Macquarie Bank Ltd. v. Knickel, No. 14-1683 (8th Cir. 2015)
Annotate this CaseKnickel approached Macquarie Bank about a loan to develop North Dakota oil and gas leases, providing confidential information about leased acreage that he had assembled over 10 years. Macquarie entered agreements with Knickel’s companies, LexMac and Novus. His other company, Lexar was not a party. Macquarie acquired a mortgage lien and perfected security interest in the leases and in their extensions or renewals. Royalties and confidential information—reserves reports on the acreage, seismic data, and geologic maps—also served as collateral. The companies defaulted. Because of the lack of development or production, many leases were set to expire. Knickel claims he agreed to renew only leases that included automatic extensions. Macquarie claims that Knickel promised to renew all leases serving as collateral in the names of LexMac and Novus. Upon the expiration of the leases without automatic extensions, Knickel entered into new leases in the name of Lexar, for development with LexMac and Novus, since they owned the confidential information. A foreclosure judgment entered, declaring that LexMac and Novus’s interest in the leases would be sold to satisfy the debt: $5,296,252.29,. Marquarie filed notice of lis pendens on Lexar’s leases, leased adjoining acreage, used the confidential information to find a buyer, and sold the leases at a profit of about $7,000,000. Marquarie filed claims of deceit, fraud, and promissory estoppel, and alleged that the corporate veil of the companies should be pierced to hold Knickel personally liable. The defendants counterclaimed misappropriation of trade secrets and unlawful interference with business. The Eighth Circuit affirmed summary judgment on all but one claim and judgment that Macquarie had misappropriated trade secrets.
Court Description: Wollman, Author, with Beam and Loken, Circuit Judge] Civil case. District court did not err in determining the contract documents did not require defendants LexMac and Novus to renew certain expires collateral leases, and the leases did not serve as collateral under the contract; the district court did not err in granting summary judgment against plaintiff on its claims of deceit, fraud and promissory estoppel; defendant Lexar's misappropriation of trade secrets claim fails because the trade secrets were misappropriated from defendants LexMac and Novus, not Lexar; North Dakota's Uniform Trade Secrets Act displaces a unlawful-interference claim on the same facts; no error in finding Macquarie had misappropriated LexMac and Novus's trade secrets, and the award of damages and attorneys' fees is affirmed.
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