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Enerplus Resources (USA) Corp. v. Wilkinson

United States District Court, D. North Dakota

December 12, 2017

Enerplus Resources USA Corporation, a Delaware corporation, Plaintiff,
v.
Wilbur D. Wilkinson, an individual; Three Affiliated Tribes, Fort Berthold District Court; Reed Alan Soderstrom, agent for Wilbur D. Wilkinson; and Ervin J. Lee, an individual, Defendants. and Ervin J. Lee, an individual, Third-Party Plaintiff,
v.
Reed Soderstrom, an individual; MHA Nation Supreme Court; Three Affiliated Tribes; and Fort Berthold Tribal District Court, Third-Party Defendants. and Ervin J. Lee, an individual, Cross-Claimant
v.
Wilbur D. Wilkinson, an individual, Cross-Defendant.

          ORDER

          Daniel L. Hovland, Chief Judge United States District Court

         Before the Court is Defendant Wilbur Wilkinson's motion for reconsideration filed on November 16, 2017. See Docket No. 93. Plaintiff Enerplus Resources (USA) Corporation (“Enerplus”) filed a response in opposition to the motion on November 20, 2017. See Docket No. 96. Also before the Court are Enerplus' motion for attorneys fees and motion for prejudgment interest filed on November 21, 2017. See Docket Nos. 97 and 98. Wilkinson filed a response in opposition to the motions on December 4, 2017. See Docket Nos. 101 and 102. Enerplus filed reply briefs in support of its motions for attorneys fees and prejudgment interest on December 11, 2017. See Docket Nos. 103 and 104. For the reasons set forth below, Enerplus' motion for attorneys fees is granted. Enerplus' motion for prejudgment interest and Wilkinson's motion for reconsideration are denied.

         I. BACKGROUND

         Enerplus is a Delaware corporation whose principal place of business is located in Denver, Colorado. Enerplus is primarily engaged in the oil and gas exploration business and is authorized to do business as a foreign corporation in the state of North Dakota. Wilbur Wilkinson is an individual residing in Garrison, North Dakota, and a citizen of the state of North Dakota. The Three Affiliated Tribes Fort Berthold District Court (“Tribal Court”) is a Tribal Court sitting on the Fort Berthold Indian Reservation in North Dakota. Reed Soderstrom is an attorney at Pringle & Herigstad, P.C., in Minot, North Dakota, and a citizen of North Dakota. Ervin Lee is a former attorney and a citizen of the state of North Dakota.

         In September 2008, Wilkinson filed a lawsuit against Peak North Dakota, LLC (“Peak North”) and others in Tribal Court. Lawsuits involving Peak North and Wilkinson were filed in a number of other courts as well. On October 31, 2008, the Tribal Court dismissed the lawsuit because it lacked jurisdiction as a result of the forum selection clauses in the agreements between Peak North and Wilkinson. See Docket No. 1-2. On or about October 4, 2010, Peak North and Wilkinson, among others, entered into a “Settlement Agreement, Full Mutual Release, Waiver of Claims and Covenant Not to Sue” (the “Settlement Agreement”) which resolved all the lawsuits, whereby Peak North agreed to assign to Wilkinson a 0.5% of 8/8ths overriding royalty interest in certain oil and gas leases located in North Dakota. See Docket No. 1-3. Lee represented Wilkinson during the negotiation of the Settlement Agreement. Ten percent (10%) of Wilkinson's overriding royalty interest was assigned to Lee as part of the Settlement Agreement. In the Settlement Agreement, Peak North and Wilkinson agreed that “any disputes arising under this Agreement and/or the transactions contemplated herein shall be resolved in the United States District Court for the District of North Dakota Northwest Division and such court shall have exclusive jurisdiction hereunder and no party shall have the right to contest such jurisdiction or venue.” See Docket No.1-3, ¶ 7.

         Pursuant to the Settlement Agreement and by way of an Assignment of Overriding Royalty Interest dated October 4, 2010, (“ORRI Assignment”), Peak North assigned to Wilkinson a 0.45% of 8/8ths overriding royalty interest and Lee 0.05% of 8/8ths overriding royalty interest, proportionately reduced accordingly, in the oil and gas leases in North Dakota. See Docket No. 1-4. The ORRI Assignment provides that all disputes arising from the ORRI Assignment “shall be resolved in the State Courts of the State of North Dakota or an applicable Federal District Court sitting in North Dakota and such courts shall have exclusive jurisdiction hereunder and neither Assignor [n]or Assignee shall have the right to contest jurisdiction or venue.” See Docket No. 1-4, ¶ 6.

         In conjunction with the execution of the Settlement Agreement and the ORRI Assignment, Wilkinson and Lee both executed “Division Orders” dated October 4, 2010. See Docket Nos. 1-5 and 1-6. Both Division Orders provide that all disputes arising from the Division Order “and/or the transactions contemplated herein shall be resolved in the State Courts of the State of North Dakota or an applicable Federal District Court sitting in North Dakota and such courts shall have exclusive jurisdiction hereunder and Interest Owner shall not have the right to contest jurisdiction or venue.” See Docket Nos. 1-5 and 1-6, p. 3.

         In December 2010, Peak North merged with Enerplus, with Enerplus being the surviving entity. See Docket Nos. 10-5 and 67-1. Around this same time, an attorney fee dispute arose between Wilkinson and Lee relating to the Settlement Agreement. On or about December 10, 2010, Wilkinson filed suit against Lee in Tribal Court, in a case styled Wilbur D. Wilkinson v. Ervin J. Lee, Civil No. CV-2010-0673. See Docket No. 24-17. In the Tribal Court action, Wilkinson alleged Lee breached the Settlement Agreement and demanded the return of $140, 000. In February 2011, the Tribal Court ordered all future payments due from Peak North to Wilkinson and Lee be deposited into the trust account of Wilkinson's attorney, Reed Soderstrom (the “IOLTA Payment Order”). See Docket No. 1-6. The Tribal Court denied Lee's motion to dismiss for lack of jurisdiction, and Lee appealed. See Docket Nos. 24-27 and 24-28. On August 31, 2015, MHA Nation Supreme Court affirmed the Tribal Court's jurisdictional ruling. See Docket No. 24-31. The MHA Supreme Court reaffirmed its jurisdictional ruling on November 30, 2015. See Docket No. 24-34.

         Between September 2014 and October 2015, when paying the overriding royalty interest amount due to Wilkinson and Lee, collectively, the Enerplus accounting department, through clerical error, authorized the total deposit of $2, 991, 425.25 into Soderstrom's IOLTA account. Enerplus was only required to deposit a total of $29, 914.10. As a result, Enerplus overpaid Wilkinson and Lee, collectively, by $2, 961, 511.15 (the “Excess Money”). See Docket Nos. 1-5 and 1-7. After Enerplus discovered the overpayment, it contacted Wilkinson and Soderstrom in December 2015, and requested the money be returned. Wilkinson and Soderstrom refused to return the Excess Money.

         On or about February 29, 2016, Wilkinson filed suit against Enerplus in Tribal Court in a case styled Wilbur D. Wilkinson v. Enerplus Resources Corporation, Civil No. CV-2016-0079 (the “Tribal Court Case”), alleging Enerplus has breached the Settlement Agreement by not fully paying Wilkinson as required by the Settlement Agreement. See Docket No. 1-8. Enerplus commenced the current action in federal court on May 4, 2016. See Docket No. 1.

         On August 30, 2016, this Court entered a preliminary injunction requiring the Excess Money to be deposited with the Court and prohibiting Wilkinson from litigating any disputes arising from the Settlement Agreement, ORRI Assignment, and Division Orders in Tribal Court, and prohibiting the Tribal Court from exercising jurisdiction over Enerplus. See Docket No. 48. The Excess Money was deposited with the Court on October 11, 2016, and remains in the Court's registry account. Wilkinson and Soderstrom appealed the preliminary injunction but this Court refused to stay the case pending the appeal. See Docket Nos. 49 and 55. The Eighth Circuit Court of Appeals affirmed the Court's grant of a preliminary injunction on August 2, 2017. See Docket No. 86.

         On February 23, 2017, the Court granted Enerplus' motion summary judgment as to the Excess Money/equitable restitution issue finding Enerplus was entitled to have the Excess Money returned to it. See Docket No. 75. Enerplus dismissed its claim for an accounting. See Docket Nos. 79 and 91. On November 2, 2017, the Court granted summary judgment in favor of Enerplus on all remaining issues and, among other things, entered a permanent injunction enjoining Wilkinson from prosecuting any lawsuits in Fort Berthold District Court or Tribal Court arising from or related to the Settlement Agreement, the ORRI Assignment, and/or the Wilkinson and Lee Division orders and enjoining the Fort Berthold District Court from hearing the case Wilkinson had previously filed; ordered the $2, 961, 511.15 held in the Court's registry account, plus interest be released to Enerplus; and awarded Enerplus attorneys fees in an amount to be determined but to include $36, 933.77 related to Wilkinson's appeal of the Court's grant of a preliminary injunction. See Docket No. 91. On or about December 8, 2017, a check in the amount of $2, 981, 452.99, which represents the $2, 961, 511.15 in Excess Money plus $19, 941.84 in interest, was mailed to Enerplus. Wilkinson now asks the Court to reconsider its order granting summary judgment. See Docket No. 93. Enerplus has filed a motion for attorneys fees as instructed by the Court. See Docket No. 98. Enerplus has also filed a motion for prejudgment interest. See Docket No. 97.

         II. LEGAL DISCUSSION

         A. RE ...


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