The opinion of the court was delivered by: Daniel L. Hovland, District Judge United States District Court
ORDER ADOPTING REPORT AND RECOMMENDATION
On December 15, 2010, the Plaintiffs filed a "Motion for Leave to File Second Amended Complaint" to add additional defendants and a claim for fraud. See Docket No. 25. The Defendant filed a response in opposition to the Plaintiffs' motion on December 29, 2010. See Docket No. 28. The Plaintiffs filed a reply brief on January 10, 2011. See Docket No. 29. On January 12, 2011, Magistrate Judge Charles S. Miller, Jr. issued a Report and Recommendation, recommending that leave be granted to add the additional defendants and that the case be remanded to state court, leaving to the state court the decision of whether to grant leave to add the fraud claim. See Docket No. 33. The parties were given fourteen (14) days to object to the report and recommendation. The Defendant filed an objection on January 26, 2011. See Docket No. 35. The Plaintiffs filed a response on February 2, 2011. See Docket No. 36.
On July 23, 2010, the plaintiffs, Daryl G. Peterson and Christine Peterson, served and filed a summons and complaint in North Dakota state district court. See Docket No. 1-1. The Petersons allege they own real property in Bottineau County, North Dakota. On April 19, 1999, the Petersons entered into a "Salt Water Disposal Well Agreement" ("the agreement") with Ballantyne Oil. See Docket No. 1-1, p. 5. In the Agreement, Ballantyne Oil agreed to pay the Petersons $200 per month for the right to dispose water into a well on the Petersons' land from two oil wells, and an additional $100 per month for disposing water from any additional wells. In January 2008, the defendant, Sagebrush Resources LLC ("Sagebrush"), assumed Ballantyne Oil's liability under the agreement. In their original complaint, the Petersons allege Sagebrush underpaid rent due under the agreement in the amount of $84,200 and requested damages in that amount and an order that Sagebrush vacate the premises.
On August 3, 2010, Sagebrush removed the action to federal district court. See Docket No. 1. Sagebrush asserts this Court has diversity jurisdiction under 28 U.S.C. § 1332. The Petersons are citizens of North Dakota, Sagebrush is a Delaware corporation with its principal place of business in Highlands Ranch, Colorado, and the Petersons requested damages in excess of $75,000. On August 4, 2010, the Petersons filed an amended complaint, captioned under the state district court heading, changing the amount of damages to "a minimum of $65,400." See Docket No. 3. The Petersons filed a motion to remand the case on August 12, 2010. See Docket No. 4. The Court denied the motion to remand on September 10, 2010. See Docket No. 14.
On December 15, 2010, the Petersons filed a motion for leave to file a second amended complaint. See Docket No. 25. The Petersons seek to add a cause of action for fraud and to add Ballantyne Oil and its partners as defendants. The Petersons describe the defendants in the proposed second amended complaint as follows:
Sagebrush Resources is a Delaware limited liability company with its principal place of business in Highlands Ranch, Colorado.
On information and belief, Defendant Ballantyne Oil is a North Dakota general partnership engaged in the business of oil and gas exploration and production in the State of North Dakota.
Dardon Energy, LLLP, is a North Dakota limited liability limited partnership and, on information and belief, engaged in the business of oil and gas exploration and production in the State of North Dakota and is a partner in Ballantyne Oil.
DC Management, Inc., is a North Dakota corporation and, on information and belief, is the general partner of Dardon Energy, LLLP, and a third-party beneficiary fo ...