Baker Chemicals, Inc. v. TXO Production Co.
| Decision Date | 24 January 1990 |
| Docket Number | No. 21125-CA,21125-CA |
| Citation | 556 So.2d 226 |
| Parties | BAKER CHEMICALS, INC., Appellant, v. TXO PRODUCTION COMPANY and Apcot-Finandel Joint Venture, Appellees. 556 So.2d 226 |
| Court | Court of Appeal of Louisiana — District of US |
Mangham, Hardy, Rolfs and Abadie by Mark B. Oliver, Lafayette, for appellant.
Shotwell, Brown & Sperry by Marshall T. Napper, Monroe, for appellees.
Before SEXTON, NORRIS and LINDSAY, JJ.
In this case, plaintiff-appellant, Baker Chemicals, Inc. (Baker), appeals the trial court's denial of its claim for recognition of a lien and privilege on an oil and gas well, the lease or leases on which the well is situated, and appurtenant structures, under LSA-R.S. 9:4861 B. For reasons hereinafter stated, we affirm.
The facts of the case are undisputed, as the case was submitted to the trial court on stipulations (and attachments thereto) between Baker and defendants-appellees, TXO Production Corp. and Apcot-Finandel Joint Venture (TXO). The stipulations reflect that in February 1986, Baker entered into a warehouse agreement with Drilling Chemicals, Inc. (DCI) under which Baker kept an inventory of drilling mud and materials at a warehouse in Minden owned by DCI. Upon receipt by a DCI representative of an order from an individual consumer such as TXO for materials at a particular site, DCI would purchase the materials or supplies necessary to fill the order from Baker. These materials would then be removed from the Baker-owned inventory and segregated, completing the sale.
The supplies in this case were delivered to the premises of TXO's well site by a Mr. M.M. Willis, d/b/a Arkla Mud Company, pursuant to a contract between Mr. Willis and DCI to operate the warehouse and deliver materials from the warehouse to well locations. Mr. Willis also had a contract with Baker to maintain its inventory at the warehouse and to act as its agent in handling Baker's supplies in the warehouse. However, it is clear that the materials at issue were segregated from Baker inventory at the DCI warehouse in Minden and delivered by Mr. Willis directly to the TXO well site at the expense of DCI.
TXO paid DCI in full $7,016.65 for the instant materials. DCI, however, did not pay Baker. This default prompted Baker to record the above described lien under the Louisiana Oil, Gas and Water Well Lien Statute (LSA-R.S. 9:4861 et seq.) against TXO. Pertinent provisions of that statute read as follows:
B. Any person who ... furnishes any ... drilling rigs, standard rigs, machinery, equipment, material or supplies for or in connection with the drilling of any well or wells in search for oil, gas or water, or for or in connection with the operation of any oil, gas or water well or wells ... has a privilege on ... all drilling rigs ... and other structures thereto attached ... (emphasis added)
Baker claims it is entitled to a lien and privilege against TXO for the drilling mud and materials which TXO purchased from DCI and which were delivered to the well by Mr. Willis. Baker claims that it is a "furnisher" of supplies under LSA-R.S. 9:4861 B because the mud and supplies delivered by Mr. Willis and sold by DCI to TXO originally belonged to Baker, being segregated from Baker-owned inventory only immediately before it was to be delivered to the TXO well site. Baker therefore contends that it can be considered a "furnisher" of...
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