Date: 10-08-2014

Case Style: International Energy Corporation v. Med Arch, LLC, Jack L. Kelley and Ken Privett

Case Number: CF-2010-6513

Judge: Daman H. Cantrell

Court: District Court, Tulsa County, Oklahoma

Plaintiff's Attorney: Scott Morgan and Jessie Pilgrim

Defendant's Attorney: John Carwile for Jack L. Kelley and Med Arch, LLC

Charles Cox and Ted Eliot for Ken Privett

Description: International Energy Corporation sued Med Arch, LLC, Jack L. Kelley and Ken Privett with fraud.

1. Plaintiff International Energy Corporation is a corporation organized under the laws of the State of Oklahoma.
2. Defendant Med-Arch, LLC (“Med-Arch”), is a limited liability company organized under the laws of the State of Oklahoma with its principal place of business in TZilsa County.
3. Defendant Jack L. Kelley (“Kelley”) is president of defendant Med-Arch adL a resident of Tulsa County, Oklahoma.
4. Defendant Ken Privett (“Privett”) is a resident of Pawnee County, State of Oklahoma, but committed the acts and omissions complained of herein in Tulsa County, Oklahoma.
5. At all times relevant hereto, defendant Kelley was acting both on his own behalf and on behalf of defendant Med-Arch.
6. At all times relevant hereto, defendant Kelley was acting within the scope and course of his employment with defendant Med-Arch.
7. This Court has jurisdiction of the parties and of the subject matter.
8. Venue is proper.
9. In the Latter half of 2008, defendants Kelley and Privett came to plaintiffs office in Tulsa and jointly represented to plaintiff that the defendants Med-Arch, Kelley, and Privett owned oil and gas rights in a project which the defendants called the “Bluehawk Quarrels 11-2”.
10. Defendants Med-Arch, Kelley, and Privett represented to plaintiff that the Bluehawk Quarrels 11-2 was a lucrative project and that plaintiff could purchase an interest of fifty percent (50%) in the Bluehawk Quarrels 11-2 project.
11. Based on the representations of defendants Med-Arch, Kelley, and Privett, plaintiff paid to entities and accounts owned or controlled by defendants Med-Arch, Kelley, and Privett the amount of $189,000.00 to purchase an interest of fifty percent (50%) in the Bluehawk Quarrels 11-2 project.
12. The last payment made by plaintiff to entities and accounts owned or controlled by defendants Med-Arch, Kelley, and Privett was in the amount of $15,000.00 and was made on or about July 24, 2009.
13. Plaintiff has never received the fifty-percent (50%) interest in the Bluehawk Quarrels I 1-2 project.
14. Plaintiff was induced by the representations of defendants Med-Arch, Kelley, and Privett to pay to entities aid accounts owned or controlled by defendants Med-Arch, Kelley, and Privett the amount of $189,000.00.
15. Defendants Med-Arch, Kelley, and Privett never had any intention to convey to plaintiff any interest in the Bluehawk Quarrels 11-2 project.
16. The representations of defendants Med-Arch, Kelley, and Privett were false and made by defendants Med-Arch, Kelley, and Privett with the intention that plaintiff rely on the representations in order for defendants Med-Arch, Kelley, and Privett to obtain the $189,000.00 from plaintiff.
17. Plaintiff reasonably relied on the representations of defendants Med-Arch, Kelley, and Privett to the detriment of plaintiff.
18. Plaintiff would not have paid the $189,000.00 to entities and accounts owned or controlled by defendants Med-Arch, Kelley, and Privett, but for the false, material and fraudulent representations of defendants Med-Arch, Kelley, and Privett described herein.
19. All representations made to plaintiff by defendants Med-Arch, Kelley, and Privett were false, misleading, and material, and made with the knowledge that they were false and misleading and with the intent that plaintiff rely on them, and plaintiff did reasonably rely on them to its detriment.
20. All omissions of defendants Med-Arch, Kelley, and Privett herein were material and the result of defendants’ intentional conduct.
21. Plaintiff has been fraudulently induced to pay $189,000.00 to entities and accounts owned or controlled by defendants Med-Arch. Kelley, and Privett.
22. Defendant Med-Arch is liable for the acts and omissions of its agent and officer defendant Kelley.
23. Defendant Med-Arch was negligent in supervising defendant Kelley.
24. Defendant Med-Arch had knowledge of defendant Kelley’s acts and omissions and did nothing to correct such acts and omissions, but rather ratified and approved such acts and omissions.
25. As a result of defendants Med-Arch, Kelley, and Privetts’ breaches, fraud, and negligence alleged herein, plaintiff has suffered actual damages in an amount in excess of $189,000.00.
26. Defendants Med-Arch, Kelley, and Privett owed to plaintiff a legal duty not to injure plaintiff.
27. Defendants Med-Arch, Kelley, and Privett have breached the legal duty they owed to plaintiff
28. The fraudulent conduct of defendants Med-Arch, Kelley, and Privett also constitutes negligence.
29. As a direct and proximate cause and result of defendants Med-Arch, Kelley, and Privetts’ fraud and negligence, plaintiff has suffered damages in excess of
$189,000.00.
30. The intentional and fraudulent conduct of defendants Med-Arch, Kelley, and Privett constitutes intentional or reckless conduct that justifies the imposition of punitive damages against defendants under 23 Okl. St. Ann. §9.1.
31. Due to the intentional and reckless conduct of defendants Med-Arch, Kelley, and Privett alleged herein, plaintiff should be granted an award of punitive damages against defendants in an amount in excess of $189,000.00.
32. Due to the fraudulent misrepresentations of defendants Med-Arch, Kelley, and Privett stated herein and plaintiff’s reasonable reliance on said fraudulent misrepresentations to its detriment, plaintiff is entitled to rescission of all agreements between plaintiff and defendants Med-Arch, Kelley, and Privett regarding the Bluehawk Quarrels 11-2 project and return of the parties to the status quo, including return to plaintiff of the $189,000.00 paid by plaintiff to entities and accounts owned or controlled by defendants Med-Arch, Kelley, and Privett.
33. Plaintiff is ready, willing and able, and pursuant to Title 15 of the Oklahoma Statutes, hereby tenders return of any consideration given to plaintiff by defendants, and will make payment of such consideration when and as directed by the Court.
34. Plaintiff is entitled to recover actual damages from defendants under one or more of the following legal theories: fraud, negligence.
35. Plaintiff is entitled to a reasonable attorney’s fee to be taxed as costs in prosecuting this action.
WHEREFORE, plaintiff International Energy Corporation demands judgment against defendants Med-Arch, LLC, Jack L. Kelley, and Ken Privett, jointly and severally, for (1) rescission of all agreements between plaintiff and defendants Med-Arch, Kelley, and Privett regarding the I3luehawk Quarrels 11-2 project; (2) actual damages in an amount in excess of $189,000.00; (3) statutory interest, and costs, including a reasonable attorney’s fee; (4) for punitive damages in an amount in excess of $189,000.00, and for further relief the Court deems just and equitable.

Outcome: Defendant: MED ARCH LLC
Disposed: DISMISSED WITHOUT PREJUDICE, 02/15/2012. Dismissed- Settled.

Defendant: KELLEY, JACK L
Disposed: STAYED PENDING ACTION OTHER JURISDICTION, 09/26/2013. Other.

Defendant: KELLEY, JACK L
Disposed: JUDGEMENT FOR DEFENDANT, 10/08/2014. Jury Trial.

Defendant: KELLEY, JACK L
Disposed: JUDGEMENT FOR DEFENDANT, 10/08/2014. Jury Trial.

Defendant: PRIVETT, KEN
Disposed: JUDGEMENT FOR DEFENDANT, 10/08/2014. Jury Trial.

Plaintiff's Experts:

Defendant's Experts:

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