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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 Defendants 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's motion for summary judgment, memorandum and exhibits in support and reply (docs. 159, 160, 182) and the response filed by Plaintiffs Univalor Trust SA and Forvest Financial Services Corporation (doc. 181); and Plaintiffs' motion for summary judgment, memorandum and exhibits in support and reply (docs. 161, 165, 184) and the Defendants' response (doc. 178).

         Upon consideration, the motions are GRANTED in part, and DENIED in part, as set forth herein. Specifically, Plaintiffs' motion for summary judgment on the issue of assent is GRANTED as to Defendants Chester English III, Alabama Energy, and Benjamin Energy, but otherwise DENIED as to the remaining Defendants; Defendants' motion for summary judgment on the issue of contract formation is DENIED; Defendants' motion for summary judgment seeking judgment as a matter of law that the Settlement Agreement is void for violation of the Statute of Frauds is DENIED; Defendants' motion for summary judgment seeking judgment as a matter of law that the Settlement Agreement is void for illegality is DENIED; and Plaintiffs' motion for summary judgment as to the Defendants' counterclaim for tortious interference with a business relation is GRANTED.

         I. Procedural and Factual Background

         This case involves a dispute as to whether a written Settlement Agreement, circulated to the parties and signed in triplicate by at least some of the parties on November 13, 14 and 17, 2014, was the final valid and binding settlement of the parties' claims.

         In the Fourth Amended Complaint, Plaintiffs assert that the 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” i.e., the cancellation of the assignments and alleged refusal to sign corrected assignments (Count One) (doc. 91, p. 13). Plaintiffs also 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” (Count Two) (doc. 91, p. 16).

         Defendants answered the Fourth Amended Complaint and denied the existence of a final and binding Settlement Agreement. Defendants also set forth three counterclaims, one of which - tortious interference with a business relation - survived the Plaintiffs' motion to dismiss (doc. 121).

         II. Conclusions of Law

         A. Summary Judgment Standard

         “The court shall grant summary judgment if the movant shows that there is no genuine dispute as to any material fact and the movant is entitled to judgment as a matter of law.” Fed.R.Civ.P. 56(a). “Cross-motions for summary judgment will not, in themselves, warrant the court in granting summary judgment unless one of the parties is entitled to judgment as a matter of law on facts that are not genuinely disputed.... Nonetheless, cross-motions may be probative of the non-existence of a factual dispute when, as here, they demonstrate a basic agreement concerning what legal theories and material facts are dispositive.” United States v. Oakley, 744 F.2d 1553, 1555-56 (11th Cir. 1984) (citing Bricklayers Int'l Union, Local 15 v. Stuart Plastering Co., 512 F.2d 1017 (5th Cir.1975)).

         The party moving for summary judgment bears the “initial responsibility of informing the district court of the basis for [their] motion, and identifying those portions of ‘the pleadings, depositions, answers to interrogatories, and admissions on file, together with the affidavits, if any, ' which [they] believe[] demonstrate the absence of a genuine issue of material fact.” Clark v. Coats & Clark, Inc., 929 F.2d 604, 608 (11th Cir. 1991) (bracketed text added) (quoting Celotex Corp. v. Catrett, 477 U.S. 317, 323 (1986)). If the moving party does not have the burden of proof at trial, such as the Defendants and Plaintiffs as Counterclaim Defendants, they may show that “there is an absence of evidence to support the nonmoving party's case.” United States v. Four Parcels of Real Property, 941 F.2d 1428, 1438 (11th Cir. 1991) (citations omitted) (emphasis added). Alternatively, the moving party may support the “motion for summary judgment with affirmative evidence demonstrating that the nonmoving party will be unable to prove its case at trial.” Id. (emphasis added). “If the moving party shows the absence of a triable issue of fact by either method, the burden on summary judgment shifts to the nonmoving party, who must show that a genuine issue remains for trial.” Id. “If the nonmoving party fails to ‘make a sufficient showing on an essential element of her case with respect to which she has the burden of proof, ' . . . the moving party is entitled to summary judgment.” Id. (citations omitted).

         “[W]hen the moving party has the burden of proof at trial” i.e., Plaintiffs (Defendants did not move for summary judgment as to their Counterclaim), “that party must show affirmatively the absence of a genuine issue of material fact: it must support its motion with credible evidence ... that would entitle it to a directed verdict if not controverted at trial. In other words, the moving party must show that, on all the essential elements of its case on which it bears the burden of proof at trial, no reasonable jury could find for the non-moving party.” Id. at 1438 (citations and internal quotation marks omitted; emphasis in original); Goolsby v. Gain Technologies, Inc., 362 Fed.Appx. 123, 136 (11th Cir. 2010) (“For a plaintiff to succeed on a summary judgment motion, he ‘must demonstrate that on all essential elements of [his] case on which [he] bears the burden of proof at trial, [that] no reasonable jury could find for the non-moving party.'”) (bracketed text in original) (quoting Irby v. Bittick, 44 F.3d 949, 953 (11th Cir.1995)) (internal quotations omitted). If the movants “make[] such an affirmative showing, [they are] entitled to summary judgment unless the non-moving party” comes “forward with significant, probative evidence demonstrating the existence of a triable issue of fact.” Id. (citations omitted).

         Overall, as to each motion for summary judgment, the Court must “resolve all issues of material fact in favor of the [non-movant], and then determine the legal question of whether the [movant] is entitled to judgment as a matter of law under that version of the facts.” McDowell v. Brown, 392 F.3d 1283, 1288 (11th Cir. 2004) citing Durruthy v. Pastor, 351 F.3d 1080, 1084 (11th Cir. 2003). “[A]ll reasonable doubts about the facts and all justifiable inferences are resolved in favor of the non-movant.” Citizens Trust Bank v. Lett, 2015 WL 4254561, at *1 (N.D.Ala. 2015). The Court is obligated to construe the record, including all evidence and factual inferences, in the light most favorable to the nonmoving party. See Skop v. City of Atlanta, 485 F.3d 1130, 1136 (11th Cir. 2007).

         However, the mere existence of any factual dispute will not automatically necessitate denial of a motion for summary judgment; rather, only factual disputes that are material preclude entry of summary judgment. Lofton v. Secretary of Dept. of Children and Family Services, 358 F.3d 804, 809 (11th Cir. 2004). “An issue of fact is material if it is a legal element of the claim under the applicable substantive law which might affect the outcome of the case. It is genuine if the record taken as a whole could lead a rational trier of fact to find for the nonmoving party.” Reeves v. C.H. Robinson Worldwide, Inc., 594 F.3d 798, 807 (11th Cir. 2010) (citation omitted). Also, “what is considered to be ‘facts' at the summary judgment stage may not turn out to be the actual facts if the case goes to trial, but those are the facts at this stage of the proceeding for summary judgment purposes.” Cottrell v. Caldwell, 85 F.3d 1480, 1486 (11th Cir. 1996).

         B. Analysis

         1. Jurisdiction and Choice of Law

         As an initial consideration, this Court exercises diversity jurisdiction over this matter. Therefore, the Court applies the choice of law principles of Alabama, the forum state. Klaxon Co. v. Stentor Electric Mfg. Co., 313 U.S. 487, 496 (1941); St. Paul Fire and Marine Ins. Co. v. ERA Oxford Realty Co. Greystone, LLC, 572 F.3d 893, 895 n.1 (11th Cir. 2009) (citation omitted). For contract disputes, Alabama applies the law of the state where the contract was formed unless the contract contains a provision specifying which law governs. Cherokee Ins. Co. v. Sanches, 975 So.2d 287, 292 (Ala. 2007).

         2. Defendants' Claim for Tortious Interference with a Business Relationship

         In their Counterclaim for Tortious Interference, Defendants (as Counterclaim Plaintiffs) allege that Plaintiffs (as Counter Defendants) improperly contacted Pruet Production Company, the operator of oil and gas wells owned by Defendants Alabama Energy Holdings II, LLC, and Benjamin Energy Holdings II, LLC. Specifically, Defendants allege that Plaintiffs “falsely” represented to “Pruet that a settlement agreement had taken place” and that Defendants “had obligated themselves to place mineral interests in trust, causing Pruet to suspend royalty payments” (doc. 121, p. 18-19). Defendants allege that Plaintiffs were “strangers” to the business relationship with Pruet and their actions were “an intentional interference” with this business relationship. (Id.)[1]

         Plaintiffs now move for summary judgment as to the Counterclaim (doc. 161, doc. 165, p. 21-24). Plaintiffs argue that they are not strangers to the business relationship between Pruet and Defendants. They argue that because they were parties to the Settlement Agreement, which required the Defendants to assign the working interests to a Trust, they acted in good faith, lawfully and with justification to protect their rights to the royalties from the working interests. Plaintiffs point out that they had no ability to prevent Pruet from paying the royalty payments to Defendants, and that they did not act tortuously or unlawfully by informing Pruet of their claim. Plaintiffs also argue that Defendants cannot establish that they have been damaged because Pruet has interpled all of the disputed payments. [2]

         Defendants respond that they have a protectable business relationship with Pruet, that Plaintiffs were aware of that relationship, that Plaintiffs were strangers to the relationship, and that they intentionally interfered and caused damages; specifically, Pruet's refusal to pay the royalty payments to Defendants. They argue that Plaintiffs' justification for interference - that the royalties from the working interest would be ...


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