Millennium Drilling Co., Inc. v. House-Meyers et al
Filing
80
ORDER Denying 32 Defendants' Motion to Dismiss and Denying 35 Defendants' Motion for More Definite Statement. Signed by Judge Miranda M. Du on 05/16/2013. (Copies have been distributed pursuant to the NEF - AC)
1
2
3
4
5
6
UNITED STATES DISTRICT COURT
7
DISTRICT OF NEVADA
8
***
9
MILLENIUM DRILLING CO., INC.,
Plaintiff,
10
v.
11
12
BEVERLY HOUSE-MEYERS
RECOVABLE TRUST, et al.,
Case No. 2:12-cv-00462-MMD-CWH
ORDER
(Defs.’ Motion to Dismiss – dkt no. 32;
Defs.’ Motion for More Definite Statement –
dkt. no. 35.)
13
Defendants.
14
15
I.
SUMMARY
16
Before the Court are Defendants’ Motion to Dismiss (dkt. no. 32) and Motion for
17
More Definite Statement (dkt. no. 35). For the reasons stated below, both motions are
18
denied.
19
II.
BACKGROUND
20
A.
21
Plaintiff Millennium Drilling Co, Inc. (“Millennium”) seeks payment related to
22
Defendants’ investments in certain oil and gas companies. Millennium alleges that
23
Defendants Beverly House-Meyers Revocable Trust, Grace Mae Properties, LLC, Molly
24
Hamrick, Robert Hamrick, Hamrick Trust, and Beverly House-Meyers acquired working
25
interests in oil and gas investments and became general partners in the Falcon, Colt,
26
and Lion drilling partnerships (collectively, the “drilling partnerships”). These partnerships
27
were engaged in oil and gas exploration. Defendants allegedly invested in the drilling
28
partnerships with cash contributions as well as subscription note, security, and pledge
Factual History
1
agreements (the “notes”).1 The notes included language allowing the notes to be
2
assigned by the drilling partnerships to Millennium.
3
Through their managing partner Montcalm Co., LLC (“Montcalm”), the drilling
4
partnerships acquired interests in portions of portfolios of oil and gas leases and lands
5
assembled by Third Party Defendant Patriot Exploration, including properties located in
6
Texas. The drilling partnerships then contracted with Millennium for the drilling of the
7
related wells. For example, Falcon Drilling Partnership executed an agreement with
8
Millennium in which Falcon pledged all of its partners’ subscription notes to Millennium
9
as security for Falcon’s future payment obligations. Millennium later claimed that Falcon
10
had defaulted according to the terms of the agreement and that Defendants owed the
11
capital contributions that they had pledged as security.
12
B.
Procedural History
13
On March 19, 2012, Millennium filed a complaint against Defendants in the
14
District of Nevada. The complaint alleged breach of contract, unjust enrichment, and
15
breach of the duty of good faith and fair dealing. Defendants raised as affirmative
16
defenses (1) that Millennium had committed fraud with respect to the contract; and (2)
17
that the contract was unconscionable and illegal. With leave of the Court, Millennium
18
filed its First Amended Complaint (“FAC”) on November 26, 2012.
19
On June 6, 2012, Hamrick, House-Myers, and R&M filed a complaint against
20
Patriot Exploration, among others, but not including Millennium, in Texas state court
21
based on the same underlying transactions giving rise to Millennium’s lawsuit. Patriot
22
Exploration removed the case to the Southern District of Texas. Hamrick, House-Myers,
23
and R&M allege (1) breach of fiduciary duty; (2) fraud/fraud in the inducement; (3)
24
///
25
26
27
28
1
Third Party Defendants Robert and Elizabeth Holt acted as Defendants’ financial
advisors from 2003 to 2008. The Holts allegedly introduced Defendants to Feldman in
2004 and informed Defendants about the investment opportunity in the drilling
partnerships.
2
1
fraudulent nondisclosure; (4) negligent misrepresentation; (5) breach of contract; (6)
2
imposition of constructive trust; and (7) conspiracy.
3
On January 15, 2013, Hon. Melinda Harmon, United States District Judge for the
4
Southern District of Texas, granted Patriot Exploration’s Motion to Transfer Venue,
5
determining that the Nevada and Texas actions involved substantially similar issues.
6
(Dkt. no. 67 at 6.)
7
On May 6, 2013, this Court consolidated the two related cases into the first-filed
8
Nevada action. (Dkt. no. 79.) The Court now addresses Defendants’ Motion to Dismiss
9
and Motion for More Definite Statement. (Dkt. nos. 32 and 35.)
10
III.
MOTION TO DISMISS
11
Defendants moved for the Court to dismiss this action in favor of the second-filed
12
Texas action. Because the two cases have been consolidated, this Motion is denied as
13
moot.
14
IV.
MOTION FOR MORE DEFINITE STATEMENT
15
A.
Legal Standard
16
A motion for more definite statement pursuant to Rule 12(e) attacks “the
17
unintelligibility of the complaint, not simply the mere lack of detail[.]” Neveau v. City of
18
Fresno, 392 F. Supp. 2d 1159, 1169 (E.D. Cal. 2005). Courts will deny the motion if the
19
complaint is specific enough to give notice to the defendants of the substance of the
20
claim asserted. Id. A Rule 12(e) motion should be granted only if the complaint is “so
21
vague or ambiguous that the opposing party cannot respond, even with a simple denial,
22
in good faith or without prejudice to himself.” Cellars v. Pac. Coast Packaging, Inc., 189
23
F.R.D. 575, 578 (N.D. Cal. 1999).
24
“Rule 12(e) is designed to strike an unintelligibility rather than want of detail . . . .
25
A motion for a more definite statement should not be used to test an opponent’s case by
26
requiring him to allege certain facts or retreat from his allegations.” Neveau, 392 F.
27
Supp. 2d at 1169 (quoting Palm Springs Med. Clinic, Inc. v. Desert Hosp., 628 F. Supp.
28
454, 464-65 (C.D. Cal. 1986)). If the facts sought by a motion for a more definite
3
1
statement are obtainable by discovery, the motion should be denied. See McHenry v.
2
Renne, 84 F.3d 1172, 1176 (9th Cir. 1996). “This liberal standard of pleading is
3
consistent with [Rule] 8(a)(2) which allows pleadings that contain a ‘short and plain
4
statement of the claim.’ Both rules assume that the parties will familiarize themselves
5
with the claims and ultimate facts through the discovery process.” Neveau, 392 F. Supp.
6
2d at 1169 (citing Sagan, 874 F. Supp. at 1077 (“Motions for a more definite statement
7
are viewed with disfavor and are rarely granted because of the minimal pleading
8
requirements of the Federal Rules.”)).
B.
9
The Court determines that the FAC is not so vague that Defendants cannot
10
11
Analysis
respond. See Cellars, 189 F.R.D. at 578.
12
Defendants’ objections to the FAC alternatively refute Millennium’s allegations or
13
request more information about the allegations. Yet Defendants’ requests for clarification
14
demonstrate that they understand the nature of Millennium’s allegations. For example,
15
Defendants ask for clarification of paragraph 41 of the FAC, which states “upon
16
information and belief, in early 2010, Falcon became insolvent and did not have
17
sufficient amounts of net operating revenue from oil and gas wells to pay for on-going
18
partnership expenses.” Defendants assert that “it is not clear that Falcon became
19
insolvent . . . .” (Dkt. no. 35 at 4.) However, this fact is obtainable via discovery, and
20
Millennium need not clarify this point. See Renne, 84 F.3d at 1176.
21
In fact, Defendants do not claim they are unable to understand Millennium’s
22
allegations and legal claims. Millennium need not plead every allegation in exact detail,
23
nor must it attach every referenced document to the FAC. See Neveau, 392 F. Supp. 2d
24
at 1169. The Court determines that the FAC is specific enough to give notice to
25
Defendants of the substance of the claims asserted. See id. The Motion is accordingly
26
denied.
27
///
28
///
4
1
2
3
4
5
6
V.
CONCLUSION
IT IS HEREBY ORDERED that Defendants’ Motion to Dismiss (dkt. no. 32) is
DENIED.
IT IS FURTHER ORDERED that Defendants’ Motion for More Definite Statement
(dkt. no. 35) is DENIED.
DATED THIS 16th day of May 2013.
7
8
MIRANDA M. DU
UNITED STATES DISTRICT JUDGE
9
10
11
12
13
14
15
16
17
18
19
20
21
22
23
24
25
26
27
28
5
Disclaimer: Justia Dockets & Filings provides public litigation records from the federal appellate and district courts. These filings and docket sheets should not be considered findings of fact or liability, nor do they necessarily reflect the view of Justia.
Why Is My Information Online?