Mineral Acquisitions, LLC v. Hamm

Citation477 P.3d 1159
Decision Date28 July 2020
Docket NumberCase No. 118,255
Parties MINERAL ACQUISITIONS, LLC and Sue Ann Arnall, Plaintiffs/Appellants, v. Harold Glenn HAMM, Defendant/Appellee.
CourtUnited States State Court of Criminal Appeals of Oklahoma. Court of Civil Appeals of Oklahoma

Amy L. Alden, Jack S. Dawson, MILLER DOLLARHIDE, Oklahoma City, Oklahoma, for Plaintiffs/Appellants

Michael Burrage, WHITTEN BURRAGE, Oklahoma City, Oklahoma, Julia C. Rieman, Craig L. Box, GUNGOLL, JACKSON, BOX & DEVOLL, P.C., Enid, Oklahoma, for Defendant/Appellee

OPINION BY STACIE L. HIXON, JUDGE:

¶1 Sue Ann Arnall (Arnall) appeals summary judgment in favor of Harold Hamm (Hamm) on her claims of breach of fiduciary duty, breach of contract, intentional interference with prospective economic advantage, actual or constructive fraud, and unjust enrichment. Mineral Acquisitions, LLC, appeals summary judgment in favor of Hamm on its claims of breach of fiduciary duty and demand for winding up and distribution of assets.

¶2 The appeal was assigned to the accelerated docket pursuant to Oklahoma Supreme Court Rule 1.36, 12 O.S. Supp. 2019, ch. 15, app.1.

¶3 Upon review of the record and the parties' briefing, the record in the underlying case, and applicable law, we affirm the trial court's Order of August 20, 2019.1

BACKGROUND

¶4 Arnall and Hamm divorced on November 10, 2014, by separate proceeding, Hamm v. Hamm , Case No. FD-2012-2048 (District Court of Oklahoma County). That protracted proceeding required the disposition of the parties' considerable assets, including the task of valuing Hamm's marital contributions to Continental Resources, Inc. (CRI). Hamm founded the company prior to his marriage to Arnall in 1988, and, at the time of the divorce, was its majority shareholder.

¶5 As part of the valuation, the court considered and addressed an Oklahoma limited liability company formed by Hamm called Mineral Acquisitions, LLC, in 2001. According to that entity's Operating Agreement, he and Arnall were its only members, each owning 50% of that entity. In turn, Mineral Acquisitions was the sole member of Jolette Oil (USA), LLC, formed in 2002.2 Jolette was formed to unobtrusively acquire certain mineral interests in an area known as the Bakken field in North Dakota and to operate a particular well. Once acquired, CRI purchased all of Jolette's assets at book value for $4.5 million in 2005. Hamm caused Mineral Acquisitions to be dissolved on June 26, 2006, and ceased filing its annual reports, certificates, or fees, with the Oklahoma Secretary of State. Jolette was subsequently dissolved.

¶6 The parties' assets acquired during marriage were distributed in the divorce. Among other assets, Arnall was awarded half of the purchase price for Jolette's assets. The value of Hamm's marital contribution to CRI was a significant issue in the divorce, and included consideration of the value of the assets CRI acquired from Jolette. Arnall was awarded a portion of the value of Hamm's marital contributions to CRI, among other assets, which she appealed. The Oklahoma Supreme Court dismissed that appeal on April 28, 2015, finding Arnall accepted Hamm's payment of the full judgment, while the appeal was pending. Hamm dismissed his own counter-appeal in the divorce proceeding. Judgment entered in the divorce is final.

¶7 On August 20, 2015, Arnall filed the underlying suit on her own behalf against Hamm for breach of fiduciary duty, breach of contract arising from breach of Mineral Acquisitions' Operating Agreement, intentional interference with prospective economic advantage, actual or constructive fraud, and unjust enrichment. She asserted derivative claims on behalf Mineral Acquisitions for breach of fiduciary duty/self dealing, and seeking wind up and distribution of its only asset, the mineral interests acquired by Jolette and transferred to CRI.

¶8 The crux of these claims was Arnall's contention that Hamm improperly transferred Jolette's assets at book value to CRI, depriving her of her share of their market value, and dissolved Mineral Acquisitions without her knowledge or consent. Arnall alleged that she did not learn of her interest in Mineral Acquisitions until discovery in the divorce case. She contended that the market value of the mineral interests transferred to CRI was in excess of $900 million.

¶9 The trial court granted summary judgment to Hamm on the claims of Arnall and Mineral Acquisitions in their entirety, finding that Arnall's claims in the underlying action were or could have been asserted in the divorce proceeding, and were barred by res judicata or claim preclusion.

¶10 The trial court also concluded that Arnall had actual and/or constructive knowledge of public filings made on behalf of Mineral Acquisitions for a period of nine years prior to filing of the suit, and that Arnall's claims were barred by the statute of limitations "up to and not exceeding five (5) years in duration." Finally, the trial court determined that Mineral Acquisitions was no longer a corporation in good standing, was deemed cancelled as a matter of law in 2009, and did not have standing to sue Hamm.3

¶11 Arnall appeals.

STANDARD OF REVIEW

¶12 "Although a trial court in making a decision on whether summary judgment is appropriate considers factual matters, the ultimate decision turns on purely legal determinations, i.e., whether one party is entitled to judgment as a matter of law because there are no material disputed factual questions." Carmichael v. Beller , 1996 OK 48, ¶ 2, 914 P.2d 1051, 1052. "Therefore, as the decision involves purely legal determinations the appellate standard of review of a trial court's grant of summary judgment is de novo ." Id . The Court will "examine the pleadings and evidentiary materials to determine what facts are material to plaintiff's cause of action, and to determine whether the evidentiary materials introduced indicate whether there is a substantial controversy as to one material fact and that this fact is in the movant's favor." Ross by and through Ross v. City of Shawnee , 1984 OK 43, ¶ 7, 683 P.2d 535, 536. All inferences and conclusions to be drawn therefrom are viewed in the light most favorable to the nonmoving party. Id .

ANALYSIS

1. Arnall's Claims
a. Res judicata or claim preclusion

¶13 The trial court concluded Arnall's claims were barred by the doctrine of res judicata, now called claim preclusion,4 upon the following facts held undisputed:

6. Extensive discovery was conducted by ARNALL and HAMM in the Divorce Proceeding relating to MINERAL ACQUISITIONS and Jolette Oil (USA), LLC.
7. On April 13, 2014, ARNALL and her counsel of record were aware of Jolette Oil (USA) and MINERAL ACQUISITIONS' asset transfers to Continental Resources, Inc. and acknowledged claims that ARNALL could assert against HAMM in the Divorce Proceeding.
8. ARNALL called witnesses that testified in the trial of the Divorce Proceeding that assets transferred from Jolette Oil (USA) and MINERAL ACQUISITION [sic] to Continental Resources, Inc. were done so at book value and not market value; that ARNALL's damages equaled $916,799,000.
9. Claims sought by ARNALL in the Divorce Proceeding and ruled upon by the Trial Court, are the same claims asserted in the instant case.
10. Claims sought by ARNALL in the appeal of the Divorce Proceeding are the same claims asserted in the instant case.
11. ARNALL's appeal of the Divorce Proceeding was dismissed by the Oklahoma Supreme Court on June 19, 2015.5

¶14 In essence, the trial court concluded that Arnall's interest in the assets of Mineral Acquisitions, and dispute of wrongful transfer or dissolution, was determined or could have been determined in the divorce proceeding. Arnall disagreed, and contended her claims were based not on the disposition of assets, but sought damages for distinct claims of Hamm's alleged wrongful conduct.

¶15 "Under the principle of claim preclusion, a final judgment on the merits of an action precludes the parties from relitigating not only the adjudicated claim, but also any theories or issues that were actually decided, or could have been decided, in that action." Miller v. Miller , 1998 OK 24, ¶ 23, 956 P.2d 887, 896. The purpose of the doctrine is to prevent "piecemeal litigation" caused by splitting a single claim into separate suits. Id . "When claim preclusion is asserted, the court must analyze the claim involved in the prior action to ascertain whether it is in fact the same as that asserted in the subsequent action." Id . "The doctrine requires an identity of subject matter, of the parties and their privies, of the capacity of the parties and of the cause of action." Barker v. State Ins. Fund , 2001 OK 94, ¶ 11, 40 P.3d 463.

¶16 "Whether preclusion doctrine will apply in any particular case is sometimes a question of law and in others a mixed question of law and fact." Feightner v. Bank of Okla, N.A. , 2003 OK 20, ¶ 3, 65 P.3d 624. Claim preclusion is a question of law if the facts are undisputed, the question can be answered solely by reviewing the previous judgment, or by inspection of the record in the previous proceeding. Id .

¶17 There is no dispute that the parties, or their privies, are the same in both actions. However, on summary judgment, Arnall contended that her tort claims for damages cannot be considered part of the claim or cause of action at issue in a divorce proceeding, relying on Miller , 1998 OK 24, 956 P.2d 887. Specifically, Arnall relied almost entirely on Miller 's comment upon the definition of "claim" provided by Retherford v. Halliburton , 1977 OK 178, 572 P.2d 966 :

¶18 In Retherford , [the Oklahoma Supreme Court] defined claim6 as:

"a legal concept which has no separate existence in the natural order of things. It is what makers of legal policy, the Legislature and the courts say it is. It exists to satisfy the needs of plaintiffs for a means of redress, of defendants for a conceptual context within which to defend an accusation, and of the courts for a framework within which to administer
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