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Woolslayer Companies, Inc. v. Woolslayer

United States District Court, N.D. Oklahoma

October 25, 2019




         Now before the Court are defendant Jeannie Woolslayer's motions to dismiss the original complaint and the complaint in intervention (Dkt. ## 12, 27). Jeannie Woolslayer asks the Court to dismiss plaintiff Woolslayer Companies, Inc.'s (WCI's) complaint (Dkt. # 2) on the grounds that she has filed a Texas state court lawsuit presenting identical factual and legal issues. Dkt. # 12, at 1-2. Intervening plaintiffs filed a motion to intervene (Dkt. # 8) to protect the value of their shares of WCI, and that motion was granted. Dkt. # 18. WCI and intervening plaintiffs filed responses to Jeannie Woolslayer's motion to dismiss the original complaint (Dkt. ## 20, 25) and Jeannie Woolslayer filed replies (Dkt. ## 23, 28). Jeannie Woolslayer also filed a separate motion to dismiss the complaint in intervention (Dkt. # 27).[1]


         Jeannie Woolslayer was married to Joseph R. Woolslayer prior to his death on July 26, 2018. Dkt. # 2, at 2, 5. Joseph R. Woolslayer had acted in a variety of capacities for WCI, a privately-held oil and gas company. Id. at 2. In 2000, WCI amended its certificate of incorporation to authorize 100 shares of voting Class A Common Stock and 99, 900 shares of non-voting Class B Common Stock. Id. Joseph R. Woolslayer owned all of the common stock that had been issued. Id. at 3. Subsequently, Joseph R. Woolslayer transferred 10, 000 shares of Class B stock to Jeannie Woolslayer, and retained 10, 000 shares of Class B stock for himself. Id. Prior to the transfer of 10, 000 shares to Jeannie Woolslayer, WCI had the Class A stock and Class B stock independently appraised. Id. The Class B stock was valued at a discount due to its non-voting status. Id.

         On July 10, 2018, WCI, Joseph R. Woolslayer, and Jeannie Woolslayer entered into an agreement (Redemption Agreement) for the redemption by WCI of either Jeannie Woolslayer's or Joseph R. Woolslayer's stock, should either of them predecease the other. Id. at 3-4. The Redemption Agreement was obligatory for WCI should Joseph R. Woolslayer or Jeannie Woolslayer choose to exercise their option to redeem. Id. at 4. The portion of the Redemption Agreement providing the price of redemption states:

The price of the stock of each party to this agreement to be sold pursuant to this Agreement must be determined by appraisal of the fair market value of WCI. One appraiser shall be selected by WCI and one appraiser shall be selected by the Shareholder or the personal representative of a deceased Shareholder. In the event that both appraisers cannot agree on a value, they shall appoint a third appraiser whose valuation shall be binding on all parties. The appraisal must be completed within sixty (60) days of the triggering event. The cost of the appraisals shall be borne 50% by WCI and 50% by the selling shareholder or the estate of the selling shareholder.

Dkt. # 2-1, at 4 (emphasis added). The parties dispute whether a discount should apply to the Redemption Agreement, as there is no express provision in the Redemption Agreement regarding a discount to be applied. Dkt. # 2, at 5. Once Joseph R. Woolslayer died, 10, 000 shares of his Class B stock were transferred to Jeannie Woolslayer. Id. On May 17, 2019, Jeannie Woolslayer gave written notice of her election that WCI redeem her 20, 000 shares pursuant to the Redemption Agreement. Id. The parties dispute whether WCI caused an independent appraisal of Jeannie Woolslayer's stock. Compare id. at 6 with Dkt. # 12, at 4. However, the parties do not dispute that Jeannie Woolslayer caused an independent appraisal of her stock. Dkt. # 2, at 6. On June 12, 2019, WCI offered Jeannie Woolslayer a sum of $1, 600, 000 in consideration for her 10, 000 shares of Class B stock. Id. This amount represented a discounted value of Jeannie Woolslayer's stock. Id. at 7. Jeannie Woolslayer refused the offer. Id.

         On July 30, 2019, Jeannie Woolslayer filed a lawsuit against WCI and intervening plaintiffs in Texas state court. See Jeannie Woolslayer v. Lee C. Moore, Inc. a/k/a Woolslayer Companies, Inc. et al., Cause No. DC-19-10734 in the 298th Judicial District of Dallas County. Id. at 6. Jeannie Woolslayer claimed, inter alia, that

WCI has breached the Redemption Agreement by failing to complete the appraisal process within sixty (60) days of Jeannie triggering the redemption of the stock. WCI has made an anticipatory breach of the contract by proclaiming that it will not go forward with the contractual redemption of Jeannie's shares without a Court order.
Jeannie has been damaged by WCI's breach and anticipatory breach of the Redemption Agreement, and seeks specific performance of the Redemption Agreement and all attendant monetary damages.

Dkt. # 2-5, at 8-9 (emphasis added). Jeannie Woolslayer also claims tortious interference with an existing contract against intervening plaintiffs. Id. at 9. On October 3, 2019, intervening plaintiffs removed the Texas state case to the U.S. District Court for the Northern District of Texas (Case No. 19-CV-02360-L). Dkt. # 25, at 2.

         On August 7, 2019, after the Texas case had been filed, WCI filed this lawsuit seeking a declaratory judgment that Jeannie Woolslayer's stock is not subject to a discount. Dkt. # 2, at 8. WCI requested that

the Court determine the rights and obligations of the parties under the Agreement and issue Declaratory Judgment as to whether, for purposes of the purchase price to be paid Jeannie pursuant to the Agreement, the value of Jeannie's Class B Common Stock should or should not be ...

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