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Millenium Drilling Co., Inc v. Beverly House-Meyers

May 16, 2013

MILLENIUM DRILLING CO., INC., PLAINTIFF,
v.
BEVERLY HOUSE-MEYERS RECOVABLE TRUST, ET AL., DEFENDANTS.



The opinion of the court was delivered by: Miranda M. DU United States District Judge

I. SUMMARY

ORDER

(Defs.' Motion to Dismiss -- dkt no. 32; Defs.' Motion for More Definite Statement -- dkt. no. 35.)

Before the Court are Defendants' Motion to Dismiss (dkt. no. 32) and Motion for More Definite Statement (dkt. no. 35). For the reasons stated below, both motions are denied.

II. BACKGROUND

A. Factual History

Plaintiff Millennium Drilling Co, Inc. ("Millennium") seeks payment related to Defendants' investments in certain oil and gas companies. Millennium alleges that Defendants Beverly House-Meyers Revocable Trust, Grace Mae Properties, LLC, Molly Hamrick, Robert Hamrick, Hamrick Trust, and Beverly House-Meyers acquired working interests in oil and gas investments and became general partners in the Falcon, Colt, and Lion drilling partnerships (collectively, the "drilling partnerships"). These partnerships were engaged in oil and gas exploration. Defendants allegedly invested in the drilling partnerships with cash contributions as well as subscription note, security, and pledge agreements (the "notes").*fn1 The notes included language allowing the notes to be assigned by the drilling partnerships to Millennium.

Through their managing partner Montcalm Co., LLC ("Montcalm"), the drilling partnerships acquired interests in portions of portfolios of oil and gas leases and lands assembled by Third Party Defendant Patriot Exploration, including properties located in Texas. The drilling partnerships then contracted with Millennium for the drilling of the related wells. For example, Falcon Drilling Partnership executed an agreement with Millennium in which Falcon pledged all of its partners' subscription notes to Millennium as security for Falcon's future payment obligations. Millennium later claimed that Falcon had defaulted according to the terms of the agreement and that Defendants owed the capital contributions that they had pledged as security.

B. Procedural History

On March 19, 2012, Millennium filed a complaint against Defendants in the District of Nevada. The complaint alleged breach of contract, unjust enrichment, and breach of the duty of good faith and fair dealing. Defendants raised as affirmative defenses (1) that Millennium had committed fraud with respect to the contract; and (2) that the contract was unconscionable and illegal. With leave of the Court, Millennium filed its First Amended Complaint ("FAC") on November 26, 2012.

On June 6, 2012, Hamrick, House-Myers, and R&M filed a complaint against Patriot Exploration, among others, but not including Millennium, in Texas state court based on the same underlying transactions giving rise to Millennium's lawsuit. Patriot Exploration removed the case to the Southern District of Texas. Hamrick, House-Myers, and R&M allege (1) breach of fiduciary duty; (2) fraud/fraud in the inducement; (3) fraudulent nondisclosure; (4) negligent misrepresentation; (5) breach of contract; (6) imposition of constructive trust; and (7) conspiracy.

On January 15, 2013, Hon. Melinda Harmon, United States District Judge for the Southern District of Texas, granted Patriot Exploration's Motion to Transfer Venue, determining that the Nevada and Texas actions involved substantially similar issues. (Dkt. no. 67 at 6.)

On May 6, 2013, this Court consolidated the two related cases into the first-filed Nevada action. (Dkt. no. 79.) The Court now addresses Defendants' Motion to Dismiss and Motion for ...


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