In re Platinum Oil Props., LLC

Decision Date12 August 2011
Docket NumberNo. 11–09–10832 JA.,11–09–10832 JA.
Citation465 B.R. 621
PartiesIn re PLATINUM OIL PROPERTIES, LLC, Debtor.
CourtU.S. Bankruptcy Court — District of New Mexico

OPINION TEXT STARTS HERE

Austin L. McMullen, Roger Jones, Bradley Arant Boult Cummings, LLP, Nashville, TN, Jennie D. Behles, Albuquerque, NM, for Debtor.

MEMORANDUM OPINION

ROBERT H. JACOBVITZ, Bankruptcy Judge.

This matter is before the Court on cross-motions for partial summary judgment filed by The Jicarilla Apache Nation (the “Nation”) and by the Debtor Platinum Oil Properties, LLC (“Platinum”).1 Platinum claims that it owns certain operating rights and working interests in and under two oil and gas leases: a) Jicarilla Oil and Gas Lease No. 71 covering certain real property described in Exhibit A to the Stipulation in Connection with Cross–Motion of Platinum Oil Properties, LLC for Summary Judgment on Threshold Issues (the “Stipulation”); and b) Jicarilla Oil and Gas Lease No. 363 covering other real property described in Exhibit A to the Stipulation. The Nation claims that Platinum has no operating rights or working interests in and under the two leases. (The operating rights and working interests at issue in the cross motions for summary judgment will be referred to herein as “Operating Rights and Working Interests”).2 The United States Department of Interior (“DOI”) supports the Nation's position but has not participated in the contested matters commenced by the filing of the cross motions for summary judgment except for the filing of an amicus brief on one issue. BP America Production Company takes no position on the issue before the Court based on the Stipulation under which the only rights or interests at issue are the Operating Rights and Working Interests.

PROCEDURAL HISTORY

Platinum commenced its chapter 11 bankruptcy case on March 2, 2009. On March 6, 2009, Platinum filed a Motion for an Order Authorizing Assumption of Leases. See Docket No. 10. On April 10, 2009, Platinum filed a Motion for Order Authorizing Secured and Super–Priority Financing. See Docket No. 27. On May 11, 2009, the Nation filed a Motion to Dismiss Chapter 11 Case. See Docket No. 43. The Nation objected to the two motions filed by Platinum. See Docket Nos. 18 and 38. Platinum objected to the Nation's motion to dismiss. See Docket No. 29. On June 30, 2009, Platinum filed a plan and disclosure statement. See Docket Nos. 55, 56 and 90. The Nation, the DOI and Enervest Energy Ltd. objected to the disclosure statement. See Docket Nos. 72 and 77. A threshold issue necessary for the determination of all three motions, and to the consideration of Platinum's disclosure statement and confirmation of its plan is whether Platinum owns the Operating Rights and Working Interests.

On June 15, 2009, the Nation filed a complaint to commence Adversary Proceeding No. 09–10832 naming Platinum as the sole defendant. The Nation asserted in the complaint, among other things, that Platinum has no rights or interests in or under Leases Nos. 71 or 363. On August 21, 2009, the Nation filed a motion for summary judgment in Adversary Proceeding No. 09–10832. See Adversary No. 09–10832, Docket No. 8.

The Court held a Status Conference in the bankruptcy case on August 31, 2009. At the Status Conference the parties who appeared, including Platinum, the Nation and the DOI, agreed that the Court should determine as a threshold matter issues relating to Platinum's ownership of the Operating Rights and Working Interests before deciding other issues raised by Platinum's motion to assume leases and motion for post-petition financing, and the Nation's motion to dismiss. See Order, Docket No. 120. The Court, with the concurrence of the parties, directed the Nation to file its motion for summary judgment in the bankruptcy case so the threshold issue would be determined in a contested matter affording any party interest with an opportunity to participate. Id. The Court also ruled that parties could take discovery relating to the Motion for Summary Judgment and fixed a deadline for responses to the Nation's motion for summary judgment after the end of the discovery period. Id. The DOI elected not to respond to the Nation's motion for summary judgment.

On September 15, 2009, the DOI filed a motion to withdraw the reference to the United States District Court for the District of New Mexico so the District Court would decide the issues relating to Platinum's ownership of the Operating Rights and Working Interests. See Docket No. 111. The Nation joined in the motion. Docket No. 134. Platinum and BP America Production Company objected to the motion. See Docket Nos. 131 and 132. On April 7, 2010, the District Court entered a Memorandum Opinion and Order denying the motion to withdraw the reference. See Case No. 09–CV–00922; Docket No. 18. On May 25, 2010 this Court held oral argument on the Nation's and Platinum's cross motions for summary judgment, and set a schedule for supplemental briefs. See Order, Docket No. 220.

SUMMARY JUDGMENT STANDARDS

The Court should grant summary judgment when the pleadings, depositions, answers to interrogatories, and admissions on file, together with the affidavits, if any, demonstrate that there is no genuine issue as to any material fact and that the moving party is entitled to judgment as a matter of law. Fed.R.Civ.P. 56(c), made applicable to adversary proceedings by Fed.R.Bankr.P. 7056. In considering a motion for summary judgment, the Court must ‘examine the factual record and reasonable inferences therefrom in the light most favorable to the party opposing summary judgment.’ Wolf v. Prudential Ins. Co. of America, 50 F.3d 793, 796 (10th Cir.1995) (quoting Applied Genetics Int'l, Inc. v. First Affiliated Sec., Inc., 912 F.2d 1238, 1241 (10th Cir.1990)). Cross motions for summary judgment raise an inference that summary judgment may be appropriate. Crossingham Trust v. Baines (In re Baines), 337 B.R. 392, 396 (Bankr.D.N.M.2006). Nevertheless, before a Court may grant summary judgment, the Court must satisfy itself that the requesting party has independently satisfied the requirements of Rule 56(c). See Harris v. Beneficial Oklahoma, Inc., (In re Harris), 209 B.R. 990, 998 (10th Cir. BAP 1997); see also, Renfro v. City of Emporia, 948 F.2d 1529, 1534 (10th Cir.1991) (stating that a cross motion for summary judgment does not relieve the court of its obligation to determine if a genuine issue of material fact exists). [A] party opposing a properly supported motion for summary judgment ‘may not rest on mere allegations or denials of his pleading, but ... must set forth specific facts showing that there is a genuine issue for trial’ through affidavits or other supporting evidence. Anderson v. Liberty Lobby, Inc., 477 U.S. 242, 256, 106 S.Ct. 2505, 91 L.Ed.2d 202 (1986) (quoting Rule 56(e), Fed.R.Civ.P.).

FACTS NOT IN GENUINE DISPUTE

The Court finds that the following facts are not in genuine dispute:

1. On March 2, 2009, Platinum filed a voluntary petition for relief under Chapter 11 of the United States Bankruptcy Court for the District of New Mexico. See Docket No. 1.

2. The Nation is a federally recognized Indian Tribe organized under the Indian Reorganization Act of 1934 located on a reservation in northwestern New Mexico.

3. On March 19, 1992, Chace Oil Company, Inc. (“Chace”) and Golden Oil Company, a Delaware corporation (“Golden Oil”), among others, executed an Assignment, Bill of Sale and Conveyance under which Chace purported to assign and convey to Golden Oil, all of Chace's operating rights, leasehold interests and other ownership interests in certain leases under which the Nation was the lessor (the “Jicarilla Leases”), including but not limited to leases commonly known as Jicarilla Lease No. 71 and Jicarilla Lease No. 363 (individually, Jicarilla Lease No. 71 and Jicarilla Lease No. 363; and together Jicarilla Lease Nos. 71 and 363). See Myore Deposition at pp. 42–44; Sandoval Deposition at pp. 130 and Exhibit 24 thereto; see also The Nation's Objection to Motion to Assume (Platinum Oil Docket No. 18), ¶¶ 4 and 5.

4. A defect in the transfer of title by Chace to Golden Oil of Chace's interest in Jicarilla Lease Nos. 71 and 363 resulted in a failure to complete and perfect the transfer. See Settlement Agreement between Golden Oil Company and McKay–Lotspeich Group, ¶ 16; Third Amended and Restated Joint Plan, ¶ 7.2.

5. Jicarilla Lease Nos. 71 and 363 contain no express provision requiring approval by the Nation of a transfer of Jicarilla Lease Nos. 71 and 363 or any interest in those leases. See Jicarilla Lease No. 71, including ¶ 3(h) of the Lease—Deposition of Kurt Sandoval (“Sandoval Deposition”), Exhibit 20; and Jicarilla Lease No. 363, including ¶ 3(h) thereto—Sandoval Deposition, Exhibit 19. Jicarilla Lease Nos. 71 and 363 do not by their express terms incorporate existing and future regulations of the DOI and do not incorporate existing or future laws or regulations of the Nation. See Jicarilla Lease No. 71, including ¶ 3(g) of the Lease—Sandoval Deposition, Exhibit 20; and Jicarilla Lease No. 363, including ¶ 3(g) thereto—Sandoval Deposition, Exhibit 19.

7. On May 12, 2003, Golden Oil filed a voluntary petition for relief under Chapter 11 of the United States Bankruptcy Code in the United States Bankruptcy Court for the Southern District of Texas, Case No. 03–36974 (the Golden Bankruptcy Case). See Golden Oil Bankruptcy Docket (Notice of Filing, Exhibit 1); Sandoval Deposition, Exhibit 31.

8. On October 22, 2003, the DOI, through the Bureau of Indian Affairs, filed a Proof of Claim in the Golden Bankruptcy Case (the “DOI Proof of Claim”). See Notice of Filing, Exhibit 22. The DOI Proof of Claim stated, in part, that to the extent it is determined that plugging and abandonment liabilities of Golden Oil under Jicarilla Lease Nos. 71 and 363 are “claims” in the Golden Bankruptcy Case, claims for such plugging and abandonment liabilities were made. See Golden Oil Bankruptcy Case,...

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