Fortenbaugh v. Geostar Corp. (In re Classicstar Mare Lease Litig.)

• Court: United States District Courts. 6th Circuit. United States District Court of Eastern District of Kentucky
• Parties: IN RE CLASSICSTAR MARE LEASE LITIGATION PETER FORTENBAUGH, et al., Plaintiffs, v. GEOSTAR CORPORATION, et al., Defendants,
• Docket Number: Civil Action No. 5:08-496-JMH,Civil Action No. 5:07-cv-353-JMH,MDL No. 1877
• Decision Date: 06 April 2012

IN RE CLASSICSTAR MARE LEASE LITIGATION PETER FORTENBAUGH, et al., Plaintiffs,
v.
GEOSTAR CORPORATION, et al., Defendants,

MDL No. 1877
Civil Action No. 5:07-cv-353-JMH
Civil Action No. 5:08-496-JMH

UNITED STATES DISTRICT COURT EASTERN DISTRICT OF KENTUCKY CENTRAL DIVISION at LEXINGTON

Dated: April 6, 2012

MEMORANDUM OPINION & ORDER

This matter is before the Court upon the Motion for Summary Judgment filed by Plaintiffs Peter Fortenbaugh and Betty Lee, individually, and in their capacity as Trustees of the Peter Fortenbaugh Trust, a California Trust, against Defendant ClassicStar Financial Services, Inc. ("CFSI") [DE 142]. In light of Plaintiffs' agreement to dismiss their claims against Defendants GeoStar Corporation, GeoStar Financial Services Corporation, and Tony Ferguson, the Court considers only their arguments with respect to Count V of their Complaint in which they aver that CFSI breached the parties' Equine and Working Interest Purchase

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Agreement.¹ Defendant CFSI has filed no response. Having considered the motion, the relevant law, and the undisputed facts, the Court concludes that summary judgment in favor of Plaintiffs is appropriate and the motion shall be granted. It shall be denied as moot with respect to the arguments made as to the now-dismissed defendants.

Summary judgment is appropriate when "there is no genuine dispute as to any material fact and the movant is entitled to judgment as a matter of law." Fed. R. Civ. P. 56(a). A genuine dispute exists if "the evidence is such that a reasonable jury could return a verdict for the nonmoving party." Anderson v. Liberty Lobby, Inc., 477 U.S. 242, 248 (1986). "On summary judgment the inferences to be drawn from the underlying facts ... must be viewed in the light most favorable to the party opposing the motion." United States v. Diebold, Inc., 369 U.S. 654, 655 (1962). While the moving party must demonstrate that no genuine issue of material fact exists, in response, the non-moving party must move beyond the pleadings and present evidence in support of its claim. Celotex Corp. v. Catrett, 477 U.S. 317, 324 (1986). "Conclusory assertions, supported only by Plaintiff's own opinions, cannot withstand a motion for summary judgment." Arendale v. City

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of Memphis, 519 F.3d 587, 605 (6th Cir. 2008

In the instant matter, there are no disputed facts. Plaintiffs invested in a mare-lease business venture with ClassicStar, LLC. Then, in 2002, Plaintiffs converted a portion of their interests in the mare-lease program into gas working interests. Beginning in 2004, Plaintiffs began negotiations to sell their mare lease interests and their gas working interests. On September 30, 2005, Plaintiffs and CFSI executed a purchase agreement pursuant to which Plaintiffs would assign their mare lease and gas working interests to CFSI, which was accomplished by virtue of §§ II.A and II.B.5 of the Purchase Agreement. In exchange, CFSI agreed to pay Plaintiffs $6.1 million plus 6 percent interest, which began to accrue on September 1, 2005, according to a schedule set forth in the Purchase Agreement and to assume certain debt as specified in the Purchase Agreement. Geostar, on behalf of CFSI, made the first payment due under the Purchase Agreement, although it was made four months late. No further payments were made by CFSI or anyone on its behalf. As of today, $5,782,175.97 of the principal remains unpaid.

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