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Morse v. Bakken Oil, LLC

United States District Court, D. Colorado

March 7, 2016

BRENT J. MORSE, Plaintiff,
BAKKEN OIL, LLC, et al., Defendants.


RAYMOND P MOORE, United States District Judge

Pending before the Court is the January 5, 2016 Report and Recommendation of U.S. Magistrate Judge Nina Y. Wang (“the R&R”) (ECF No. 51). Also pending is plaintiff Brent Morse’s (“plaintiff”) motion for leave to amend complaint (“the motion to amend”). (ECF No. 54.)

1. The Original Complaint

In the complaint, plaintiff raised the following claims: (1) breach of contract against defendant Northern Oil & Gas, Inc.’s (“Northern”); (2) breach of the implied warranty of authority against defendant CORE Consulting, LLC (“Core”); (3) “negligent misrepresentation regarding scope of authority” against defendant Bakken Oil, LLC’s (“Bakken”) and Core; (4) “deceit based on fraud regarding promised future performance” against Northern, Bakken, and Core; and (5) “negligent misrepresentation regarding promised future performance” against Northern, Bakken, and Core. (ECF No. 1 at 5-11.)

2. The R&R

In the R&R, the Magistrate Judge recommended that the Court: (1) grant Northern’s motion to dismiss (ECF No. 21) the fourth and fifth claims of the complaint; and (2) grant Bakken’s motion to dismiss (ECF No. 25) the complaint. (ECF No. 51 at 17.) The R&R also specifically advised the parties that written objections were due within 14 days after service of the same. (Id. at 17 n.9.) The Magistrate Judge warned the parties that failure to file specific objections may waive de novo review of the R&R. (Id.)

On January 19, 2016, plaintiff filed an Objection to the R&R (“the objection”) on one limited ground: that the R&R not be interpreted as recommending dismissal without leave to amend his complaint. (ECF No. 53 at 1-2.) In other words, plaintiff raises no objection to the Magistrate Judge’s recommendation to grant the motions to dismiss. As a result, the Court ADOPTS the recommendations to GRANT Northern and Bakken’s motions to dismiss. See Summers v. Utah, 927 F.2d 1165, 1167 (10th Cir. 1991) (“In the absence of timely objection, the district court may review a magistrate’s report under any standard it deems appropriate.”).[1] Below the Court discusses whether to sustain plaintiff’s objection as to whether he should be allowed leave to amend the complaint.

3. The Motion to Amend

a. Background Material

Since filing the objection, plaintiff has filed an actual motion to amend (ECF No. 54), along with red-lined and clean versions of the proposed amended complaint (ECF Nos. 54-1-2). Bakken has filed a response to the motion to amend, and plaintiff and Northern have both filed replies. (ECF Nos. 58-60.) Essentially, Bakken opposes leave to amend, while plaintiff and Northern desire it. In order to understand this moderately odd alignment of the parties, it is necessary to know a few of the underlying alleged facts.

First, in the original complaint, plaintiff alleged that Bakken was an agent of Northern with respect to the acquisition of oil and gas rights in Montana, and Core was an agent of Bakken. (ECF No. 1 at ¶¶ 10, 11.) Second, after Core contacted plaintiff about obtaining oil and gas leases on plaintiff’s real property, Core and plaintiff embarked upon several months of negotiations that ultimately resulted in Northern accepting a counterproposal from plaintiff with respect to the oil and gas leases. (Id. at ¶¶ 12-16.) This allegedly happened in September 2014. (Id. at ¶ 16.) Third, at some point in the middle of November, after plaintiff had agreed to a Northern-proposed modification, plaintiff received from Core, executed, and returned formal leases for his interests. (Id. at ¶¶ 19-21.) Fourth, after Northern informed Bakken that Northern would “close” on the oil and gas leases in 2015, Core confirmed to plaintiff that Northern’s lease payments would begin in early 2015. (Id. at ¶¶ 23, 24.) Finally, having received no payment by mid-January 2015, plaintiff contacted Core and Bakken, and was informed that Northern did not intend to honor the leases that plaintiff had executed. (Id. at ¶¶ 25-27.)

In making these factual allegations, plaintiff relied upon certain exhibits attached to the original complaint, containing, inter alia, emails between Bakken and Northern. (See id. at ¶¶ 22, 23, 27; ECF No. 1-1.) Plaintiff presumably believed that these emails buttressed his first claim for relief in light of Northern’s Vice President of Operations’ statement that Northern would “close in 2015” on the oil and gas leases. (See ECF No. 1-1 at 42.) The Magistrate Judge, though, found, at least with respect to the third, fourth, and fifth claims in the original complaint, a little less support than the plaintiff may have intended. Specifically, the Magistrate Judge found that:

The exhibits attached to [the complaint] tend to support, rather than contradict, the following factual allegations: Core and Bakken had the authority to negotiate on behalf of Northern; Northern was interested in obtaining a lease on [p]laintiff’s mineral interest; and CORE and Bakken confirmed that Northern would remit payment in 2015.

In the motion to amend, plaintiff asserts that evidence obtained during discovery effectively casts the above-referenced emails in a new light. (See ECF No. 54 at 2-3.) According to plaintiff, after the deadline to amend pleadings, “Northern stated under oath that it terminated Bakken’s agency relationship in April 2014, and never authorized Bakken (or CORE) to negotiate or enter into lease agreements on its behalf with [plaintiff].” (Id. at 3.) Plaintiff appears to contend that, because this discovery was received after the deadline to amend had passed, under Fed.R.Civ.P. 16(b) (“Rule 16(b)”), “good cause” exists to modify the deadline to amend. (See id.) Plaintiff further argues that, under Fed.R.Civ.P. 15(a)(2) (“Rule 15(a)(2)”), justice requires that leave to amend be allowed because he ...

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