ENDEAVOR ENERGY RESOURCES, L.P. v. GATTO & REITZ, LLC

Filing 269

ORDER denying 184 Motion for Summary Judgment; denying 190 Motion for Summary Judgment; denying 192 Motion for Summary Judgment; denying 193 Motion for Summary Judgment; denying 199 Motion for Summary Judgment; denying 206 Motion for Summary Judgment; denying 212 Motion for Summary Judgment; denying 216 Motion for Summary Judgment; granting but moot 222 Motion and granting but moot 267 Motion to Amend/Correct. Signed by Judge Bill R. Wilson on 7/9/2018. (kly)

IN THE UNITED STATES DISTRICT COURT
WESTERN DISTRICT OF PENNSYLVANIA
PITTSBURGH DIVISION
ENDEAVOR ENERGY RESOURCES, L.P.
VS.

PLAINTIFF

2:13-CV-00542-BRW

GATTO & REITZ, LLC

DEFENDANT/
THIRD-PARTY PLAINTIFF

VS.
RIDEC, INC., ET AL.

THIRD-PARTY DEFENDANT
ORDER

Pending are numerous motions for summary judgement. For the reasons set out below,
all the motions (Doc. Nos. 184, 190, 192, 193, 199, 206, 212, 216) are DENIED. The Motions
to Correct Concise Statement of Facts (Doc. Nos. 222, 267) are GRANTED, but MOOT.
I.

BACKGROUND
Third-Party Defendant James Ellis is an oil and gas landman, employed by Marcellus

Mineral Group (“MMG”) who brokers deals between oil companies and landowners. Defendant
Gatto & Reitz, LLC was a law firm used by Mr. Ellis. On April 29, 2011, Plaintiff distributed
funds Defendant to pay for an oil and gas lease (“OGL”) brokered by Mr. Ellis. The funds were
sent to the law firm because Mr. Ellis did not know his company account number, and Plaintiff
was ready to send funds. After that deal fell through, Defendant held the money in its account to
be used as payment in a possible future deal.
Next, Mr. Ellis brokered a deal between Plaintiff and RIDEC. On May 9, 2012,
Defendant distributed the funds to RIDEC and the next day distributed funds to Mr. Ellis, care of
MMG. Plaintiff claims that it never received an acceptable lease and never gave Defendant
permission to distribute the funds.

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Plaintiff asserts claims for breach of contract, breach of fiduciary duty, conversion, fraud,
and civil conspiracy and seeks to recover the $2,702,500.00 that Defendant distributed, as well
as related damages, fees, and costs. Plaintiff also asserts that the Third-Party Defendants (Ellis,
RIDEC, and MMG) (potentially with Defendant’s support) misled Plaintiff into believing that
the lease contained Plaintiff’s demanded terms.
Defendant filed a third-party complaint against the Third-Party Defendants seeking
indemnification and a declaration that there was a binding agreement between Plaintiff and
RIDEC. Defendant also asserts that if there was no binding agreement, the Third-Party
Defendants have been unjustly enriched.
RIDEC contends that, when this case was filed, it had been operating under the terms of
the lease for over a year and was unaware that there were issues with the lease, and this case is
based, simply, on Plaintiff’s buyer’s remorse.
II.

SUMMARY JUDGMENT STANDARD

Summary judgment is appropriate only when there is no genuine issue of material fact, so
that the dispute may be decided on purely legal grounds.1 The Supreme Court has established
guidelines to assist trial courts in determining whether this standard has been met:
The inquiry performed is the threshold inquiry of determining whether there is the
need for a trial – whether, in other words, there are any genuine factual issues that
properly can be resolved only by a finder of fact because they may reasonably be
resolved in favor of either party.2
Only disputes over facts that may affect the outcome of the suit under governing law will
properly preclude the entry of summary judgment.3

1

Fed. R. Civ. P. 56.

2

Anderson v. Liberty Lobby, Inc., 477 U.S. 242, 250 (1986).

3

Anderson, 477 U.S. at 248.
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III.

DISCUSSION
Numerous material facts in this case disputed. This is to be expected when a multi-

million dollar deal was being negotiated, only orally, between an owner of an oil and gas
company (allegedly trying to avoid the attention of his in-house counsel) and a landman.
Complicating matters more is the owner depositing money for the lease purchase (and bonuses
and payments to the landman) into the landman’s lawyer’s IOLTA account, because the landman
did not know his account number at the time Plaintiff was itching to send the money.
Additionally, the owner, allegedly, sent a signature page to the landman before seeing the entire
lease and agreeing to all the terms in the agreement. Ultimately, the landman’s lawyer released
the money (presumably with the understanding that the release was authorized), and the landman
and property owner were paid. However, the oil and gas company now claims there was never a
valid lease – despite internal correspondence that would indicate otherwise. Additionally, the oil
and gas company never acted on the lease and now, six years later, wants its money back.
In short, this is a soup sandwich. And the parties’ extensive filings do not make things
any clearer. There’s lots of hyperbole (e.g., “ever-mutating and twisted theory of the case”), that
overlooks the fact that the entire case rests on disputed facts. All of the claims are based on
whether there was a escrow agreement, a valid lease, and authorization to release funds.
Ultimately, it comes down to this: who will the jury believe, based on testimony, credibility,
surrounding circumstances, and the actions of the parties. While some causes of action may be
resolved after the presentation of evidence, I find that, at this point, it’s better to see how things
shake out in front of the jury.

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CONCLUSION
Accordingly, Third-Party Defendant MMG and Ellis’s Motion for Summary Judgment
(Doc. No. 184); Defendant’s Motion for Summary Judgment re: Third-Party Defendant’s
Counterclaims (Doc. No. 190); Plaintiff’s Motion for Summary Judgment re: Cross-Claim
Against James Ellis and Marcellus Minerals Group (Doc. No. 192); Defendant’s Motion for
Summary Judgment on Plaintiff’s Claims (Doc. No. 193); Plaintiff’s Motion for Summary
Judgment on It’s Unjust Enrichment Claim against Ridec (Doc. No. 199); Plaintiff’s Motion for
Summary Judgement re: Defendant as an Escrow Agent (Doc. No. 212); Plaintiff’s Motion for
Summary Judgment re: Ridec’s Counterclaims (Doc. No. 216); and Third-Party Defendants’
Motion for Summary Judgment (Doc. No. 206) are DENIED.
The Motions to Correct Concise Statement of Facts (Doc. Nos. 222, 267) are
GRANTED, but MOOT.
IT IS SO ORDERED this 9th day of July, 2018.
/s/ Billy Roy Wilson
UNITED STATES DISTRICT JUDGE

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