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Univalor Trust, SA v. Columbia Petroleum, LLC

United States District Court, S.D. Alabama, Southern Division

May 25, 2017

UNIVALOR TRUST, SA and FORVEST FINANCIAL SERVICES CORP., Plaintiffs,
v.
COLUMBIA PETROLEUM LLC, COLUMBIA INTERNATIONAL LLC, ALABAMA ENERGY HOLDINGS II LLC, BENJAMIN ENERGY HOLDINGS II LLC, OCCIDENTAL ENERGY PARTNERS, INC., and CHESTER F. ENGLISH III, Defendants/Counter-Claimants,
v.
UNIVALOR TRUST, SA and FORVEST FINANCIAL SERVICES CORP., Plaintiffs/Counter-Defendants, PRUET PRODUCTION, CO., Intervenor, BRADLEY ENERGY HOLDINGS II, LLC, Intervenor Defendant.

          ORDER

          KRISTI K. DuBOSE CHIEF UNITED STATES DISTRICT JUDGE

         This action is before the Court on the Motions for Summary Judgment filed by Defendant Alabama Energy Holdings II, LLC, Defendant Benjamin Energy Holdings II, LLC, and Intervenor Defendant Bradley Energy Holdings II LLC, wherein these Defendants move for summary judgment on the issues raised in Pruet Production Company's Complaint for Interpleader (docs. 163, 164, 174, 175);[1] Plaintiffs' response in opposition and motion to strike Bradley Energy's motion as untimely filed (doc. 183); and Defendants' objection and motion to strike Plaintiffs' response in opposition and motion to strike (doc. 187).

         Upon consideration, and for the reasons set forth herein, Defendants' motions for summary judgment (docs. 163, 164, 174, 175) are DENIED AT THIS TIME. Plaintiffs' motion to strike Bradley Energy's motion for summary judgment as untimely filed (doc. 183) is DENIED, Defendants' motion to strike Plaintiffs' motion to strike (doc. 187) is MOOT, and Defendants' motion to strike Plaintiffs' response as untimely filed (doc. 187) is GRANTED.

         I. Procedural and Factual Background

         Defendants Alabama Energy, Benjamin Energy and Intervenor Defendant Bradley Energy own working interest points in three oil and gas wells operated by Pruet Production Company in Conecuh County, Alabama (docs. 164, 164-1, 166). Pruet distributed royalty payments generated by the percentage working interests in the producing wells to the Defendants.

         In early 2015, Plaintiffs Univalor Trust, SA and Forvest Financial Services Corporation notified Pruet of their claim to certain royalty payments previously due to Defendants for the three wells (doc. 180-6).[2] Plaintiffs based their claim on the terms of the disputed Settlement Agreement (doc. 164-2, Exhibit B, Settlement Agreement), which required Defendants to assign certain working interest points into a Trust for the benefit of Plaintiff Univalor, and the assignments made by the Defendants but subsequently cancelled. After notice of the disputed ownership, Pruet began to hold the royalty payments in suspense.

         In August 2015, Plaintiffs filed a complaint in this Court against Defendants, seeking to enforce the Settlement Agreement. The complaint was last amended in February 2016 (doc. 91, Fourth Amended Complaint). In Count One, Plaintiffs assert that parties entered into a binding Settlement Agreement and request the “Court enter an Order declaring that Defendants entered into a valid binding settlement agreement with Plaintiffs that was not invalidated by Defendants' attempt at repudiation or rescission” (doc. 91, p. 13). In Count Two, Plaintiffs seek an Order for the “Defendants to immediately comply with all terms of the settlement agreement” and alternatively, “Plaintiffs demand judgment for breach of contract, holding Defendants separately and severally liable for the value of the settlement agreement, which is $2, 500, 000.00 plus interest and costs” (doc. 91, p. 16).

         In November 2016, Pruet moved the Court for leave to intervene in this action to file a Complaint for Interpleader to interplead the suspended royalty payments and to interplead future royalty payments as they accrued, pending resolution of the claims (doc. 143). The Motion was granted (doc. 150). By the time of Pruett's first deposit to the Court, the royalties were as follows:

Bradley 25-5 No. I Well (Alabama Energy) $100, 356.21
Bradley 25-12 No. 1 Well (Bradley Energy) $167, 931.75
Benjamin 26-4 No. I Well (Benjamin Energy) $8, 719.08.

(Doc. 155).

         Pruet deposited additional royalties in the amount of $1, 521.96 from the Bradley 25-12 No. 1 Well and in the amount of $3, 114.79 from the Bradley 25-5 No. I Well (docs. 176, 177).

         Pruet did not separately docket its Complaint for Interpleader. Instead, the Complaint was included within the Motion (doc. 143, p. 2-5). In the complaint, Pruet alleges that it was unable to resolve the ownership claims and thus, without an adjudication of ownership of the royalty interests, it was unable to disburse the suspended royalty payments. Pruet alleges ...


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