone (individually, “Tal-one” and together with the Edward Talone Trust No. 1, for which he serves as Trustee, the “Talone Plaintiffs”). Anloc hired Talone to perform various services in connection with its drilling operations. This dispute arises out of Talone’s efforts to obtain compensation.

The dispute predates Anloc’s bankruptcy filing. After the filing, the Talone Plaintiffs have attempted to collect compensation in multiple ways: (i) filing an adversary proceeding seeking a declaratory judgment that an employment contract conveyed equitable title to a portion of Anloc’s interest in certain oil and gas leases 1; (ii) filing an unsecured claim for the estimated value of the interests in the oil and gas leases the Talone Plaintiffs argue should have been assigned to them pursuant to the same employment contract2; and, (iii) filing a secured proof of claim related to an M & M lien filed by Talone to secure compensation for services rendered.

This Memorandum Opinion resolves: (i) Anloc’s Objections to Proof of Claim 22 (Edward Talone Trust No. 1) and Proof of Claim Number 23 (Edward R. Talone), (ECF No. 293); (ii) Anloc’s Motion to Estimate Claims, (ECF No. 296); and, (iii) Talone’s Motion to Estimate Claim Pursuant to § 502(c), (ECF No. 331). In resolv[829]*829ing these motions, it is necessary to address the various theories of recovery put forth by the Talone Plaintiffs in the adversary proceeding.

Background

Although the parties dispute many facts, few of the disputed facts are material to the outcome of these motions.

Anloc is a Texas Railroad Commission Operator which has been approved to operate crude oil and natural gas leases in Texas. (ECF No. 37 at 3).

In early 2009, Anloc entered into a Farmout Agreement with Direct Petroleum Exploration, Inc., the lessor of two oil and gas leases in Harris County, Texas (known individually as the “Warren” and “Colvin” leases, and together as the “Hockley Dome Leases”). (Case No. 12-3216, ECF No. 12 at 2, ECF No. 13 at 3). Pursuant to the Farmout Agreement, An-loc would earn interests in these oil and gas leases by meeting certain drilling requirements. (Case No. 12-3216, ECF No. 12 at 2, ECF No. 13 at 3).

In February 2009, Anloc entered into a “Participation Agreement” with Petro-dome Energy, LLC. In return for helping finance Anloc’s drilling operations, Petro-dome had the right to share in Anloc’s earned interests in the oil and gas leases.

Anloc hired Talone to perform services in connection with these operations. The initial employment agreement (entered into in either January or February 2009) was oral. (Case No. 12-3216, ECF No. 12 at 2, ECF No. 13 at 3). The exact terms of the contract, the exact services Talone was hired to perform, and whether Talone competently performed those services are disputed issues of fact.

Both parties acknowledge that (at some point) Talone was to receive as compensation a portion of the interests in oil and gas leases acquired by Anloc.3 The parties dispute exactly which form this interest was to take. Compare (Case No. 12-3216, ECF No. 12 at 3) (“[I]n return for Talone working with ANLOC and providing those services Talone would receive and ANLOC would convey to him a ten percent (10%) carried working interest in all interests, including future interests, that ANLOC realized in the Hockley Dome Leases.”) with (Case No. 12-3216, ECF No. 13 at 3) (“The precise interest to be assigned by Anloc to Talone in a given well would be a percentage of the net interest that Anloc ultimately owned in the well in question after all interests necessary for financing activities were granted and assigned. As Anloc owned nothing more than the right to own an interest in wells (and certain surrounding acreage) as they were developed, this is all that Anloc could assign. The agreement was limited to Anloc’s wells developed in and around the Hockley Dome, and those developed on Anloc’s High Island Block 19-S, Jefferson County, Texas lease.”).

Anloc eventually obtained interests in several oil and gas leases as a result of its drilling operations. In September 2009, Petrodome (Anloc’s financial partner) sued Anloc over these interests. In March 2010, Anloc was temporarily forced out as operator of these leases and its interests were temporarily terminated. In November 2010, after a settlement in the Petro-dome lawsuit, Anloc regained most of its interests in the leases (subject to ownership claims of additional parties connected to Anloc).

In the meantime, Talone continued to work for Anloc. Eventually, Talone and Anloc executed a written employment con[830]*830tract to replace the oral agreement entered into in January or February of 2009.4 On January 5, 2010, Talone and Anloc executed the written employment contract known as the “Sharing Agreement.” (Case No. 12-3216; ECF No. 12 at 3, No. 13 at 4).5

Not long after execution of the Sharing Agreement, Anloc temporarily lost control of its interests in the oil and gas leases. As a result, Talone’s compensation as originally contemplated was not possible. Tal-one alleges that, to rectify the problem, Anloc offered alternate compensation at the rate of $20,000.00 per month.

On April 15, 2010, Talone filed an Affidavit of Mechanic’s Lien Oil and Mineral Property (hereinafter, “M & M lien”). (Case No. 12-3216; ECF No. 12 at 29-30). The amount of the lien ($300,000.00) corresponds to approximately 15 months’ work (mid-January 2009 to mid-April 2010) at the rate of $20,000.00 per month.

Anloc regained most of its lost interests by November 2010. Although this made possible the original compensation agreement, the Talone plaintiffs never received an assignment of any interest in the oil and gas leases. In late 2010, Talone became aware that Anloc would not honor the terms of Sharing Agreement.

On December 22, 2010, Talone filed a copy of the Sharing Agreement in the real property records. Talone acknowledges altering the Sharing Agreement prior to filing it by writing the phrase “This instrument acknowledged before me” beside the notary’s stamp. (ECF No. 381 at 54).

Anloc was involved in litigation with various other parties around the same time period. On January 11, 2011, the Talone Plaintiffs intervened in a state court lawsuit involving Anloc’s interests in the oil and gas leases. The Talone Plaintiffs asserted a breach of contract claim against Anloc (for refusing to assign the lease interests and for failure to pay the $300,000.00 secured by the M & M lien) as well as a claim for quantum meruit. (Case No. 12-3216, ECF No. 1-1).

Anloc and the Talone Plaintiffs engaged in settlement negotiations after the intervention.

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Bluebook (online)
487 B.R. 825, 2013 WL 244033, 2013 Bankr. LEXIS 257, 57 Bankr. Ct. Dec. (CRR) 149, Counsel Stack Legal Research, https://law.counselstack.com/opinion/in-re-anloc-llc-txsb-2013.