Unit Petroleum Co. v. Veitch
| Decision Date | 07 January 2015 |
| Docket Number | Case No. 14–CV–0105–CVE–TLW. |
| Citation | 79 F.Supp.3d 1234 |
| Parties | UNIT PETROLEUM COMPANY, Plaintiff, v. William A. VEITCH, KT Capital Corp. f/k/a Petrohunter Energy, Ltd., Ashley Tumleson, previously named as Ashley Tumelson, Steven Simonyi Gindele, and Petrohunter Energy, Inc., Defendants. |
| Court | U.S. District Court — Northern District of Oklahoma |
Chad J. Kutmas, Gary Michael McDonald, McDonald McCann Metcalf & Carwile LLP, Tulsa, OK, for Plaintiff.
John Edward Howland, Kelsey Kaylyn Bardwell, Rosenstein Fist & Ringold, Ronnie Jack Freeman, Graham & Freeman PLLC, Phyllis Gae Widdows, Bonham & Howard, P.L.L.C., Tulsa, OK, for Defendants.
Now before the Court are the Motion of William A. Veitch for Summary Judgment on the Issue of Ownership of Petrohunter Energy, Inc. and Related Properties and Brief in Support (Dkt. # 119) and KT Capital and Steven Simonyi–Gindele's Joint Motion and Brief for Partial Summary Judgment Adjudication Regarding Ownership of Petrohunter Energy, Inc. (Dkt. # 120). Unit Petroleum Company (Unit) filed this interpleader action because it has received competing claims to oil and gas revenues held for the benefit of Petrohunter Energy, Inc. (Petrohunter). There is a dispute among the defendants as to who owns Petrohunter and the Court ordered defendants to submit simultaneous briefs and responses concerning the ownership of Petrohunter. Dkt. # 115.
On February 25, 1981, Petrohunter was incorporated in Nevada and it subsequently filed a Certificate of Authority to conduct business in Oklahoma. Dkt. # 54–2; Dkt. # 54–3. The stock of Petrohunter was owned by Petrohunter Energy, Ltd. until August 26, 1986, when Petrohunter Energy, Ltd. changed its name to KT Capital Corp. (KT). Dkt. # 54–4, at 1; Dkt. # 54–8. KT was incorporated under the laws of Alberta, Canada. Dkt. # 54–4, at 1. KT has been owned throughout its existence by Steven Simonyi–Gindele and his family, and Simonyi–Gindele has also served as the president, chairman of the board of directors, and chief executive officer of KT. Id. Ruth Simonyi–Gindele was appointed the secretary of KT in 1992. Id. Petrohunter's corporate charter became delinquent on April 1, 1985 and the state of Nevada permanently revoked the charter on December 1, 1990. In addition, Petrohunter's domestication and authorization to conduct business in Oklahoma lapsed in 1986.
Petrohunter owns an interest in several oil and gas leases in Oklahoma, and Unit operates some of those leases located in Latimer County, Oklahoma. Dkt. # 46, at 3. On July 12, 1985, Petrohunter filed bankruptcy proceedings in the United States District Court for the Western District of Oklahoma, seeking relief under Chapter 11 of the United States Bankruptcy Code. Dkt. # 119–2. The bankruptcy was converted to a Chapter 7 bankruptcy. Dkt. # 119–6, at 12. In its bankruptcy petition, Petrohunter listed the oil and gas interests operated by Unit as assets of the bankruptcy estate. Dkt. # 119–2, at 16–19. Win Holbrook was appointed the bankruptcy trustee, and Holbrook chose not to liquidate Petrohunter's interest in the oil and gas leases. Dkt. # 120–1, at 5. The bankruptcy case was closed in 1993 and Holbrook was discharged as trustee of the bankruptcy estate.1 Dkt. # 119–7. Even though the bankruptcy case was closed, Unit continued to send all notices concerning the oil and gas leases to Holbrook. Dkt. # 120–2. In 2001 and 2005, the Oklahoma Corporation Commission entered pooling orders for the leases in which Petrohunter had an interest.2 Dkt. # 54–5. After the pooling orders were entered, Unit engaged in additional drilling and Petrohunter's revenues began to accumulate. Dkt. # 78, at 8. Unit contacted Holbrook in an attempt to communicate with Petrohunter about the accumulated revenues, but Holbrook advised Unit that the bankruptcy case was closed. Dkt. # 125–3, at 1. Unit continued to hold the accumulated revenue for the benefit of Petrohunter.
William A. Veitch was employed by Unit from 2004 to 2009. Dkt. # 78, at 15. In 2006, Unit assigned Veitch to research who was entitled to receive funds held for the benefit of Petrohunter, and Veitch was the Unit employee who spoke to Holbrook. Dkt. # 125–1, at 2. Veitch represented to Holbrook that Unit would be interested in purchasing Petrohunter's interests, and Holbrook advised Veitch that the bankruptcy proceedings would have to be reopened. Dkt. # 125–3. Holbrook believed that a buyer may have purchased Petrohunter's oil and gas interests as part of the bankruptcy proceedings, but he believed that the buyer failed to record the deed. Id. Unit was interested in purchasing Petrohunter's interests even though it knew that Petrohunter's interests were overproduced and that Petrohunter then had a negative balance.Id. Vietch states that Unit directed him to discontinue his investigation before he could determine who then owned Petrohunter's interests in oil and gas leases. Dkt. # 125–1, at 2. On May 28, 2009, Unit terminated Veitch's employment as part of a company-wide layoff. Id.
In January 2013, Veitch's attorney, Ben McGill contacted the registered agent of Petrohunter, Gene Howard, and McGill advised Howard that Veitch was interested in buying Petrohunter. Dkt. # 54–10. McGill stated that Vietch was Id. Howard responded that Petrohunter was active in the 1980s and that “Stephen Simone Gendell owned the stock.” Id. at 2. Howard believed that Simonyi–Gindele “would be glad to assign the name to you if you can contact him.” Id. McGill states that Veitch advised McGill to contact Howard about Petrohunter because Veitch was aware that Unit “at one time produced oil and gas revenues attributable to some oil and gas interests in Oklahoma that had been owned by Petrohunter,” but Veitch did not advise McGill what the value of those revenues might be. Dkt. # 125–2, at 1–2. McGill also states that he was unaware of any pooling orders entered by the Oklahoma Corporation Commission concerning Petrohunter's oil and gas leases in Oklahoma. Id. at 2.
In March 2013, McGill called Simonyi–Gindele and they discussed Simonyi–Gindele's interests in Petrohunter and its parent entity. Id. at 4. McGill sent an e-mail to Howard and advised Howard of Simonyi–Gindele's belief that Petrohunter and its parent entity were “long defunct.” Id. at 11. Veitch wanted to pay Simonyi–Gindele $1,000 for an assignment of Simonyi–Gindele's “right, title, and interest in and to those two entities with the hope that it will give him sufficient color of title to claim the name in the State of Oklahoma.” Id. McGill asked Howard to contact Simonyi–Gindele to discuss Veitch's proposal because “[t]he deal is sufficiently off-the-wall that I think that he will be more likely to consider it if he has his own attorney explain it to him.” Id. He also advised Howard that “there isn't enough money involved here to put a lot of time into it....” Id. Howard responded that Simonyi–Gindele was “agreeable to signing a document as long as there is no indication that he presently has any right to the companies or the name” and Simonyi–Gindele wanted more information about his “exposure” if he were to assign his rights in Petrohunter to Veitch. Id. McGill proposed to draft an assignment stating that the “Assignor owns or controls whatever residual rights remained in Petrohunter Energy, Ltd. after it ceased to do business, and those rights include that company's interest in Petrohunter Energy, Inc., its wholly owned subsidiary.” Id. at 10. Howard responded that Simonyi–Gindele was “very cautious about litigation” and he was reluctant to claim an interest in a “defunct entity” if it would subject him to litigation. Id. Simonyi–Gindele refused to sign an assignment and he did not receive any payment from Veitch. Dkt. # 55–1, at 4. During e-mails and conversations on March 21 and 22, 2013, McGill did not disclose that any pooling orders had been entered by the Oklahoma Corporation Commission or that Unit was holding funds in suspense, but McGill claims that he had no personal knowledge of the pooling orders or the funds being held for Petrohunter. Dkt. # 125–2, at 1–2.
McGill claims that he had a telephone conversation with Simonyi–Gindele on March 25, 2013, and McGill states that Simonyi–Gindele claimed that Petrohunter had been abandoned by its owner, Petrohunter Energy, Ltd. Id. at 2. Simonyi–Gindele allegedly stated that ownership of Petrohunter could be claimed by a “finder,” and he also claimed that Petrohunter Energy, Ltd. had been abandoned by its shareholders. Id. McGill states that Simonyi–Gindele “told me that neither he nor anyone he knew owned an interest in [Petrohunter], Petrohunter Energy, Ltd., nor any entity claiming an interest in either of those companies ... [and] that he was not an officer, director nor shareholder in either of these companies.” Id. at. 3.
On May 5, 2013, Veitch held a shareholder meeting for Petrohunter and declared himself the sole shareholder of Petrohunter. Dkt. # 119–20. As the sole shareholder, Veitch elected himself as vice-president, secretary, and treasurer, and he elected his wife, Ashley Tumleson, to serve as president and chief executive officer of Petrohunter. Veitch and Tumleson were authorized to “take such actions as may be necessary for the Secretary of State of Nevada to revive [Petrohunter] and for the Secretary of State of Oklahoma to return the corporation to Good Standing in the State of Oklahoma.” Dkt. # 119–21. Veitch did not give notice of the alleged shareholder meeting to Simonyi–Gindele or KT. On May 15, 2013, Tumleson filed Oklahoma franchise tax returns for the years of 1988 to 2011 on behalf of Petrohunter. Dkt. # 124–5. Tumleson also filed Oklahoma annual business activity tax returns for the years of 2010 and 2011, representing that...
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