United States District Court, E.D. Louisiana
CEH ENERGY, LLC ET AL.
KEAN MILLER LLP ET AL.
ORDER & REASONS
the Court are Defendants Stephen Hanemann and Kean
Miller's Motions to Dismiss. R. Docs. 27, 29. Plaintiffs
oppose the motions. R. Doc. 31. The Court held oral argument
on this matter on November 15, 2017. Having considered the
parties' arguments, submissions, and the applicable law,
the Court now issues this Order and Reasons.
lawsuit arises from the representation by Defendants of
Plaintiffs when they invested in Louisiana oil prospects.
Plaintiff CEH Energy, LLC (“CEH Energy”) is a
Delaware corporation, wholly owned and created by Plaintiff
Shenzhen Careall Investment Holdings Group Co., Ltd.
(“Careall”), for the purpose of investing in
Louisiana oil prospects. R. Doc. 1 at 1-2. Plaintiffs
invested a total of $2.1 million in two oil prospects. R.
Doc. 1 at 5. The oil prospects were owned by Intrepid
Drilling, LLC (“Intrepid”), which is owned by
Bill Simmons. R. Doc. 1 at 2. Plaintiffs allege that the
investments were fraudulent. R. Doc. 1 at 25-26. Plaintiffs
have filed a lawsuit in federal court in Mississippi against
Intrepid and Bill Simmons claiming that these defendants
failed to disclose material omissions, including a $205
million outstanding RICO judgment, and defrauded Plaintiffs.
R. Doc. 1 at 5, 10-11.
in the present lawsuit are Kean Miller LLP (“Kean
Miller”) and Stephen Hanemann. R. Doc. 1. Stephen
Hanemann is a partner at Kean Miller. R. Doc. 1 at 3. Stephen
Hanemann was engaged by Plaintiffs, at the suggestion of Bill
Simmons, to represent them regarding their investments in
Louisiana oil prospects. R. Doc. 1 at 2-3. Plaintiffs allege
that Kean Miller and Stephen Hanemann already were, and had
been, representing Intrepid and Bill Simmons. R. Doc. 1 at 4.
Plaintiffs allege that Kean Miller and Stephen Hanemann had a
conflict of interest, failed to disclose material omissions
regarding the investment, and breached their fiduciary
duties. R. Doc. 1 at 5-6, 30.
claim that had they known about the conflict of interest they
would have hired different representation. R. Doc. 1 at 7.
Plaintiffs further allege that competent counsel would have
discovered and/or disclosed the judgments against Intrepid
and Bill Simmons and therefore, Plaintiffs would not have
made the oil prospect investments. R. Doc. 1 at 7. Plaintiffs
bring the following claims against Kean Miller and Stephen
Hanemann: breach of fiduciary duty, conspiracy, conversion,
negligent misrepresentation, unjust enrichment, violation of
Louisiana Unfair Trade Practices Act (“LUTPA”),
detrimental reliance, and fraud. R. Doc. 1 at 39-48.
Plaintiffs request damages in the amount of their investment
as well as attorney fees. R. Doc. 1 at 39-48.
Stephen Hanemann moves to dismiss for failure to state a
claim upon which relief can be granted. R. Doc. 27. Defendant
argues that each claim made by Plaintiff is insufficient or
barred by preemption or estoppel. R. Doc. 27-1 at 1-2.
Therefore, Defendant asks that the Court dismiss
Plaintiffs' claims against him. R. Doc. 27.
Kean Miller also moves to dismiss all of Plaintiffs'
claims against it for failure to state claims upon which
relief can be granted. R. Doc. 29. Defendant avers that
Plaintiffs' claims are either barred by res judicata,
perempted, and/or not well pleaded. R. Doc. 29-1 at 1.
Defendant also alleges that Plaintiffs had decided to invest
in the oil prospects before contacting Kean Miller and
Stephen Hanemann and that Plaintiffs' retention of
Defendants was limited to reviewing the agreement to
participate in the oil prospects. R. Doc. 29-1 at 2-3.
respond in opposition to Defendants' motions. R. Doc. 31.
Plaintiffs allege that all of their claims are timely. R.
Doc. 31-1 at 11. Plaintiffs submit that all of their claims
are based on alleged fraudulent actions by the Defendants and
so are not perempted because they fall into an exception. R.
Doc. 31-1 at 11-12. Plaintiffs allege that, because the fraud
exception applies, normal prescriptive periods apply to their
claims. R. Doc. 31-1 at 13. Plaintiffs allege that all
relevant actions of Defendants took place within the
prescriptive periods and even if they did not, the claims
would not be prescribed because they relate back to the
complaint filed in Mississippi court. R. Doc. 31-1 at 16.
Plaintiffs claim that they are not suing for malpractice but
rather all of their claims are based on Defendants'
alleged fraud. R. Doc. 31-1 at 21.
Motion to Dismiss Standard
Federal Rules of Civil Procedure permit a defendant to seek a
dismissal of a complaint based on the “failure to state
a claim upon which relief can be granted.” Fed.R.Civ.P.
12(b)(6). A complaint should not be dismissed for failure to
state a claim “unless it appears beyond doubt that the
plaintiff can prove no set of facts in support of his claim
which would entitle him to relief.” Conley v.
Gibson, 355 U.S. 41, 47 (1957). Generally, when
evaluating a motion to dismiss pursuant to Rule 12(b)(6), the
court should not look past the pleadings.
survive a motion to dismiss, a complaint must contain
sufficient factual matter, accepted as true, to ‘state
a claim to relief that is plausible on its face.'”
Ashcroft v. Iqbal, 556 U.S. 662, 678 (2009) (quoting
Bell Atlantic Corp. v. Twombly, 550 U.S. 544, 570
(2007)). The district court must construe facts in the light
most favorable to the nonmoving party and must accept as true
all factual allegations contained in the complaint.
Ashcroft, 556 U.S. at 678. “A claim has facial
plausibility when the plaintiff pleads factual content that
allows the court to draw the reasonable inference that the
defendant is liable for the misconduct alleged.”