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Lookabaugh v. Hanna Oil & Gas Co.

Court of Appeals of Arkansas, Division II

September 3, 2014

J.C. LOOKABAUGH, APPELLANT,
v.
HANNA OIL AND GAS CO., APPELLEE

APPEAL FROM THE SEBASTIAN COUNTY CIRCUIT COURT, FORT SMITH DISTRICT. NO. CV-13-424. HONORABLE JAMES O. COX, JUDGE.

Rush & Rush, by: David L. Rush, for appellant.

Daily & Woods, P.L.L.C., by: Thomas A. Daily and Colby T. Roe, for appellee.

OPINION

Page 2

PHILLIP T. WHITEAKER, Judge.

Appellant J.C. Lookabaugh appeals from an order of the Sebastian County Circuit Court granting summary judgment in favor of appellee Hanna Oil & Gas Co. (" Hanna" ). Hanna filed a complaint against J.C., raising claims of fraud and unjust enrichment. J.C. answered and moved to dismiss. Hanna subsequently moved for summary judgment, and the circuit court granted Hanna's motion on its claim for unjust enrichment. On appeal, J.C. urges that the circuit court erred in two respects: first, in considering an affidavit attached to Hanna's posttrial brief, and second, in granting Hanna's summary-judgment motion while denying his motion to dismiss. We find no error and affirm.

I. The Affidavit

In his first point on appeal, J.C. argues that the circuit court gave improper consideration to an affidavit attached to a posttrial brief filed by Hanna in violation of Arkansas Rule of Civil Procedure 56(c). That rule provides, in pertinent part, that " [n]o party shall submit supplemental supporting materials after the time for serving a reply [to a motion for summary judgment], unless the court orders otherwise."

In considering this issue, we must examine the basis for Hanna's motion for summary judgment and J.C.'s arguments made below. In its pleadings, Hanna asserted that, in 2002, it acquired an interest in a natural gas well in Logan County. At that time, Hanna's records indicated that an overriding royalty interest was owned by J.C. Hanna did not have an address for J.C., so it held the royalty in suspense. In 2010, Nate Buerer, a research specialist for ARI Asset Recovery, contacted J.C. to inform him that ARI had discovered the royalties being held in escrow.[1] Hanna obtained a tax identification number from J.C. and, between July 2010 and October 2010, Hanna paid J.C. a total of $71,135.33 as overriding royalties. Hanna subsequently discovered that the actual owner of the overriding royal interest was L.C. Lookabaugh, J.C.'s brother. Hanna wrote to J.C. on several occasions and asked him to repay the $71,135.33. J.C. failed to do so. Hanna therefore filed its complaint against J.C. alleging fraud and unjust enrichment.

At the subsequent summary-judgment hearing, J.C. argued, among other things, that Hanna lacked standing to sue him for unjust enrichment. In essence, J.C. contended that only L.C. Lookabaugh or his heirs would have standing to bring an unjust-enrichment claim, because they--not Hanna--were the beneficiaries of the royalty payments. The circuit court questioned the parties about the standing issue and requested simultaneous posttrial briefs on the matter. In its brief, Hanna asserted that it had paid the lawful heirs of L.C. Lookabaugh the royalties to which they were entitled. In support of this point, Hanna attached an affidavit from

Page 3

Jackie Clotfelter, a Division Order Analyst for Hanna, stating that Hanna paid L.C.'s heirs the overriding royalty interests, part of which had already been paid to J.C.

After submission of the briefs, the circuit court subsequently entered an order granting summary judgment in favor of Hanna on its unjust-enrichment claim. J.C. filed a motion for new trial, arguing that the circuit court improperly considered the affidavit that Hanna attached to its posttrial brief, after the court had already conducted the summary-judgment hearing. The circuit court denied the new-trial motion.

As noted above, Rule 56 prohibits the submission of supplemental materials without direction by the court. On appeal, J.C. argues that Hanna's affidavit constituted such supplemental materials in violation of the rule. He maintains that the circuit court, by referencing the affidavit in its order, must have improperly considered it in ...


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