Case Title: Black Diamond Energy Partners Ltd. v. S&T Bank

Citation: 

Docket Number: S-11-0206

State: wyoming

Court: Wyoming Supreme Court

Date: 2012-06-15T00:00:00Z

Document:
BLACK DIAMOND ENERGY PARTNERS 2001-A LTD., BLACK DIAMOND ENERGY PARTNERS 2001-B LTD., BLACK DIAMOND ENERGY PARTNERS 2002-A LTD., BLACK DIAMOND ENERGY PARTNERS 2003-A LTD., BLACK DIAMOND ENERGY PARTNERS 2003-B LTD., BLACK DIAMOND ENERGY PARTNERS 2004-A LTD., BLACK DIAMOND ENERGY PARTNERS 2004-B LTD., BLACK DIAMOND ENERGY PARTNERS 2005-A LTD., BLACK DIAMOND ENERGY PARTNERS 2005-B LTD., BLACK DIAMOND ENERGY PARTNERS 2005-C LTD., BLACK DIAMOND ENERGY PARTNERS 2006-A LTD., BLACK DIAMOND ENERGY PARTNERS 2006-B LTD., BLACK DIAMOND ENERGY PARTNERS 2007-A LTD., BLACK DIAMOND ENERGY PARTNERS 2007-B LTD., BLACK DIAMOND ENERGY PARTNERS 2008 - A LTD., BLACK DIAMOND ENERGY PARTNERS 2008-B LTD. v. S & T BANK2012 WY 84Case Number: S-11-0206Decided: 06/15/2012This opinion is subject to formal revision before publication in Pacific Reporter Third.  Readers are requested to notify the Clerk of the Supreme Court, Supreme Court Building, Cheyenne, Wyoming 82002, of any typographical or other formal errors so that correction may be made before final publication in the permanent volume.  
APRIL 
TERM, A.D. 2012
 
(1) 
BLACK DIAMOND ENERGY PARTNERS 2001-A LTD.,(2) BLACK DIAMOND ENERGY PARTNERS 
2001-B LTD.,(3) BLACK DIAMOND ENERGY PARTNERS 2002-A LTD.,(4) BLACK 
DIAMOND ENERGY PARTNERS 2002-B LTD.,(5) BLACK DIAMOND ENERGY PARTNERS 2003-A 
LTD.,(6) BLACK DIAMOND ENERGY PARTNERS 2003-B LTD.,(7) BLACK DIAMOND 
ENERGY PARTNERS 2004-A LTD.,(8) BLACK DIAMOND ENERGY PARTNERS 2004-B 
LTD.,(9) BLACK DIAMOND ENERGY PARTNERS 2005-A LTD.,(10) BLACK DIAMOND 
ENERGY PARTNERS 2005-B LTD.,(11) BLACK DIAMOND ENERGY PARTNERS 2005-C 
LTD.,(12) BLACK DIAMOND ENERGY PARTNERS 2006-A LTD.,(13) BLACK DIAMOND 
ENERGY PARTNERS 2006-B LTD.,(14) BLACK DIAMOND ENERGY PARTNERS 2007-A 
LTD.,(15) BLACK DIAMOND ENERGY PARTNERS 2007-B LTD.,(16) BLACK DIAMOND 
ENERGY PARTNERS 2008-A LTD.,(17) BLACK DIAMOND ENERGY PARTNERS 2008-B 
LTD.,Appellants(Plaintiffs),v.S & T 
BANK,Appellee(Defendant).

 
 
Appeal 
from the District Court of Johnson County
The 
Honorable John G. Fenn, Judge
 
Representing 
Appellants:
Greg 
L. Goddard of Goddard, Wages & Vogel, P.C., Buffalo, Wyoming; Mark A. Waller 
of Sneed Lang Herrold PC, Tulsa, Oklahoma.  
Argument by Mr. Goddard.
 
Representing 
Appellee:
Stuart 
R. Day and Ryan Schwartz of Williams, Porter, Day & Neville, P.C., Casper, 
Wyoming; John B. Joyce and Andrew G. Dittoe of Grenen & Birsic, P.C., 
Pittsburgh, Pennsylvania.  Argument 
by Mr. Joyce.
 
 
Before 
KITE, C.J., and GOLDEN, HILL, VOIGT, and BURKE, JJ.
 
 
KITE, 
Chief Justice.
 
[¶1]  Black Diamond Energy Partners 2001-A 
Ltd., 2001-B Ltd., 2002-A Ltd., 2002-B Ltd., 2003-A Ltd., 2003-B Ltd., 2004-A 
Ltd., 2004-B Ltd., 2005-A Ltd., 2005-B Ltd., 2005-C Ltd., 2006-A Ltd., 2006-B 
Ltd., 2007-A Ltd., 2007-B Ltd., 2008-A Ltd., and 2008-B Ltd. (BDE Partners) are 
Nevada limited partnerships which own interests in coal bed methane wells 
located in Wyoming.  Black Diamond 
Energy, Inc., (BDE, Inc.) is a Wyoming corporation and the managing general 
partner of BDE Partners 2001-A Ltd. through 2006-A Ltd.  Black Diamond Energy, Inc. of Delaware 
(BDE Del) is a Delaware corporation and the managing general partner of BDE 
Partners 2006-B Ltd. through 2008-B Ltd.  
BDE, Inc. and BDE Del are wholly owned subsidiaries of Koval Resources, 
LLC (Koval Resources), a Nevada limited liability company.  
 
[¶2]  Koval Resources entered into a loan 
agreement in Pennsylvania with S&T Bank (S&T), a regional state bank 
with offices only in Pennsylvania.  
Koval Resources ultimately defaulted on the loan.  BDE Partners filed a complaint in 
Wyoming against S&T alleging negligence, breach of fiduciary duty, breach of 
the implied covenant of good faith and fair dealing and other claims.  S&T moved to dismiss the complaint, 
asserting Wyoming lacked personal jurisdiction because S&T did not have 
sufficient contacts with the State to establish personal jurisdiction.  The district court granted S&T’s 
motion.  BDE Partners appealed, 
claiming the district court erred in concluding it did not have personal 
jurisdiction over S&T.   We 
reverse.
 
ISSUE
 
[¶3]  The issue for our determination is 
whether the district court correctly concluded it did not have personal 
jurisdiction over S&T.
 
FACTS
 
[¶4]  BDE Partners are comprised of 
approximately 3800 limited partners and two general managing partners who reside 
in various states, including Pennsylvania and Wyoming.  BDE Partners own interests in 
approximately 430 coal bed methane wells located in Johnson, Converse, Sublette, 
Sweetwater, and Campbell counties in Wyoming.  BDE, Inc. owns 36% and/or 40% of BDE 
Partners 2001-A Ltd. through 2006-A Ltd.  
BDE Del owns 36% of BDE Partners 2006-B Ltd. through 2008-B Ltd.   Charles and Eric Koval are the 
owners and principal officers and directors of Koval Resources, BDE, Inc. and 
BDE Del.    

 
[¶5]  In 2002, Koval Resources and S&T 
entered into a loan agreement in Pennsylvania pursuant to which S&T agreed 
to extend a revolving line of credit to Koval Resources in the amount of 
$5,000,000.  The funds were to be 
used exclusively as working capital for Koval Resources operations.  Charles Koval, Eric Koval and their 
respective spouses individually guaranteed the loan and pledged their assets as 
collateral.  Additionally, BDE, 
Inc., acting as corporate guarantor for the loan, executed a guaranty and 
suretyship agreement with S&T providing that it would mortgage or assign 
certain oil and gas royalty interests it owned in Wyoming as collateral.      

 
[¶6]  At the time the loan agreement was 
executed, the Kovals were residents of Pennsylvania and BDE, Inc.’s principal 
offices were located there as well.  
The loan agreement and note provided that they were governed by and to be 
construed in accordance with Pennsylvania law and, in the event of a dispute, 
Koval Resources consented to the “non-exclusive jurisdiction” of a Pennsylvania 
court.  BDE, Inc.’s guaranty and 
surety agreement likewise provided that it was governed by Pennsylvania law and 
that BDE, Inc. consented to the non-exclusive jurisdiction of the courts in 
Pennsylvania.         

 
[¶7] 
Shortly after the Koval Resources loan agreement and note were executed, BDE, 
Inc. entered into an escrow agreement pursuant to which partnership interests in 
BDE Partners 2002-B Ltd. would be offered for sale to qualified investors.  Proceeds from the sales were to be 
deposited in an escrow account opened with S&T, held in the account until 
they reached a specified amount and then released to BDE, Inc.  Similar escrow agreements were executed 
in subsequent years for the sale of interests in BDE Partners 2003-A Ltd. 
through BDE Partners 2008-B Ltd.         

 
[¶8]  Between 2002 and 2009, S&T and Koval 
Resources executed nine amendments to the original loan agreement and note.  In some instances, the amendments merely 
extended the term of the loan.  In 
other instances, the amendments also increased the principal amount of credit 
extended.  All of the amendments 
provided that they were governed by Pennsylvania law and Koval Resources 
consented to the nonexclusive jurisdiction of courts in Pennsylvania.   Between the fourth amendment in 
January of 2006 and fifth amendment a year later, two S&T senior vice 
presidents came to Wyoming where they met with BDE, Inc. employees and viewed 
BDE, Inc.’s assets and operations.    
 
[¶9]  By May of 2007, when the original loan 
agreement was amended for the sixth time, S&T had extended credit to Koval 
Resources in the amount of $20,000,000.  
With that increase in the principal amount, BDE Del joined BDE, Inc. as a 
corporate guarantor of the line of credit extended to Koval Resources.  In September of 2007, S&T retained 
an independent petroleum engineer licensed in Wyoming to perform an evaluation 
of the reserves and economic value of BDE, Inc.’s oil and gas interests in three 
Wyoming counties.  Shortly 
thereafter, S&T loaned Koval Resources and BDE, Inc. $3,320,000 in a 
separate term loan.1  The promissory note evidencing the term 
loan provided that it was governed by federal law applicable to S&T and, to 
the extent not preempted by federal law, the law of Pennsylvania.  It also provided that in the event of a 
lawsuit, BDE, Inc., and Koval Resources agreed upon S&T’s request to submit 
to the jurisdiction of Pennsylvania courts.    
 
[¶10]  As collateral for the additional amounts 
loaned to Koval Resources and itself, BDE, Inc. executed new and amended 
agreements mortgaging additional oil and gas interests it owned in Wyoming and 
assigning interests it had in leases and pipelines located in Wyoming.  Seven of the nine documents contained in 
the record evidencing BDE, Inc.’s mortgages or assignments of property provide 
that they are governed by Wyoming law; the remaining two provide they are 
governed by Pennsylvania law.       

 
[¶11]  In mid-January of 2008, BDE, Inc. and 
BDE Del each executed control agreements with S&T, whereby they granted 
S&T a security interest in and control over all of the BDE Partners.  As with most of the other loan 
documents, the control agreements provided that they were governed by 
Pennsylvania law.  Also in early 
2008, BDE, Inc. began moving its offices from Pennsylvania to Wyoming.  By late 2008, BDE, Inc. had completely 
relocated to Wyoming.    

 
[¶12]  Prior to the relocation, BDE, Inc. began 
experiencing cash flow and other financial problems and sold some of its Wyoming 
property.  S&T approved the sale 
but advised that 100% of the proceeds would be applied to the outstanding 
loans.  BDE, Inc. responded that it 
had other Wyoming properties it believed it could sell but would be obligated to 
distribute the proceeds of any such sales to its partners pursuant to the 
partnership agreements.  BDE, Inc. 
expressed concern that S&T would delay sales and/or freeze the proceeds, 
leaving BDE, Inc. unable to pay BDE Partners in violation of the 
agreements.  In response, S&T 
proposed that proceeds from sales of BDE, Inc. properties be payable to the bank 
in different percentages depending upon how the property had been designated2 and that those percentages payable 
to S&T be applied either to the term loan debt or the line of credit.  In the event the proceeds were applied 
to the line of credit, S&T advised BDE, Inc. that the availability of the 
funds would be reduced until the oil and gas reserves could be 
re-evaluated.  In July of 2008, the 
Wyoming petroleum engineer hired by S&T completed another evaluation of BDE, 
Inc’s Wyoming oil and gas reserves.    
 
[¶13]  BDE, Inc.’s financial condition 
continued to worsen and in the fall of 2008 its representatives met with S&T 
representatives in Pennsylvania to discuss the situation and request additional 
funding.  In February of 2009, 
S&T’s senior vice president came to Wyoming along with an oil and gas 
consultant hired by S&T to assess its collateral.  They met with BDE, Inc. representatives, 
viewed its operations and property and traveled to Casper where they met with 
the petroleum engineer who had prepared the evaluations of BDE, Inc.’s 
reserves.    

 
[¶14]  Emails in the record reflect that 
communications between S&T and BDE, Inc., after S&T’s February 2009 trip 
to Wyoming focused primarily on liquidating BDE, Inc.’s assets as a means of 
repaying the loans.  In March of 
2009, S&T’s consultant visited Wyoming again to oversee the planned 
liquidation.  Among his objectives 
during his stay were to review BDE, Inc.’s budget, determine what properties the 
company intended to keep and let go, meet with an oil and gas clearing house 
representative concerning potential interest in BDE, Inc.’s assets, discuss the 
company’s salary plan and visit some of its key properties “to get a feel for 
the capital investment there in wells, infrastructure including pipelines, water 
treatments facilities, pipe lines, etc.”  
S&T’s consultant also indicated that BDE, Inc. needed to “identify an 
asset or assets that could be sold quickly . . . [because] the bank has offered 
to work with you . . . but you need to come up with some contribution to the 
effort from your side.”  

 
[¶15]   After the consultant’s trip to 
Wyoming, the parties attempted to negotiate a forbearance agreement.  In essence, the proposed agreement 
provided that S&T would refrain for three months from exercising its rights 
under the loan agreements and would make funds available during that time to 
fund Koval Resources and BDE, Inc.’s day to day operations, lease rental 
payments and accounts payable as approved by S&T.  In exchange, Koval Resources and BDE, 
Inc. were to arrange for the orderly liquidation of their assets.  Ultimately, the negotiations broke down 
and the forbearance agreement was never executed.  In the summer of 2009, S&T filed a 
complaint in confession of judgment against BDE, Inc. in Pennsylvania for 
$19,434,348.07.  The Pennsylvania 
court entered judgment against BDE, Inc. in that amount and S&T filed the 
judgment as a foreign judgment in Wyoming.    
 
[¶16]  In 2010, BDE Partners filed their 
complaint against S&T in Wyoming district court asserting in essence that 
S&T improperly interfered with BDE, Inc.’s ability to maintain its Wyoming 
operations, causing the operations to fail and BDE Partners to sustain 
damages.  S&T moved to dismiss 
the action asserting the Wyoming court lacked personal jurisdiction because 
S&T did not have even minimum contacts with Wyoming.  The district court granted the 
motion.  
 
STANDARD 
OF REVIEW
 
[¶17]   We have said many 
times:
 
The 
question of in personam jurisdiction is a mixed question of law and fact that, 
if disputed, must be resolved before a matter can proceed.  The district court has considerable 
leeway in deciding a pretrial motion to dismiss for lack of personal 
jurisdiction.  The court may 
determine the matter on the basis of pleadings and other materials called to its 
attention; it may require discovery; or it may conduct an evidentiary 
hearing.  The procedural path the 
district court chooses to follow determines the plaintiff’s burden of proof and 
the standard to be applied on appeal.  

 
When 
the underlying facts are undisputed, the existence of personal jurisdiction is a 
matter of law.  If the district 
court’s determination is made without an evidentiary hearing, the plaintiff must 
show only a prima facie case to defeat the motion to dismiss.  The district court must view the 
allegations in the pleadings and documentary evidence in the light most 
favorable to the non-moving party, resolving all reasonable inferences in favor 
of the non-moving party. 
 
When 
material factual allegations regarding jurisdiction in the affidavits cannot be 
harmonized, the district court should hold an evidentiary hearing to determine 
the issue of jurisdiction. Once an evidentiary hearing is held, however, we will 
defer to the district court’s findings of fact and the plaintiff will succeed 
upon showing, by a preponderance of the evidence, that the defendant is subject 
to jurisdiction.  No matter the 
procedural course charted, however, the ultimate question of whether personal 
jurisdiction can properly be exercised is a question of law to be reviewed de 
novo.  
 
Cheyenne 
Publishing, 
LLC v. Starostka, 2004 WY 88, ¶ 10, 
94 P.3d 463, 469 (Wyo. 2004) (citations omitted). 
 
[¶18] 
In support of its motion to dismiss for lack of personal jurisdiction, S&T 
submitted affidavits and exhibits.  
In response, BDE Partners also submitted affidavits and exhibits.    The district court did not 
hold an evidentiary hearing; rather, it decided S&T’s motion based on the 
pleadings, the other materials the parties submitted and the legal arguments of 
counsel.   Given this course of 
proceedings, the district court was required to view the allegations in the 
pleadings and documentary evidence in the light most favorable to BDE Partners 
and resolve all reasonable inferences in its favor.  Applying this same standard, we review de novo the question of whether the 
district court had personal jurisdiction over S&T.  O’Bryan v. McDonald, 952 P.2d 636, 638 
(Wyo. 1998).
 
DISCUSSION
 
[¶19]  As we have said:
 
The 
courts of Wyoming are authorized by statute to exercise personal jurisdiction 
over defendants on any basis which is not inconsistent with the Wyoming or 
United States constitutions.  W.S. 
5-1-107(a) (1977).  So long as the 
exercise of jurisdiction does not offend the Due Process Clause of the 
Fourteenth Amendment to the United States Constitution, the courts of this state 
have jurisdiction over a defendant.  
Markby v. St. Anthony Hosp. 
Sys., 647 P.2d 1068, 1070 (Wyo.1982).
 
            
Due process requires that the defendant have certain “minimum contacts” 
with the forum state such that the exercise of jurisdiction over him does not 
offend “traditional notions of fair play and substantial justice.”  Int’l Shoe Co. v. Washington, 326 U.S. 310, 316, 66 S. Ct. 154, 158, 90 L. Ed. 95 (1945); Markby, 647 P.2d  at 1070.   
 
Amoco 
Prod. Co. v. EM Nominee Partnership Co., 
886 P.2d 265, 267 (Wyo. 1994).
 
[¶20]  For a plaintiff to meet its burden of 
making a prima facie showing that a defendant is subject to personal 
jurisdiction in Wyoming, 
 
[i]t 
is essential in each case that there be some act by which the defendant 
purposefully avails itself of the privilege of conducting activities within the 
forum state, thus invoking the benefits and protections of its laws. 

 
Olmstead 
v. American Granby Co., 
565 P.2d 108, 112 (Wyo. 1977), citing Cozzens v. Piper Aircraft Corp., 514 P.2d 1375, 1378 (Wyo. 1973) (emphasis added).  A showing that a defendant had casual, 
isolated, or sporadic transactions of limited duration and extent within the 
forum state is not sufficient.  Olmstead, 565 P.2d  at 112.  However,
 
to 
the extent that a corporation exercises the privilege of conducting activities 
within a state, it enjoys the benefits and protection of the laws of that 
state.  The exercise of that 
privilege may give rise to obligations; and, so far as those obligations arise 
out of or are connected with the activities within the state, a procedure which 
requires the corporation to respond to a suit brought to enforce them can, in 
most instances, hardly be said to be undue.       

 
Ford 
Motor Co. v. Arguello, 
382 P.2d 886, 894 (Wyo. 1963), quoting Int’l Shoe, 326 U.S. 310, 66 S. Ct.  at 
160.  
 
 [¶21]  In addition to the above considerations, 
this Court has applied the following three part test to determine whether 
Wyoming has personal jurisdiction over a non-resident 
defendant:
 
First, 
the defendant must purposefully avail himself of the privilege of acting in the 
forum state or of causing important consequences in that state.  Second, the cause of action must arise 
from the consequences in the forum state of the defendant’s activities.  Finally, the activities of the defendant 
or the consequences of those activities must have a substantial enough 
connection with the forum state to make the exercise of jurisdiction over the 
defendant reasonable.  

 
Anderson 
v. Perry, 667 P.2d 1155, 1157 (Wyo. 1983); Amoco, 
886 P.2d  at 267.  We have also 
adopted the United States Supreme Court’s distinction between “general” and 
“specific” personal jurisdiction.
 
“Specific” 
jurisdiction is when a state exercises jurisdiction over a defendant in a suit 
arising out of or related to that defendant’s contacts with the forum.  Helicopteros Nacionales De Colombia, S.A. v. 
Hall, 466 U.S. 408, 414 n. 8, 104 S. Ct. 1868, 1872, n. 8, 80 L. Ed. 2d 404 
(1984); see Eddy v. Oukrop, 784 P.2d 610, 612-14 (Wyo.1989)  
(jurisdiction exercised over defendants because suit arose out of 
defendants’ contacts with Wyoming).  
In contrast, “general” jurisdiction is when a state exercises 
jurisdiction over the defendant in a suit not arising out of or related to that 
defendant’s contacts with the state.  
Helicopteros Nacionales, 466 U.S.  at 414 n. 9, 104 S. Ct.  at 1872; see Markby, 647 P.2d  at 1074 (defendant’s 
contacts with the state not sufficient to create personal jurisdiction in 
Wyoming where defendant’s contacts with the state were not related to the 
suit).  Even if a single act arises 
out of or is related to the suit, a state may not have jurisdiction if the 
nature of the act creates only an “attenuated” connection with the forum.  Burger King, 471 U.S.  at 475 n. 18, 105 S. Ct.  at 2184 n. 8.
 
Amoco, 
886 P.2d 267-268.  

 
[¶22]  To illustrate, in Markby, the plaintiff filed a wrongful 
death suit in Wyoming against a Colorado hospital claiming it failed to properly 
care for the decedent, a Wyoming resident, while she was a patient at the 
hospital in Colorado.  The 
hospital’s only contact with Wyoming was placing an advertisement in Wyoming 
telephone directories for its air ambulance service.  This Court concluded Wyoming did not 
have personal jurisdiction over the hospital because the wrongful death action 
did not result from and was not related in any way to the hospital’s only 
activity in Wyoming— advertising its air ambulance service.  
 
[¶23]  In contrast, in Eddy, the defendant entered into a 
contract in Wyoming and his alleged breach of the contract gave rise to the 
lawsuit.  The Court held that 
Wyoming had jurisdiction over the defendant in part based on the fact that his 
activity in Wyoming—entering into a contract here—gave rise to the lawsuit.  Similarly, in Amoco, the plaintiff brought suit in 
Wyoming claiming the defendant breached an oil and gas unit agreement when it 
refused to reimburse Amoco for royalties it had mistakenly paid to the 
defendant.  The defendant’s only 
contacts with Wyoming were that it owned real property (its overriding royalty 
interest) in Wyoming and became a party to the unit agreement in Wyoming when it 
purchased the royalty interest.  
Because the lawsuit arose out of one of the defendant’s contacts with 
Wyoming—the unit agreement, which Amoco claimed it breached—the Court concluded 
Amoco was asserting specific jurisdiction.  

 
[¶24] 
The Amoco Court went on to apply the 
three part test for determining whether the defendant’s contacts with Wyoming 
were sufficient for the courts to exercise personal jurisdiction over it.  Addressing the first requirement, the 
Court concluded the defendant purposefully availed itself of the privilege of 
acting in Wyoming when it purchased property here and accepted the benefits of 
that ownership in the form of royalty payments that were earned based on oil and 
gas production in the State.  The 
Court rejected the argument that passive ownership of property is insufficient 
to justify the exercise of jurisdiction and concluded that jurisdiction based 
upon a contract is proper in Wyoming when the contract has consequences in 
Wyoming.    

 
[¶25]  Addressing the second part of the test, 
the Court reiterated that the cause of action involved specific personal 
jurisdiction; it arose out of the unit agreement to which the defendant was a 
party and was related to the defendant’s ownership of the royalty interest.  Thus, the cause of action arose as a 
consequence of the defendant’s activities in Wyoming.  The Court further concluded the 
defendant’s activities had a substantial connection with Wyoming, thus meeting 
the third requirement for personal jurisdiction.  “[T]he contract [to which the defendant 
is a party] concerns a royalty interest located in Wyoming, which earned [the 
defendant] substantial amounts of money on oil and gas produced in this 
state.”  Amoco, 886 P.2d  at 269.  Moreover, the Court concluded, the 
exercise of jurisdiction by Wyoming was reasonable because the State has a 
strong interest in its natural resources and their production.  Id.     
 
[¶26]  Another Wyoming case warrants 
discussion.  In Anderson, 667 P.2d  at 1157, the Court 
concluded Wyoming had personal jurisdiction over a non-resident defendant who 
was being sued after he defaulted on payments under a contract for the purchase 
of real estate in Wyoming.  In 
concluding that the defendant had purposefully availed himself of the privilege 
of acting in Wyoming for purposes of due process, the Court cited as support two 
cases of note from other jurisdictions.  
Id. at 1157-1158.  In Waterval v. District Court In and For El 
Paso County, Colo., 620 P.2d 5 (1980), the defendant had never been in 
Colorado; his contacts consisted of investment advice given by telephone over a 
two-year period.  The court 
concluded those contacts adequately demonstrated a purposeful election to cause 
important consequences in the forum state. The court stated: 

 
His 
was not a single, isolated act, the effects of which occurred fortuitously in 
this state.  Nor was [his] contact 
with the forum state thrust upon him against his will.  Rather, [he] freely and deliberately 
chose to continue in Colorado his attorney-client relationship which originated 
in Virginia.
 
Id. 
at 11.  In Proctor & Schwartz, Inc. v. Cleveland 
Lumber Co., 228 Pa.Super. 12, 323 A.2d 11 (1974), the defendant corporation 
had no offices, property, agents, representatives or employees in the forum 
state and the contract giving rise to the suit was signed in a different state 
and was the only business contact the defendant had with the forum state.  Still, given the other circumstances, 
the court found it reasonable that the defendant should have foreseen that the 
transaction would have consequences in the forum state.  
 
[¶27]  Relying on these cases, the Court 
concluded in Anderson that the 
defendant’s activities had a substantial enough connection with Wyoming to make 
the exercise of jurisdiction reasonable.  The Court found it important that the 
contract at issue involved real property located in Wyoming and covenants 
recorded in Wyoming.  Borrowing 
words from another Colorado decision, the Court found it of “utmost importance” 
that the subject matter of the contract, the real estate, was located in 
Wyoming, thereby making Wyoming the state with the greatest interest in the 
transaction.  Anderson, 667 P.2d  at 1158, citing Dwyer v. District Court, Sixth Judicial 
District, Colo., 188 Colo. 41, 532 P.2d 725 (1975).
 
[¶28]  Similarly, in First Michigan Bank v. Mueller, No. 
11-10975, 2011 U.S. Dist. LEXIS 84888, (E.D. Mich. Aug. 2, 2011) the court 
dismissed an action brought in Michigan by a Michigan bank that had extended 
five loans to out of state businesses.  
Because none of the loans facilitated businesses in Michigan, the court 
concluded the exercise of personal jurisdiction in Michigan was not 
appropriate.  See also, Lachman v. Bank of Louisiana, 510 F. Supp. 753 (D. Ohio 1981), in which the court held it had personal jurisdiction 
in an action brought by an Ohio resident against a Louisiana bank where the 
credit arrangement was entered into in Louisiana, the debtor notified the bank 
of her move to Ohio, and the bank continued to 
extend credit to her in Ohio and billed her at her Ohio address for purchases 
made in Ohio. 
 
 
[¶29]  With these cases in mind, we turn to 
consideration of the present case. The activities BDE Partners asserts S&T 
engaged in that were connected to or had consequences in Wyoming include the 
following:
 
-       
extending 
millions of dollars in credit to Koval Resources and BDE Partners’ general 
managing partner for use exclusively in establishing and maintaining their 
operations and assets in Wyoming; 
-       
accepting 
as collateral for the loans BDE, Inc. property located exclusively in Wyoming, 
property in which BDE Partners owned an interest;
-       
controlling 
through security interests and control agreements BDE, Inc.’s ability to sell 
property located in Wyoming in which BDE Partners owned an interest in order to 
free up cash for use in maintaining BDE, Inc.’s Wyoming operations and paying 
BDE Partners;
-       
limiting 
BDE, Inc.’s ability to access the proceeds of sales of Wyoming property to pay 
expenses necessary to keep its Wyoming operations going, including Wyoming lease 
rentals, surface use fees, taxes, utility bills and employee salaries, and 
thereby pay amounts owed to BDE Partners;
-       
refusing 
to allow BDE, Inc. to use funds held in Charles Koval’s wealth management 
account to run its Wyoming operations;
-       
requiring 
BDE, Inc. to liquidate its assets rather than taking action to assist it in 
maintaining its Wyoming operations and thereby pay BDE 
Partners;
-       
failing 
to take BDE Partners’ ownership interests into account in liquidating BDE, 
Inc.’s Wyoming operations; 
-       
requiring 
BDE, Inc. to turn its Wyoming operations over to a third party restructuring 
officer; and
-       
freezing 
all of BDE, Inc.’s bank accounts and line of credit without notice when $900,000 
was available on the line of credit which directly impacted its Wyoming 
operations.
 
As 
a result of these activities and others by S&T, BDE Partners asserts BDE, 
Inc. was unable to keep the Wyoming operations going, defaulted on its loans and 
was unable to pay BDE Partners monies owing to them.  In engaging in the above activities, BDE 
Partners assert among other claims that S&T acted negligently, breached its 
fiduciary duties and the covenant of good faith and fair dealing, and interfered 
with BDE Partners’ contractual relations, business expectancy and prospective 
economic advantage. 
 
[¶30]  Viewing the allegations in the pleadings 
and documentary evidence in the light most favorable to BDE Partners and 
resolving all reasonable inferences in its favor as we are required to do, we 
conclude BDE Partners met its burden of showing that S&T had sufficient 
contacts with Wyoming to warrant the exercise of personal jurisdiction by 
Wyoming courts.  As has been true in 
other cases addressing personal jurisdiction, the basic facts upon which BDE 
Partners relies to show that S&T engaged in activities connected to or 
having consequences in Wyoming are not in dispute, only their characterization 
and application to the law.  Meyer v. Hatto, 2008 WY 153, ¶ 15, 198 P.3d 552, 555 (Wyo. 2008).  It is 
undisputed, for example, that S&T extended millions of dollars in credit to 
Koval Resources and BDE, Inc. for their use exclusively in establishing and 
maintaining their Wyoming operations and assets and that S&T accepted as 
collateral for the loans property located exclusively in Wyoming.  It also is undisputed that through 
security interests and control agreements S&T controlled BDE, Inc.’s ability 
to sell property located in Wyoming.  
The record likewise contains evidence that S&T: controlled BDE, 
Inc.’s ability to access the proceeds of sales of Wyoming property to pay 
expenses incurred in Wyoming in order to maintain its operations, such as 
Wyoming lease rentals, surface use fees, taxes, utility bills and employee 
salaries; hired a consultant and sent him to Wyoming to oversee on its behalf 
the liquidation of BDE, Inc.’s Wyoming assets; required BDE, Inc. to turn its 
Wyoming operations over to a third party restructuring officer; and denied BDE, 
Inc. access to bank accounts and the line of credit to operate its Wyoming 
properties.  
 
[¶31]  Applying the three part test for 
determining personal jurisdiction, we conclude from these activities that BDE 
Partners presented sufficient evidence that S&T purposefully availed itself 
of the privilege of acting in Wyoming or of causing important consequences 
here.  BDE Partners’ suit is based 
upon activities which had substantial connections with Wyoming.  S&T purposefully and voluntarily 
elected to accept as collateral property located in Wyoming and the payments 
S&T received on the loans were earned in Wyoming based on oil and gas 
operations here.  It is reasonable 
under these circumstances that S&T should have foreseen there would be 
consequences here.  

 
[¶32]  We further conclude the cause of action 
arose from the consequences of S&T’s activities in Wyoming.  In its dealings with Koval Resources and 
BDE, Inc., S&T accepted as collateral property located exclusively in 
Wyoming.  All of the money loaned 
was used as working capital for BDE, Inc.’s Wyoming operations.  S&T received payments on the loans 
from money earned in Wyoming, visited Wyoming to inspect the property, employed 
a Wyoming petroleum engineer to evaluate the property, exercised control over 
whether the property could be sold, received and held the proceeds from such 
sales, and employed a consultant to come to Wyoming to oversee liquidating the 
property.  
 
[¶33]  Finally, we conclude S&T’s 
activities had a substantial enough connection to Wyoming to make the exercise 
of jurisdiction by Wyoming courts reasonable.  All of the collateral for the loan 
agreements was located in Wyoming, thereby making Wyoming the state with the 
greatest interest in the transaction.  
The collateral consisted of oil and gas interests located in Wyoming in 
which the State has a strong interest.  
As we have said before,
 
[we] 
realize that the factors to be weighed must, of necessity, be somewhat 
subjective.  However, under the 
circumstances of this case, we find that it is reasonable and fair to require 
defendant to submit to the jurisdiction of a Wyoming 
court.
 
Anderson, 
667 P.2d  at 1159.
 
[¶34]  In reaching this result, it is important 
to note that the claims before us are not between the borrower, Koval Resources, 
and the lender, S&T, based on the loan documents negotiated and executed in 
Pennsylvania.  In that context, 
S&T’s arguments against the exercise of personal jurisdiction in Wyoming may 
well have been persuasive.  This 
case, however, was brought by BDE Partners, who were not parties to the 
Pennsylvania loan agreements, against S&T for actions it took with respect 
to property located in Wyoming which, they claim, adversely and improperly 
affected their financial interests.   
In that context, and in light of the undisputed facts concerning 
S&T’s activities in Wyoming, we conclude the exercise of personal 
jurisdiction is appropriate in Wyoming.  
In reaching the conclusion that personal jurisdiction is proper in 
Wyoming, however, we have not considered the substantive merits of BDE Partners’ 
claims.  Our holding is limited 
solely to the determination that BDE Partners presented sufficient undisputed 
evidence that S&T’s activities in Wyoming were such that, as a matter of 
law, Wyoming courts have personal jurisdiction to decide their claims. 

 
[¶35]  We reverse and remand to district court 
for further proceedings consistent with this opinion.  
 
 
FOOTNOTES
1The record indicates S&T made other term loans to BDE, Inc. as 
well.  
2Specifically, S&T proposed the following:  
 
1)     
Sales of properties designated as “Proved Developed Producing” 
(PDP)
S&T will require 65% of the proceeds.
2)     
Sales of properties designated “Proved Developed Non-Producing” 
(PDNP)
S&T will require 20% of the sale 
proceeds.
3)     
All other acreage S&T will require 80% of $186.00 per acre or 
$149.00/acre.