Pennsylvania Record

Wednesday, April 8, 2020

Tucker Arensberg ordered to turn over records in Fla. energy company's fraud and deceit lawsuit

Attorneys & Judges

By Karen Kidd | Mar 6, 2020


PITTSBURGH — A Pittsburgh law firm has until later this month to produce certain communications between one of its attorneys and principals of a Florida-based oil and gas company suing the firm over alleged fraud and deception.

In his 12-page memorandum and order issued Feb. 26, U.S. Magistrate Judge Martin C. Carlson, on the bench in Pennsylvania's Western District, granted two portions of Prime Energy and Chemical's  motion to compel additional information from Tucker Arensberg, P.C.

Tucker Arensberg has until March 26 to provide the court with redacted and unredacted documents about a $50,000 deposit the firm received and to look "any relevant non-privileged communications" between one of its attorneys and a client the firm is accused of assisting to hide information about a property sale.

"If this search reveals further, relevant and non-privileged communications, those communications should be produced," Carlson's order said.

Prime Energy, based in Juniper, Florida, initially filed its lawsuit in March 2018, alleging that Tucker Arensberg assisted its client, Mark A. Thompson, and Thompson's companies tp hide information about litigation that bound property subsequently sold to Prime Energy. 

Prime Energy paid $3 million for the oil and gas property, generally know as the "Swamp Angel" property in McKean County, according to the background portion of Carlson's memorandum.

The property also was subject to a government enforcement action, part of the information that Tucker Arensberg attorneys are accused of helping Thompson conceal.

Prime Energy alleges Arensberg and Thompson's deception led to losses of about $678,000 in direct funds and approximately $35 million in potential revenue and profit generation.

In August, U.S. District Court Judge Yvette Kane denied Tucker Arensberg motion to dismiss the claims. A previous Arensberg motion to dismiss was denied in July 2018.

Tucker Arensberg has denied any and all wrongdoing on its own part and that of its attorneys.

In the latest memorandum and order handed down in the case, Prime Energy sought information about a $50,000 deposit payment Tucker Arensberg allegedly received in connection with the Swamp Angel transaction.

"Prime Energy alleges that these funds were stolen and misapplied by the defendants when they were used to pay other outstanding obligations that Thompson and Thompson-controlled entities owed to the defendants," the memorandum said. "The defendants have responded to this request by asserting that they have provided all the information regarding the disposition of these funds in depositions and have produced the invoices relating to the receipt and disposition of this payment to the plaintiff, albeit in a redacted form."

Prime Energy wants to see that information in unredacted form, in addition to "pertinent portions of the defendant law firm's ledgers," the memorandum said.

Prime Energy also wants Tucker Arensberg to produce all not-privileged communications between Thompson and firm attorney Michael Shiner, a named defendant in the case, that relate to underlying transactions in the case.

"The defendants have responded by asserting that they have produced all relevant, nonprivileged communications between Mr. Shiner and Thompson between 2015 and 2016, the time frame specified in Prime Energy’s complaint," the memorandum said. "The defendants, therefore, assert that they have produced all of the evidence they possess which is responsive to these discovery demands."

Prime Energy, "dissatisfied with this response," alleges that that in 2018 and 2019 Thompson "sent angry and threatening communications to Prime Energy’s principals," the memorandum said.

"Even though Mr. Thompson is not a party to this lawsuit, Prime Energy speculates that Thompson’s communications, which took place two to three years after the events alleged in its complaint, are related to those underlying events and took place with the active or tacit approval of Mr. Shiner," the memorandum continued.

Prime Energy is sought the communications "based upon this speculative assertion," the memorandum said.

As part of his decision to grant part of Prime Energy's motion to compel, Carlson said he was "once again acting out of a surfeit of caution" when he ordered Tucker Arensberg to look for "any relevant non-privileged communications between Mr. Shiner and Mr. Thompson" in the dispute.

"If this search reveals further, relevant and non-privileged communications, those communications should be produced," Carlson's memorandum said. "If nothing relevant is located, the defendants shall notify the plaintiff that no further relevant records exist."

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Organizations in this Story

U.S. District Court for the Western District of Pennsylvania Pittsburgh DivisionTucker Arensberg PC