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Joshi Technologies International, Inc. v. Chi Energy, Inc.

United States District Court, D. New Mexico

July 1, 2019

JOSHI TECHNOLOGIES INTERNATIONAL, INC., Plaintiff/Counterdefendant,
v.
CHI ENERGY, INC., Defendant/Counterclaimant.

          MEMORANDUM OPINION AND ORDER

         This matter comes before the Court upon Chi Energy, Inc.'s (Chi) Opposed Motion for Reconsideration of Summary-Judgment Rulings (Motion for Reconsideration), filed February 28, 2019. (Doc. 131). Joshi Technologies International, Inc. (Joshi) filed a response on March 14, 2019, and Chi filed a reply on March 27, 2019. (Docs. 134 and 135). Having reviewed the Motion for Reconsideration and the accompanying briefing, the Court grants the Motion for Reconsideration, but denies Chi's request to vacate the Court's decision (Doc. 44) denying Chi's motion for summary judgment (Doc. 32).

         A. Background

         The subject of this lawsuit is Joshi's sale of oil and gas interests to Chi in September 2012 for $11, 000.00. (Doc. 5-1). Joshi contends that it sold to Chi its interests in non-Zircon wellbores-only (operated by Chi). On the other hand, Chi contends that Joshi sold all of its interests in leases and wellbores, including non-Zircon wellbores and Zircon wellbores (operated by Mewbourne Oil Company, Inc. (Mewbourne)).

         On May 10, 2016, Chi filed a motion for summary judgment. (Doc. 32). After full briefing on the motion for summary judgment, the Court held a hearing on the motion on August 10, 2017. (Doc. 43). At the hearing, the Court determined that the September 10, 2012, Agreement Letter, and the September 17, 2012, Assignment and Bill of Sale, including Exhibit A, (collectively, PSA documents) contain ambiguities as to what interests Joshi sold to Chi, ambiguities a fact finder would have to resolve. See (Docs. 5-1 and 5-2). Having found genuine issues of material fact, the Court denied the motion for summary judgment. (Doc. 44).

         The Court subsequently appointed a Special Master to report on the pre-September 2012 values of Joshi's interests in wellbores-only and leases. (Docs 95 and 97). On September 28, 2018, the Special Master filed his Report, which the Court adopted. (Docs. 105 and 140).

         Relevant to this Motion for Reconsideration, the Special Master noted that “the PSA documents do not specifically speak to the concept of a wellbore-only assignment” and so “there is no contractual guidance on what a wellbore-only assignment means.” (Doc. 105) at 2. The Special Master, therefore, decided to use Joshi's definition of “wellbore-only” in valuing wellbores-only.[1] Id.

         Also, relevant to this Motion for Reconsideration is the Special Master's pre-September 2012 valuation of Joshi's interests in the non-Zircon wellbores-only at $794, and the pre-September 2012 valuation of all of Joshi's interests in wellbores and leases at $85, 454.00. Id. at 4-5.

         In light of the Special Master's Report, Chi moves the Court to (1) reconsider its denial of Chi's motion for summary judgment pursuant to Fed. R. Civ. 54(b); (2) grant Chi summary judgment, including on “claims to which Joshi failed to respond” such as Joshi's fraud in the inducement and breach of contract claims, [2] and Chi's breach of contract and “money had and received” claims; and (3) sustain Chi's objections (Doc. 37) to Joshi's summary judgment evidence. (Doc. 131) at 7. Joshi opposes the Motion for Reconsideration in its entirety.

         B. Rule 54(b) Standard of Review

         Rule 54(b) governs the Court's review of interlocutory orders and provides that such orders “may be revised at any time before the entry of a judgment adjudicating all the claims and all the parties' rights and liabilities.” The Tenth Circuit looks to Fed.R.Civ.P. 59(e) for guidance in addressing motions to reconsider interlocutory orders. Ankeney v. Zavaras, 524 Fed.Appx. 454, 458 (10th Cir. 2013) (stating that in considering Rule 54(b) motion to reconsider, “court may look to the standard used to review a motion made pursuant to Federal Rule of Civil Procedure 59(e)”). Courts grant Rule 59(e) relief if there is new intervening and controlling law, new evidence not available previously, or if there is a “need to correct clear error or prevent manifest injustice.” Id. (quoting Servants of the Paraclete v. Does, 204 F.3d 1005, 1012 (10th Cir. 2000)). Rule 59(e) does not allow a losing party to “revisit issues already addressed or advance arguments that could have been raised in prior briefing.” Servants of the Paraclete, 204 F.3d at 1012.

         C. Discussion

         1. The Issue of Ambiguity

         The Court finds that the Special Master's Report constitutes new evidence not previously available to the parties. Consequently, the Court will consider those portions of the Report cited in the Motion for Reconsideration to revisit the ambiguity issue.

         In addition to the argument and evidence Chi already propounded in its motion for summary judgment, Chi argues first that the Special Master's statement that “the PSA documents do not specifically speak to the concept of a wellbore-only assignment” provides evidence “that the Assignment is not ambiguous and cannot be construed as a wellbore-only assignment.” See (Doc. 105) at 2; (Doc. 131) at 5. Second, Chi argues that the Special Master's pre-September 2012 valuation of $794 for ...


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