Morse v. Bakken Oil, LLC, 1:15-cv-00962

Background

Brent J. Morse (Plaintiff) executed and returned recordable oil & gas lease documents on Nov. 19, 2014 after CORE Consulting (agent) negotiated terms on behalf of Northern Oil & Gas, communicated through Bakken Oil representatives. CORE is a single-member Montana LLC (Cori Schock).
CORE and Bakken exchanged emails with Northern confirming Northern’s interest and a revised four‑year term; CORE informed Morse payment was "scheduled for next year." Northern later decided, due to market conditions, not to proceed and did not remit payment.
Morse sued in Colorado federal court asserting breach of contract (against Northern) and tort claims (negligent misrepresentation and deceit/fraud) against CORE, Bakken, and Northern; the court has diversity jurisdiction.
Northern and Bakken moved to dismiss the tort claims at issue (Counts 4–5 against Northern and Counts 3–5 against Bakken) for failure to state a claim and for lack of particularity under Fed. R. Civ. P. 9(b).
The Magistrate Judge applied Montana substantive law (choice‑of‑law analysis) and concluded the Complaint and attached emails do not plausibly plead fraudulent or negligent‑misrepresentation claims against Bakken or Northern; recommended granting both motions to dismiss.

Issues

Issue	Plaintiff's Argument	Defendant's Argument	Held
Whether Plaintiff pleaded negligent misrepresentation based on CORE/Bakken representations of authority and payment schedule	Morse contends CORE (and thus Bakken/Northern via respondeat superior) represented Northern’s present intent to be bound and that payment was scheduled, inducing reliance	Bakken/Northern argue emails and exhibits show they reasonably believed Northern intended to proceed; plaintiff fails to plead a false representation of past/existing fact or knowledge of falsity	Dismissed — Montana requires misrepresentation of past/existing fact and allegation that defendant lacked reasonable grounds or knew falsity; pleadings/exhibits contradict fraud elements
Whether promise to perform in the future (pay under the leases) can support deceit/fraud	Morse alleges promises to pay and to be bound induced him to sign and return leases; asserts defendants either knew or should have known they would not perform	Defendants argue promises of future performance and subsequent nonpayment are not actionable fraud absent allegations the promisor had no intent to perform when making the promise; plaintiff fails to plead intent	Dismissed — under Montana law mere unkept promise/failure to pay is not fraud; must plead present intent not to perform with particularity
Whether pleading satisfied Rule 9(b) particularity for fraud	Morse relies on general allegations and attached emails to support fraudulent intent and knowledge	Defendants argue Morse’s claims are conclusory, lack particulars (who, when, how, why fraud existed), and some attachments undermine his theory	Dismissed — Rule 9(b) not met; conclusory allegations insufficient and exhibits do not support knowledge of falsity

Key Cases Cited

Bell Atlantic Corp. v. Twombly, 550 U.S. 544 (pleading must state plausible claim)
Ashcroft v. Iqbal, 556 U.S. 662 (plausibility standard for pleadings)
Robbins v. Oklahoma, 519 F.3d 1242 (plausibility and pleading burden)
Casanova v. Ulibarri, 595 F.3d 1120 (accept well‑pleaded facts at motion to dismiss)
Reese v. BP Exploration (Alaska) Inc., 643 F.3d 681 (statement must be misleading when made; subsequent events cannot create fraud)
Mattingly v. First Bank of Lincoln, 285 Mont. 209 (adopting Restatement § 552 for negligent misrepresentation under Montana law)
Krone v. McCann, 197 Mont. 380 (elements of fraud under Montana law)
Davis v. Church of Jesus Christ of Latter Day Saints, 852 P.2d 640 (promise to pay in the future/failure to pay is not actionable fraud under Montana law)