United States District Court, D. Alaska
ORDER RE EX PARTE MOTION FOR TEMPORARY RESTRAINING
ORDER
SHARON
L. GLEASON, UNITED STATES DISTRICT JUDGE.
Before
the Court at Docket 3 is Plaintiff ConocoPhillips Alaska,
Inc.'s (“ConocoPhillips”) Ex Parte Motion for
Temporary Restraining Order and Preliminary Injunction. Also
before this Court at Docket 6 is Plaintiff's Motion for
Expedited Consideration of its Ex Parte Motion for Temporary
Restraining Order and Preliminary Injunction.
In its
Complaint, ConocoPhillips asserts eight counts against
Forrest Wright, Amanda Wright, Nathan Keays, Kelly Keays, Eco
Edge Armoring LLC, David Benefield, Wright Capital
Investments, LLC, and DB Oilfield Support Services
(“Defendants”) including: (1) RICO claims, (2)
embezzlement, (3) fraud, (4) conversion, (5) unjust
enrichment, (6) breach of contract, (7) constructive trust,
and (8) piercing the corporate veil.[1] ConocoPhillips asserts that
Defendants engaged in a scheme wherein former employee
Forrest Wright fraudulently obtained approval from
ConocoPhillips to hire and pay vendors for services and
materials never rendered or provided.[2]
ConocoPhillips
seeks a temporary restraining order with the stated purpose
of preventing Defendants from “withdrawing,
transferring, or dissipating in any manner any funds, or
selling any real or personal property (including vehicles)
until such time as the Court has ruled further on a Motion
for Preliminary Injunction, or otherwise prevent the transfer
or sale of any assets purchased, or partially purchased, paid
for or maintained with the fraudulently obtained, embezzled
funds.”[3] According to ConocoPhillips, it employed
Forrest Wright as a Senior Drilling and Wells Planner in
Anchorage until December 5, 2019, when he
resigned.[4] In this position, Mr. Wright had the
authority to propose and approve suppliers for
ConocoPhillips.[5] Beginning in February 2019, Mr. Wright
sought to include DB Oilfield Support Services (“DB
Oilfield”) and Eco Edge Armoring, LLC (“Eco
Edge”) among ConocoPhillips' approved vendors. The
former is owned by Mr. Wright's father-in-law, Defendant
David Benefield, and the latter by Defendants Nathan and
Kelly Keays.[6]
ConocoPhillips
asserts that between April and October 2019, Mr. Wright
fraudulently obtained approval to purchase materials and
services from DB Oilfield and Eco Edge totaling more than $7,
000, 000.[7] ConocoPhillips alleges that these
materials and services were never provided, but that Mr.
Wright used misrepresentation and fraud to convince his
colleagues at ConocoPhillips that they had been provided and
to pay the vendors.[8]
The
security manager for ConocoPhillips, Jeff Laughlin, launched
an investigation into Mr. Wright upon receiving an anonymous
tip that Mr. Wright had authorized payments of nearly $4,
000, 000 to DB Oilfield for products that had never been
delivered.[9] Mr. Laughlin's investigation revealed
that Mr. Wright sought and received approval to authorize DB
Oilfield as a vendor; Mr. Wright's father-in-law, Mr.
Benefield, was the vendor contact.[10] Mr. Laughlin discovered
that DB Oilfield obtained a business license in Alaska just
three days before Mr. Wright proposed them as a vendor.
Moreover, the day after he proposed them as a vendor, Mr.
Wright himself contacted an IT specialist to create, among
other things, a website for DB Oilfield.[11]
DB
Oilfield invoiced ConocoPhillips in the amount of $4, 148,
000 for a patented pipe racking system that it purportedly
delivered to a Fairbanks railroad yard.[12] Mr. Wright
confirmed that the pipes were delivered and were in use in
Fairbanks, but through his investigation, Mr. Laughlin spoke
with senior drilling supervisor, Rick Bjorhus, who
“confirmed with individuals at the Fairbanks railyard
that there were no racks or inspection shelters of the type
allegedly sold to ConocoPhillips by DB
Oilfield.”[13]
In the
course of his investigation, Mr. Laughlin determined that in
February 2019, Mr. Wright also initiated the process to
approve Eco Edge as a vendor.[14] Mr. Keays was the vendor
contact for Eco Edge, and wrote to Mr. Wright offering
“pipe inspection and inventory services” at the
Fairbanks railroad yard in the amount of $2, 075 per
day.[15] Mr. Wright obtained approval for these
services, and Eco Edge submitted invoices for pipe inspection
totaling $439, 930.[16] Mr. Bjorhus confirmed that none of the
contractors at the Alaska Railroad, or the drilling operators
at the Alpine oilfield had ever heard of or been in contact
with anyone from Eco Edge.[17]
In
addition to the pipe inspection services, Mr. Keays offered
Mr. Wright 11, 000 feet of “joint retainers”
(sections of pipe) at a liquidation price.[18] Mr. Keays
claimed the joint retainers were stored at Unique Machine in
Anchorage. Mr. Wright convinced his colleagues at
ConocoPhillips that the joint retainers were a good deal
using a fictitious email exchange with Pat Hanley, the
president of Cal IV Pipe, quoting a higher
price.[19] During his investigation, Mr. Laughlin
confirmed with Mr. Hanley that the email was fabricated, and
did not come from him.[20] Mr. Laughlin also spoke with the
president of Unique Machine, Chris Shumate, who knew nothing
about Mr. Keays, Eco Edge, or the joint retainers that were
purportedly stored in his facility.[21] Nevertheless, Eco Edge
invoiced ConocoPhillips for the joint retainers in the amount
of $974, 474 on April 15, 2019 and of $495, 000 on April 17,
2019.[22]
Finally,
Mr. Laughlin determined that Forrest and Amanda Wright formed
Wright Capital Investments LLC (“Wright Capital”)
in Nevada on or around July 21, 2019 and, shortly thereafter,
used Wright Capital to purchase more than $4, 000, 000 worth
of real estate in Las Vegas.[23]
LEGAL
STANDARD
The
standard for obtaining a temporary restraining order is the
same as that for a preliminary injunction. Plaintiffs seeking
injunctive relief must establish “(1) they are likely
to succeed on the merits; (2) they are likely to suffer
irreparable harm in the absence of preliminary relief; (3)
the balance of equities tips in their favor; and (4) a
preliminary injunction is in the public
interest.”[24]
Injunctive
relief is an equitable remedy, and “[t]he essence of
equity jurisdiction is the power of the court to fashion a
remedy depending upon the necessities of the particular
case.”[25]
DISCUSSION
Based
on the record before it, the Court finds that ConocoPhillips
is likely to succeed on the merits of this action and obtain
a judgment ordering a return of their funds. Among other
things, Plaintiff has provided an affidavit from its security
manager, Mr. Laughlin, that provides extensive and detailed
evidence resulting from his investigation in support of
Plaintiff's allegations against Defendants.
Further,
ConocoPhillips has demonstrated that it is likely to suffer
irreparable harm if injunctive relief is not ordered with
respect to Defendants' funds and assets. In light of
Plaintiff's complaint against them, Defendants would be
incentivized to make their funds and assets unavailable, to
the extent possible, thereby irreparably harming
ConocoPhillips in the amount that it is unable to recover.
The record demonstrates that Defendants have already pursued
a $4, 000, 000 out-of-state real estate
opportunity.[26]
The
Court finds that the balance of equities tips in
ConocoPhillips' favor. Although Defendants will
undoubtedly be burdened by the constraints on their financial
freedom that Plaintiff seeks, the loss is only temporary. In
contrast, should Defendants dispose of or otherwise make
unavailable their funds and assets, ConocoPhillips could be
permanently harmed. Moreover, injunctive relief to prevent
Defendants from transferring funds or assets received from
ConocoPhillips is in the public interest. The public has a
vested interest in preventing ...