Wearmouth v. Four Thirteen, LLC

The Wyoming Supreme Court affirmed a district court decision declining to dismiss three individual defendants from litigation concerning alleged misrepresentations regarding a carbon credits venture. The plaintiff provided funds for “a speculative business venture to monetize Brazilian carbon credits owned by some of the corporate defendants.” Against the corporate defendants and two individual defendants who were alleged to be principal actors and shareholders, officers, and board members of the corporate entities, the plaintiff asserted claims of breach of contract, breach of fiduciary duty, breach of the covenant of good faith and fair dealing, fraud, constructive fraud, negligent misrepresentation, conversion, violation of the Wyoming Securities Act, unjust enrichment, and civil conspiracy. Only fraud, constructive fraud, and negligent misrepresentation claims were asserted against the three individuals who sought dismissal based on affidavits of non-involvement. The court found no error in the court’s ruling that the three individuals were not entitled to dismissal. The Supreme Court noted that the record was limited but that the individuals had admitted to being listed as officers and to having discussions with the other individual defendants. In addition, affidavits included some information regarding their involvement in conversations regarding efforts to monetize the carbon credits.