940234 La.App. 1 Cir. 2/23/96, Supreme Contractors, Inc. v. Halliburton Logging Services, Inc.

• Decision Date: 23 February 1996
• Citation: 668 So.2d 1363
• Parties: Cir
• Court: Court of Appeal of Louisiana — District of US

Page 1363

668 So.2d 1363

940234 La.App. 1 Cir. 2/23/96

SUPREME CONTRACTORS, INC. v. HALLIBURTON LOGGING SERVICES, INC.

No. CA 94 0234R.

Court of Appeal of Louisiana, First Circuit.

Feb. 23, 1996.

Writ Denied April 26, 1996.

Daniel Cavell, Thibodaux, for Plaintiff-Appellee, Supreme Contractors, Inc.

Raymond Beyt, Lafayette, for Plaintiff-Appellee, Supreme Contractors, Inc.

Robert W. Daigle, Lafayette, for Defendant-Appellant, Halliburton Logging Services, Inc.

Harry R. Holladay, Douglas L. Grundmeyer, New Orleans, for Amicus Curiae, Petroleum Equipment Suppliers Association.

Before LeBLANC, WHIPPLE and FOGG, JJ.

[940234 La.App. 1 Cir. 2] LeBLANC, Judge.

This matter is before us on remand from the Louisiana Supreme Court. On December 22, 1994, this court rendered a decision reversing the trial court's granting of a summary judgment in favor of Supreme Contractors, Inc. (plaintiff), and against Halliburton Logging Services, Inc. (defendant). Supreme Contractors, Inc. v. Halliburton Logging Services, Inc., 94-0234 (La.App. 1st Cir. 12/22/94), 648 So.2d 461. The Supreme Court granted Supreme Contractors' application for writ of certiorari and remanded the case to this court for reconsideration in the light of Guichard Drilling v. Alpine Energy Serv., 94-1275 (La. 7/3/95), 657 So.2d 1307. Supreme Contractors, Inc., 95-0052 (La. 9/29/95), 660 So.2d 866.

I.

On January 31, 1989, Supreme Contractors submitted an invoice in the amount of $7,587.17 to WTL Energy, Inc. for oilfield services provided on the W.A. Jones No. 5 well in the Cut Off Field in Lafourche Parish. Supreme Contractors recorded a notice of lien and privilege against the Jones well for the amount of its invoice on July 25, 1989. Subsequently, WTL Energy submitted a payment in the amount of $750.00 to Supreme Contractors.

On February 1, 1990, WTL Energy transferred certain leases, (which included the land on which the well at issue is situated) related wells and equipment to Sea Hawk Oil and Gas Company and Alpine Energy, Inc. These assignments were recorded in the public records of Lafourche Parish on April 12, 1990.

On July 11, 1990, Supreme Contractors filed suit against WTL Energy in the 17th JDC to recover the unpaid balance of $6,837.17 and to enforce its lien and privilege against the Jones well. (Neither Sea Hawk nor Alpine was named as a party to this action.) On July 18, 1990, Supreme Contractors filed a "Notice of Pendency of Action" in the public records of Lafourche Parish.

[940234 La.App. 1 Cir. 3] On September 22, 1990, the defendant in the present action, Halliburton, performed production evaluation services on the Jones well at the request of Sea Hawk. The work performed by Halliburton was accomplished in one day, and was performed using machinery and equipment brought to and from the worksite by Halliburton.

On December 7, 1990, Supreme Contractors obtained a default judgment against WTL in the sum of $6,837.17 together with interest, attorney's fees and costs. On September 20, 1991, Supreme Contractors, relying on its judgment against WTL, filed an action against Halliburton for a writ of sequestration, seeking recognition of its lien and privilege against the machinery and equipment used by Halliburton on the well site in the performance of services on September 22, 1990. Supreme Contractors asserted that its lien and privilege against WTL Energy attached to Halliburton's property when it arrived on the well site. Supreme Contractors further alleged that it was entitled to enforce the lien by writ of sequestration when Halliburton removed its machinery and equipment from the site without the consent of Supreme Contractors.

The trial court granted summary judgment in favor of Supreme Contractors, recognizing its lien and privilege and issued a writ of sequestration to seize and sell Halliburton's machinery and equipment. Halliburton appealed.

Halliburton asserted the trial court erred in its application of the Louisiana Oil, Gas and Water Wells Lien Act, La.R.S. 9:4861 et seq., that the application violated Halliburton's due process rights, and that even if Supreme Contractors had lien rights, such rights were extinguished by the passing of the one year peremptive period provided by La.R.S. 9:4865.

La.R.S. 9:4861 creates a lien and privilege in favor of anyone who performs any labor or service or furnishes supplies in [940234 La.App. 1 Cir. 4] connection with any oil, gas or water well. The statute provides, in pertinent part:

A. Any person who performs any labor or service in drilling or in connection with the drilling of any well or wells in search of oil, gas or water ... has a privilege on all oil or gas produced from the well or wells, and the proceeds thereof inuring to the working interest therein, and on the oil, gas or water well or wells and the lease whereon the same are located, and on all drilling rigs, standard rigs, machinery, pipelines ... and other structures thereto attached or located on the lease....

The lien creates only an in rem liability; it does not create any personal obligations or rights and is not dependent on the owner of the liened property. Genina Marine Services, Inc. v. Arco Oil & Gas Co., 552 So.2d 1005, 1008 (La.App. 1st Cir.1989), writ denied, 556 So.2d 1281 (La.1990).

La.R.S. 9:4862 provides, in pertinent part:

A. (1) To preserve the privilege granted by R.S. 9:4861, a notice of such claim or privilege, setting forth the nature and amount thereof, shall be filed for record and inscribed in the mortgage records of the parish where the property is located....

La.R.S. 9:4865 provides:

The privilege granted under this Part shall be extinguished if:

(1) The claimant or holder of the privilege does not preserve it as required by R.S. 9:4862; or

(2) The claimant or holder of the privilege does not institute an action thereon within one year after the date of recordation of notice of the privilege.

Pretermitting the other issues raised by Halliburton's appeal, this court held Supreme Contractors' privilege created by La.R.S. 9:4861 as to Halliburton's property and equipment was extinguished upon the passing of one year and once the peremptive period lapsed, the right ceased to exist. Any claims Supreme Contractors might have had against Halliburton had been perempted when Supreme Contractors filed an action against Halliburton more than two years after the recordation of its lien against WTL Energy. Therefore, this court reversed the summary judgment granted by the trial court [940234 La.App. 1 Cir. 5] in favor of Supreme Contractors. Supreme Contractors, Inc., 94-0234, pp. 4-5, 648 So.2d at 463.

While Supreme Contractors' application for writ of certiorari was pending, Guichard Drilling v. Alpine Energy Serv., 94-1275 (La. 7/3/95), 657 So.2d 1307, was decided by the Louisiana Supreme Court, and we now reconsider our prior decision in the instant case. In Guichard Drilling, Transamerica hired Alpine Energy to drill a well in St. Martin Parish. Alpine subcontracted the drilling services to Guichard. Guichard was not paid and timely filed both an affidavit asserting the lien and a suit against Alpine to enforce the lien. Guichard also sent notice of the action to the record owner of the mineral lease. The lease owner did not intervene and Guichard obtained a default judgment against Alpine. Guichard then sought to have the default judgment made executory and garnished funds held by Texaco which were owed to the lease owner. The lease owner intervened and filed a peremptory exception raising the objection of prescription. The trial court denied the lease owner's exception and the lease owner appealed.

The Supreme Court held Guichard had complied with the statutory requirements of the Oil, Gas, and Water Wells Lien Act, that the lease owner was not an indispensable party to the Guichard's suit against Alpine, and therefore, did not have to be a named party to the suit in order to have Guichard's lien recognized against the whole of the property, and that the judgment recognizing Guichard's lien rights did not violate the lease owner's due process rights. Lastly, the Supreme Court stated that regardless of whether the act was peremptive or prescriptive, Guichard's timely action on the lien was effective against the whole of the property and Guichard's claims were not extinguished.

This case is controlled by the holding in Guichard Drilling. Pursuant to La.R.S. 9:4862, Supreme Contractors, after failing to be paid for services, recorded its lien against the Jones No. 5 [940234 La.App. 1 Cir. 6] well on July 25, 1989. On July 11, 1990, within one year of recording its lien, Supreme Contractors instituted an action to enforce its lien against the Jones well, as required by La.R.S. 9:4865. Supreme Contractors performed the acts required by statute. Being an action on the lien effective against the whole of the property, it served to preserve the lien as to the whole of the property. Supreme Contractors' claim against the property was not extinguished. Because Supreme Contractors' right had not been extinguished reversal by this court of the trial court's granting of summary judgment was in error and is hereby reversed. Our prior decision pretermitted consideration of Halliburton's other assignments of error and we now consider them.

II.

Halliburton asserts as error the trial court finding that Supreme Contractors' lien, which had been filed and perfected, attached to Halliburton's equipment which was placed on the lease property after the filing and perfecting of the lien.

Louisiana jurisprudence has clearly established that (1) the lease on which the well is located defines the area subject to the privilege; (2) the privilege does not attach to the landowner's property; (3) the privilege attaches to all property listed in the statute, regardless of ownership of the property; and (4) the statute "does not require a contract or any contractual relationship between the furnisher of...