MOUNDSVILLE – A class action lawsuit has been filed against AB Resources LLC after seven people claim the company has cheated them out of more than $1 million in royalty payments.
The seven plaintiffs named in the suit are Patricia S. Hoskins, Mary Jako, Clarence Rulong, William R. and Linda L. Standiford and Lewis A. and Cathy Aston.
The plaintiffs claim AB Resources made improper deductions in calculating royalty payments and used “fraud, deception, concealment, suppression and omission of material facts to deprive plaintiffs of the royalties to which they were entitled.”
AB Resources’ bad faith is evidenced by the fact that its successor-in-interest, Chevron USA, Inc., which obtained the rights to the defendant’s oil and gas leases, does not make the same cost deductions when calculating royalty payments for the identical oil and gas leases, according to the suit.
Daniel J. Guida, one of the attorneys for the plaintiffs said AB Resources’ improper deduction costs were realized when its successor did not make the same deductions.
“When the successor didn’t make the same deductions it was realized that AB Resources had been improperly deducting costs and had acted in bad faith regarding the royalty payments” Guida said.
The plaintiffs claim AB Resources intentionally failed and refused to pay the royalties to them as required by the leases with no deduction of any costs incurred by it or its affiliates to “gather, transport, compress dehydrate or otherwise treat such gas prior to the point of custody transfer into pipelines or other facilities owned by a regulated utility or pipeline company or a non-affiliated third party.”
AB Resources entered into a scheme and design to intentionally mislead the plaintiffs into believing they were being paid all the royalties due to them, according to the suit.
The plaintiffs also claim as part of the defendant’s legal responsibilities, it agreed to and/or had the duty to account for all the sales of gas from the gas wells and to accurately account for the wells and to act as a fiduciary for their moneys due to them as a result of any owed royalties.
The defendant breached its fiduciary duties and with its actions, fraudulently concealed information from the plaintiffs that deprived them of the rents and royalties to which they are entitled, according to the suit.
The plaintiffs claim AB Resources actions and conduct was “so outrageous as to shock the conscious …”
AB Resources’ actions were also in bad faith and were intentional, outrageous and reprehensible, according to the suit.
The plaintiffs are seeking compensatory and punitive damages with pre- and post-judgment interest. They are being represented by Guida, Jonathan E. Turak and Eric Gordon.