837 F.2d 423 (10th Cir. 1988), 85-2634, Greenwood Explorations, Ltd. v. Merit Gas and Oil Corp., Inc.

Docket Nº:85-2634.
Citation:837 F.2d 423
Party Name:GREENWOOD EXPLORATIONS, LTD., Plaintiff/Appellee, v. MERIT GAS AND OIL CORPORATION, INC., Benmor International, Inc., and Sam Mor, a/k/a Sam Merit, a/k/a Sam Moalen, an individual, Defendants/Appellants.
Case Date:January 14, 1988
Court:United States Courts of Appeals, Court of Appeals for the Tenth Circuit
 
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Page 423

837 F.2d 423 (10th Cir. 1988)

GREENWOOD EXPLORATIONS, LTD., Plaintiff/Appellee,

v.

MERIT GAS AND OIL CORPORATION, INC., Benmor International,

Inc., and Sam Mor, a/k/a Sam Merit, a/k/a Sam

Moalen, an individual, Defendants/Appellants.

No. 85-2634.

United States Court of Appeals, Tenth Circuit

January 14, 1988

Page 424

H.I. Aston, of Tulsa, Okl., for defendants/appellants.

Daniel Doris, of Tulsa, Okl., for plaintiff/appellee.

Before MOORE and BARRETT, Circuit Judges, and ANDERSON, [*] District Judge.

ALDON J. ANDERSON, Senior District Judge.

INTRODUCTION

This case is an appeal from the District Court's denial of defendants' Motion to Vacate Judgment under Rule 60(b) or in the alternative, Motion for New Trial under Rule 59. On April 5, 1985, the District Court for the Northern District of Oklahoma, Thomas R. Brett, Judge, entered its Findings of Fact and Conclusions of Law in the present case, holding in plaintiff's favor and awarding plaintiff $11,180,000.00 in damages, plus costs and attorney fees. Throughout the litigation, defense of the case was virtually non-existent due to defendants' failure to cooperate--or even communicate--with their hired counsel. Defense counsel appeared at trial but was unable to present any serious arguments because of his lack of familiarity with the case, through no fault of his own. Upon the court's entry of judgment in plaintiff's favor, defendants requested that the court either vacate the judgment or grant a new trial. Defendants argued before the District Court, first, that they had not been heard at trial because of mistake, inadvertence, surprise and excusable neglect, and second, that the damages awarded plaintiff were inconsistent with both Oklahoma law and the parties' agreement. The court denied defendants' motions, finding that defendants were guilty of gross carelessness in their handling of the case. It is from that ruling that defendants now appeal.

FACTS

On December 28, 1983, plaintiff filed its Complaint alleging that on September 22, 1981, it entered into a contract with defendants whereby defendants agreed to drill seven oil wells and have them completed by November 18, 1981. The agreement provided for liquidated damages to be taken from production revenues, in the amount of $1,000.00 per uncompleted well per day. (Agreement, paragraph 16.) When the November 18 deadline passed with none of the wells completed, damages began accruing at the rate of $7,000.00 per day until May 1, 1982, when one well was completed. (Trial Transcript, p. 9) Damages thereafter accrued at the rate of $6,000.00 per day until the filing of the Complaint, at which time the six wells were still uncompleted. Plaintiff's Amended Complaint requested liquidated damages from the uncompleted wells amounting to $4,760,000.00. 1

Defendants filed an Answer which emphasized that the $1,000.00 per well per day was to be taken from the production revenues. Since there were not yet any such revenues, defendants argued, no liability existed under the liquidated damages clause. 2

Page 425

Trial was scheduled for November 26, 1984. On November 21, defense counsel, Kenneth G. Shouse, moved the court for permission to withdraw from the case. The court granted Shouse's motion and, also on November 21, Eric W. Spooner entered as defendants' new counsel. In...

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