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Cole v. Jebf Holdings, LLC

United States District Court, E.D. Louisiana

November 13, 2014

DAVID L. COLE, et al.
JEBF HOLDINGS, LLC, et al., Section



Before the Court is Defendant Louisiana Delta Oil Company's ("LDOC") "Motion to Dismiss for Failure to State a Claim and Alternative Motion for a More Definite Statement."[1] Having considered the motions, the memoranda, and the applicable law, the Court will grant in part and deny in part the pending motion.

I. Background

Plaintiffs David L. Cole and John M. Mulhall (collectively, "Plaintiffs") filed the petition in this matter on December 18, 2013 in the 17th Judicial District Court, Parish of Lafourche, [2] wherein they allege that Brian Rose ("Rose"), JEBF Holdings, LLC ("JEBF"), and LDOC (collectively, "Defendants") fraudulently converted Plaintiffs' funds. Plaintiffs allege that they each invested $69, 463.50 in an oil well, LDF #4 (the "Well"), located in Lafourche Parish, Louisiana and operated by LDOC.[3] According to the complaint, Plaintiffs purchased these interests from Lux Petroleum, Inc., which is not a party to this lawsuit.[4] Plaintiffs seek a judgment awarding them an ownership interest in LDF #4, an accounting and payment of royalties allegedly owed to them, and a preliminary injunction enjoining LDOC from disbursing any royalties to Defendants until the final resolution of this litigation.[5]

Defendants removed the case to federal court on February 7, 2014.[6] On April 4, 2014, LDOC filed the pending motion.[7] Plaintiffs filed a memorandum in opposition on April 23, 2014, [8] and LDOC filed a reply memorandum on April 24, 2014.[9]

II. Parties' Arguments

A. LDOC's Arguments in Support

LDOC argues first that the Plaintiffs have not and cannot state a cause of action against LDOC because they have not alleged that they currently have any cognizable interest "in and to" the Well.[10] According to LDOC, Plaintiffs' allegations relate to the "collecting and remitting of royalties" from the Well, but "based on plaintiffs' own allegations in their Petition, plaintiffs have no current interest in and to the Well."[11] Specifically, LDOC argues, Plaintiffs have failed to allege (1) any relationship with LDOC; (2) any writing establishing their alleged interest in or to the Well, or (3) "that any such writing translative [sic] of title to an interest in and to the Well is properly recorded in Lafourche Parish, Louisiana."[12]

LDOC argues in the alternative that if Plaintiffs' claims are not dismissed, the Court should order Plaintiffs to provide a more definite statement of their claims against LDOC pursuant to Federal Rule of Civil Procedure 12(e).[13] According to LDOC, the need for a more definite statement is evidenced by Plaintiffs' "loose and broad allegations that they purchased an interest in either an oil and gas well or an interest in an entity called lux-LDF #4, LLP."[14] LDOC contends that Plaintiffs have asserted no tort or contract claim against LDOC, and that Plaintiffs should be required to (1) provide the particular facts surrounding their allegations against LDOC; (2) plead the facts establishing the ownership interest being claimed by Plaintiffs in and to the Well, how that interest was obtained, the precise amount of that interest, and how that interest was evidenced of record; and (3) plead the facts establishing that plaintiffs have any rights to receive royalty payments or any other consideration directly from LDOC.[15]

B. Plaintiffs' Arguments in Opposition

In opposition, Plaintiffs argue that:

Considering the Rose Family's [sic] legal history, see: Securities and Exchange Commission vs. Berkshire Resources, LLC, et al, No. 1:09-cv-0704, U.S. District Court, SD, Ind. [sic], plaintiffs do not believe they can get an accurate accounting of the sums paid them by LDOC from the well in question, whereas LDOC would give an accurate accounting.[16]

Plaintiffs argue that they consider LDOC an indispensable party to the lawsuit pursuant to Federal Rule of Evidence 19, and that "[h]ad the plaintiffs not sued LDOC in the first place, plaintiffs submit that this court would order them joined as provided by F.R.C.P. Rule [sic] 19(2)."[17] According to Plaintiffs, LDOC operates the Well, handles all money from the Well, and keeps records of all monetary disbursements from the Well.[18] Plaintiffs aver that:

As a practical matter, plaintiffs will be seeking an accounting from LDOC for all sums paid to the other defendants during the time in question in this action, when the plaintiffs purportedly purchased their interest in the well in question and to monies the other ...

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