AI Generated Opinion Summaries

This summary was computer-generated without any editorial revision. It is not official, has not been checked for accuracy, and is NOT citable.

Facts

The case concerns disputes over oil and gas properties in Lea County, New Mexico. The Plaintiff alleged that the Defendant, through its subsidiaries, failed to pay proceeds owed under joint operating agreements, refused to provide accounting information, and breached fiduciary duties. Additionally, the Harton Plaintiffs claimed that the Defendant's lease terminated due to non-compliance with reworking obligations and sought damages for unpaid royalties, slander of title, and bad faith trespass (paras 1, 5-13).

Procedural History

• Capco Acquisub, Inc. v. Greka Energy Corporation, No. CV-2001-249 (Lea County District Court, July 6, 2001): Plaintiff filed a complaint for accounting, damages, and punitive damages.
• Michael Harton, et al. v. Greka AM, Inc., et al., No. CV-2001-417 (Lea County District Court, October 29, 2001): Harton Plaintiffs filed a petition for declaratory judgment and damages.
• Lea County District Court, February 9, 2004: The two cases were consolidated for trial.
• Capco Acquisub, Inc. v. Greka Energy Corporation, 2007-NMCA-011: The Court of Appeals affirmed the denial of the Subsidiaries' motion for an extension of time to file a notice of appeal and dismissed the remainder of their appeal (para 2).

Parties' Submissions

• Appellant (Greka Energy Corporation): Argued that the district court lacked personal jurisdiction, improperly allowed the Harton Plaintiffs to add GEC as a defendant at trial, erred in awarding punitive damages, disregarded corporate separateness, and that the Capco Plaintiffs were precluded from filing suit under NMSA 1978, § 53-17-20 (paras 3, 27).
• Appellees (Capco Plaintiffs and Harton Plaintiffs): Asserted that GEC had sufficient minimum contacts with New Mexico to establish jurisdiction, that GEC waived its jurisdictional defense through its conduct, and that the evidence supported the punitive damages award. They also argued that GEC’s actions justified piercing the corporate veil (paras 29-30, 37-38).

Legal Issues

• Did the district court have personal jurisdiction over GEC?
• Was it proper to allow the Harton Plaintiffs to add GEC as a defendant at trial?
• Did the district court err in awarding punitive damages against GEC?
• Were the Capco Plaintiffs precluded from filing suit under NMSA 1978, § 53-17-20?

Disposition

• The judgment against GEC in the Harton Action was reversed and remanded.
• The discovery sanctions against GEC were vacated.
• The judgment against GEC in the Capco Action was affirmed in all respects (paras 61-62).

Reasons

Per Bustamante J. (Pickard and Kennedy JJ. concurring):

Personal Jurisdiction: The court found that GEC had sufficient minimum contacts with New Mexico, including operating oil and gas properties, employing personnel in the state, and holding itself out as the operator of the lease. These activities satisfied the requirements of the New Mexico long-arm statute and due process (paras 36-38).

Trial Amendments: The district court erred in allowing the Harton Plaintiffs to add GEC as a defendant at trial without proper notice. This violated Rule 1-015(C) NMRA and GEC’s due process rights, as GEC was prejudiced by the lack of opportunity to defend itself (paras 39-49).

Discovery Sanctions: The sanctions imposed on GEC were improper because GEC was not a party to the Harton Action at the time and had not been served with discovery requests. The district court lacked authority to impose such sanctions (paras 50-51).

Punitive Damages: GEC’s challenge to the punitive damages award in the Capco Action was not preserved for appeal, as it failed to raise the issue adequately before the district court. The court declined to consider the argument (paras 52-54).

Section 53-17-20 Defense: GEC waived its defense under NMSA 1978, § 53-17-20 by failing to raise it as an affirmative defense in its answer or by motion. The statute does not impose a pleading requirement, and the issue pertains to capacity to sue, which must be specifically raised (paras 55-60).