Ivey v. Phillips Petroleum Co.

• Decision Date: 07 January 1941
• Docket Number: No. 79.,79.
• Citation: Ivey v. Phillips Petroleum Co., 36 F.Supp. 811 (S.D. Tex. 1941)
• Parties: IVEY v. PHILLIPS PETROLEUM CO.
• Court: U.S. District Court — Southern District of Texas

36 F. Supp. 811

IVEY v. PHILLIPS PETROLEUM CO.

No. 79.

District Court, S. D. Texas, Corpus Christi Division.

January 7, 1941.

Sewell, Taylor, Morris & Connally and W. J. Knight, all of Houston, Tex., McCraw & Holt, of Dallas, Tex., Young & Easterling, of Corpus Christi, Tex., and James A. Stanford, of Austin, Tex., for plaintiff.

R. K. Batten, of Houston, Tex., John E. Lyle, of Corpus Christi, Tex., and T. L. Dyer, of Austin, Tex., for defendant.

ALLRED, District Judge.

Plaintiff, a resident citizen of Texas and the owner of an 800-acre farm in San Patricio County, Texas, sued defendant, a foreign corporation, for damages to the surface of his land and for injuries to the oil and gas bearing sands under his land.

Defendant owns an oil and gas lease, with four producing wells, on 500 acres of plaintiff's farm.

In July, 1938, one Harlan Grimes owned and operated a 40-acre lease on the Coggin lands offsetting the 500-acre lease on the south. Grimes had drilled two wells on this lease. His No. 2 well was brought in as a producer on July 13, 1938, and produced oil and water until about the 18th of July, at which time an attempt was made to run a squeeze job in an effort to cut off the water.

Early on the morning of July 20, 1938, the well began to blow out and caught fire under the boilers. It was first evidenced by escaping gas about fifty feet from the top of the well. This continued until the main blowout occurred some 300 or 400 feet southwest of the well, at which point a crater formed through which enormous amounts of gas, oil, mud and other formations were emitted, forming an enormous cavity or crater, burning and heaving from the surface of the earth.

Grimes and his associates, after removing the rig and machinery from the well, made a number of efforts to bring the well under control, including the running of one inch tubing through the two inch tubing already in the well; and the pumping of 2,000 sacks of baroid, as well as large quantities of mud, clay, cottonseed hulls and other substances. They failed, however, to bring the well under control and finally gave up.

On July 27th, no one else appearing to be desirous of trying to kill the well, Grimes and his associates executed a release to defendant, exempting them from any claims for damages by reason of defendant's intended attempt to stop the blowout. The release recited that it was clearly understood that defendant was "under no obligation whatsoever to stop or attempt to stop the blowing out of said well."

Phillips employed Otis Pressure Control Company and numerous others in an effort to kill the well. The two inch tubing was pulled and a hole was found in the 51st joint. All of the tubing was pulled in an effort to determine whether there were any other defective joints. Then, after replacing the 51st joint, an effort was made to re-run the tubing equipped with a packer. It could only be re-run to a depth of approximately 1,200 feet.

The tubing was then pulled again, the packer removed and the tubing re-run into the well to a depth of approximately 1,270 feet, where some obstruction was encountered. The tubing was then pumped and spudded about 80 additional feet after encountering the obstruction. This was about the 7th day of August, 1938, and on the following day the Otis Pressure Control people stopped work. On the 10th day of August they withdrew and removed their equipment, except one control head, which was left attached to the top of the well.

Beginning about August 13th, defendant pumped over 3,000 sacks of Cal-Seal and other substances followed by clear water into the tubing. After that their men and equipment were moved off the lease because the well was cratering at its top, rendering it extremely hazardous to continue the work. The only work done by defendant after August 27, 1938, was in removing its equipment and tools away from the lease.

Defendant had nothing whatever to do with the well or its operation before it cratered and caught on fire, and was under no obligation to try to kill it. Defendant, nevertheless, spent several thousand dollars in an effort to bring the well under control.

A receiver of the Harlan Grimes lease and properties was afterwards appointed in the State District Court of San Patricio County upon the application of plaintiff and other adjacent royalty owners. Numerous hearings were held before the Railroad Commission of Texas looking to the determination of some method by which the well could be killed; and the entry of an order therefor. Nothing was done about it, however, probably due to the fact that the Grimes receivership properties were not of sufficient value to justify the expense.

The well continued to crater and burn in terrific fashion until about November 6, 1938, at which time it subsided for about eight days, when it again became extremely active. The crater enlarged and emitted large quantities of formation including salt water, mud and other substances. Dikes were thrown up and enlarged from time to time until the acreage enclosed by the dikes covered approximately 30 acres.

The well continued to erupt near the top of the hole and was out of control for about a year. About July 19, 1939, it bridged itself and ceased to erupt.

Plaintiff's cause of action, as submitted to the Court in requested charges, was based upon two theories:

First: That defendant had committed "waste" under the Texas statutes, Articles 6014 and 6015, Vernon's Revised Civil Statutes of Texas, resulting in the damages complained of.

Second: That irrespective of the waste statutes, defendant was negligent in the manner and method in which it tried to kill the well; and that such negligence was the proximate cause of the damages and injuries sustained by plaintiff.

At the conclusion of plaintiff's testimony and again at the conclusion of all the evidence, defendant moved for an instructed verdict. The Court overruled these motions but carried them along with the case and submitted it to the jury: first, upon the general issue as to defendant's alleged negligence; second, upon special questions as to whether defendant had committed acts denominated as "waste" under the Texas statute, Art. 6014, supra. These questions were submitted, with considerable misgivings, at the earnest insistence of plaintiff's counsel, the Court stating to counsel at the time that he did not believe defendant could be held liable under the provisions of the conservation statutes.

The jury returned a general verdict in favor of defendant upon the negligence theory tendered by plaintiff; and in response to question No. 1 found that the fact that the well had caught fire and cratered before defendant ever attempted to kill it was not the sole proximate cause of plaintiff's injuries. The jury disagreed upon the answers to the other questions as to whether defendant committed acts constituting "waste" under the statute.

Based upon the jury's general verdict defendant has tendered a judgment; plaintiff opposes the entry of such judgment and has filed a motion that the Court set aside the general verdict and declare a mistrial.

I have concluded that judgment should be entered for defendant for the following reasons:

First: Because, under all the facts, defendant is not subject to the terms of the Texas waste statutes, Articles 6014, 6015, and 6049c, Sec. 13.¹

Article 6014 prohibits and declares unlawful the production, storage, or transporation of oil or gas in such a manner as to constitute "waste"; and defines "waste." It deals with the operation of a well in producing, storing or transporting oil or gas — in other words, only with the general operation of wells and leases. The Commission is not even limited by this article to the statutory definition of "waste" in its consideration of other facts and circumstances in making "rules, regulations or orders to prevent waste of oil or gas."

Clearly, it seems to me, it would be a strained construction of the statute to hold that defendant, by reason of any of the acts or omissions charged against it, comes within Article 6014.

Likewise as to Article 6015,² which only applies to all operators, etc., "drilling for or producing * * * or piping oil or gas," etc. This latter statute, it will be observed, requires such operators to use "every possible precaution * * * to prevent * * * waste of oil and gas * * * in drilling and producing operations, storage or in piping or distributing * * *," etc. This statute clearly applies to drilling and producing operations, not to a person or concern voluntarily going on premises where a wild well was already cratered and burning, as did defendant, without obligation, in an effort to stop such waste.

No provision of the Texas conservation statutes, Title 102, has been pointed out dealing, either expressly or by implication, with a wild cratered or burning oil well.³ Nor has any order of the Railroad Commission, general or special, been cited imposing any special duty or method of dealing with such wild well upon an operator or owner, much less a volunteer who goes on the premises, after a well has gone wild and has been abandoned, as did defendant; although the statutes give the Commission broad powers, as pointed out in Brown v. Humble Oil & Refining Co. (footnote 1 supra) to deal with every phase of operation in connection with conservation of the State's natural resources.

The State simply has not legislated as to the duties of an operator in case of a "wild well." Probably, under the broad powers conferred on the Railroad Commission to prevent "waste," it could promulgate general rules and regulations on the subject; and, after hearing, order an operator to adopt specific methods to kill or bring such a well under control. Cases cited by plaintiff as to the meaning of the words "operation" and "operations,"⁴ are not helpful.

Article 6049c, Section 13, is a part of the Acts of the 42nd Legislature of 1931, granting additional powers to...