Univalor Trust, SA v. Columbia Petroleum, LLC

315 F.R.D. 374, 2016 WL 3460412, 2016 U.S. Dist. LEXIS 80202
CourtDistrict Court, S.D. Alabama
DecidedJune 21, 2016
DocketCIVIL ACTION: 15-00414-KD-C
StatusPublished
Cited by24 cases

This text of 315 F.R.D. 374 (Univalor Trust, SA v. Columbia Petroleum, LLC) is published on Counsel Stack Legal Research, covering District Court, S.D. Alabama primary law. Counsel Stack provides free access to over 12 million legal documents including statutes, case law, regulations, and constitutions.

Bluebook
Univalor Trust, SA v. Columbia Petroleum, LLC, 315 F.R.D. 374, 2016 WL 3460412, 2016 U.S. Dist. LEXIS 80202 (S.D. Ala. 2016).

Opinion

ORDER

KRISTI K. DuBOSE, UNITED STATES DISTRICT JUDGE

This matter is before the Court on “Defendants’ Motion to Amend Answer and Counterclaim” (Doc. 104), Plaintiffs’ Response (Doc. 112), and Defendants’ Reply (Doc. 114).

I. Background

On August 13, 2015, Plaintiffs Univalor Trust, SA and Forvest Financial Services Corp. (Plaintiffs) initiated this federal diversity subject matter jurisdiction action against Defendants Columbia Petroleum, LLC, Columbia International, LLC, Alabama Energy Holdings II, Benjamin Energy Holdings II, LLC, Occidental Energy Partners, Inc. and Chester F. English, III (Defendants). (Doc. 1). Specifically, Plaintiffs filed a $2.5 million action seeking entry of a declaratory judgment against the Defendants concerning the enforceability of a settlement agreement and asserting claims for breach of contract and contract enforcement of the settlement agreement. (Doe. 91 (as amended)).

In contrast, Defendants assert that no settlement agreement was ever reached as there was no meeting of the minds — ie., there is nothing to enforce. Defendants assert that:

[377]*377Plaintiffs[ ] loaned Livingston Investments II, LLC, a company that Chester English had an ownership interest in, $2.2 million dollars in late 2007., .In late 2009, that note was in default_Plaintiffs and English originally agreed that another English related company, Columbia Petroleum, LLC, would put up 75% of certain oil well assets it held as security for that note — The wells would be drilled by Columbia and Plaintiffs would be repaid by the sale of the oil recovered. Plaintiffs later changed their minds and decided that the vehicle for this arrangement would be for Columbia to convey its oil well assets to a Canadian company of Plaintiffs’ choosing, Parkland Energy Services, Inc., which Plaintiffs had found through one of its Directors, Roy Murad...Murad is a convicted felon and a con man and Plaintiffs failed to conduct adequate due diligence before naming him as a Director....
Murad and David Wollach (Chairman of the Univalor board of directors), on behalf of Plaintiffs, told English and Columbia that a company Murad owned had raised between $5 million and $8 million dollars in funding for Parkland to drill Columbia’s offset wells... This was a lie. In reliance on that lie, and to fulfill its agreement with Plaintiffs, Columbia tendered those oil and gas interests (reserving 25%) to Parkland in May of 2010.... Parkland in turn, issued a debenture for the amount of Defendants’ debt in favor of Murad’s company, Link, as trustee for Plaintiffs and Plaintiffs accepted that debenture.. .Defendants also paid an additional $547,000 to the Plaintiffs in 2011 and Columbia’s debt to Plaintiffs was extinguished...
As both sides now agree, Parkland illegally transferred those pledged assets to Rick Fletcher and his company, Fletcher Petroleum Corp., and thus Parkland had no way to re-pay the debt owed to Plaintiffs... In an effort to recoup their loss, Plaintiffs sued their now former director, Murad, in Canada (along with his lawyers) for the amount of the original debt, along with interest and attorney’s fees, and also tamed to Fletcher for repayment.. .Fletcher, however, proved wilier than Plaintiffs thought and, in an effort to bring him to the table, Plaintiffs sought English’s involvement...
Settlement discussions ensued. Plaintiffs claim that there is a final agreement. Defendants claim that there is not. Plaintiffs claim there is an enforceable settlement agreement.. ,a key element is to whether or not Defendants proffered adequate consideration for Defendants to enter into such agreement. The only way to do that is to start from the original loan in November of 2007 and work forward through the common core of operative facts....

(Doe. 114 at 1-3 (footnotes omitted)).

On March 10, 2016, Defendants answered Plaintiffs’ Fourth Amended Complaint (Doc. 91) and asserted counterclaims for tortious interference with contracVfraud (Count 1), coercion/fraud (Count 2), civil conspiracy (Count 3) and negligence (Count 4). (Doc. 95). On March 28, 2016, Plaintiffs moved to dismiss Defendants’ counterclaims. (Doc. 99). In response, on April 15, 2016, Defendants timely1 moved to amend their answer/counterclaims, proposing 12 counterclaims: tortious interference (Count 1), intentional misrepresentation (Count 2), reckless misrepresentation (Count 3), innocent misrepresentation (Count 4), civil conspiracy (Count 5), negligence (Count 6), wantonness (Count 7), unjust enrichment (Count 8), accounting (Count 9), breach of contract (Count 10), conversion (Count 11) and breach of fiduciary duty (Count 12). (Doc. 104). Also on April 15th, Defendants responded to Plaintiffs’ motion to dismiss (Doc. 105), stating the dismissal contentions are moot as the proposed amended answer/counterclaims supersede their prior answer/counterclaims.

II. Standard of Review

Rule 15(a) of the Federal Rules of Civil Procedure governs requests for leave to amend and leave should be freely given except in the presence of countervailing factors such as undue prejudice to the opposing party and futility of the amendment. See, e.g., Foman v. Davis, 371 U.S. 178, 182, 83 S.Ct. [378]*378227, 9 L.Ed.2d 222 (1962); Bartronics, Inc. v. Power-One, Inc., 245 F.R.D. 532, 534 (S.D.Ala.2007).2 While eases addressing a proposed amended answer are sparse, this Court has derived guidance from analogous authorities relating to amended complaints. See, e.g., Bartronics, 245 F.R.D. at 535 (citing Arista Records, Inc. v. Flea World, Inc., 356 F.Supp.2d 411, 419 (D.N.J.2005)) (stating that “[t]he same standard applies to motions for leave to amend both complaints and answers[]”). Additionally, in Foman, the Supreme Court explained that leave should be given “[i]f the underlying facts or circumstances relied upon by the plaintiff may be a proper subject for relief.” Foman, 371 U.S. at 182, 83 S.Ct. 227. Therefore, “there must be a substantial reason to deny a motion to amend.” Laurie v. Ala. Ct. of Crim.App., 256 F.3d 1266, 1274 (11th Cir.2001). Overall the Federal Rules favor allowing amendments. Dussouy v. Gulf Coast Invest. Corp., 660 F.2d 594, 597 (5th Cir.1981) (finding that “[t]he policy of the federal rules is to permit liberal amendment to facilitate determination of claims on the merits and to prevent litigation from becoming a technical exercise in the fine points of pleading[ ]”). Also, “[t]his Circuit has accepted a policy of liberal amendment.” U.S. for Use and Benefit of Krupp Steel Products, Inc. v. Aetna Ins. Co. 831 F.2d 978, 983 (11th Cir.1987) (citing Loughan v. Firestone Tire & Rubber Co., 749 F.2d 1519 (11th Cir.1985) and Dussouy, 660 F.2d 594).

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315 F.R.D. 374, 2016 WL 3460412, 2016 U.S. Dist. LEXIS 80202, Counsel Stack Legal Research, https://law.counselstack.com/opinion/univalor-trust-sa-v-columbia-petroleum-llc-alsd-2016.