KC Ravens, LLC v. Micah Energy Corporation et al

Filing 64

JUDGMENT in favor of KC Ravens, LLC against Micah Energy Corporation; in favor of KC Ravens, LLC against Mike Snell. Signed on February 9, 2015 by Chief District Judge Greg Kays. (Lehr, Jonathan)

IN THE UNITED STATES DISTRICT COURT FOR THE
WESTERN DISTRICT OF MISSOURI
WESTERN DIVISION
KC RAVENS, LLC,
Plaintiff,
v.
MICAH ENERGY CORPORATION and
MIKE SNELL,
Defendants.

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Case No. 4:13-00870-CV-DGK

JUDGMENT
This case comes before the Court for a damages hearing pursuant to the Court’s Order
(Doc. 56). The Court held this hearing on February 5, 2015. Plaintiff KC Ravens, LLC (“KC
Ravens”) appeared by and through its managing member Vince Hodes and its attorneys John
Mullen and Nick Hillyard. Defendants Micah Energy Corporation (“Micah”) and Mike Snell
(“Snell”) failed to appear. After considering the evidence, including the testimony of Mr. Hodes
and the plaintiff’s agent, Michael Tighe Greenhalgh, and hearing argument from Plaintiff’s
counsel, John Mullen, the Court finds as follows:
1.

Plaintiff KC Ravens is a Kansas limited liability company that is located and

operates in Kansas City, Missouri. KC Ravens’ sole member is Vince Hodes, a Kansas citizen.
Defendant Micah is an Arizona corporation with its principal place of business there. Defendant
Snell resides in Texas. KC Ravens filed this lawsuit in the Circuit Court of Jackson County,
Missouri, and Snell removed the case to federal court by invoking the Court’s diversity
jurisdiction. Before removal, the Jackson County Circuit Court entered an interlocutory order of
default against Defendant Micah.

2.

This Court previously made an entry of default against Snell as a sanction under

Federal Rule of Civil Procedure 37(b)(2)(A) for failing to respond to Plaintiff’s discovery
requests. The Court also noted that entry of default was also appropriate under Rule 55 because
the record demonstrated that Snell had “failed to plead or otherwise defend.” The Court further
held that it would enter a default judgment against Snell as soon as it held a hearing to determine
the amount of damages. See Entry of Default By the Clerk (Doc. 53); Order Granting in Part
Motion for Sanctions (Doc. 55).
3.

The Court finds and holds that Micah had a valid contract with KC Ravens to

guarantee a $1 million loan, that Micah breached its contract with KC Ravens to guarantee this
loan, and that due to this breach, KC Ravens sustained damages of more than $1.5 million, but
Micah’s liability is capped under the contract at $1.5 million. These damages include unpaid
principal and interest, as well as attorneys’ fees, costs, and expenses incurred in prosecuting this
action.
4.

The Court finds and holds that Snell tortiously induced KC Ravens into making

this loan by making fraudulent misrepresentations that KC Ravens relied on in deciding to make
the loan. As a result of Snell’s fraudulent misrepresentations, KC Ravens sustained a loss of
principal in the amount of $1 million and loss of interest in the amount of $1 million, as well as
attorneys’ fees, costs, and expenses incurred in prosecuting this action.
5.

During the damages hearing, Plaintiff’s counsel requested an award of attorneys’

fees pursuant to the parties’ contract and submitted Exhibit M, which the Court accepted,
detailing these fees. The Court construes counsel’s request and the exhibit as a motion under
Rule 54(d)(2) for attorneys’ fees. The Court finds that KC Ravens incurred $47,335.00 in
attorneys’ fees and expenses of $942.81 in prosecuting this action. The Court holds these fees

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and expenses are fair and reasonable. These fees include $562.50 in attorneys’ fees the Court
ordered Snell to pay as a sanction for an earlier discovery violation. See Order Granting Motion
to Compel (Doc. 44); Order Determining Amount of Reasonable Attorneys’ Fees (Doc. 54).
6.

Defendant Mike Snell’s actions were calculating, intentional, deceitful, and

reckless, and show a conscious disregard for the rights of others, thus warranting an award of
punitive damages. Echoing the Supreme Court’s decision in BMW of North America v. Gore,
Missouri law considers three factors in determining an amount of punitive damages: “(1) the
reprehensibility of the defendant’s misconduct; (2) the disparity between the harm and the
punitive damages award; and (3) the difference between the punitive damages award and
penalties authorized or imposed in comparable cases.” Lewellen v. Franklin, 441 S.W.3d 136,
146 (Mo. 2014) (citing Gore, 517 U.S 559, 574-75 (1996)). “The reprehensibility of the conduct
is the most important factor.” Lewellen, 441 S.W.3d at 146. Reprehensibility is determined by
considering whether the harm caused was physical or economic; whether the conduct “evinced
an indifference to or a reckless disregard of the health or safety of others;” whether the victim
was financially vulnerable; whether the conduct involved repeated actions or was an isolated
incident; and whether the conduct was intentional or accidental. Id.
7.

Applying these factors to the present case, the Court finds Snell’s conduct was

reprehensible and involved repeated, intentional fraudulent conduct. However, the Court also
recognizes that his conduct did not involve physical harm, did not evince an indifference to the
physical health or safety of others, and did not involve a financially vulnerable victim. The
Court holds that an award of punitive damages equal to KC Ravens’ actual damages is
appropriate and similar to the punitive damages imposed in roughly comparable cases. See, e.g.,
State Farm Mut. Auto. Ins. Co. v. Campbell, 538 U.S. 408, 414-16,429 (2003) (holding an award

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of punitive damages at or near the amount of compensatory damages appropriate to punish
insurer’s nationwide fraud and intentional infliction of emotional distress).
WHEREFORE, IT IS ORDERED, ADJUDGED AND DECREED that Plaintiff KC
Ravens, LLC, recover the following amount from Defendant Micah Energy Corporation:
a.

Actual damages in the amount of $1,500,000.

IT IS FURTHER ORDERED, ADJUDGED AND DECREED that Plaintiff KC Ravens,
LLC, recover the following amounts from Defendant Mike Snell:
a.

Actual damages in the amount of $2,000,000;

b.

Attorneys’ fees, costs and expenses in the amount of $48,277.81; and

c.

Punitive damages in the amount of $2,000,000.

IT IS FURTHER ORDERED, ADJUDGED AND DECREED that Defendant Micah
Energy Corporation and Defendant Mike Snell shall be jointly and severally liable for the actual
damages.
IT IS FURTHER ORDERED, ADJUDGED AND DECREED that this Judgment as to
Defendant Micah Energy Corporation shall bear interest from this date forward at the rate of 9%
per annum as directed by Mo. Rev. Stat. § 408.040.2, and this Judgment as to Defendant Mike
Snell shall bear interest from this date forward at the rate of 5.25% per annum as directed by Mo.
Rev. Stat. § 408.040.3.
IT IS SO ORDERED.
Date: February 9, 2015

/s/ Greg Kays
GREG KAYS, CHIEF JUDGE
UNITED STATES DISTRICT COURT

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