Source: http://nv.findacase.com/research/wfrmDocViewer.aspx/xq/fac.20180330_0003875.DNV.htm/qx
Timestamp: 2019-04-25 04:17:36+00:00

Document:
FindACase | Wingen v. Ventrum Energy Corp.
Wingen v. Ventrum Energy Corp.
VENTRUM ENERGY CORP., et al., Defendants.
Presently before the court is defendants CGrowth Capital, Inc. (“CGrowth”), Keystone Financial Management, Inc. (“Keystone”), and William Wright's (collectively, the “CGrowth defendants”) motion for judgment on the pleadings (ECF No. 136), to which defendants Fossil Energy, Inc (“Fossil”), Montgomery George, Paul Grady, William Sturdevant, and Tari Vickery (collectively, the “Fossil defendants”) joined, (ECF No. 137). Plaintiffs Karen and Phillip Wingen filed a response. (ECF No. 140). The CGrowth defendants and the Fossil defendants filed separate replies. (ECF Nos. 141, 142).
Plaintiffs are a married couple residing in Minnesota. (ECF No. 1). Plaintiffs brought this lawsuit in their individual capacities as investors in securities issued in 2012 by Salt Creek West Drilling Fund, LLP (“Salt Creek West”) and Ventrum Louisiana, LLP (“Ventrum LA”). Id.
Defendant Ventrum Energy (“VE”) was a Nevada corporation with its principal place of business in Nevada. VE was the managing partner of Salt Creek West and Ventrum LA. On December 15, 2014, VE's corporate charter was dissolved in the state of Nevada.
Defendant Andrew Van Slee was, at all relevant times, a Nevada resident. Id. “Van Slee directly or indirectly controlled [VE], Salt Creek West, [and] Ventrum LA.” Id.
Plaintiffs invested in both Salt Creek West and Ventrum LA between February and July of 2012. Id. During that time period, plaintiffs purchased 2.5 partnership units in Salt Creek West for $500, 000. Id. On April 15, 2012, plaintiffs purchased one partnership unit of Ventrum LA for $100, 000. Id. Plaintiffs allege that Van Slee and his related entities made false or misleading statements to induce plaintiffs to invest in Salt Creek West and Ventrum LA. Id.
CGrowth is a Delaware corporation with its principal place of business in Washington. Id. Keystone is a Washington corporation with its principal place of business in Washington. Id. Keystone holds 33.5% of CGrowth's common stock and all of CGrowth's Series B preferred stock. Id. Wright is a Washington resident who maintains a controlling stake in CGrowth and Keystone as a shareholder, sole director, and CEO. Id.
In late 2013 and early 2014, CGrowth entered into two purchase and sale agreements for oil leases and wells under development by Salt Creek West and Ventrum LA. Id.; (ECF Nos. 54-1, 54-2). As consideration, CGrowth issued shared of CGrowth stock to VE and Ventrum LA. (ECF No. 1).
Plaintiffs allege that as a result of the purchase and sale agreements the CGrowth shares were distributed to plaintiffs and the other limited partners of Salt Creek West and Ventrum LA. Id. Plaintiffs allege that the sale of these partnership assets to CGrowth was done without the consent or involvement of plaintiffs or the other limited partners. Id.
On October 22, 2015, plaintiffs filed their complaint in this court, asserting causes of action for alleged violations of state and federal securities laws, fraudulent or intentional misrepresentation, negligent misrepresentation, breach of contract, breach of fiduciary duty, racketeering, deceptive trade practices, civil conspiracy, partnership-by-estoppel, and aiding and abetting. (ECF No. 1).
Motions for judgment on the pleadings pursuant to Federal Rule of Civil Procedure 12(c) are “functionally identical” to motions to dismiss for failure to state a claim under Federal Rule of Civil Procedure 12(b)(6). Dworkin v. Hustler Magazine Inc., 867 F.2d 1188, 1192 (9th Cir. 1989).
In reviewing a motion for judgment on the pleadings pursuant to Rule 12(c), the court “must accept all factual allegations in the complaint as true and construe them in the light most favorable to the non-moving party.” Fleming v. Pickard, 581 F.3d 922, 925 (9th Cir. 2009). “[J]udgment on the pleadings is proper ‘when, taking all the allegations in the non-moving party's pleadings as true, the moving party is entitled to judgment as a matter of law.'” Ventress v. Japan Airlines, 486 F.3d 1111, 1114 (9th Cir. 2007) (citation omitted). The allegations of the nonmoving party must be accepted as true while any allegations made by the moving party that have been denied or contradicted are assumed to be false. MacDonald v. Grace Church Seattle, 457 F.3d 1079, 1081 (9th Cir. 2006).

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