DALLAS (CN) - An oil and gas firm says in court that it faces $30 million in liability because a former landman failed to pay rent toward at least 43 mineral leases in three states.
Paying on the leases to avoid lapses was one of the "very basic" yet "most important" duties of Plano-based landman Khory Ramage, according to the complaint in the 14th Judicial District Court of Dallas County.
"As a landman, Ramage's basic duties were to track and maintain leases on government land already under plaintiffs' ownership, as well as to seek out and investigate other available leases," the 8-page complaint states. "Ramage was compensated handsomely for his duties - often in excess of $225,000 per year." Dallas-based Harvey Ventures Group and Harvey Mineral Partners say that they learned in March that Ramage had allowed a lease on a sizeable piece of land in New Mexico to lapse with the U.S. Bureau of Land Management, resulting in $1.5 million in potential losses.
"Though Ramage apologized for the lapse, he did not accept full responsibility and levied blame upon [managing partner Michael J.] Harvey's administrative assistant," the complaint states. "This was despite the fact that it was Ramage's primary duty to assure that leases such as the one in New Mexico did not lapse. Nevertheless, plaintiffs gave Ramage a second chance. Of course, no good deed goes unpunished."
Six months later, they learned that Ramage had allegedly allowed a lease in Montana and 41 leases in North Dakota to lapse, resulting in potential losses of at least $30 million.
"Furthermore, the lapses caused the offering materials that plaintiffs had just presented in New York to become inaccurate," the complaint states. "Accordingly, plaintiffs have had to undertake efforts to revise the offering materials and explain to prospective purchasers that plaintiffs had lost certain mineral rights as a result of negligence. This resulted in substantial reputational harm to plaintiffs at a critical time."
The firms say they fired Ramage, but that he demanded his job back on Sept. 26 and once again refused to accept blame for the 42 new lapsed leases, placing "unarticulated" blame on an administrative assistant.
"When Harvey refused to rehire him, Ramage inexplicably demanded over $2 million, at least one year of severance, and rights to additional overrides for any future sales which plaintiffs completed," the complaint states. "Ramage made these unreasonable demands despite his second clear failure to perform the very basic duties of his position."
The Harvey entities seek declaratory relief and damages for negligence and breach of contract. They are represented by Steven Stodghill with Fish Richardson of Dallas.
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