United States District Court, W.D. Kentucky, Louisville Division
R&J OIL, et al. PLAINTIFFS
R.C. RODGERS, et al. DEFENDANTS
MEMORANDUM OPINION AND ORDER
N. Stivers, Chief Judge
matter is before the Court on Plaintiffs' Motion for
Partial Summary Judgment (DN 42) on Counts V and VI of their
Complaint (DN 1). The motion is ripe for adjudication. For
the reasons that follow, the motion is GRANTED.
STATEMENT OF FACTS AND CLAIMS
Keith and Nikkoll Johnson are residents of Ohio who decided
to invest in the oil and gas industry in hopes of enhancing
their retirement savings. (Pls.' Mem. Supp. Mot. Partial
Summ. J. 1, DN 43 [hereinafter Pls.'
Mot.]). Plaintiffs entered into a
“Refurbishing Contract Agreement” with John
Patterson (“Patterson”) and Defendants Ronnie
Charles Rodgers (“Rodgers”) and R&R Plus, LLC
(“R&R Plus”), a Tennessee limited liability
company of which Rodgers was the sole member. (Pls.' Mem.
Supp. Mot. Partial Summ. J. Ex. A, at 1, DN 43-1; Compl.
¶¶ 4, 8, DN 1). The Refurbishing Contract Agreement
provided that Rodgers and R&R Plus would transfer mineral
rights to a 67-acre tract in Tennessee, along with an
existing well and associated personalty, and refurbish the
existing well. (Pls.' Mem. Supp. Mot. Partial Summ. J.
Ex. A, at 1-3). Patterson, who is not a party to this action,
was to check the wells and remove the oil. (Pls.' Mem.
Supp. Mot. Partial Summ. J. Ex. A, at 3).
Rodgers, and R&R Plus entered into a separate
“Escrow Agreement” to accomplish the transfer of
the mineral rights, designating Defendant Elmer George
(“George”) a party to the contract as the escrow
agent. (Pls.' Mem. Supp. Mot. Partial Summ.
J. Ex. B, at 1, DN 43-2). The Escrow Agreement provided that
Plaintiffs would deposit $105, 000 with George, who was not
to release the funds “until receipt from the Parties of
all documents, properly completed and executed, necessary to
affect [sic] the transfer of ownership or assignment of the
Oil and Gas Lease, including but not limited to the
Assignment of Oil and Gas Lease and Refurbishing [Contract]
Agreement between First Party and Second Parties herein . . .
.” (Pls.' Mem. Supp. Mot. Partial Summ. J. Ex. B,
at 1). The Escrow Agreement further stated that in the event
the transfer documents were not received within thirty days,
George was to return the escrow funds to Plaintiffs.
(Pls.' Mem. Supp. Mot. Partial Summ. J. Ex. B, at 1).
Rodgers, and R&R Plus also signed a document titled
“Assignment of Oil and Gas Lease”
(“Assignment”). (Pls.' Mem. Supp. Mot.
Partial Summ. J. Ex. C, at 1, DN 43-3). Notwithstanding the
nominal caption, the Assignment conveyed only an 87.5%
working interest in a particular well (#12313) and did not
include transfer of the referenced oil and gas lease.
(Pls.' Mem. Supp. Mot. Partial Summ. J. Ex. C, at 1).
Nevertheless, upon receipt of the executed Assignment and
Refurbishing Contract Agreement, George disbursed the
escrowed funds. (George Aff. ¶ 27).
before closing it was necessary for Rodgers and R&R Plus
to obtain the leasehold interest they were obligated to
transfer to Plaintiffs under the terms of the Refurbishing
Contract Agreement. George effected this transfer by drafting
a document (“Adventure Assignment”) conveying
Adventure Enterprises, Inc.'s interest in the well and
lease to Rodgers and R&R Plus. (Pls.' Mem. Supp. Mot.
Partial Summ. J. Ex. D, at 1, DN 43-4). The language of the
Adventure Assignment assigned to Rodgers and R&R Plus all
of Adventure Enterprises' interests in both the
“well and Oil and Gas Lease . . . .” (Pls.'
Mem. Supp. Mot. Partial Summ. J. Ex. D, at 1). Indeed, before
preparing either transfer, George consulted John Nisbet,
Adventure Enterprises' Tennessee attorney, who provided a
written title abstract to George and advised that,
“[b]ecause [Rodgers] is purchasing BOTH the well and
lease, I would suggest that you include a paragraph about the
lease.” (Pls.' Reply Mot. Partial Summ. J. Ex. 1,
at 1, DN 50-1 (emphasis in original)).
the closing, relations between Plaintiffs and Rodgers
ultimately fell apart. Plaintiffs allege Rodgers failed to
meet his obligations under the Refurbishing Contract
Agreement. (Pls.' Mot. 7). The well was eventually filled
with concrete and the permit necessary to drill was
temporarily lost. (Pls.' Mot. 7). In this lawsuit,
Plaintiffs assert claims against George because he failed to
accomplish the transfer of the oil and gas lease to them from
Rodgers as specified in the Escrow Agreement. (Compl.
¶¶ 56-65). Plaintiffs have moved for summary
judgment on those claims.
Court has subject matter jurisdiction over this action under
28 U.S.C. § 1332 as there is complete diversity between
the parties and the amount in controversy exceeds the sum of
STANDARD OF REVIEW
ruling on a motion for summary judgment, the Court must
determine whether there is any genuine issue of material fact
that would preclude entry of judgment for the moving party as
a matter of law. See Fed.R.Civ.P. 56(a). The moving party
bears the initial burden of stating the basis for the motion
and identifying evidence in the record that demonstrates an
absence of a genuine dispute of material fact. See
Celotex Corp. v. Catrett, 477 U.S. 317, 322 (1986). If
the moving party satisfies its burden, the non-moving party
must then produce specific evidence proving the existence of
a genuine dispute of fact for trial. See Anderson v.
Liberty Lobby, Inc., 477 U.S. 242, 247-48 (1986).
the Court must view the evidence in the light most favorable
to the non-moving party, the non-moving party must do more
than merely show the existence of some “metaphysical
doubt as to the material facts.” Matsushita Elec.
Indus. Co. v. Zenith Radio Corp.,475 U.S. 574, 586
(1986) (citation omitted). Rather, the non-moving party must
present specific facts proving that a genuine factual dispute
exists by “citing to particular parts of the materials
in the record” or by “showing that the materials
cited do not establish the absence . . . of a genuine dispute
. . . .” Fed.R.Civ.P. 56(c)(1). “The mere