Lorelei Oil and Gas, Ltd v. Walker and Associates, Inc. ( 2020 )

RENDERED: SEPTEMBER 4, 2020; 10:00 A.M.
NOT TO BE PUBLISHED
Commonwealth of Kentucky
Court of Appeals
NO. 2020-CA-000190-MR
LORELEI OIL AND GAS, LTD. APPELLANT
APPEAL FROM MARTIN CIRCUIT COURT
v. HONORABLE JOHN DAVID PRESTON, JUDGE
ACTION NO. 19-CI-00036
WALKER AND ASSOCIATES, INC.
AND MICHAEL S. WALKER APPELLEES
OPINION
REVERSING AND REMANDING
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BEFORE: ACREE, DIXON, AND K. THOMPSON, JUDGES.
ACREE, JUDGE: Appellant, Lorelei Oil & Gas, Ltd. (Lorelei), appeals the Martin
Circuit Court’s January 21, 2020 order granting summary judgment in favor of
Appellees, Walker and Associates, Inc. and Michael S. Walker, individually
(Walker). Upon careful consideration, we reverse and remand for further
proceedings.
BACKGROUND
Lorelei is a limited partnership consisting of multiple investors. It
entered into an operating agreement with Walker on June 15, 1989, designating
Walker as the operator and agent of two natural gas wells – Ebb Castle Well 1 and
Ebb Castle Well 2. According to Lorelei, it requested an accounting from Walker
for the years 2015-2017. Unhappy with the documents furnished, Lorelei filed a
petition for an accounting in Martin Circuit Court.
Walker moved for summary judgment. The circuit court granted the
motion, concluding Lorelei failed to produce any documentation to establish its
ownership of a working interest in the wells; thus, it lacked standing to seek an
accounting. Lorelei appealed.
Before this court, Walker moved to strike Lorelei’s brief. As grounds,
Walker stated Lorelei’s brief violated Kentucky Rule of Civil Procedure (CR)
76.12(4)(c)(iv) in two ways: (1) by failing to include any citation to the record;
and (2) by asserting facts that cannot be supported by the record. In a separate
order, this Court denied the motion to strike but agreed that Lorelei’s brief failed to
substantially comply with the Rule and concluded the proper sanction was a review
of the claims of error for manifest injustice only.
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REVIEW FOR MANIFEST INJUSTICE
A circuit court may only enter summary judgment if it concludes there
are “no genuine issues of material fact and that the moving party [is] entitled to
judgment as a matter of law.” Cabrera v. JBS USA, LLC, 568 S.W.3d 865, 868
(Ky. App. 2019). We conclude a genuine issue of material fact appears on the face
of the circuit court’s order granting summary judgment. Hence, we find manifest
error.
The summary judgment is internally inconsistent. First, it states:
On June 15, 1989, [Walker] entered into an Operating
agreement with [Lorelei] for Ebb Castle Wells 1 and 2.
The Operating Agreement recited that [Lorelei] was a
working interest owner in those wells.
(Order Granting Summary Judgment, January 21, 2020, Record (R.)
at 141 (emphasis added)). Then, later in the order it concludes:
[Lorelei] has filed a response and objection to the
motion for summary judgment, but that response does not
cite the Court to any specific lease assignment or other
documentation showing [Lorelei’s] ownership of a
working interest in the wells in question.
At argument on the motion, [Lorelei] once again failed to
produce any documentation as to its ownership interest in
the working interest in the wells in question. Since
[Lorelei] cannot produce any documentation evidencing
its ownership interest or working interest in the wells in
question, it is clear that [Walker is] entitled to summary
judgment.
(Id. at 142 (emphasis added)).
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The contradiction is patent. The summary judgment says both that
Lorelei “was a working interest owner” based on documentation in the record, and
then says Lorelei failed to present documentation of a working interest. We cannot
and do not reconcile this contradiction. Clearly, whether Lorelei has a working
interest in the wells is a material fact and, just as clearly, there is a genuine issue as
to which of these mutually exclusive positions is correct.
Because this is dispositive of the appeal, we do not address Lorelei’s
remaining arguments.
CONCLUSION
Based on the foregoing, we find manifest error in the Martin Circuit
Court’s January 21, 2020 order granting summary judgment. We reverse and
remand for further proceedings.
ALL CONCUR.
BRIEFS FOR APPELLANT: BRIEF FOR APPELLEES:
Eldred E. Adams, Jr. Brian Cumbo
Louisa, Kentucky Inez, Kentucky
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