Guichard Drilling Co. v. Alpine Energy Services, Inc.

• Decision Date: 03 July 1995
• Citation: 657 So.2d 1307
• Parties: 94-1275 La
• Court: Louisiana Supreme Court

Page 1307

657 So.2d 1307

94-1275 La. 7/3/95, 131 Oil & Gas Rep. 477

GUICHARD DRILLING COMPANY v. ALPINE ENERGY SERVICES, INC.

No. 94-C-1275.

Supreme Court of Louisiana.

July 3, 1995.

Dissenting Opinion July 18, 1995.

Rehearing Denied Sept. 1, 1995.

Dennis Joseph Vidrine, Lafayette, Dana Roxanne Perkins, New Orleans, for applicant.

Guy Earl Wall, New Orleans, for defendant.

[94-1275 La. 1] KIMBALL, Justice. ^*

We granted certiorari in this case to determine whether plaintiff, Guichard Drilling Company (Guichard) ¹, validly preserved and enforced its lien under the Louisiana Oil Well Lien Act (the Act), La.R.S. 9:4861 et seq. The district court granted Guichard's motion for summary judgment upholding its lien rights against certain property, including a mineral lease in which intervenors, Transamerican Energy, LTD., III (Transamerican), Toce Oil Company (Toce) and Crossroads Oil Company (Crossroads) had an interest. The court of appeal reversed and dismissed Guichard's suit, holding that Guichard did not properly preserve its lien, and therefore, its lien rights were perempted. We conclude the court of appeal erred in so holding and reverse the court of appeal judgment. We agree with the district court that Guichard properly preserved and enforced its lien under the Oil Well Lien Act. However, because the lower courts did not address the effect of Transamerican's bankruptcy proceedings, and because there are material factual issues remaining regarding the claims of Transamerican, Toce, and Crossroads that Guichard has garnished proceeds not covered by its lien, we reverse the district court's granting of summary judgment and remand the case to the district court for further proceedings.

[94-1275 La. 2] I.

In July of 1989, Transamerican hired Alpine Energy Services (Alpine) to drill a well on certain property in St. Martin Parish covered by an oil and gas lease known as the Wilbert lease. ² Alpine subcontracted the drilling services to Guichard, and drilling was completed in August of 1989, resulting in a dry hole. On October 11, 1989, pursuant to La.R.S. 9:4861 et seq., Guichard filed an affidavit in the mortgage records of St. Martin Parish asserting a lien against the Wilbert lease, alleging that Alpine had failed to pay Guichard for the work it performed in drilling the well. On the date the lien was filed, Toce was the record owner of the Wilbert lease. ³

On October 12, 1989, Guichard filed suit against Alpine in Plaquemines Parish to enforce its lien on the Wilbert lease. Neither Toce, Transamerican, nor Crossroads were named as defendants in the suit. The following day, Guichard filed a notice of lis pendens in St. Martin Parish. Copies of the lis pendens, along with copies of the lien affidavit, were sent via certified mail by Guichard to Transamerican and Toce on October 17, 1989, notifying them of Guichard's suit asserting its lien and that the suit may affect their interests in the well and lease. Neither Transamerican nor Toce sought to intervene in the suit. Subsequently, on April 19, 1990, Guichard obtained a default judgment in Plaquemines Parish against Alpine for $112,060.06 plus interest and attorney fees. Guichard also obtained a judgment recognizing Guichard's lien against the Wilbert lease and that the lien secured the money judgment against Alpine.

On July 19, 1990, Guichard filed suit in Orleans Parish to [94-1275 La. 3] make the Plaquemines Parish judgment executory. At the same time, Guichard garnished funds held by Texaco Trading and Transportation, Inc. which were owed to Toce, Transamerican, and Crossroads for the purchase of oil produced from a productive well located on the Wilbert lease. The Plaquemines Parish judgment was made executory and the funds held by Texaco were ordered seized to satisfy Guichard's judgment.

On December 7, 1990, Transamerican, Toce and Crossroads intervened in the Orleans Parish action seeking a preliminary injunction to prohibit the garnishment of its funds and asking for a return of the funds previously seized. The district court denied injunctive relief and the intervenors sought supervisory writs from the Fourth Circuit Court of Appeal. The court of appeal reversed, ⁴ holding that because the intervenors were indispensable parties to Guichard's action to enforce its lien the district court erred in refusing to grant a preliminary injunction. ⁵ On April 3, 1992, Guichard answered the petition of intervention and reconvened naming the intervenors as defendants, again seeking recognition of its lien and its "in rem" interest in the subject lease. The intervenors responded by filing a peremptory exception of prescription. Thereafter, pursuant to Guichard's motion for summary judgment on its reconventional demand, the district court held that Guichard's lien rights were "in rem" rights and recognized the lien as securing the money judgment obtained against Alpine in Plaquemines Parish, granting Guichard's motion for summary judgment. The preliminary injunction was dissolved and the intervenors' exception of prescription was denied.

On appeal, the Fourth Circuit again reversed the decision of the district court. Guichard Drilling Co. v. Alpine Energy Servs., [94-1275 La. 4] Inc., 93-1859 (La.App. 4th Cir. 4/14/94), 635 So.2d 1312. The court of appeal reiterated that the intervenors were indispensable parties to Guichard's suit to enforce its lien and held that because the intervenors were not made parties to the suit in Plaquemines Parish, the judgment rendered therein could not affect their ownership interests in any of the property subject to Guichard's lien. The court of appeal then held that Guichard's attempt to enforce that judgment in the Orleans Parish proceedings could not affect the rights of the intervenors, and thus, the intervenors should have been afforded an opportunity to defend Guichard's claim. However, the court of appeal rendered this holding moot by further holding that Guichard's lien was extinguished by peremption under La.R.S. 9:4865 because Guichard failed to institute an action on the lien against the intervenors within one year after recordation of its lien affidavit (the lien affidavit was filed on October 11, 1989 and Guichard's reconventional demand against the intervenors was not filed until April 3, 1992).

On Guichard's application, we granted certiorari to determine the correctness of the court of appeal's decision. 94-1275 (La. 9/23/94), 642 So.2d 1303.

II.

The Oil Well Lien Act provides broad and far reaching protection to providers of labor and furnishers of material in conjunction with the drilling of oil wells. Louisiana Revised Statutes 9:4861 provides:

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, flow lines, gathering lines and other related equipment, including, but not limited to, monitoring, measuring, metering and control equipment, appurtenances, appliances, equipment, buildings, tanks, and other [94-1275 La. 5] structures thereto attached or located on the lease ... for the amount due for labor or service, in principal and interest, and for the cost of preparing and recording the privilege, as well as ten percent attorney's fees in the event it becomes necessary to employ an attorney to enforce collection.

B. Any person who does any trucking, towing or barging, or who makes any repairs, or furnishes any fuel, drilling rigs, standard rigs, machinery, equipment, material or supplies for or in connection with the drilling of any well or wells in search of oil, gas or water, or for or in connection with the operation of any oil, gas or water well or wells, or for or in connection with the construction, operation or repair of any flow lines or gathering lines, regardless of their length, and any other pipeline owned by the producer, operator or contract operator of the well or wells, whether or not a producing well is obtained and whether or not such materials, machinery, equipment, services and supplies are incorporated in or become a part of the completed oil, gas or water well, 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, appurtenances, appliances, equipment, buildings, tanks, pipelines, flow lines, gathering lines and other related equipment, including, but not limited to monitoring, measuring, metering and control equipment and other structures thereto attached for drilling, equipment and operation of the well or lease, and rights-of-way in the case of a gathering line, flow line or other producer, operator or contract operator owned pipeline, for the amount due for such trucking, towing barging, repairs, fuel, drilling rigs, standard rigs, machinery, equipment, material, or supplies, in principal and interest, and for the cost of preparing and recording the privilege as well as ten percent attorney's fees in the event it becomes necessary to employ an attorney to enforce collection thereof. This privilege is second in rank only to the privilege granted in favor of laborers.

It is well settled under the Oil Well Lien Act that the privilege created by La.R.S. 9:4861 attaches to all property listed in the statute, regardless of ownership, and requires no contractual relationship between the supplier of labor, service, or equipment and the owner of the lease or equipment. Oil Well Supply Co. v. Indep. Oil Co., 219 La. 936, 54 So.2d 330 (1951); Sargent v. Freeman, 204 La. 997, 16 So.2d 737 (1943...