Source: s3://data.kl3m.ai/documents/govinfo/USCOURTS/USCOURTS-caed-2_04-cv-01249/USCOURTS-caed-2_04-cv-01249-6/pdf.json

Nature of Suit Code: 190
Nature of Suit: Other Contract Actions
Cause of Action: 28:1332 Diversity-Breach of Contract

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1 Because oral argument will not be of material

assistance, the court orders this matter submitted on the briefs. 

See E.D. Cal. L.R. 78-230(h).

1

 

UNITED STATES DISTRICT COURT

EASTERN DISTRICT OF CALIFORNIA

----oo0oo----

DONALD E. BENSON, MARYLAN

J. BENSON, and DONALD BENSON 

FAMILY LLC

NO. CIV. S-04-1249 FCD EFB

Plaintiffs,

v. MEMORANDUM AND ORDER

CREST ENERGY, INC., et al.,

Defendants.

----oo0oo----

This matter is before the court on defendant and counterclaimant Crest Oil & Gas Management Corp.’s (“Crest”) motion for

attorney’s fees and for an amended judgment against plaintiffs

and counter-defendants Donald E. Benson, Marylan J. Benson and

the Donald Benson Family LLC (collectively, the “Bensons”). The

Bensons oppose the motions. For the reasons set forth below,1

Crest’s motions are GRANTED. 

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Case 2:04-cv-01249-FCD-EFB Document 172 Filed 10/23/07 Page 1 of 7
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2 This court’s Memoranda & Orders adjudicating Crest’s

prior motions for summary judgment set forth more detailed

descriptions of the facts of this case. (See Mem. & Order

[Docket #151], filed Aug. 20, 2007; Mem. & Order [Docket #99],

filed Dec. 1, 2006).

2

BACKGROUND2

This case arises out of the Bensons’ investment in oil and

gas wells developed by Crest Energy, Inc. The Bensons originally

filed this action in February 2004 in the Superior Court of

California, County of Glenn, for (1) breach of contract; (2)

intentional misrepresentation; (3) negligent misrepresentation;

(4) accounting; and (5) unfair business practices. Defendants

removed the action to this court on the basis of diversity

jurisdiction. In April 2005, Crest filed counterclaims against

all the Bensons for (1) unjust enrichment; (2) express indemnity;

and (3) breach of contract. On December 1, 2006, the court

granted Crest’s motion for summary judgment regarding the

Bensons’ claims against it. However, Crest did not seek

adjudication of its counterclaims against the Bensons through its

initial summary judgment motion. Subsequently, the court amended

the pretrial scheduling order to allow Crest to file a

dispositive motion regarding its remaining counterclaim for

unjust enrichment. 

Crest’s claim for unjust enrichment arose out of $301,258.74

paid as royalty payments to the Bensons based on a well to which

they were not participants (the “NWG #2 Well”). In their

opposition to Crest’s motion for summary judgment, the Bensons

did not argue that they were entitled to the royalty payments

from the NWG #2 Well. Rather, the Bensons argued that Crest

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3

Energy, Inc., the entity named in the Agreement, did not assign

its rights in the NWG #2 Well to Crest, and thus, Crest has no

interest in the royalty interests paid to the Bensons by Crest

Energy, Inc. In response, Crest submitted undisputed evidence

that (1) demonstrated that Crest Energy, Inc. merged into Crest

and; (2) Crest Energy, Inc. assigned its rights in the NWG #2

Well to Crest. Based upon this evidence, and the lack of any

opposition to Crest’s contention that the Benson’s were not

entitled to the royalty payments distributed to them from the NWG

#2 Well, the court granted Crest’s motion for summary judgment

regarding its claim of unjust enrichment. On August 20, 2007,

the court entered judgment in accordance with the court’s

Memorandum & Order filed that same day. 

ANALYSIS

A. Attorney’s Fees

Crest moves for attorney’s fees in this matter pursuant to

contract. The Private Placement Memorandum (the “PPM”), entitled

“1999 California Oil and Natural as Drilling Program,” was the

principal document governing the contractual relationship between

the parties and the basis for all of plaintiffs’ claims for

relief. The PPM provides for the recovery of all court costs, as

well as attorney’s fees to the prevailing party of a legal

action. Moreover, the parties set forth in their Joint Pretrial

Statement that “[p]ursuant to contract, Crest shall be entitled

to attorney’s fees in defending the Second Amended Complaint.” 

(Joint Pre-Trial Stmt. [Docket # 107], filed Mar. 2, 2007, at

20).

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4

In opposition to Crest’s motion for attorney’s fees, the

Bensons again assert that because Crest was not a signatory to

the PPM, it can not recover attorneys’ fees. As set forth in

this court’s Memorandum and Order addressing defendant’s motion

for summary judgment on its counterclaim, Crest has demonstrated

that Crest Energy, Inc. merged into Crest and that Crest Energy,

Inc. assigned its rights under the PPM to Crest. As such, the

Bensons’ argument is without merit. 

The Bensons also once again assert that Crest Energy, Inc.

never existed as a California corporation. In support of this

assertion, the Bensons request that the court take judicial

notice of a print-out of an internet search on the California

Secretary of State website for Crest Energy, Inc., which did not

yield a matching result. (Request for Judicial Notice, filed

Sept. 25, 2007). Rule 201 of the Federal Rules of Evidence allow

that court to take judicial notice of adjudicative facts. Fed.

R. Evid. 201. 

A judicially noticed fact must be one not subject to

reasonable dispute in that it is either (1) generally

known within the territorial jurisdiction of the trial

court or (2) capable of accurate and ready

determination by resort to sources whose accuracy

cannot reasonably be questioned. 

Id. The Bensons proffered print-out of a webpage is not

authenticated. Moreover, the print-out provides, “If you are

unable to locate a record, you may request a more extensive

search by ordering a status report.” (Request for Judicial

Notice). As such, on its face, the Bensons’ “evidence” is

neither “unquestionably accurate” nor conclusive of their

contention that Crest Energy, Inc. was not a valid California

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3 The Bensons also contend that Crest is overcharging for

travel time to Orange County for a court ordered deposition. The

description of this activity by Crest’s attorney includes both

travel time and preparation for the deposition. The Bensons

offer no argument or suggestion regarding what reasonable hours

expended for this would be or why Crest should not be compensated

for deposition preparation, even if the deposition was compelled

by court order. 

5

corporation. Thus, this argument is also without merit.

Crest seeks $96,850.00 in attorney’s fees in this case. The

Bensons assert that this amount is unreasonable. However, in

support of their assertion, the Bensons merely place “x” marks

next to those hours that they deem unreasonable without further

information. The Bensons’ cursory and unsubstantiated objections

to Crest’s documented attorneys fees cannot justify a finding of

unreasonableness. In their opposition, the Bensons specifically

object to fees relating to Crest’s motion for discovery

sanctions, which they assert was denied. The Bensons

mischaracterize this motion. A review of the docket reveals that

the referenced motions and hearing related to both parties’

cross-motions to compel and for sanctions. Both parties

prevailed on their motions to compel, and both parties’ motions

for sanctions were denied. As such, Crest prevailed with respect

to their motion to compel and in defending against the Bensons’

motion for sanctions. Therefore, attorney’s fees relating to

these motions are reasonable.3 

This litigation began over three years ago. Crest prevailed

in both defending itself in this action and asserting its own

counterclaims. The fees set forth by Crest’s attorney are

reasonable, and the Bensons have failed to set forth any contrary

evidence or coherent argument in opposition. Therefore, because

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4 The docket reflects that Donald E. Benson was

terminated on January 5, 2006. However, this was a clerical

error, as the court’s Order, filed January 5, 2006, dismissed

Donald E. Benson only as a plaintiff.

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the operative agreement between the parties provides for

reasonable attorney’s fees, Crest’s motion for attorney’s fees in

the amount of $96,850.00 is GRANTED. 

B. Motion for Amended Judgment

Crest moves for an amended judgment to specify the parties

bound by the judgment and the monetary value of the award. 

Crest’s counterclaim was asserted against counter-defendants

Donald E. Benson, Marylan J. Benson, and Donald Benson Family

LLC. While Donald Benson was dismissed as a plaintiff in this

action, he was never dismissed as a counter-defendant.4

Moreover, in its prior order, the court found that the undisputed

evidence demonstrated that the Bensons were paid $301,258.74 in

total as royalty payments on the NWG #2 Well. Crest sought prejudgment interest at the legal rate from August 1, 2001, totaling

$529,655.04. The Bensons raised no argument in either their

opposition to the summary judgment motion or their opposition to

Crest’s motion to amend the judgment with respect to either the

amount of damages or the pre-judgment interest sought by Crest. 

Therefore, judgment is entered against counter-defendants Donald

E. Benson, Marylan J. Benson, and Donald Benson Family LLC in the

amount of $529,655.04.

CONCLUSION

For the foregoing reasons, Crest’s motion for attorney’s

fees and for an amended judgment is GRANTED. Crest’s motion for

attorney’s fees in the amount of $96,850.00 is GRANTED. Judgment

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is entered against counter-defendants Donald E. Benson, Marylan

J. Benson, and Donald Benson Family LLC in the amount of

$529,655.04 with interest to accrue at the legal rate. 

IT IS SO ORDERED.

DATED: October 23, 2007

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