On this day came Plaintiffs, JAMES CAPITAL ENERGY, LLC and VICTORY ENERGY CORPORATION, and moved for default judgment against Defendants, JIM DIAL, 1ST TEXAS NATURAL GAS COMPANY, INC., UNIVERSAL ENERGY RESOURCES, INC., GRIFCO INTERNATIONAL, INC. and PRECISION DRILLING & EXPLORATION, INC. who failed to file answers in this case. Plaintiffs appeared through their attorneys of record and Defendants did not appear. The Court has already entered two Interlocutory Judgments by Default on April 20, 2010 and September 7, 2010 respectively. The Court, after hearing the evidence and arguments&n bsp; of counsel is of the opinion that Plaintiffs, James Capital Energy, LLC and Victory Energy Corporation are entitled to recover from the Defendants, Jim
Dial, 1st Texas Natural Company, Inc., Universal Energy Resources, Inc, Grifco International, Inc., and Precision Drilling & Exploration, Inc.
Proof of Service - Defendant Jim Dial
The Court finds that Defendant, Jim Dial was served by substituted service with citation and a copy of Plaintiffs' First Amended Original Petition, Application for Injunctive Relief, Request for Disclosure and TRCP 193.7 Notice on July 19, 2010, pursuant to order of this Court signed July 2, 2010, and that the citation and proof of service have been on file for more than ten (10) days before this judgment was signed. The Court finds that Defendant, Jim Dial did not file an answer or any other pleading constituting an answer.
Proof of Service -1st Texas Natural Gas Company, Inc.
The Court finds that Defendant, 1st Texas Natural Gas Company, Inc., was served by substituted service with citation and a copy of Plaintiffs' First Amended Original Petition, Application for Injunctive Relief, Request for Disclosure and TRCP 193.7 Notice on July 19,2010, pursuant to order of this Court signed July 2, 2010, and that the citation and proof of service have been on file for more than ten (10) days before this judgment was signed. The Court finds that Defendant, 1st Texas Natural Gas Company, Inc., did not file an answer or any other pleading constituting an answer.
Proof of Service – Universal Energy Resources, Inc.
The Court finds that Defendant, Universal Energy Resources, was served with citation and a copy of Plaintiffs' First Amended Original Petition, Application for Injunctive Relief, Request for Disclosure and TRCP 193.7 Notice on February 10, 2010, and that the citation and proof of service have been on file for more than ten (10) days before this judgment was signed. The Court finds that Defendant, Universal Energy Resources, Inc. did not file an answer or any other pleading constituting an answer.
Proof of Service - Grifco International, Inc.
The Court finds that Defendant, Grifco International, Inc., was served by substituted service with citation and a copy of Plaintiffs' First Amended Original Petition, Application for Injunctive Relief, Request for Disclosure and TRCP 193.7 Notice on July 19, 2010, pursuant to order of this Court signed July 2,2010, and that the citation and proof of service have been on file for more than ten (10) days before this judgment was signed. The Court finds that Defendant, Grifco International, Inc. did not file an answer or any other pleading constituting an answer.
Proof of Service - Precision Drilling & Exploration, Inc.
The Court finds that Defendant, Precision Drilling & Exploration, Inc. was served by substituted service with citation and a copy of Plaintiffs' First Amended Original Petition, Application for Injunctive Relief, Request for Disclosure and TRCP 193.7 Notice on July 19, 2010, pursuant to order of this Court signed July 2, 2010, and
that the citation and proof ofservice havebeen on file for more than ten (10) days before judgment was signed. The Court finds that Defendant, Precision Drilling & Exploration, Inc did not file an answer or any other pleading constituting an answer.
Plaintiffs' Damages - Un-liquidated
The Court finds that the amount of damages claimed by Plaintiffs, James Capital Energy, LLC and Victory Energy Corporation are un-liquidated and the necessity for a hearing for evidence existed.
Considered Testimony - Default Judgment Should be Granted
The Court, after considering the testimony of Robert J. Miranda, individually and in his capacity as President CEO of Victory Energy Corporation, and on behalf of James Capital Energy, LLC, and further considering the testimony of David R McCall, Plaintiffs' counsel, as to the necessity and reasonableness of the requested recovery of attorneys' fees, finds that a default judgment should be GRANTED for Plaintiffs against Defendants, Jim Dial, 1st Texas Natural Gas Compa ny, Inc, Universal Energy Resources, Inc, Grifco International, Inc. and Precision Drilling & Exploration, Inc.
Judgment - Plaintiffs (Un-Liquidated)
The Court further finds that Plaintiffs, James Capital Energy, LLC and Victory Energy Corporation have and recover judgment against Defendants, Jim Dial, 1st Texas Natural Gas Company, Inc, Universal Energy Resources, Inc., Grifco International, Inc.,
and Precision Drilling & Exploration, Inc., jointly and severally, in the amount of $5,611,225.00, together with prejudgment interest at the rate of 5.00% per annum, from January 19, 2010 to the date preceding this judgment in the amount of $225,218; said judgment bearing post-judgment interest at the rate of 5.00% per annum from the date this judgment is signed until paid.
Judgment – Punitive Damages – Jim Dial (Un-Liquidated)
The Court further finds that Plaintiffs, James Capital Energy, LLC and Victory Energy Corporation have and recover judgment against Defendant Jim Dial in the amount of $2,244,490,00 for his actions in knowingly and intentionally perpetuating a fraud on Plaintiffs, and for fraudulently inducing Plaintiffs into the payment of a significant amount of money which caused them unreasonable and substantial harm.
Judgment - Punitive Damages - 1st Texas Natural Gas Company, Inc (Un-Liquidated)
The Court further finds that Plaintiffs, James Capital Energy, LLC and Victory Energy Corporation have and recover judgment against Defendant, 1st Texas Natural Gas Company, Inc. in the amount of $2,244,490,00 for its actions in knowingly and intentionally perpetuating a fraud on Plaintiffs, and for fraudulently inducing Plaintiffs into the payment of a significant amount of money which caused them unreasonable and substantial harm.
Judgment – Punitive Damages – Universal Energy Resources, Inc. (Un-Liquidated)
The Court further finds that Plaintiffs, James Capital Energy, LLC and Victory Energy Corporation have and recover judgment against Defendant Universal Energy Resources, Inc. in the amount of $2,244,490.00 for its actions in knowingly and intentionally perpetuating a fraud on Plaintiffs, and for fraudulently inducing Plaintiffs into the payment of a significant amount of money which caused them unreasonable and substantial harm.
Judgment - Punitive Damages - Grifco International, Inc. (Un-Liquidated)
The Court further finds that Plaintiffs, James Capital Energy, LLC and Victory Energy Corporation have and recover judgment against Defendant Grifco International, Inc. in the amount of $2,244,490.00 for its actions in knowingly and intentionally perpetuating a fraud on Plaintiffs, and for fraudulently inducing Plaintiffs into the payment of a significant amount of money which caused them unreasonable and substantial harm.
Judgment - Punitive Damages - Precision Drilling & Exploration, Inc. (Un-Liquidated)
The Court further finds that Plaintiffs, James Capital Energy, LLC and Victory Energy Corporation have and recover judgment against Defendant Precision Drilling & Exploration, Inc. in the amount of $2,244,490.00 for its actions in knowingly and intentionally perpetuating a fraud on Plaintiffs, and for fraudulently
inducing Plaintiffs into the payment of a significant amount of money which causedthem unreasonable and substantial harm.
Judgment - Breach of Contract - Jim Dial, 1st Texas Natural Gas Company, Inc. andUniversal Energy Resources, Inc.
The Court further finds that Defendants Jim Dial, 1st Texas Natural Gas Company, Inc. breached the express and implied contractual obligations to operate the Adams-Baggett Ranch in a good and workmanlike manner as a reasonably prudent operator should, to maintain and furnish Plaintiffs with accurate records and accountings, operations, and conditions regarding the Adams-Baggett Ranch, and to operate the properties in a manner that would not adversely affect Plaintiffs.
Judgment - Breach of Fiduciary Duty - Tim Dial, 1st Texas Natural Gas Company,Inc. and Universal Energy Resources, Inc.
The Court further finds that Defendants Jim Dial, 1st Texas Natural Gas Company, Inc., and Universal Energy Resources, Inc. owed a fiduciary duty to Plaintiffs James Capital Energy, LLC and Victory Energy Corporation and that they breached this duty by wrongfully withholding and misappropriating proceeds otherwise payable to Plaintiffs, and when they profited at Plaintiffs expense by handling monies and properties in a manner inconsistent with the agreements under which the properties were held.
Judgment - Constructive Trust
The Court further finds that a constructive trust is imposed over all the funds and properties of Defendants, Jim Dial, 1st Texas Natural Gas Company, Inc.,
Universal Energy Resources, Inc, Grifco International, Inc., and Precision Drilling & Exploration, Inc., owed to Plaintiffs or acquired by Defendants using Plaintiffs' funds.
Judgment - Violation of the Texas Oil and Gas Proceeds Payment Act - Jim Dial, 1stTexas Natural Gas Company, Inc., and Universal Energy Resources, Inc.
The Court further finds that Defendants Jim Dial, 1st Texas Natural Gas Company, Inc., and Universal Energy Resources, Inc. violated the Texas Oil and Gas Proceeds Payment Act when they failed to pay Plaintiffs James Capital Energy, LLC and Victory Energy Corporation any of the cash proceeds received from the sale of Plaintiffs' gas.
Judgment - Declaratory Judgment
The Court further finds that Plaintiffs, James Capital Energy, LLC and Victory Energy Corporation have the right to take over control and operation of their properties at any time under the Adams-Baggett Ranch agreements and that Defendants are wrongfully in possession of same.
Attorneys' Fees - Plaintiffs (Un-Liquidated)
The Court further finds that Plaintiffs, James Capital Energy, LLC and Victory Energy Corporation have and recover judgment against Defendants, Jim Dial, 1st y International, Inc., and Precision Drilling & Exploration, Inc., jointly and severally, for reasonable and necessary attorneys' fees incurred in the trial court in the amount of $125,094.08. In the event that Defendants, Jim Dial, 1st Texas Natural Gas
Company, Inc., Universal Energy Resources, Inc., Grifco International, Inc., and/or Precision Drilling & Exploration, Inc., appeals to the Court of Appeals and the appeal is unsuccessful, Plaintiffs, James Capital Energy, LLC and Victory Energy Corporation will be further entitled to an additional $50,000.00 as reasonable attorneys' fees; in the event that Defendants Jim Dial, 1st Texas Natural Gas Company, Inc., Universal Energy Resources, Inc., Grifco International, Inc., and/or Precision Drilling & Exploration, Inc., files a petition for review to the Texas Supreme Court ;and the petition for review is denied, Plaintiffs, James Capital Energy, LLC and Victory Energy Corporation will be further entitled to an additional $25,000.00 as reasonable attorneys' fees; in the event the Texas Supreme Court grants the petition for review filed by Defendants Jim Dial, 1st Texas Natural Gas Company, Inc., Universal Energy Resources, Inc., Grifco International, Inc., and/or Precision Drilling & Exploration, Inc., and the appeal is unsuccessful, Plaintiffs, James Capital Energy, LLC and Victory Energy Corporation will be entitled to an additional $50,000.00 as reasonable attorneys' fees; said judg ment bearing post-judgment interest at the rate of 5.00% per annum from the date this judgment is signed until paid.
Costs of Court - Plaintiffs
The Court further finds that Plaintiffs, James Capital Energy, LLC and Victory Energy Corporation, be awarded all costs of Court incurred, which costs are assessed both jointly and severally against Defendants, Jim Dial, 1st Texas Natural
Gas Company, Inc., Universal Energy Resources, Inc., Grifco International, Inc., and Precision Drilling & Exploration, Inc.
Enforceable
The Court further finds that all writs and processes for the enforcement and collection of this judgment may issue as necessary.
