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Lonesome Dove Petroleum, Inc. v. Holt

United States Court of Appeals, Eighth Circuit

May 7, 2018

Lonesome Dove Petroleum, Inc. Plaintiff-Appellant
v.
John H. Holt; John H. Holt Oil Properties, Inc. Defendants-Appellees Lonesome Dove Petroleum, Inc. Plaintiff-Appellee
v.
John H. Holt; John H. Holt Oil Properties, Inc. Defendants-Appellants

          Submitted: October 16, 2017

          Appeals from United States District Court for the District of North Dakota - Bismarck

          Before SMITH, Chief Judge, and MURPHY and COLLOTON, Circuit Judges.

          MURPHY, Circuit Judge.

         In 2004, Lonesome Dove, through its president, Brett Boedecker, formed a plan with John Holt to take advantage of the booming oil business in the Bakken region of North Dakota. Holt and Boedecker, along with two investors, intended to acquire oil and gas leases in Mountrail County and sell them for a profit. After they completed a successful round of acquisitions in 2005, Holt and the investors began excluding Boedecker from any new acquisitions. Lonesome Dove filed this lawsuit in 2012 and Holt moved for partial summary judgment on the following claims: 1) breach of a joint venture contract; 2) breach of the implied covenant of good faith and fair dealing; 3) breach of fiduciary duty; 4) civil conspiracy; 5) negligent misrepresentation; and 6) unjust enrichment. The district court[1] granted summary judgment on all claims other than the breach of the joint venture contract, which was later decided in Holt's favor by a jury. Lonesome Dove moved for equitable relief and a new trial; both were denied. Lonesome Dove now appeals the summary judgments on the negligent misrepresentation and unjust enrichment claims, as well as the denial of equitable relief and a new trial. We affirm.[2]

         I.

         Lonesome Dove Petroleum, Inc. ("Lonesome Dove") is a corporation which acquires oil and gas leases and sells them for a profit. Brett Boedecker owns a majority of the corporate shares and serves as its president. In 2004 John Holt, owner of John H. Holt Oil Properties, Inc., contacted Boedecker about a plan to purchase leases in Mountrail County, North Dakota. Holt and Boedecker, together with two investors (Jim Williams and David Flinn), reached an oral agreement to obtain oil and gas leases and sell them at a profit while retaining overriding royalty interests (ORIs). Holt and Boedecker planned to each retain 12.5 percent of the profits.

         Except for these provisions, the parties disagree about the nature and scope of the oral agreement. According to Boedecker, the agreement was for a joint venture to acquire between 20, 000 and 50, 000 acres of land. He believed the venture would continue in perpetuity for the purpose of procuring leases east of the Nesson Anticline region in Mountrail and Burke Counties. He also claims that the joint venture established fiduciary duties for the partners. Holt disagrees and claims there was only a "limited lease play" to purchase between 20, 000 and 50, 000 acres in Mountrail County.

         From August 2004 to January 2005, the four men acquired leases covering over 25, 000 acres. During this time period, Boedecker received his agreed upon percentage of the profits and ORIs. Holt, Williams, and Flinn then began acquiring other leases in the Nesson Anticline region without involving Boedecker. Boedecker alleges he discovered in 2011 that he had not been notified about them. He also alleges that when he had asked Holt about acquiring additional leases, Holt had responded that the area was too competitive and the prices were too high. Holt contends, however, that he informed Boedecker that he would be entering new lease plays without him and that Boedecker had not objected.

         In 2012, Lonesome Dove brought the following claims against Holt in Montana state court: 1) breach of a joint venture contract; 2) breach of an implied covenant of good faith and fair dealing; 3) breach of fiduciary duty; 4) civil conspiracy; 5) negligent misrepresentation; and 6) unjust enrichment. After the case was removed to federal court, it was transferred to North Dakota.

         Holt moved for partial summary judgment on Lonesome Dove's claims outside the limited lease play. In a separate motion, he sought summary judgment on the statute of frauds for any claims beyond the "limited lease play." The district court granted summary judgment on the claims for breach of implied covenant of good faith and fair dealing, breach of fiduciary duty, civil conspiracy, negligent misrepresentation, and unjust enrichment. Summary judgment was denied on the claim for breach of a joint venture contract and a motion for summary judgment based on the statute of frauds. The jury then found that a joint venture had been formed and that Holt had not breached the agreement. Lonesome Dove moved for equitable relief and a new trial. The district court denied both motions.

         Lonesome Dove now appeals the order granting summary judgment on the negligent misrepresentation and unjust enrichment claims, as well as the denials of the motions for equitable relief and a new trial.

         II.

...


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