In May 1996, Sandvick, Bragg, LaCrosse and Haughton purchase three oil and gas leases (the "Base Leases") which provide for a primary term of five years and do not contain any provision for extending or renewing the leases. Record title to the Base Leases is held by Empire Oil Company, owned by LaCrosse, and the leases were purchased from the parties' credits in the Empire Oil Company JV checking account. The parties' initial intent is to try to sell the leases before the expiration of their primary terms. The parties had previously owned other oil and gas leases together. In November 2000, Haughton and LaCrosse purchase three oil and gas leases on the same property (the 'Top Leases"), with terms that are set to commence upon the expiration of the Base Leases. The Top Leases are not recorded until December 2001. Prior to purchasing those leases, Haughton and LaCrosse twice offer to purchase Sandvick's and Bragg's interests in the Base Leases, but the offers are refused. Sandvick and Bragg, upon learning of the purchase of the Top Leases, bring suit against LaCrosse and Haughton in 2004 asserting that they breached fiduciary duties by not offering Sandvick and Bragg an opportunity to purchase the Top Leases with them. At the trial, the court finds that no joint venture or partnership exists and enters judgment in favor of the defendants.
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