United States District Court, W.D. Oklahoma
WHITE OAK GLOBAL ADVISORS, LLC, a Delaware limited liability company, Plaintiff,
TOMMY W. WEDER, SR., Defendant.
MEMORANDUM OPINION AND ORDER
J. CAUTHRON UNITED STATES DISTRICT JUDGE
August of 2011, Plaintiff entered into a loan agreement with
Pistol Drilling, LLC (“Pistol”). Pistol defaulted
on the loan and Plaintiff obtained a judgment against Pistol.
The assets owned by Pistol related to the loan were sold and
a deficiency resulted. Plaintiff filed the present action
against Defendant, arguing that he was the alter ego of
Pistol and therefore it should be allowed to collect the
deficiency from him.
filed a Motion to Dismiss, raising claims under Fed.R.Civ.P.
12(b)(1) and 12(b)(6). The 12(b)(1) Motion argues that the
Court lacks subject matter jurisdiction because Plaintiff has
failed to identify the citizenship of each of its members.
The 12(b)(6) Motion is premised on arguments that Plaintiff
has failed to plead sufficient facts to support its claim for
piercing the corporate veil and that Plaintiff's claims
were not filed within the appropriate statute of limitations.
Plaintiff filed a Response to the Motion to Dismiss and
Defendant filed a Reply.
Rule 12(b)(1) Motion is easily resolved. Plaintiff has now
disclosed the citizenship of each of its members and
Defendant concedes in his Reply that the Court has subject
matter jurisdiction. Accordingly, that portion of
Defendant's Motion will be denied.
the claim for piercing the corporate veil, Defendant argues
that Plaintiff has failed to plead facts sufficient to state
a cause of action under Oklahoma law. In its Complaint,
Plaintiff argued that Pistol was organized and conducted in
such a manner that it was simply an alter ego of Defendant.
Plaintiff argues Oklahoma has recognized a disjunctive
standard in veil-piercing claims, permitting a plaintiff to
recover if it shows either that the separate corporate
existence is a design or scheme to perpetrate a fraud, or
that the corporation is organized and controlled its its
affairs so that it is a mere instrumentality or alter ego of
the shareholder. See King v. Modern Music Co., 2001
OK CIV APP 126, ¶ 16, 33 P.3d 947, 952. Defendant argues
that this alternative option is available only when the
underlying entity is a corporation. He argues that Oklahoma
has never applied the alter ego portion of the veil-piercing
theory when the underlying entity is an individual.
Court is not persuaded that the distinction offered by
Defendant is supported in Oklahoma law. Certainly, the cases
cited by Defendant discuss only the “fraud”
theory in support of piercing the corporate veil; however,
the facts of those cases make clear that was the argument
presented by the parties or relied upon by the lower court.
No Oklahoma appellate court has ever relied on the analysis
suggested by Defendant. Indeed, on many occasions Oklahoma
courts have permitted use of the alter ego theory in piercing
the corporate veil when an individual was the alternative
entity. See King, supra; Atkinson,
Haskins, Nellis, Holeman, Phipps, Brittingham & Gladd v.
Vector Sec., 2011 OK CIV APP 42, ¶ 24, 255 P.3d
453, 459; Okla. Oil & Gas Exploration Drilling
Program 1983-A v. W.M.A. Corp., 1994 OK CIV APP 11, 877
P.2d 605, 609. Accordingly, this portion of Defendant's
Motion to Dismiss will be denied.
argues that Plaintiff's claim is untimely because the
date of breach was June 21, 2012, and that triggered the
running of the statute of limitations. According to
Defendant, because this action was filed more than five years
after that date, it is barred by the limitations period. In
response, Plaintiff asserts that under Oklahoma law a cause
of action for breach of an installment payment agreement does
not begin until either the lender declares its right to
accelerate the whole debt due or the lender takes an
affirmative act towards enforcing its right. Union Cent.
Life Ins. Co. v. Adam, 1934 OK 693, 38 P.2d 26. In its
Reply, Defendant does not dispute this law, but argues that
the doctrine of judicial estoppel prevents Plaintiff from
arguing that the default occurred on any date other than June
Court is not persuaded by Defendant's reliance upon
judicial estoppel. The Tenth Circuit has provided a
three-part analysis for application of the doctrine.
First, a party's subsequent position must be
“‘clearly inconsistent'” with its
former position. Id. Next, a court should inquire
whether the suspect party succeeded in persuading a court to
accept that party's former position, “so that
judicial acceptance of an inconsistent position in a later
proceeding would create the perception that either
the first or the second court was misled[.]”
Id. (emphasis added) (internal quotations omitted).
Finally, the court should inquire whether the party seeking
to assert an inconsistent position would gain an unfair
advantage in the litigation if not estopped. Id.
Eastman v. Union Pac. R. Co., 493 F.3d 1151, 1156
(10th Cir. 2007) (quoting New Hampshire v.
Maine, 532 U.S. 742, 749-51 (2001)). Even assuming that
Plaintiff made representations in the earlier case that are
“clearly inconsistent” with its current position,
Defendant cannot demonstrate the second two factors weigh in
his favor. The date of the breach was not a decisive factor
in the earlier litigation. Plaintiff's Second Amended
20. Each of the Pistol Companies has breached its obligations
under the Agreement and the related documents, and, as a
result, an event of default has occurred and continues under
the Loan Agreement.
(CIV-13-280, Dkt. No. 144). The Defendants in the underlying
case did not deny the breach, only that White Oak was the
lender. See CIV-13-280, Dkt. No. 145. ¶ 20.
Thus, any determination about the date of the breach in this
litigation would not create the perception that the Court has
been misled. Finally, permitting Plaintiff to, in this case,
litigate the timing of the breach would not give it an unfair
advantage. Accordingly, the Court declines to apply the
doctrine of judicial estoppel. Therefore, the limitations
period did not begin on June 21, 2012, as suggested by
Defendant, but at the time the underlying action was filed,
March 21, 2013. Because the present action was filed within
five years of that date, it was timely commenced.
reasons set forth herein, Defendant Tommy W. Weder, Sr.'s
Motion to Dismiss ...