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Operations and Consulting, United Pacific Energy v. Gas and Oil Technologies

September 30, 2011

OPERATIONS AND CONSULTING, UNITED PACIFIC ENERGY
INC., ET AL.,
PLAINTIFFS,
v.
GAS AND OIL TECHNOLOGIES, INC., ET AL., DEFENDANTS.



The opinion of the court was delivered by: Oliver W. Wanger United States District Judge

ORDER DENYING PETITION TO INVALIDATE THIRD PARTY CLAIM (Doc. 17)

I. INTRODUCTION.

On January 5, 2011, United Pacific Energy Operations and Consulting, Inc., and Paul Giller ("UPEOC") filed a Registration of Foreign Judgment and Request for Execution. (Doc. 1). A writ of execution issued on February 2, 2011. (Doc. 5). A second writ of execution issued on April 14, 2011. (Doc. 9).

On May 6, 2011, Tearlach Resources (California), LTD ("Tearlach California") filed a third party claim pursuant to California Code of Civil Procedure 720.110, asserting an ownership interest in the property levied upon by UPEOC. On May 21, 2011 UPEOC filed a Petition to Invalidate Tearlach California's third party claim. (Doc. 17).

The court held a hearing pursuant to California Code of Civil Procedure 720.310 et seq. on August 2 and August 3, 2011. UPEOC filed proposed findings of fact and conclusions of law on August 4, 2011. (Doc. 85). Tearlach California filed proposed findings of fact and conclusions of law on July 29, 2011. (Doc. 72).

II. FACTUAL BACKGROUND*fn1 Nature of the Dispute

Judgment debtor Western States International, Inc. ("WSI") is the record owner of federal oil leases with the U.S. Bureau of Land Management ("Federal Leases") for a property referred to by the parties as Kern Front Field in Bakersfield, California.*fn2 UPEOC and Tearlach California each hold judgments against WSI issued in separate proceedings by two separate courts, federal and state, respectively.

UPEOC seeks to execute on approximately 900 barrels of crude oil produced at Kern Front Field by WSI. Tearlach California asserts an ownership interest in oil produced at Kern Front Field by WSI.

UPEOC's Judgment

On May 25, 2007, UPEOC filed suit in the Los Angeles County Superior Court against, inter alia, WSI and Tearlach Resources (Canada) LTD., a Canadian Corporation ("Tearlach Canada"). United Pacific Energy Operations and Consulting, Inc., et al. v. Gas and Oil Technologies, Inc., et al., 2:07-cv-04436-CJC-RNB, Doc. 1.

Tearlach California, a subsidiary of Tearlach Canada, was not named as a defendant. The action was removed to the United States District Court for the Central District. Id. On May 29, 2007, UPEOC recorded Lis Pendens with the Kern County Recorder against the Federal Leases.

UPEOC filed a first amended complaint ("UPEOC's FAC") on September 26, 2007. United Pacific Energy Operations and Consulting, Inc., et al. v. Gas and Oil Technologies, Inc., et al., 2:07-cv-04436-CJC-RNB, Doc. 27. Tearlach California was not named as a defendant in UPEOC's FAC. UPEOC's FAC alleged nineteen causes of action, all but two of which sought only monetary relief. Only the tenth and eleventh causes of action in UPEOC's FAC asserted interests in real property.

On October 19, 2007, Default Judgment was entered against Tearlach Canada. United Pacific Energy Operations and Consulting, Inc., et al. v. Gas and Oil Technologies, Inc., et al., 2:07-cv-04436-CJC-RNB, Doc. 26. On February 25, 2008, the court granted Tearlach Canada's motion to set aside the default judgment. Id., Doc. 42.

On May 2, 2008, the United States District Court for the Central District of California entered a Stipulated Amended Judgment ("2008 Consent Judgment") against WSI and several other entities. The 2008 Consent ...


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