Wellington Resource Group LLC v. Beck Energy Corp.

975 F. Supp. 2d 833, 182 Oil & Gas Rep. 726, 2013 U.S. Dist. LEXIS 134838, 2013 WL 5311412
CourtDistrict Court, S.D. Ohio
DecidedSeptember 20, 2013
DocketCase No. 2:12-CV-104
StatusPublished
Cited by5 cases

This text of 975 F. Supp. 2d 833 (Wellington Resource Group LLC v. Beck Energy Corp.) is published on Counsel Stack Legal Research, covering District Court, S.D. Ohio primary law. Counsel Stack provides free access to over 12 million legal documents including statutes, case law, regulations, and constitutions.

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Wellington Resource Group LLC v. Beck Energy Corp., 975 F. Supp. 2d 833, 182 Oil & Gas Rep. 726, 2013 U.S. Dist. LEXIS 134838, 2013 WL 5311412 (S.D. Ohio 2013).

Opinion

OPINION & ORDER

ALGENON L. MARBLEY, District Judge.

I. INTRODUCTION

This matter is before the Court on Defendant and Third-Party Plaintiff Beck Energy Corporation’s (“Beck”) Renewed Motion to Dismiss (Doc. 76) against Intervenor-Plaintiff Transact Partners International, LLC’s (“Transact”) First Amended Complaint (Doc. 61). Pursuant to Fed. R.Civ.P. 12(b)(6), Beck moves to dismiss Transact’s Second through Seventh Causes of Action. In addition, also before the Court is Plaintiff and Third-Party Defendant Wellington Resource Group’s (“Wellington”) Motion for Oral Argument on Beck’s above-mentioned Motion to Dismiss (Doc. 98), as well as Transact’s Motion for Leave to File Notice of Supplemental Authority Instanter (Doc. 139) regarding this same Motion to Dismiss. For the reasons stated below, Beck’s Motion to Dismiss is hereby GRANTED IN PART AND DENIED IN PART; Wellington’s Motion for Oral Argument is hereby DENIED as moot; and Transact’s Motion for Leave to File Notice of Supplemental Authority Instanter is hereby DENIED as moot.

II. PROCEDURAL POSTURE

This case originated with a suit brought in diversity jurisdiction by Wellington against Beck, alleging breach of contract and unjust enrichment / quantum meruit. Shortly after the case began, Transact sought and was granted leave to intervene, [835]*835and filed claims against both Wellington and Beck. The parties have filed several rounds of amended pleadings, with the result that Beck now asserts counterclaims against Wellington, as well as third-party claims against individuals associated with Wellington, and Third-Party Defendants Michael Sahadi and Levencrest Consulting, Inc. Wellington, Levencrest, and the Third-Party Defendants have answered, while Beck has answered Wellington but moved to dismiss Transact’s claims against it. In addition, Wellington sought and was granted leave to file a memorandum of law in opposition to Beck’s motion to dismiss Transact’s claims. Wellington also requested oral argument regarding Beck’s motion, while Transact recently requested leave to add supplemental information relating to the briefing regarding the motion. Both of these motions are resolved herein, together with the underlying Motion to Dismiss. These motions have been amply briefed, and are ripe for review.1

III. STATEMENT OF FACTS

Given the number of parties involved, as well as the voluminous filings, multiple competing versions of the events of this case have been presented to this Court. For the purposes of this Motion to Dismiss, however, this Court accepts as true the facts as pleaded by non-movant Transact in its First Amended Complaint (Doc. 61).

This story began, from Transact’s point of view, in October 2010, when it was approached by representatives of Wellington, and shown the assets owned by Wellington’s client, Beck. (Transact’s Amended Cmplt., Doc. 61 at ¶ 7). The “Beck Assets” included oil and gas leases, oil and gas wells, and related assets, in Monroe, Belmont, and Nobel Counties in Ohio. Id. at ¶ 8. Transact agreed to enter into a co-brokerage agreement with Wellington, whereby Transact would utilize its expertise and knowledge of industry contacts to find interested purchasers of the Beck Assets and put them in contact with Beck, and in return receive 2% of the total transaction price in compensation, if Transact was successful in “presenting a ready, willing and able purchaser, and [if] such purchaser in fact eomplete[d] the purchase of [the Beck Assets].” Id. at ¶¶ 8-12. Before entering into the co-brokerage agreement, Transact asked Wellington to reduce its agreement with Beck to writing; Wellington represented that it had done so in late January 2011 (though Wellington and Beck in fact executed their written contract on February 28, 2011). Id. at ¶¶ 10-11. Under the terms of this contract, Wellington agreed to provide Beck “with prospective purchasers for oil and gas leases to which Beck possessed the oil and gas rights.” Id. at ¶ 11 (quoting Wellington’s Amended Complaint, Doc. 31, at ¶ 18). Transact and Wellington executed their co-brokerage agreement on January 31, 2011. Id. at ¶ 11.

In April 2011, Brian Reilly, principal of Transact, spoke with several oil and gas industry contacts regarding the Beck Assets, including representatives of XTO Energy, Inc. (“XTO”). Id. at ¶ 13. Mr. Reilly also marketed the Beck Assets to Eclipse Energy (“Eclipse”), which led to a meeting between Beck principal, Raymond Beck, and Eclipse. Id. at ¶ 14. During [836]*836this time, Mr. Reilly explained his role to Mr. Beck, and made himself available to Mr. Beck via phone and email. Id. at ¶¶ 16-19.

Ultimately, no deal was reached between Beck and Eclipse, but in June 2011, Mr. Reilly again contacted representatives of XTO, at which time XTO expressed its interest in the Beck Assets. Id. at ¶ 20. A phone conference was held in July 2011 between representatives of XTO and Wellington, which led to several more meetings and telephone conferences between Mr. Beck and representatives of Wellington and XTO. Id. at ¶¶ 20-21.

In August and September 2011, Mr. Reilly sought information from Wellington concerning the Beck-XTO negotiations, at which time he was informed that Mr. Beck had requested that all communications run through Wellington. Id. at ¶ 22. Several weeks later, Wellington informed Transact that it too had been shut out of the Beck-XTO negotiations. Id. at ¶ 23. In November 2011, Beck and XTO executed a purchase and sale agreement for the Beck Assets, and in December Beck executed two Assignments and Bills of Sale, conveying the Beck oil and gas leases and related properties. The purchase price paid by XTO was $84,961,346.00. Id. at ¶¶ 24-26.

In January 2012, when Transact inquired as to when Beck would pay Wellington, and thus Wellington would pay Transact its 2%, Mr. Reilly was informed that Wellington would not pay. Id. at ¶ 28. Mr. Reilly spoke to Wellington’s attorney, who informed him that Wellington did not consider Transact’s claims to be “valid,” and invited Transact instead to demand a “nominal sum” in payment. Id.

Wellington commenced this action against Beck on February 1, 2012 (Doc. 1). Transact moved to intervene on March 14 (Doc. 9), and filed its Third Party Complaint on July 23 (Doc. 46), and its Amended Complaint on September 25, 2012 (Doc. 61). One month later, Beck filed the present motion to dismiss Counts Two through Seven of Transact’s Amended Complaint (Doc. 76).

IV. STANDARD OF REVIEW

Federal Rule of Civil Procedure 12(b)(6) allows for a case to be dismissed for “failure to state a claim upon which relief can be granted.” Such a motion “is a test of the plaintiffs cause of action as stated in the complaint, not a challenge to the plaintiffs factual allegations.” Golden v. City of Columbus, 404 F.3d 950, 958-59 (6th Cir.2005). Thus, the Court must construe the complaint in the light most favorable to the non-moving party. Total Benefits Planning Agency, Inc. v. Anthem Blue Cross & Blue Shield,

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975 F. Supp. 2d 833, 182 Oil & Gas Rep. 726, 2013 U.S. Dist. LEXIS 134838, 2013 WL 5311412, Counsel Stack Legal Research, https://law.counselstack.com/opinion/wellington-resource-group-llc-v-beck-energy-corp-ohsd-2013.