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Bison Resources Corp. v. Antero Resources Corp.

United States District Court, N.D. West Virginia

February 2, 2018

BISON RESOURCES CORPORATION, an Oklahoma limited liability company, Plaintiff,
v.
ANTERO RESOURCES CORPORATION, a Delaware corporation and ANTERO RESOURCES APPALACHIAN CORPORATION, a Delaware corporation and predecessor-in-interest to defendant Antero Resources Corporation, Defendants, and ANTERO RESOURCES CORPORATION, a Delaware corporation, Third-Party Plaintiff,
v.
BISON ASSOCIATES, L.L.C., an Oklahoma limited liability company, PSPI PARTNERSHIP NO. 2, a Pennsylvania partnership, BROWN RESOURCES, L.L.C., MARK F. HARISON, partner, PATRICIA F. HARISON, partner, JON D. HAZLEY, partner, SHERRY L. HAZLEY, partner, E. CRAIG THOMPSON, partner, VICTORIA F. THOMPSON, partner, and BISON INTERESTS, L.L.C., Third-Party Defendants.

         MEMORANDUM OPINION AND ORDER GRANTING THIRD-PARTY DEFENDANT PATRICIA F. HARISON'S MOTION TO DISMISS FOR LACK OF JURISDICTION, GRANTING THIRD-PARTY DEFENDANT MARK F. HARISON'S MOTION TO DISMISS FOR LACK OF JURISDICTION, GRANTING THIRD-PARTY DEFENDANT VICTORIA F. HIGGINS'S MOTION TO DISMISS FOR LACK OF JURISDICTION, GRANTING THIRD-PARTY DEFENDANT E. CRAIG THOMPSON'S MOTION TO DISMISS FOR LACK OF JURISDICTION, GRANTING ANTERO RESOURCE CORPORATION'S MOTION FOR LEAVE TO FILE SURREPLY, DENYING INDIVIDUAL THIRD-PARTY DEFENDANTS' MOTIONS TO STRIKE, DENYING THIRD-PARTY DEFENDANT BISON INTERESTS, LLC'S MOTION TO DISMISS FOR FAILURE TO STATE A CLAIM, DENYING THIRD-PARTY DEFENDANT BISON ASSOCIATES, LLC'S MOTION TO DISMISS FOR FAILURE TO STATE A CLAIM AND DENYING THIRD-PARTY DEFENDANT PSPI PARTNERSHIP NO. 2'S MOTION TO DISMISS FOR FAILURE TO STATE A CLAIM [1]

          FREDERICK P. STAMP, JR. UNITED STATES DISTRICT JUDGE

         I. Background

         This civil action involves a real property dispute arising out of an alleged trespass, conversion of property, and tortious interference as to certain oil and gas leases and further involves a “right of first refusal” issue. ECF No. 68 at 4. The plaintiff, Bison Resources Corporation (“Bison Resources”), originally filed this civil action in the Circuit Court of Harrison County, West Virginia. The defendants removed this case to the United States District Court for the Northern District of West Virginia citing diversity of citizenship. ECF No. 1. The Honorable Irene M. Keeley then transferred this civil action to the undersigned judge. ECF No. 4.

         Defendant/third-party plaintiff Antero Resources Corporation (“Antero”) filed its third-party complaint with claims for express and implied indemnification, contribution, breach of warranty, and subrogation against third-party defendants, Bison Associates, L.L.C., PSPI Partnership No. 2 and/or its partners, [2] Charles R. Brown, Terri A. Brown, Mark F. Harison, Patricia F. Harison, Jon D. Hazley, Sherry L. Hazley[3], E. Craig Thompson, Victoria F. Thompson, and Bison Interests, L.L.C. ECF No. 49.

         Third-party plaintiff, Antero Resources Corporation, advances agency, predecessor/successor relationship, and alter ego theories in paragraphs 44-46 of its third-party complaint (ECF No. 49) in an attempt to establish a binding relationship between the individual partners, Patricia F. Harison, Mark F. Harison, Victoria F. Higgins[4], and E. Craig Thompson, and the commercial entities, Bison Interests, L.L.C., Bison Associates, L.L.C., and PSPI Partnership No. 2.

         Individual third-party defendants, Patricia F. Harison, Mark F. Harison, Victoria F. Higgins, and E. Craig Thompson, filed motions to dismiss the third-party complaint (ECF No. 49) by Antero as it relates to them for lack of jurisdiction. These individuals argue that they have no legally meaningful connection to the State of West Virginia nor has Antero alleged such a connection other than naming them as individual third-party defendants as partners. The individuals argue that the Court does not have personal jurisdiction over them, Antero cannot establish either general or specific personal jurisdiction, and personal jurisdiction does not exist solely because the Court possesses supplemental jurisdiction over related claims.

         Antero states in its response (ECF No. 92), “as a threshold matter, Federal Rule of Civil Procedure 8(a) does not require a party to plead personal jurisdiction.” Antero argues that each of these third-party defendants has had sufficient contacts with West Virginia to establish general or specific personal jurisdiction in accordance with due process. Antero asserts that for more than 20 years these third-party defendants have established contacts with West Virginia through assignments of multiple property interests, and each currently owns working interests in oil and gas leases in West Virginia. In addition, each has been a signatory on multiple documents related to the Ash, Clark, and West Leases in West Virginia, which are at issue in this action. ECF No. 92 at 2. Moreover, Antero argues these individuals are “agents of and subject to joint and several liability with PSPI, ” asserting that “Mr. Harison signed the Assignment, Bill of Sale and Conveyance at the heart of the Third-Party Complaint on behalf of PSPI and Bison Associates, L.L.C.”. ECF No. 92 at 2.

         Individual third-party defendants, Patricia F. Harison, Mark F. Harison, Victoria F. Higgins, and E. Craig Thompson, filed replies to Antero's response and assert the following arguments in support of dismissal: (1) the Court did not have personal jurisdiction over these individuals at the time the third-party complaint was commenced; (2) general jurisdiction does not exist given these individuals have not owned working interests in West Virginia oil and gas assets in excess of 15 years; (3) the actions that occurred from 1996 to 2011 are irrelevant and not sufficient to confer general personal jurisdiction; (4) specific jurisdiction does not exist since these individuals did not have any contact with West Virginia at the time of the events underlying the dispute; (5) Antero's “partnership” theory is misguided and does not support a finding of personal jurisdiction; and (6) exercise of personal jurisdiction over these individuals would be constitutionally unreasonable.

         Defendant Antero, pursuant to Local Rule of Civil Procedure 7.02(b)(3), filed a motion for leave to file a surreply in response to the motions to dismiss for lack of personal jurisdiction by Mark F. Harison, Patricia F. Harison, E. Craig Thompson, and Victoria F. Higgins. Defendant asserts leave of court is proper because Antero seeks to respond to arguments made for the first time, including “that these Third-Party Defendants are no longer partners in Third-Party Defendant PSPI Partnership No. 2.” ECF No. 131. Antero asserts “[e]ach of these Third-Party Defendants has had sufficient contacts with West Virginia to establish personal jurisdiction in accordance with due process” and “[c]ontrary to the argument made for the first time in these Third-Party Defendants' reply briefs, courts should not assess jurisdictional contacts solely at the moment the third-party complaint is filed but also as they existed prior to and at the time the claim arose.” ECF No. 131-1 at 2. Further, Antero contends that “these Third-Party Defendants have sufficient minimum contacts to satisfy due process either as partners in PSPI Partnership No. 2 (“PSPI”) or because they are alter egos of the other Third-Party Defendants.” Id.

         Third-party individual defendants Mark F. Harison, Patricia F. Harison, E. Craig Thompson, and Victoria F. Higgins filed motions to strike (ECF Nos. 132, 133, 134, 135) the surreply filed by Antero asserting that, “[c]ontrary to its assertions, [Antero] does not introduce new arguments in the briefing appended to its Motion, and [Antero] has had a full and fair opportunity to brief and argue this issue to the Court - an issue which is ripe for decision.” ECF No. 132 at 2-3. Third-party defendants contend that Antero simply “reiterates the very facts and issues presented to the Court prior to, and during, oral argument on November 16, 2017.” Id.

         Antero filed a response (ECF No. 143) to the individual third-party defendants' motions to strike Antero's motion for leave to file surreply, and asserts that in its surreply, Antero responds to arguments made by these individual third-party defendants for the first time during oral argument on the motions to dismiss. ECF No. 143.

         Third-party defendants, Bison Interests, L.L.C., Bison Associates, L.L.C., and PSPI Partnership No. 2, filed motions to dismiss Antero's third-party complaint for failure to state a claim. These entities argue that they are separate legal entities and not signatories to the “BRC-Antero” contract. These entities assert “Antero's alleged claims are borne out of the Assignment, Bill of Sale and Conveyance, ” and argue that Antero's third-party complaint fails to articulate any basis upon which this Court should “pierce the corporate [or limited liability] veil.” ECF No. 68 at 5. These parties argue that “[t]he entirety of Antero's allegations against Bison and PSPI are contained in three paragraphs of its Third-Party Complaint which generically assert a right to recovery from the third-party defendants but contain no factual information that asserts why liability could be imputed to the Third-Party Defendants for Plaintiff's claims in this civil action and lack and explanation of how or why the corporate form of Bison and PSPI should be disregarded in this civil action in light of the clear contract between BRC and Antero.” ECF No. 87 at 2-3. Ultimately, these three third-party defendants assert that because they are “separate legal entities, not parties to the contract between BRC and Antero, they are entitled the protections afforded to distinct legal entities under the settled law of corporations.” ECF No. 87 at 4.

         Antero states in its response (ECF No. 93) that the third-party complaint states claims upon which relief may be granted by asserting that Bison Associates and PSPI are assignors under the assignment, [5] bill of sale and conveyance with express indemnity, warranty, and subrogation provisions, and that Bison Interests is the successor-in-interest of Bison Associates and PSPI and the surviving/active Bison successor entity. ECF No. 93 at 2. Antero asserts that it “has alleged facts regarding the relationships of Bison Associates, PSPI, and Bison Interests to the Assignment, Bill of Sale and Conveyance and to each other sufficient to establish the liability of each of these Third-Party Defendants.” ECF No. 93 at 14 n.2.

         Bison Associates, PSPI, and Bison Interests did not file replies to the responses by Antero in opposition to the motions to dismiss for failure to state a claim upon which relief can be granted.

         Further, this Court held oral argument on the third-party defendants' motions to dismiss, particularly regarding the requests for dismissal for lack of personal jurisdiction and for dismissal under Rule 12(b)(6), on November 16, 2017. ECF No. 117.

         Now before the Court are seven pending motions: (1) motion to dismiss by third-party defendant Patricia F. Harison for lack of personal jurisdiction (ECF No. 62); (2) motion to dismiss by third-party defendant Mark F. Harison for lack of personal jurisdiction (ECF No. 64); (3) motion to dismiss by third-party defendant Victoria F. Higgins for lack for lack of personal jurisdiction (ECF No. 79); (4) motion to dismiss by third-party defendant E. Craig Thompson for lack of personal jurisdiction (ECF No. 81); (5) motion to dismiss for failure to state a claim by Bison Interests, LLC (ECF No. 66); (6) motion to dismiss for failure to state a claim by Bison Associates, LLC (ECF No. 86); and (7) motion to dismiss for failure to state a claim by PSPI Partnership No. 2 (ECF No. 88).

         The motions have been fully briefed and the parties' pending motions to dismiss are ripe for decision.

         II. Applicable Law

         A. Motion to Dismiss Pursuant to Federal Rule of Civil Procedure 12(b)(2) for Lack of Personal Jurisdiction

         When a court's power to exercise personal jurisdiction over a non-resident defendant is challenged by a motion under Rule 12(b)(2) of the Federal Rules of Civil Procedure, the plaintiff bears the burden of proving the existence of the grounds for jurisdiction by a preponderance of the evidence. Owens-Illinois, Inc. v. Rapid Am. Corp., (In re The Celotex Corp.), 124 F.3d 619, 628 (4th Cir. 1997) (citing Combs v. Bakker, 886 F.2d 673, 676 (4th Cir. 1989)).

         Under a “long-arm” statute, such as West Virginia Code § 56-3-33, [6] a state may enable its courts to exercise personal jurisdiction over non-residents that commit certain acts within the state, or certain acts outside of the state, that have caused injury within the state. See Lozinski v. Lozinski, 408 S.E.2d 310, 315 ( W.Va. 1991) (“The intent and benefit of any long-arm statute is to permit the secretary of state to accept process on behalf of a nonresident and to view such substituted acceptance as conferring personal jurisdiction over the nonresident.”). Because the West Virginia long-arm statute is coextensive with the full reach of due process, it is unnecessary to go through the normal two-step formula for determining the existence of personal jurisdiction. In re Celotex Corp., 124 F.3d 619, 627-28 (4th Cir. 1997). Instead, the “statutory inquiry merges with the Constitutional injury, ” and this Court must determine whether exercising personal jurisdiction is consistent with the due process clause. Id. at 628; see WorldWide Volkswagen Corp. v. Woodson, 444 U.S. 286, 291 (1980). (4) Causing tortious injury in this state by an act or omission outside this state if he regularly does or solicits business, or engages in any other persistent course of conduct, or derives substantial revenue from goods used or consumed or ...


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