ConocoPhillips Alaska, Inc. v. Wright et al

IN THE UNITED STATES DISTRICT COURT
FOR THE DISTRICT OF ALASKA
CONOCOPHILLIPS ALASKA, INC.,
Plaintiff,
v.
FORREST WRIGHT; AMANDA
WRIGHT; NATHAN KEAYS; KELLY
KEAYS; ECO EDGE ARMORING,
LLC; DAVID BENEFIELD; WRIGHT
CAPITAL INVESTMENTS, LLC; and
DB OILFIELD SUPPORT
SERVICES,
Defendants.
Case No. 3:19-CV-00311-SLG
ORDER RE EX PARTE MOTION FOR TEMPORARY RESTRAINING ORDER
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
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Case No. 3:19-cv-00311, ConocoPhillips Alaska, Inc. v. Wright, et al.
Order re Plaintiff’s Ex Parte Motion for Temporary Restraining Order
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(“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
1 Docket 1 at 11–17, ¶¶ 51–97.
2 Docket 1 at 3–4, ¶¶ 14–19.
3 Docket 3 at 1.
4 Docket 3 at 2.
5 Docket 3 at 2.
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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
6 Docket 3 at 2.
7 Docket 3 at 2.
8 Docket 3 at 2.
9 Docket 4 at 2, ¶¶ 2–3 (Laughlin Aff.).
10 Docket 4 at 2, ¶ 4 (Laughlin Aff.).
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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
11 Docket 4 at 4, ¶¶ 12–13 (Laughlin Aff.).
12 Docket 4 at 3, ¶¶ 6–7 (Laughlin Aff.).
13 Docket 4 at 3–4, ¶ 10 (Laughlin Aff.).
14 Docket 4 at 2, ¶ 4 (Laughlin Aff.).
15 Docket 4 at 2, 4 ¶¶ 4, 14 (Laughlin Aff.).
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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
16 Docket 4 at 5, ¶¶ 15–16 (Laughlin Aff.).
17 Docket 4 at 5, ¶ 17 (Laughlin Aff.).
18 Docket 4 at 5, ¶ 18 (Laughlin Aff.).
19 Docket 4 at 6, ¶ 22 (Laughlin Aff.).
20 Docket 4 at 5–6, ¶¶ 18–22 (Laughlin Aff.).
21 Docket 4 at 5, ¶ 20 (Laughlin Aff.).
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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
22 Docket 4 at 6, ¶ 24 (Laughlin Aff.).
23 Docket 4 at 6, ¶¶ 25–26 (Laughlin Aff.).
24 Sierra Forest Legacy v. Rey, 577 F.3d 1015, 1021 (9th Cir. 2009) (citing Winter v. Nat.
Res. Def. Council, Inc., 555 U.S. 7, 20 (2008)). In Winter, the Court clarified that
irreparable harm must be likely, not just possible, for an injunction to issue. 555 U.S. at
25; see also All for the Wild Rockies v. Cottrell, 632 F.3d 1127, 1131 (9th Cir. 2011).
25 Sierra Forest Legacy v. Rey, 577 F.3d 1015, 1022 (9th Cir. 2009) (citing United States
v. Odessa Union Warehouse Co-op, 833 F.2d 172, 175 (9th Cir. 1987)).
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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
26 Docket 4 at 6, ¶ 26 (Laughlin Aff.).
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ConocoPhillips is in the public interest. The public has a vested interest in
preventing embezzlers from dissipating fraudulently obtained assets, as well as an
interest in protecting employers and businesses from fraud by their employees.
For these reasons, the Court finds that a temporary restraining order is
warranted. Further, the Court will enter the temporary restraining order without
notice to Defendants as the record before the Court clearly shows that
ConocoPhillips would suffer immediate and irreparable injury, loss, or damage
before Defendants can be heard in opposition.
CONCLUSION
In light of the foregoing, Plaintiff’s Motion for Expedited Consideration of its
Ex Parte Motion is GRANTED and Plaintiff’s Ex Parte Motion for a Temporary
Restraining Order is GRANTED. The Court order as follows:
1. All funds held in any and all accounts owned or controlled by Forrest
Wright, Amanda Wright, Nathan Keays, Kelly Keays, David Benefield, Eco Edge
Armoring, LLC, DB Oilfield Support Services, and/or Wright Capital Investments,
LLC, or any combination thereof are hereby frozen, specifically including but not
limited to AlaskaUSA Federal Credit Union Account #1700047859829 (held by DB
Oilfield Support Services) and account #170001977951 (held by Eco Edge
Armoring, LLC). AlaskaUSA, and all other financial institution where Defendants
have accounts, shall not allow any disbursements or transfers of any type from
such accounts until this order expires, or until further order of this Court.
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2. Forrest Wright, Amanda Wright, Nathan Keays, Kelly Keays, David
Benefield, Eco Edge Armoring, LLC, CB Oilfield Support Services, and Wright
Capital Investments, LLC shall not sell, transfer, or dispose of any assets received
from ConocoPhillips or any assets—including any real property, any personal
tangible property and any intangible property—purchased, partially purchased,
paid for, or maintained with any assets, or money received from or paid to them by
ConocoPhillips.
3. This Temporary Restraining Order is effective as of the date and time
of this Order. ConocoPhillips shall place with the Clerk of Court a cash bond or
other appropriately secured undertaking to pay costs associated with the
temporary restraining order should it later be determined to have been wrongly
issued. The penal sum of such bond shall be Five Thousand Dollars ($5,000) and
shall be submitted to the Clerk of Court no later than December 16, 2019.
4. This Temporary Restraining Order shall expire fourteen (14) days from
the date of this Order unless extended by further court order.
5. A hearing on ConocoPhillips’ Motion for a Preliminary Injunction is
schedule before this Court for December 26, 2019 at 2:30 p.m. Any opposition
by Defendants to that motion shall be served and filed on or before December 19,
2019, and Plaintiff shall serve and file any reply on or before December 23, 2019.
6. The following procedure shall govern the hearing on the preliminary
injunction motion:
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(a) Each party shall be accorded a total of one hour for the presentation
of any evidence and argument by counsel.
(b) A party may rely on the affidavits submitted with its motion, opposition
or reply in lieu of, or in addition to, the presentation of direct testimony by that
witness, but only so long as the affiant is present at the hearing for cross-
examination.
7. ConocoPhillips shall make all reasonable efforts to immediately serve
upon Defendants this order, and a copy of all moving papers, and shall file proof
of service thereof.
DATED this 13th day of December, 2019 at 1:15 PM, at Anchorage, Alaska.
/s/ Sharon L. Gleason
UNITED STATES DISTRICT JUDGE
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