By Tim Leeds
A fairly complicated lawsuit, with a potential monetary impact well into the millions, is finishing its first week of litigation in Havre's 12th Judicial District Court today.
The case, which District Court Judge John Warner is presiding over, is expected to last one to two more weeks, and involves several people and business interests those people are affiliated with.
On April 21, 1998, Textana, Inc., a Texas company which is listed as an entity affiliated with the John O. Brown family in one of the claims, filed a claim alleging that Klabzuba Oil and Gas, a Texas partnership of which John Klabzuba is president, "is interfering and/or threatening to interfere with Plaintiff's business operations."
Textana alleges in the claim that uncertainty or controversy has arisen over new oil and gas leases purchased and obtained by the plaintiff after the termination of a contract for professional services. Textana alleges that Klabzuba terminated the contract effective Jan. 1, 1998, and requests that the court declare that the contract in no way governs, controls or limits Textana's rights to work in the oil and gas industry.
On June 9, 1998, Klabzuba and affiliated third party plaintiffs, which are other Klabzuba affiliated oil and gas businesses working in north central Montana, filed a motion to intervene against John O. Brown and Textana and other affiliated companies, including the J. Burns Brown Operating Company (JBBO.) The motion claims that under Montana code the parties are permitted to intervene because of interests in the issues in the complaint.
Also on June 9, 1998, the Klabzuba third party plaintiffs filed an answer, counterclaim and third party complaint. In this action, Klabzuba denied the grounds of Textana's April claims, and makes several allegations against the third party defendants. These include Brown and JBBO breaching an agreement to jointly pay for building an office and shop on donated land with Klabzuba, failing to contribute JBBO's share for the purpose, converting funds from the Klabzuba parties for their own use, taking out a mortgage for the purpose without notifying the Klabzuba parties and taking the name of the property solely in the name of JBBO.
The claim also alleges that the defendants failed to acquire joint property interests and failed to transfer title to a number of joint property interests; began taking property interests in violation of a services contract; moved or attempted to move and redistribute assets in joint businesses without the knowledge of Klabzuba; failed to provide files, records and contracts and refused to cooperate in a transition of Klabzuba to take over joint operations as agreed, and has unlawfully altered official notices to the State of Montana without the knowledge of Klabzuba.
On Sept. 9, 1998, Eagle Gas Marketing, a Brown affiliated company, filed a complaint against Cornerstone Gas Marketing, a Klabzuba affiliated company, stating that Cornerstone resold gas which Eagle had advanced more than $700,000 for the company to purchase without repayment of the advance. The complaint said that the advance was to be repaid as soon as the gas was resold. The complaint demands judgment in the sum of the advance.
On May 28, 1999, Merle and Ronald Harmon filed a complaint in intervention against Brown, his wife, Sandra, Textana and JBBO with several allegations.
In the complaint, Harmons allege that John Brown knowingly and intentionally misrepresented amounts due to them for wells drilled on their property; with Sandra Brown converted funds owed to them to purchase of Ronald and Nancy Harmon's house; that the defendants were unjustly enriched by acts of fraud against the Harmons; and that the they owe the Harmons an accounting of the exact amount of production and revenue attributable to them.
The amounts of the monetary damages in the Klabzuba and Harmon complaints are left to be determined at the trial.