Texas Pipe and Supply Co. v. Coon Ridge Pipeline Co., Inc.
| Decision Date | 06 May 1987 |
| Docket Number | No. 18631-CA,18631-CA |
| Citation | 506 So.2d 1296 |
| Parties | TEXAS PIPE AND SUPPLY COMPANY, Plaintiff-Appellee, v. COON RIDGE PIPELINE CO., INC., et al., Defendants-Appellants. |
| Court | Court of Appeal of Louisiana — District of US |
Sockrider, Bolin and Anglin by James E. Bolin, Shreveport, for plaintiff-appellee.
Schober & Brabham by John L. Schober, Jr., Kim Hanson LaVigne, Shreveport, for defendants-appellants Dilligas, Inc. and Palmer R. Long, Sr.
Before HALL, JASPER E. JONES and LINDSAY, JJ.
Suit was filed on February 15, 1985 by Texas Pipe and Supply Company, Inc. (Texas Pipe) against Coon Ridge Pipeline Company, Inc. and others for recognition of a lien under LSA-R.S. 9:4861 et seq. and to collect money due on an open account for materials furnished in the building of a pipeline. The trial court rendered judgment in favor of the plaintiff, Texas Pipe, and against defendants, Dilligas, Inc. and Palmer R. Long, Sr., in solido, in the sum of $101,947.30, plus interest, attorney fees and costs, subject to a set off for any amounts recovered by plaintiff from the pending bankruptcy of Bell Supply Company (Bell Supply). In addition, the lien and privilege of Texas Pipe provided by the Oil Well Lien Act, LSA-R.S. 9:4861 et seq., was recognized. Dilligas, Inc. and Palmer R. Long, Sr. appealed, contending that LSA-R.S. 9:4861 et seq. does not provide a lien and privilege to one who has furnished supplies to a person other than the builder and/or owner of the pipeline. For the following reasons, we affirm the trial court judgment.
Wicker Oil, Inc. is the operator of several gas wells located in Sabine Parish, Louisiana. In order to market this gas, the owners of the wells asked Mr. Wicker, the principal stockholder of Wicker Oil, Inc., to build a pipeline. In order to build the pipeline, Mr. Wicker created a corporation known as Coon Ridge Pipeline Company, Inc. However, Mr. Wicker eventually decided not to use Coon Ridge but instead caused Wicker Oil Company, Inc. to supervise the construction of the pipeline. Upon completion of the pipeline, ownership was transferred to Dilligas, Inc.
In order to build the pipeline, it was determined that approximately 32,000 feet of four (4) inch pipe would be required. Officials of Wicker Oil Company, Inc. contacted several suppliers of pipe, including Bell Supply, seeking bids for supplying the pipe. Bell Supply submitted the low bid of $111,406.98 and it was awarded the contract.
In order to fulfill its contract with Wicker Oil Co., Inc., Bell Supply entered into a purchase contract for the pipe with Texas Pipe. Bell Supply agreed to purchase the pipe from Texas Pipe for $101,947.30. The pipe was to be delivered F.O.B. the job site in Sabine Parish. Pursuant to its contract with Bell Supply, Texas Pipe delivered approximately 32,000 feet of four inch pipe to work sites in Sabine Parish, Louisiana between October 10 and October 16, 1984. The pipe was delivered directly to the various sites where the pipe was to be laid in the construction of the pipeline.
On October 31, 1984, Wicker Oil, Inc. paid Bell Supply the contract price for the pipe which it had ordered. However, shortly thereafter, and without paying Texas Pipe for the pipe which had been delivered to the job sites in Sabine Parish, Bell Supply filed for protection under Chapter 11 of the Bankruptcy Code. Not having been paid, Texas Pipe filed a lien in the mortgage records of Sabine Parish pursuant to LSA-R.S. 9:4861 et seq.
When the lien was filed, Dilligas, Inc. was the owner of the pipeline. Mr. Palmer R. Long, Sr. is the owner of an undivided interest in the gas pipeline and a shareholder in Dilligas, Inc. In order to have the lien removed from the mortgage records, Dilligas, Inc. and Mr. Long signed personal guarantees for the sum of $101,947.30.
Suit was filed on February 15, 1985 against Coon Ridge Pipeline Company, Inc. The suit was later amended to join Dilligas, Inc. and Palmer R. Long, Sr. as defendants. Dilligas and Palmer Long, Sr. then resisted payment, contending that Bell Supply, the furnisher of the pipe, had already been paid and that Texas Pipe was not entitled to any lien rights under LSA-R.S. 9:4861.
Following a trial on the merits, a judgment was rendered by the trial court in favor of Texas Pipe and against Dilligas, Inc. and Palmer R. Long, Sr., in solido, in the amount of $101,947.30 with interest and attorney's fees, plus all costs of the proceedings, subject to a set off for any amounts recovered by Texas Pipe from the bankruptcy proceedings initiated by Bell Supply. The trial court also recognized plaintiff's lien against the pipeline under the provisions of LSA-R.S. 9:4861.
The basic issue presented in this case is whether Texas Pipe was a "furnisher" of materials and supplies under the provisions of LSA-R.S. 9:4861. Appellants contend that the transactions involving Texas Pipe and Bell Supply were contracts of sale and resale whereby Texas Pipe sold to Bell Supply and Bell Supply sold to the ultimate end user. Appellants contend that only Bell Supply was a "furnisher." Appellants contend that LSA-R.S. 9:4861 must be strictly construed and the statute does not extend to or provide a lien in favor of Texas Pipe because Texas Pipe was a "furnisher of a furnisher" of material and supplies. Hence, according to appellants, if Bell Supply had not been paid, Bell Supply would have been entitled to a lien and privilege, but not Texas Pipe.
Part 2 of the Private Works Act relates specifically to oil, gas, and water wells. LSA-R.S. 9:4861(B) provides, in part:
Any person who ... furnishes any ... equipment, material or supplies ... 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 ... has a privilege on all oil or gas produced from the well or wells and the proceeds thereof and earnings 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 ... for the amount due for such ... material, or supplies, in principle and interest, and for the cost of preparing and recording the privilege as well as 10% attorney's fees in the event it becomes necessary to employ an attorney to enforce collection thereof....
Since the privilege is in favor of "any person who furnishes," this court must determine whether Texas Pipe is a...
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