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Celeste C. Grynberg D/B/A Grynberg Petroleum Company v. L & R Exploration Venture

September 21, 2011


Appeal from the District Court of Sweetwater County The Honorable Jere A. Ryckman, Judge

The opinion of the court was delivered by: Kite, Chief Justice.

Before KITE, C.J., and GOLDEN, HILL, VOIGT, and BURKE, JJ.

NOTICE: This 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 typographical or other formal errors so correction may be made before final publication in the permanent volume.

[¶1] Celeste C. Grynberg, d/b/a/ Grynberg Petroleum Company (Grynberg Petroleum), filed a complaint for declaratory relief, breach of contract, unjust enrichment, and conversion against L&R Exploration Venture and numerous individuals and entities having an interest in the venture (collectively L&R). In essence, Mrs. Grynberg claimed that L&R owes her compensation for services Grynberg Petroleum provided to L&R and she is entitled to payment of those amounts. The district court granted summary judgment for L&R and dismissed the complaint on the basis of res judicata, finding that Mrs. Grynberg was in privity with parties involved in prior litigation in Colorado and New York and her complaint involved the same subject matter and issues resolved in those proceedings. Mrs. Grynberg appeals, claiming the district court erred in holding her claims are barred. We affirm.


[¶2] Mrs. Grynberg presents two issues, which we restate as follows:

I. Whether the district court properly entered summary judgment for L&R when L&R failed to file a separate statement of material facts demonstrating the absence of a genuine issue for trial as required by W.R.C.P. 56.1.

II. Whether the district court correctly concluded that her claims are barred by the doctrine of res judicata.

L&R re-states these issues and asks the Court to award it attorney fees and costs in defending this appeal.


[¶3] Mrs. Grynberg and her husband, Jack Grynberg, are co-owners of Grynberg Petroleum, a company registered in the State of Utah that has been involved in acquiring, exploring, developing, and producing oil and natural gas fields. L&R Exploration Venture v. Grynberg, 31 Misc.3d 1219A, 927 N.Y.S.2d 816 (Table), 2011 WL 1564647 (N.Y. Sup.), 2011 N.Y. Slip Op. 50732(U) (April 19, 2011). Mr. Grynberg is the chief operating officer of the company. In 1960, he and several individuals entered into a joint venture agreement, L&R Exploration Venture, for the purpose of developing oil and natural gas fields primarily in Wyoming. Pursuant to the agreement, Mr. Grynberg acted as the chief executive officer of L&R and contributed the services, personnel, facilities, and accumulated knowledge of himself and the staff of Grynberg Petroleum. The other participants in L&R collectively contributed $250,000 as capital for the joint venture.

[¶4] The Nitchie Gulch Gas Field in Sweetwater County, Wyoming is among the fields Mr. Grynberg acquired and developed and from which he produced and marketed natural gas on behalf of L&R. Originally, Mr. Grynberg had a 41.5% interest in the gas field and L&R owned the remaining 58.5% interest. L&R Exploration, 2011 WL 1564647 at *1. In 1994, Mr. Grynberg assigned 99% of his interest in the gas field to Mrs. Grynberg. Id.

[¶5] Over the years, Mr. Grynberg and L&R entered into agreements authorizing Grynberg Petroleum to recover damages for L&R's interests in the Nitchie Gulch Gas Field by filing suit against various entities. In exchange for pursuing L&R's claims and advancing the costs and fees of litigation, Grynberg Petroleum was to receive a percentage of any amounts recovered for L&R.

[¶6] In 2000, an accountant for L&R raised questions concerning Mr. Grynberg's accountings and payments to the joint venture participants. When Mr. Grynberg learned that he was being questioned, he and Mrs. Grynberg filed suit against L&R in their home state of Colorado. The complaint named Mr. and Mrs. Grynberg d/b/a/ Grynberg Petroleum as plaintiffs. They sought a judgment declaring that Mr. Grynberg had fully accounted to and paid L&R its share of the proceeds from the litigation involving the Nitchie Gulch Gas Field. They also brought claims for breach of contract, unjust enrichment, and quantum meruit claiming L&R owed Grynberg Petroleum compensation for its services in developing the gas field and recovering damages for the joint venture's interests in that field.

[¶7] In response to the Colorado action, L&R filed a petition in New York seeking a court order compelling the Grynbergs to arbitrate the dispute in accordance with the arbitration provisions contained in the joint venture agreement. The Grynbergs moved for an order dismissing L&R's petition and transferring the matter to the Colorado state court.*fn1 The New York court granted the motion to the extent that it dismissed Mrs. Grynberg from the proceeding, denied the motion as to Mr. Grynberg, granted L&R's arbitration petition and ordered Mr. Grynberg "and all others acting on his behalf" to refrain from initiating "any court proceeding as to the disputes, including the pending action in the District Court of . . . Colorado . . . ."

[¶8] Consistent with the New York court's order, the Colorado court stayed the Grynbergs' action there while the New York arbitration proceeded. Mr. Grynberg appealed the order compelling arbitration to the New York intermediate appeals court and New York's highest court. Both courts rejected the appeal and affirmed the order compelling arbitration.

[¶9] Less than two months after the order staying the Colorado action, Mrs. Grynberg filed a complaint in Colorado state district court. This complaint was identical to the Grynbergs' earlier Colorado complaint except that Mrs. Grynberg d/b/a Grynberg Petroleum was the sole plaintiff, Mr. Grynberg was referred to in the body of the complaint as assignor and Mrs. Grynberg sought damages as his assignee. Finding that the two complaints involved "identical claims and facts," the Colorado court consolidated the cases and entered an order staying them until resolution of the New York proceedings. The order stated further: "The Court also finds that [Mrs.] Grynberg's actions have frivolously multiplied the proceedings in the case and that an award of attorney's fees and costs against [her] is therefore appropriate."

[ΒΆ10] After the New York appellate courts rejected Mr. Grynberg's appeals of the order compelling arbitration, the matter proceeded to arbitration. L&R asserted that Mr. Grynberg had breached the joint venture agreement, his fiduciary duty and the implied covenant of good faith and fair dealing by failing to account to L&R and make distributions to its participants while at the same time he had been paying himself from L&R funds. L&R sought an accounting and payment of all sums due and owing to each participant. Mr. Grynberg generally denied the allegations and filed counterclaims against L&R for breach of contract, ...

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