Antero Res. Corp. v. Braddock Constr.

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ANTERO RESOURCES CORPORATION and ANTERO MIDSTREAM LLC, Plaintiffs, v. BRADDOCK CONSTRUCTION, LLC, DAVID WEIMER, KRISTEN WEIMER, and JOHN DOE CORPORATIONS 1-10, Defendants, and BRADDOCK CONSTRUCTION, LLC, Third-Party Plaintiff, v. SAFETY CONCERN INC., TIMOTHY SIVIC, JAMES MEYERS and DOTPROCESSAGENTS.COM, LLC, Third-Party Defendants.

Civil Action No. 1:20-CV-147

United States District Court, N.D. West Virginia, Clarksburg

March 18, 2022

KLEEH JUDGE

OMNIBUS REPORT AND RECOMMENDATION

MICHAEL JOHN ALOI, UNITED STATES MAGISTRATE JUDGE

Pending before the Court in the above-referenced matter is a Motion to Dismiss for Failure to State a Claim, [ECF No. 11], a Motion to Dismiss the Third-Party Complaint, [ECF No. 28], a Motion for Protective Order and Stay of Discovery [ECF No 30], and a Motion to Join Third-Party Defendants' Motion to Dismiss the Third-Party Complaint in Lieu of Filing a Formal Answer, [ECF No. 32]. By Order, [ECF No. 40], dated November 15, 2021, United States District Judge Thomas S Kleeh referred said motions to the undersigned Magistrate Judge for issuance of a report and recommendation as to the appropriate disposition of the motions. For judicial economy, the undersigned will put forth herein proposed recommendations for all referred motions.

Upon consideration and for the reasons articulated herein, the undersigned RECOMMENDS that Defendants' Motion to Dismiss, [ECF No. 11], be DENIED, that the Third-Party Defendants' Motion to Dismiss the Third-Party Complaint, [ECF No. 28], be DENIED, that the Motion for Protective Order and Stay of Discovery, [ECF No. 30], be DENIED AS MOOT, and that Defendant DOTprocessagents.com, LLC's Motion to Join Third-Party Defendants' Motion to Dismiss the Third-Party Complaint in Lieu of Filing a Formal Answer, [ECF No. 32], be GRANTED IN PART AND DENIED IN PART.

I. FACTUAL BACKGROUND^[1]

Antero Resources Corporation and Antero Midstream LLC (“Antero”) are Delaware corporations, with their principal placed of business in Colorado, who are in business of oil and gas exploration, who are authorized to do business in West Virginia, and who operate in West Virginia. [ECF No. 1 at 1-2]. Braddock Construction, LLC (“Braddock”) is a business organized under the laws of Maryland, with its principal place of business in Frostburg, Maryland. [ECF No. 1 at 2]. Kristen Weimer is either the sole member of Braddock or one of two members along with her husband David Weimer. [Id.]. Braddock contracted with Safety Concern, Inc. (“Safety Concern”), Timothy Sivic (“Sivic”), James Meyers, Jr. (“Meyers”), and DOTProcessagents.com, LLC (“DOTprocess”) for the purposes of ensuring Braddock was in compliance with all applicable rules and regulations, including, but not limited to the Federal Motor Carrier Safety Regulations (“FMCSR”). [ECF No. 16 at 6-9]. Braddock relied upon Safety Concern, Sivic, Meyers, and DOTprocess to file all needed documents for Braddock's commercial vehicle operations and compliance with Department of Transportation (“DOT”) compliance. [Id.].

From June to September 2017, Antero and Braddock negotiated for Braddock to become an Antero contractor for the purposes of hauling produced water from oil and gas well operations in West Virginia and Ohio. [ECF No. 1 at 3-5]. Braddock and Antero entered into a Master Service Agreement (“MSA”), effective September 1, 2017, which was executed by Braddock's managing member Kristen Weimer. [Id.]. The MSA includes provisions which require Braddock to release, protect, defend, indemnify, and hold harmless Antero in specific circumstances, including claims arising from a contractor's failure to comply with applicable laws, governing regulations, and/or Article 11 of the MSA. [Id.].

From October 2017 to July 2018, Braddock hauled produced water for Antero in West Virginia on an almost daily basis. [ECF No. 1 at 6].

On July 19, 2018, Braddock employee Dexter Skidmore was operating a commercial water truck in the course and scope of his employment and negligently caused a motor vehicle accident resulting in the death of two individuals - Michael R. Moore and Braylie M. Moore. [Id.].

The administrator of the decedents' estates, Heather Moore, filed suit, Civil Action Number 18-C-58, (“the Underlying Litigation”), in the Circuit Court of Wetzel County, West Virginia, against Antero, Braddock, and Braddock's employee Dexter Skidmore, alleging various acts of negligence. [ECF No. 1 at 6]. Throughout the Underlying Litigation, Antero requested Braddock meet its legal obligations to defend and indemnify Antero. Braddock failed to do so. [ECF No. 1 at 7-8]. Antero ultimately executed a settlement with Heather Moore in order to resolve the Underlying Litigation. [ECF No. 1 at 8].

II. PROCEDURAL HISTORY

a. Complaint and Motion to Dismiss

On July 31, 2020, Plaintiffs Antero Resources Corporation and Antero Midstream LLC filed their Complaint in this Court bringing express indemnity and breach of contract claims and seeking declaratory judgment and to pierce the corporate veil. [ECF No. 1]. Antero Plaintiffs bring this claim before the Court pursuant to federal diversity jurisdiction under 28 U.S.C. § 1332. [ECF No. 1 at 3]. Plaintiffs allege that Braddock failed to meet its contractual obligations under the MSA to indemnify Plaintiffs in the underlying litigation. [ECF No. 1 at 9].

Plaintiffs allege Braddock owes Antero Plaintiffs defense and indemnity for the cost of the settlement entered into in the underlying litigation, unpaid attorney's fees and expenses of the underlying litigation, and reasonable attorney's fees incurred in his action in enforcing the right to defense and indemnity under the MSA. [ECF No. 1 at 11]. Plaintiffs further allege that Braddock's liability and recovery may extend to David Weimer, Kristen Weimer and the other entities owned by them, John Doe Corporations 1-10, based upon the comingling of funds, assets, costs, and employees, and the closely held nature of the John Doe Corporations, which would allow for the piercing or multiple piercings of corporate veils. [ECF No. 1 at 11-13].

On December 4, 2020, Defendants David Weimer, Kristen Weimer, and John Doe Corporations 1-10 filed a Motion to Dismiss alleging that Maryland law should apply to Plaintiffs' attempt to pierce the corporate veil and arguing that Plaintiffs' Complaint fails to state a claim upon which relief may be granted under Maryland law for piercing the corporate veil. [ECF Nos. 11, 12]. Defendants argue, in the alternative, that even if West Virginia law applies, the Complaint still fails to state a claim upon which relief may be granted for piercing the corporate veil. [Id.].

On December 15, 2020, Plaintiffs filed their Response wherein they argue that discovery is needed to determine the extent to which Maryland law applies. [ECF No. 15 at 4]. Plaintiffs further argue Maryland law allows piercing the corporate veil for equity, and, nonetheless, Plaintiffs have made sufficient claims to pierce the corporate veil under Maryland or West Virginia law. [Id. at 5-10]. In support of their arguments, Plaintiff included as exhibits deposition transcripts, [ECF No. 15-1 and 15-2], and a video on a CD-ROM, [ECF No. 15-3].

In their Reply, filed on December 23, 2020, Defendants assert that this Court should not consider the deposition and transcript attachments submitted by Plaintiffs in their Reply as they were not previously included with the submission of the Complaint. [ECF No. 17 at 1-2]. Defendants reiterate their arguments that Maryland law applies to the analysis for piercing the corporate veil, that Plaintiffs' Complaint fails to state a claim upon which relief may be granted for piercing the corporate veil under Maryland law, and that, even if West Virginia law applies, Plaintiffs' Complaint still fails to state a claim upon which relief may be granted for piercing the corporate veil.

b. Third-Party Complaint and Motion to Dismiss Third-Party Complaint

On December 16, 2020, Defendant Braddock filed a Third-Party Complaint alleging that “[i]f the allegations in the Antero Complaint are true, which Braddock denies, then the Antero Plaintiffs' injuries/damages arose from the actions, inactions, negligence, professional negligence, and/or misrepresentations of Safety Concern, Timothy Sivic, James Meyers, and/or DOTProcess.” [ECF No. 16 at 8-9].

On April 26, 2021, Third-Party Defendants Safety Concern, Sivic, and Meyers filed a Motion to Dismiss the Third-Party Complaint, [ECF No. 28], and Memorandum of Law in Support, [ECF No. 29], arguing that the negligence claims set forth therein are time-bared, the Third-Party Complaint violated Fed.R.Civ.P. 14(a)(1), and this Court should decline to exercise jurisdiction pursuant to the Colorado River doctrine.

First, Third-Party Defendants argue the third-party claims are time-barred because they were filed more than two years after Braddock knew or should have known of the alleged negligence. [ECF No. 29 at 8-10]. Second, Third-Party Defendants further argue that the Third-Party Complaint violates Rule 14(a)(1) because the negligence claims in Braddock's third-party complaint are not secondary or derivative of the Antero Plaintiff's original claims against Braddock. [Id. at 10-13]. Third and finally, Third-Party Defendants argue this Court should dismiss this third-party action, pursuant to the Colorado River doctrine because an identical third-party complaint is pending in parallel state proceeding in the Circuit Court of Wetzel County, West Virginia, Civil Action No. 18-C-58. [Id. at 13-21].

Braddock filed a Response in Opposition on May 10, 2021, [ECF No. 31] arguing that the Third-Party Complaint is not time-barred because the claims did not accrue until Antero filed their...