In re Holyoak

• Decision Date: 10 June 2016
• Docket Number: No. 114,836,114,836
• Citation: 304 Kan. 644,372 P.3d 1205
• Parties: In the Matter of Kerry Dale Holyoak, Respondent.
• Court: Kansas Supreme Court

304 Kan. 644

372 P.3d 1205

In the Matter of Kerry Dale Holyoak, Respondent.

No. 114,836

Supreme Court of Kansas.

Opinion filed June 10, 2016

Kate F. Baird, Deputy Disciplinary Administrator, argued the cause, and Alexander M. Walzcak, Deputy Disciplinary Administrator, and Stanton A. Hazlett, Disciplinary Administrator, were on the formal complaint for the petitioner.

Kerry Dale Holyoak, respondent, argued the cause pro se.

ORIGINAL PROCEEDING IN DISCIPLINE

Per Curiam:

This is an original proceeding in discipline filed by the office of the Disciplinary Administrator against the respondent, Kerry Dale Holyoak, of Leawood, an attorney admitted to the practice of law in Kansas in 1989.

On March 23, 2015, the office of the Disciplinary Administrator filed a formal complaint against the respondent alleging violations of the Kansas Rules of Professional Conduct (KRPC). The respondent filed an answer on April 9, 2015. A hearing was held on the complaint before a panel of the Kansas Board for Discipline of Attorneys on July 1, 2015, where the respondent was present and was represented by counsel. The hearing panel determined that respondent violated KRPC 5.4(d)

(2015 Kan. Ct. R. Annot. 639) (professional independence of a lawyer); 7.1(a) (2015 Kan. Ct. R. Annot. 653) (communications concerning a lawyer's services); 8.4(c) (2015 Kan. Ct. R. Annot. 672) (engaging in conduct involving misrepresentation); and 8.4(g) ( 2015 Kan. Ct. R. Annot. 672) (engaging in conduct adversely reflecting on lawyer's fitness to practice law).

Upon conclusion of the hearing, the panel made the following findings of fact and conclusions of law, together with its recommendation to this court:

“Findings of Fact

....

“8. Wilson County Holdings, LLC (WCH), a subsidiary of Stranded Oil Resources Corporation based in Austin, Texas, developed a project to revitalize an oil field located in Fredonia, Kansas. To carry out the project, they sought to purchase mineral rights within the City of Fredonia from individual lot owners, based on the size of each lot.

“9. On January 30, 2013, Donald Missey, Project Manager for WCH, sent the respondent and his wife an offer to purchase the mineral rights associated with his residential property and commercial property. The total mineral purchase price for the respondent's two properties totaled $938.52.

“10. On February 1, 2013, the respondent and his wife, Kerry I. Holyoak, sent Mr. Missey a letter rejecting WCH's offer. The respondent and his wife made a counter offer. The offer to lease their mineral rights for an annual payment of $34,450 plus .689% of revenues in excess of $5,000,000 annually. In addition, the respondent's letter provided:

‘To date we have chosen not to share our research, data or any information related to this offer with anyone. We recognize the sensitivity of such a proposal and would agree to sign a confidentiality and non-disclosure agreement. This counterproposal is valid until 5:00 PM on Friday, February 15, 2013.’

“11. On February 12, 2013, Mr. Missey responded to the respondent's offer. Mr. Missey told the respondent that he had passed their offer on to their management team for evaluation. It appears that WCH did not accept or reject the respondent's counter offer during the time allotted.

“12. On April 29, 2013, the respondent and his wife wrote to Mr. Missey again. In that correspondence, they clearly stated they were only willing to consider leasing their mineral rights. They made a new offer. According to their April 29, 2013, letter, they were willing to accept a lease signing bonus of $35,156.25 plus annual royalties of 3/16 for their relative portion of the pooled units [ (gross revenue x .1875) x .05]. In addition to making an additional offer, the respondent and his wife posed a number of detailed questions regarding the project to Mr. Missey at that time.

“13. On May 17, 2013, Mr. Missey wrote to the respondent and his wife and rejected their latest offer. Through Mr. Missey, WCH made another proposal to the respondent and his wife.

“14. On June 3, 2013, the respondent and his wife made a verbal presentation to the mayor and commissioners of Fredonia at the regularly scheduled City Council meeting. They expressed their concerns about the mineral rights of the residents of Fredonia, Kansas, related to the project being conducted by WCH.

“15. On August 5, 2013, the respondent and his wife wrote to the Fredonia, Kansas, City Manager and Mr. Missey. The respondent provided a proposed franchise agreement. According to the respondent, he and his wife ‘discussed this proposed franchise agreement with numerous citizens' who were ‘willing to sign a petition or vote in a special election.’ Also according to the respondent, the proposed franchise agreement sought to accomplish the following:

‘1. Pool the mineral rights of the residents of the entire city [sic ] of Fredonia, Kansas;

‘2. Authorize a lease of said mineral rights to Wilson County Holdings, LLC for the purpose of horizontally drilling under the city [sic ] for the exploration and production of oil and gas minerals;

‘3. Require Wilson County Holdings, LLC to compensate each landowner their proportionate share of a 3/16 royalty on production of all gas and oil gross revenues;

‘4. Require Wilson County Holdings, LLC to properly survey the entire city [sic ] of Fredonia in order to accurately determine the square footage allocation of each parcel owner, in an effort to illustrate an accurate representation of the mineral owner's percentage of the overall pool, for future compensation purposes;

‘5. Establish procedures for responding to emergencies;

‘6. Require specific performance from Wilson County Holdings, LLC whenever there is an incident of damage reported that has been caused by their drilling and exploration activities;

‘7. Revert ownership of mineral rights that have been sold to Wilson County Holdings during the period January 2011 to date, to the original surface owner, and treat payments made for said sales, as advances on future royalties.’ “16. On May 16, 2014, the respondent and his wife wrote to WCH. In the letter, the respondent and his wife indicated that they had reconsidered their position and would agree to sell the mineral rights associated with their residential property to WCH. However, they indicated their interest in selling the mineral rights was contingent upon WCH purchasing their home at a price of $250,000 plus moving expenses. The respondent and his wife indicated that they were only interested in leasing the mineral rights associated with their commercial property.

“17. On May 29, 2014, Bill Metzler met with the respondent and his wife at their residence. The respondent and his wife told Mr. Metzler that if WCH would pay them $1.9 million, they would agree not to pursue any legal action against WCH due to its underground drilling project. To memorialize that agreement, the respondent and his wife presented Mr. Metzler with a ‘Covenant Not to Sue’ and ‘Purchase Contract.’

“18. Also during that meeting, the respondent and his wife made oral statements and representations concerning the transactions proposed. Mr. Metzler memorialized the respondent's statement in the form of an affidavit, which provided as follows:

‘a. Kerry Dale Holyoak is legal counsel to 50 local landowner clients who have engaged him “to bring the company down” and “stop the project”;

‘b. The Holyoaks prefer to enroll their children in private school and relocate Kerry Dale Holyoaks' [sic ] law practice in Kansas City but need WCH's help [sic ] finance that move;

‘c. In exchange for payment of $1.9 million the Holyoaks would agree to leave the town “quickly and quietly”; ‘d. The $1.9 million dollar [sic ] payment to KWADCO, a Bahamas Corporation, via an offshore wire to an unidentified account at the Royal Bank of Canada;

‘e. The landowners opposed to WCH will not do anything if the Holyoaks “don't take the lead for them”; and

‘f. The Holyoaks will only sign the covenant not to sue if WCH purchases Kerry Dale Holyoak's law practice in addition to the Holyoaks' mineral rights and house, and if WCH refuses, then the Holyoaks will commute from Kansas City to ensure its allies “stand and fight” against WCH.’

The respondent later explained that he was not attempting to sell his law practice. Rather, he agreed to sell his property and in order to value the property, he took into account the value of his law practice.

“19. The ‘Covenant Not to Sue’ prepared by the respondent and given to Mr. Metzler provides as follows:

‘COVENANT NOT TO SUE

‘THIS Agreement made and entered this _____day of ____________, 2014, by and between Kerry Dale Holyoak and Kerry Irene Holyoak, a married couple (hereinafter referred to as PLAINTIFFS), located at 530 N. 10th Street, Fredonia, KS 66736 and Wilson County Holdings, and Stranded Oil (hereinafter referred to as DEFENDANTS), located at 1135 N 15th St., Fredonia, KS 66736.

‘In exchange for the complete compliance of all terms of the PURCHASE CONTRACT for the sale of all real estate owned by the PLAINTIFFS within Wilson County, Kansas, plus the cost of professional movers, and additional consideration in the amount of $____________ (_________millions) paid to (KWADCO, a Bahamas Corporation) the chosen entity to receive compensation for and on behalf of Kerry Dale Holyoak and Kerry Irene Holyoak, by Wilson County Holdings. (Funds to be paid by wire transfer to the Royal Bank of Canada, Account No. ________________.)

‘WITNESSETH:

‘1. PLAINTIFFS, have a cause of action against DEFENDANTS for fraud and misrepresentation with regard to the manner in which DEFENDANTS coerced mineral purchases and mineral leases from the residents within the city limits of Fredonia, Kansas.

‘2. PLAINTIFFS understand that should they initiate a lawsuit against DEFENDANTS for their claims it would cause no less than fifty additional plaintiffs to come forward and file similar lawsuits for similar claims. The potential number of plaintiffs could escalate to

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