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Alexander O&G, L.L.C. v. Nomad Land & Energy Resources, L.L.C.

United States District Court, S.D. Texas, Houston Division

May 9, 2018

Alexander O&G, L.L.C., et al., Plaintiffs,
Nomad Land and Energy Resources, L.L.C., Defendant.


          Gray H. Miller, United States District Judge

         Pending before the court is a motion for summary judgment filed by counter-defendants Michael D. Jones (“Jones”) and Jones Gill LLP (collectively, “Jones Gill”). Dkt. 32. Counter-plaintiff Nomad Land and Energy Resources L.L.C. (“Nomad”) responded. Dkt. 52. Jones Gill replied. Dkt. 54. Nomad supplemented its response. Dkt. 58. Jones Gill supplemented its reply. Dkt. 61. Having considered the motion, response, reply, supplemental briefing, record evidence, and applicable law, the court is of the opinion that Jones Gill's motion should be GRANTED.

         I. Background

         This dispute arises out of an oil and gas transaction. Counter-defendant and plaintiff Alexander O&G, L.L.C. (“Alexander”) and Nomad are oil and gas companies. Dkt. 32 at 1-3. Jones Gill is a law firm. Id. Jones is an attorney at that firm. Id.

         On June 27, 2016, Alexander's president, Michael Mann (“Mann”), and Nomad's managing partner, John T. Bay (“Bay”), signed a Purchase and Sale Agreement (“PSA”) for a transaction involving mineral rights.[1] Dkt. 15-1; Dkt. 32-1 at 3 (Jones Aff.) . Jones Gill did not draft, review, or sign the PSA. Dkt. 15-1; Dkt. 32-1 at 1-3.

         The PSA defines Nomad as the “Seller” and Alexander as the “Buyer.” Id. The PSA states:

Upon the execution and delivery of the Agreement, Buyer shall tender Seller, in an agreed escrow agent's account, an earnest money deposit of $100, 000.00 to help assure Buyer's performance hereunder, which deposit shall be non-refundable, except in the event that Seller shall be unwilling or unable to perform his obligations hereunder, in which case, the entirety of the earnest money deposit, and any interest or any other additions thereto, shall be refunded to Buyer. If the agreement closes, as contemplated, the earnest money, and any other additions thereto, shall be applied toward the satisfaction of the payment of the total consideration due and payable hereunder.

Dkt. 15-1 (underlined in original). The PSA does not mention or identify Jones or Jones Gill. Id.

         Nomad and Alexander used a third-party broker, Steve Fulton (“Fulton”). Dkt. 61 at 3. Fulton asked Bay about appointing an escrow agent. Id. Bay testified that he “agreed” and “said ‘anybody.'” Id. Before asking Jones Gill, Alexander suggested the parties could use the firm as the escrow agent. Dkt. 58 at 3; Dkt. 61. at 4.

         In June 2016, Mann contacted Jones Gill about two transactions: one with Noroma Energy, L.L.C. (“Noroma”) as well as the one with Nomad. Dkt. 32-1 at 1. For the first, Jones Gill gave Alexander instructions on wiring money to Jones Gill's IOLTA account.[2] Id. at 2. But the parties to the Noroma-Alexander transaction agreed to use a different escrow agent. Id.

         For the second transaction, Mann asked Jones Gill to “hold the earnest money for the Nomad PSA in the event the parties agreed to the terms of the proposed sale.” Id. (emphasis added); Dkt. 61 at 3. Jones Gill “agreed to hold the earnest money only if all parties executed and returned an escrow agreement.” Dkt. 32-1 at 2 (emphasis added).

         Jones Gill attorney Brian Wittpenn inserted the names of the potential parties into a proposed escrow agreement (“proposed agreement”). Dkt. 15-2 at 2; Dkt. 32-1 at 2. Specifically, the proposed agreement was to govern Nomad as the “Seller, ” Alexander as the “Buyer, ” and Jones Gill as the “Escrow Agent.” Id.

         Wittpenn forwarded the proposed agreement to Alexander via email. Dkt. 32-1 at 2. Fulton sent it to Bay. Dkt. 61 at 3. But Bay did not sign it. Id. Dkt. 61 at 4. No. one from Alexander or Jones Gill signed it, either. Dkt. 15-2 at 4; Dkt. 61 at 3.

         On June 29, 2016, Alexander wired $100, 000.00 to Jones Gill's IOLTA account. Dkt. 58 at 2-3. Alexander used the wiring instructions from the Noroma-Alexander transaction. Id. Jones Gill did not receive a signed copy of the proposed agreement from Alexander or Nomad. Dkt. 32-1 at 2-3.

         On July 7, 2016, Mann told Jones Gill that the parties did not execute the proposed agreement. Id. Then, Jones asked the firm's accountant and bookkeeper, Patty Blake, to wire the money back to Alexander. Id. at 1, 3. Blake completed the transfer on July 8, 2016. Dkt. 32-2 at 1.

         On July 27, 2016, Bay emailed Jones. Dkt. 15-3 at 3. That email was the first contact that anyone from Jones Gill had with Bay. Dkt. 32-1 at 1. Bay's message included an unsigned copy of the proposed agreement that Fulton had sent him. Dkt. 15-3 at 2. Bay asked Jones to release the escrow balance to him. Id. at 2-3 Jones replied:

Dear Mr. Bay: You have sent me an unexecuted escrow agreement. Neither you nor Alexander Oil and Gas executed this agreement. Jones Gill LLP returned the funds deposited in our IOLTA to Alexander Oil and Gas at its request. Alexander Oil & Gas paid the funds into our IOLTA and it is the owner of those funds.

Id. at 2.

         On August 23, 2016, Alexander sued Nomad to get a state court judgment declaring that the PSA had been terminated. Dkt. 1-4. Nomad removed to this court. Dkt. 1. On April 12, 2017, Nomad amended its answer to include third-party claims against Jones Gill for breach of contract, money had and received, breach of fiduciary duty, and, alternatively, promissory estoppel or partial performance. Dkt. 15. Jones Gill moves for summary judgment on all of Nomad's claims. Dkt. 32.

         II. Legal Standard

         A court shall grant summary judgment when a “movant shows that there is no genuine dispute as to any material fact and the movant is entitled to judgment as a matter of law.” Fed.R.Civ.P. 56(a). “[A] fact is genuinely in dispute only if a reasonable jury could return a verdict for the nonmoving party.” Fordoche, Inc. v. Texaco, Inc., 463 F.3d 388, 392 (5th Cir. 2006). The moving party bears the initial burden of demonstrating the absence of a genuine issue of material fact. Celotex Corp. v. Catrett, 477 U.S. 317, 323, 106 S.Ct. 2548 (1986). If the party meets its burden, the burden shifts to the non-moving party to set forth specific facts showing a genuine issue for trial. Fed.R.Civ.P. 56(c). The court must view ...

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