Day Dreams Resources, LLC et al v. Hutchison
Filing
42
ORDER denying without prejudice 26 Motion for Partial Summary Judgment; granting 32 Motion for Leave to File Amended Answer; denying as moot 41 Motion for Leave to File Sur-Reply; denying as moot 22 Motion to Dismiss Counterclaim. Signed by Honorable David C. Bramlette, III on 10/28/2015 (ECW)
IN THE UNITED STATES DISTRICT COURT
FOR THE SOUTHERN DISTRICT OF MISSISSIPPI
WESTERN DIVISION
DAY DREAMS RESOURCES, LLC
and JERRY P. OGDEN
PLAINTIFFS
VS.
CIVIL ACTION NO: 5:15-cv-37(DCB)(MTP)
CHARLES D. HUTCHISON
DEFENDANT
MEMORANDUM OPINION AND ORDER
This cause is before the Court on the plaintiffs’ (Day Dreams
Resources, LLC, and Jerry P. Ogden) Motion to Dismiss Defendant’s
(Charles D. Hutchison) Counterclaim (docket entry 22); on the
plaintiffs’ Motion for Partial Summary Judgment (docket entry 26);
on the defendant’s Motion for Leave to Amend Answer (docket entry
32); and on the defendant’s Motion for Leave to file a Sur-Reply to
the plaintiffs’ reply brief in support of their motion for partial
summary judgment (docket entry 41).
the
motions
and
responses,
the
Having carefully considered
arguments
of
counsel
and
the
applicable law, and being fully advised in the premises, the Court
finds as follows:
The plaintiffs’ Complaint makes the following allegations:
plaintiff Jerry P. Ogden (“Ogden”) is the sole member and manager
of Plaintiff Day Dreams Resources, LLC (“Day Dreams”).
Day Dreams
entered into an oral contract with Defendant Charles D. Hutchison
(“Hutchison”) to acquire interests in the Tuscaloosa Marine Shale,
which
covers
parts
of
southern
Mississippi, on Hutchison’s behalf.
Louisiana
and
southwestern
On Hutchison’s instructions,
“Day Dreams and Ogden, or their agent,” were to obtain commitments
for lease agreements with the owners of the mineral rights in the
land, contingent on receiving clear title.
Compl. ¶ 8(c).
Day
Dreams contracted with Lone Wolf Properties, LLC (“Lone Wolf”) to
act as its “acquisition agent in providing lease acquisition and
other landman services.”
Compl. ¶ 9.
“Hutchison agreed to
reimburse Day Dreams for expenditures made for his benefit during
the course of acquiring the leases.”
Compl. ¶ 8(h).
Hutchison
also agreed to pay Ogden a finder’s fee based on the net mineral
acreage acquired.
“Day Dreams and/or Lone Wolf acquired for
Hutchison’s benefit twenty-one (21) oil, gas and mineral leases
consisting of 3,517.455 net mineral acres” from July 2013 to July
2014.
Compl. ¶11. Between July and September 2014, Day Dreams
identified
nineteen
more
mineral
tracts
acquisition for the benefit of Hutchison.
with
potential
for
In the last week of
October 2014, Hutchison instructed Day Dreams, through Ogden, to
stop leasing additional acreage.
By this time, Day Dreams and/or
Lone Wolf had already “leased or committed to lease” ten of those
nineteen tracts.
Compl. ¶ 13.
Day Dreams alleges that Hutchison
has refused to pay for these leases, thus requiring Day Dreams
and/or Lone Wolf “to fund the lease acquisitions in order to avoid
defaulting.”
Compl. ¶ 15.
Hutchison filed a Motion to Dismiss the plaintiffs’ Complaint
on May 28, 2015.
The motion was denied on July 22, 2015.
August
Hutchison
5,
2015,
Counterclaims.
filed
his
Original
Answer
On
and
The plaintiffs moved to dismiss the counterclaims
on August 26, 2015, and filed a motion for partial summary judgment
2
on September 9, 2015.
Magistrate Judge Parker entered a Case
Management Order on September 16, 2015, which set deadlines for,
inter alia, motions for amended pleadings (October 16, 2015) and
discovery (April 15, 2016).
Hutchison filed his motion to amend
his Answer on September 24, 2015.
He also filed his response to
the plaintiffs’ motion to dismiss counterclaims on September 25,
2015, and his response to the plaintiffs’ motion for partial
summary judgment on September 28, 2015. The plaintiffs filed their
reply memorandum in support of their motion for partial summary
judgment on October 8, 2015, and their response to the defendant’s
motion to amend answer on October 12, 2015.
Hutchison filed his
reply memorandum in support of his motion to amend answer on
October 19, 2015.
On October 22, 2015, the plaintiffs filed a
motion to file a sur-reply to Hutchison’s reply memorandum, and the
plaintiffs attached a copy of their proposed sur-reply to the
motion.
Hutchison’s Motion for Leave to Amend Answer was filed well
before the case management deadline for amendments of pleadings;
however, it was filed more than 21 days after the Original Answer
was filed.
Therefore, the defendant may amend his Answer “only
with the opposing party’s written consent1 or the court’s leave.”
Fed.R.Civ.P. 15(a)(1)(B) & 15(a)(2). “The court should freely give
leave when justice so requires.”
Fed.R.Civ.P. 15(a)(2).
The Fifth Circuit has devised a four-part test for deciding
1
The plaintiffs do not consent to the proposed Amended
Answer.
3
whether leave to amend should be allowed: the court must consider
(1) the explanation for the failure to timely move for leave to
amend; (2) the importance of the amendment; (3) potential prejudice
in
allowing
continuance
the
to
amendment;
cure
such
and
(4)
prejudice.
the
S
availability
&
W
Enter.,
of
LLC
a
v.
Southtrust Bank of Alabama, 315 F.3d 533, 536 (5th Cir. 2003).
In his motion for leave to amend, Hutchison states that in his
original
Answer
he
mistakenly
admitted
the
paragraphs 12 and 13 of the plaintiffs’ Complaint.
allegations
in
He also states
that he informed plaintiffs’ counsel of the mistake “within one or
two days of discovering it.”
(Docket entry 32, p. 1).
Paragraph 12 of the Complaint alleges:
Between July and September, 2014, Day Dreams
notified Hutchison that it had identified nineteen (19)
additional mineral tracts in the TMS that were available
for leasing.
Consistent with the terms of the oral
contract, Hutchison instructed Day Dreams to attempt to
acquire leases on fifteen (15) of these mineral interests
on his behalf at lease prices agreed to by Hutchison,
contingent upon good and marketable title. Accordingly,
Day Dreams and Lone Wolf, as brokers and agents for
Hutchison, contacted the owners of the available mineral
interests to finalize lease terms. By the last week of
October, 2014, Day Dreams and/or its agent, Lone Wolf,
for Hutchison's benefit, had entered into and/or obtained
lease commitments for ten (10) of these mineral tracts
contingent only on good and marketable title. Of the
remaining five (5) tracts requested by Hutchison, by that
time three (3) of the mineral owners had not leased or
committed to lease, and two (2) of the mineral owners
granted options to lease but not lease commitments.
Complaint, ¶ 12.
Regarding paragraph 12, defendant states in his motion to
amend that he “cannot admit all the allegations of paragraph 12
4
because (1) he lacks knowledge about whether Day Dreams and Lone
Wolf
contacted
the
owners
of
available
mineral
interests
to
finalize lease terms; and (2) he lacks knowledge about whether, by
the last week of October 2014, Day Dreams or Lone Wolf entered into
or
obtained
lease
commitments
for
certain
mineral
tracts.”
Further, he avers that he is “trying to find out what discussions
Day Dreams or Lone Wolf had with mineral owners ... when, if ever,
Day Dreams or Lone Wolf entered into ‘lease commitments’ for
certain tracts ... [and] what the ‘lease commitments’ were.”
(Docket entry 32, p. 3).
Paragraph 13 of the Complaint alleges:
In the last week of October, 2014, Ogden spoke with
Hutchison regarding payment for the ten mineral leases
that Hutchison had instructed Day Dreams to acquire and
which had been committed to date. During those
conversations, Hutchison instructed Ogden to “stop
leasing.” As instructed, Ogden, Day Dreams and Lone Wolf
ceased their efforts to locate available TMS mineral
interests, and ceased their efforts to acquire leases
with the five (5) mineral owners who had not yet entered
into leases or lease commitments for Hutchison’s benefit.
However, by this time, on Hutchison’s instructions, Day
Dreams and/or Lone Wolf had leased or committed to lease,
for Hutchison’s benefit, ten (10) of the mineral tracts
totaling 462.99 net mineral acres.
Complaint, ¶ 13.
As for paragraph 13, defendant states in his motion to amend
that he cannot admit all the allegations in paragraph 13 because he
“does not recall speaking with Ogden the last week of October
2014.”
He does recall telling Ogden to stop leasing, and believes
that their conversation happened no later than the last week of
5
October, and perhaps weeks earlier than that. (Docket entry 32, p.
3).
In support of his position that his admissions in the Original
Answer were a mistake, Hutchison states that in February of 2015,
months before filing his Answer, he told Ogden that he (Hutchison)
was not responsible for any of the leases at issue because the
leases were closed on after Hutchison told Ogden to stop.
Also, a
footnote in Hutchison’s Answer states that “Hutchison maintains
that he told Ogden to stop leasing before the last week in
October.”
Thus, Hutchison maintains, both of these positions are
inconsistent with admitting paragraphs 12 and 13 of the plaintiffs’
Complaint.
Hutchison also admitted the allegations in paragraphs 17 and
27 of plaintiffs’ Complaint.
His proposed Amended Answer proposes
clarification that Hutchison denies that the amounts mentioned in
the December 30, 2014, demand letter from Day Dreams to Hutchison
were due.
The proposed Amended Answer also withraws Hutchison’s
counterclaim, which would moot Day Dreams’ motion to dismiss the
counterclaim.
Finally, Hutchison states that the amendments would
“moot most of Plaintiffs’ recently filed motion for partial summary
judgment.”
(Docket entry 32, p. 3).
The Court accepts defendant’s explanation of mistake in the
Original Answer, and finds that the mistake was called to the
plaintiffs’ attention as soon as it was discovered.
“The Federal
Rules reject the approach that pleading is a game of skill in which
6
one misstep by counsel may be decisive to the outcome and accept
the principle that the purpose of pleading is to facilitate a
proper decision on the merits.”
Conley v. Gibson, 355 U.S. 41, 48
(1957)(quoted in Foman v. Davis, 371 U.S. 178, 181 (1962)).
Furthermore, the defendant’s motion was filed well within the
deadline for amending pleadings, and the parties are in the very
early stages of discovery.
The Court further finds that any
prejudice to the plaintiffs is so slight it does not justify denial
of the defendant’s motion.
The Court shall grant the defendant’s Motion for Leave to
Amend Answer.
The plaintiffs’ Motion to Dismiss Defendant’s
Counterclaim shall be denied as moot.
The plaintiffs’ Motion for
Partial Summary Judgment shall be denied without prejudice, and the
plaintiffs shall be granted leave to file a new Motion for Partial
Summary
Judgment
after
the
Amended
Answer
is
filed.
The
defendant’s motion to file a Sur-Reply to the plaintiffs’ reply
brief in support of their motion for partial summary judgment shall
therefore be denied as moot.
Accordingly,
IT IS HEREBY ORDERED that the defendant Charles D. Hutchison’s
Motion for Leave to Amend Answer (docket entry 32) is GRANTED, and
the defendant shall file his Amended Answer upon receipt of this
Order;
FURTHER ORDERED that plaintiffs Day Dreams Resources, LLC, and
Jerry P. Ogden’s Motion to Dismiss Defendant’s Counterclaim (docket
7
entry 22) is DENIED AS MOOT;
FURTHER
ORDERED
that
the
plaintiffs’
Motion
for
Partial
Summary Judgment (docket entry 26) is DENIED WITHOUT PREJUDICE, and
the plaintiffs may file a new motion for partial summary judgment
upon the filing of the Amended Answer;
FURTHER ORDERED that the defendant’s motion to file a SurReply to the plaintiffs’ reply brief in support of their motion for
partial summary judgment (docket entry 41) is DENIED AS MOOT.
SO ORDERED, this the 28th day of October, 2015.
/s/ David Bramlette
UNITED STATES DISTRICT JUDGE
8
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