Wasatch Oil & Gas, LLC v. Edward A. Reott
263 P.3d 391
Utah Ct. App.2011Background
- Reott appeals a trial court judgment quieting title in Wasatch and denying damages for an alleged oil-leases transfer in June 2000.
- Mission Energy LLC (Colorado) transferred Section 32 leases to Wasatch Oil & Gas LLC; dispute concerns validity of the transfer under oral authorization and fraud defenses.
- The trial court applied Utah law to the oral authorization issue and found the oral authorization exception to the statute of frauds applicable.
- The court held Mission was not insolvent at the time of the transfer, defeating a claim of fraudulent transfer.
- The court reconsidered causation of an oil spill after partial summary judgment, finding the spill resulted from a loose connection, not Wasatch’s conduct.
- Damages were calculated using lost-profits logic, with the court concluding no lost profits occurred due to later higher gas prices and finite recoverable gas.
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Oral authorization applies to the transfer | Reott argues no Utah oral-exception applies | Wasatch argues oral-exception applies given Mission management approval | Yes; oral authorization exception applied |
| Whether the oral authorization exception was properly supported by findings | Findings show insufficient basis for authorization by anyone acting as Mission manager | Findings show Sutton and Jager represented Mission managers and approved actions | Findings support application of oral authorization exception |
| Whether the June 2000 transfer was fraudulent under Utah law | Mission insolvent; transfer lacked reasonably equivalent value | Assets exceeded debts; presumption of insolvency rebutted | No fraudulent transfer; Mission not insolvent at relevant times |
| Whether the court properly reconsidered causation | Reconsideration of causation was improper after summary judgment | Reconsideration appropriate due to new evidence and corrected facts | No abuse of discretion; reconsideration warranted |
| Damages calculation method | Lost profits should be used to measure damages | Lost profits not applicable; profits recovered offset losses | Correct application of damages; lost profits not shown; profits offset by later gains |
Key Cases Cited
- Records v. Briggs, 887 P.2d 864 (Utah Ct.App.1994) (law issues reviewed de novo; no deference to trial court on legal questions)
- State v. Pena, 869 P.2d 932 (Utah 1994) (statutory interpretation and standard of review principles cited)
- Robinson v. Robinson, 2010 UT App 96, 232 P.3d 1081 (Utah Ct.App.2010) (clarifies questions of law and factual findings on appeal)
- Mathis v. Madsen, 261 P.2d 952 (Utah 1953) (oral-authentication exception to statute of frauds for corporate officers)
- Trembly v. Mrs. Fields Cookies, 884 P.2d 1306 (Utah Ct.App.1994) (factors for reconsideration of prior rulings; discretion of trial court)