Walthers v. Hermat Oilfield Services, Inc. , 373 F. App'x 497 ( 2010 )

Case: 09-40549 Document: 00511084775 Page: 1 Date Filed: 04/19/2010
IN THE UNITED STATES COURT OF APPEALS
FOR THE FIFTH CIRCUIT United States Court of Appeals
Fifth Circuit
FILED
April 19, 2010
No. 09-40549 Lyle W. Cayce
Summary Calendar Clerk
In the Matter of: REICHMANN PETROLEUM CORP.
Debtor
------------------------------
BILL WALTHERS; DANNY JACKSON; DR. STEVE DANCHOK; ERIC
KIERSH; LEO "CHIP" HANLY; PHIL KEESLING; STEVE SPALDING;
GARTH STRANGER; MORFAR INVESTMENTS LLC; HUMPHREYS
FAMILY TRUST; LAGUNA MADRE OIL & GAS II LLC; ANDERSON
LIVING TRUST; PALOMA VENTURES, INC.
Appellants
v.
HERMAT OILFIELD SERVICES, INC.; W.L. FLOWERS MACHINE &
WELDING COMPANY, INC.; FESCO, LTD.; ALICE SOUTHERN
EQUIPMENT SERVICE, INC.; PROTECHNICS DIVISION OF CORE
LABORATORIES, INC.; BJ SERVICES COMPANY USA; RATHOLE
DRILLING INC.; BRUINGTON ENGINEERING INC.; BECK BROTHERS,
INC.; DOUBLE RAFTER H. CONSTRUCTION COMPANY, LLC; PETRON
INDUSTRIES, INC.; AINSWORTH TRUCKING, LP; KEY ENERGY
SERVICES, INC.; BASIC ENERGY SERVICES, INC.; VP SALES &
COMPANY
Appellees
__________________________________________________
In the Matter of: REICHMANN PETROLEUM CORPORATION
Case: 09-40549 Document: 00511084775 Page: 2 Date Filed: 04/19/2010
No. 09-40549
Debtor
------------------------------
BILL WALTHERS; DANNY JACKSON; DR. STEVE DANCHOK;
ERIC KIERSH; LEO "CHIP" HANLY; PHIL KEESLING
Appellants
v.
HERMAT OILFIELD SERVICES, INC.; W.L. FLOWERS MACHINE
& WELDING COMPANY, INC.; FESCO, LTD.; ALICE SOUTHERN
EQUIPMENT SERVICE, INC.; PROTECHNICS DIVISION OF CORE
LABORATORIES, INC.; B.J. SERVICES COMPANY, USA
Appellees
__________________________________________________
In the Matter of: REICHMANN PETROLEUM CORP.
Debtor
------------------------------
ERIC KIERSH; PHIL KEESLING; BILL WALTHERS; STEVE SPALDING;
LEO "CHIP" HANLY; DANNY JACKSON; GARTH STRANGER; DR. STEVE
DANCHOK
Appellants
v.
HERMAT OILFIELD SERVICES; W.L. FLOWERS MACHINE
& WELDING COMPANY., INC.; FESCO, LTD; ALICE SOUTHERN
EQUIPMENT SERVICE, INC.; PROTECHNICS DIVISION OF
CORE LABORATORIES, INC.; BJ SERVICES COMPANY USA
Appellees
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No. 09-40549
__________________________________________________
In the Matter of: REICHMANN PETROLEUM CORP.
Debtor
------------------------------
BILL WALTHERS; DANNY JACKSON; DR. STEVE DANCHOK; ERIC
KIERSH; LEO "CHIP" HANLY; PHIL KEESLING
Appellants
v.
BJ SERVICES COMPANY USA
Appellee
__________________________________________________
In the Matter of: REICHMANN PETROLEUM CORP.
Debtor
------------------------------
RICHMAN OIL CORP.; MORFAR INVESTMENTS, LLC
Appellants
v.
HERMAT OILFIELD SERVICES INC.; W.L. FLOWERS MACHINE
& WELDING COMPANY, INC.; FESCO LTD; ALICE SOUTHERN
EQUIPMENT SERVICE INC.; BJ SERVICES COMPANY USA; RATHOLE
DRILLING INC.
Appellees
__________________________________________________
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No. 09-40549
In the Matter of: REICHMANN PETROLEUM CORP.
Debtor
------------------------------
ERIC KEIRSH; PHIL KEESLING; BILL WALTHERS, STEVE
SPALDING; LEO "CHIP" HANLY; DANNY JACKSON;
GARTH STRANGER; DR. STEVE DANCHOK; RICHMAN
OIL CORPORATION; MORFAR INVESTMENTS, LLC
Appellants
v.
W.L. FLOWERS MACHINE & WELDING COMPANY., INC.; FESCO LTD.;
ALICE SOUTHERN EQUIPMENT SERVICE; B J SERVICES COMPANY
USA; RATHOLE DRILLING, INC.
Appellees
__________________________________________________
In the Matter of: REICHMANN PETROLEUM CORP.
Debtor
------------------------------
ERIC KIERSH; PHIL KEESLING; BILL WALTHERS; LEO "CHIP" HANLY;
DANNY JACKSON; HUMPHREYS FAMILY TRUST; MORFAR
INVESTMENTS, LLC; LAGUNA MADRE OIL & GAS II LLC.; ANDERSON
LIVING TRUST; PALOMA VENTURES, INC.
Appellants
v.
PROTECHNICS DIVISION OF CORE LABORATORIES, INC.;
BJ SERVICES COMPANY USA; BRUINGTONENGINEERING INC.;
BECK BROTHERS, INC.; DOUBLE RAFTER H. CONSTRUCTION
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No. 09-40549
COMPANY, LLC.; PETRON INDUSTRIES INC.; AINSWORTH TRUCKING
LP; RATHOLE DRILLING INC.
Appellees
________________________________________
In the Matter of: REICHMANN PETROLEUM CORP.
Debtor
------------------------------
MORFAR INVESTMENTS LLC; CHIP HANLY; PHIL KEESLING;
ERIC KIERSH; DANNY JACKSON; LAGUNA MADRE OIL & GAS II LLC;
PALOMA VENTURES INC.; WILLIAM WALTHERS; HUMPHREYS
FAMILY TRUST; THE ANDERSON LIVING TRUST
Appellants
v.
BJ SERVICES COMPANY USA; BRUINGTON ENGINEERING LTD;
BECK BROTHERS INC.; DOUBLE RAFTER H. CONSTRUCTION;
PETRON INDUSTRIES, INC.; AINSWORTH TRUCKING LP;
RATHOLE DRILLING INC.; PROTECHINCS DIVISION OF CORE
LABORATORIES
Appellees
___________________________________________________
In the Matter of: REICHMANN PETROLEUM CORP.
Debtor
------------------------------
MORFAR INVESTMENTS LLC; ERIC KIERSH; LAGUNA MADRE
OIL & GAS II LLC.; WILLIAM WALTHERS; ANDERSON LIVING TRUST;
CHIP HANLY; DANNY JACKSON; PALOMA VENTURES, INC.
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No. 09-40549
PHIL KEESLING; HUMPHREYS FAMILY TRUST
Appellants
v.
BRUINGTON ENGINEERING LTD; PETRON INDUSTRIES INC.
Appellees
__________________________________________________
In the Matter of: REICHMANN PETROLEUM CORP.
Debtor
MORFAR INVESTMENT, LLC; ERIC KIERSH; LAGUNA MADRE OIL
& GAS II LLC; WILLIAM WALTHERS; ANDERSON LIVING TRUST;
CHIP HANLY; DANNY JACKSON; PALOMA VENTURES INC.;
PHIL KEESLING; HUMPHREYS FAMILY TRUST
Appellants
v.
PETRON INDUSTRIES INC.
Appellee
_____________________________________________
In the Matter of: REICHMANN PETROLEUM CORP.
Debtor
------------------------------
MORFAR INVESTMENTS LLC; CHIP HANLY; PHIL KEESLING;
ERIC KIERSH; DANNY JACKSON; LAGUNA MADRE OIL & GAS
II, LLC.; PALOMA VENTURES INC.; WILLIAM WALTHERS;
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No. 09-40549
HUMPHREYS FAMILY TRUST; ANDERSON LIVING TRUST
Appellants
v.
KEY ENERGY SERVICES INC.; BASIC ENERGY SERVICES, INC.;
BECK BROTHERS INC.; PETRON INDUSTRIES INC.; ALICE SOUTHERN
EQUIPMENT SERVICE INC.; W.L. FLOWERS MACHINE & WELDING
COMPANY, INC.; FESCO, LTD; V.P. SALES & COMPANY
Appellees
Appeal from the United States District Court
for the Southern District of Texas
USDC No. 2:08-CV-96
Before BENAVIDES, PRADO, AND SOUTHWICK, Circuit Judges.
PER CURIAM:*
Appellants appeal the district court’s decision on the sufficiency of
Appellees’ affidavits under Chapter 56 of the Texas Property Code. For the
reasons set forth below, we affirm the order of the district court.
Background
Reichmann Petroleum Corp. (Reichmann), an operator of oil and gas
properties throughout Texas, filed Chapter 11 bankruptcy in December 2006.
A portion of Reichmann’s creditors claimed mineral liens for goods, drilling
services, and operation of wells on various mineral leases. They filed affidavits
containing descriptions of the property interests involved to support their claims.
Under the settlement plan, the bankruptcy court held four hearings on
*
Pursuant to 5TH CIR . R. 47.5, the court has determined that this opinion should not
be published and is not precedent except under the limited circumstances set forth in 5TH CIR .
R. 47.5.4.
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objections to the lien claims, including objections on the sufficiency of the
descriptions contained in the affidavits provided in support of the liens. The
affidavits at issue referenced and included survey maps or plats obtained from
the Texas Railroad Commission showing the location of the serviced wells and
complete or partially complete descriptions of the leases for which the goods or
services had been provided. The district court upheld the bankruptcy court’s
determination on which mineral lien claims did or did not contain adequate
property descriptions. The court rejected Appellant’s alternative argument that,
at most, these parties had only a lien on the mapped portions of the lease.
Standard of Review
The lower court’s rulings involve a question of law and statutory
interpretation which we review de novo. In re Lambert, 179 F.3d 281, 284 (5th
Cir. 1999).
Sufficiency of Property Description in Mineral Lien Affidavits
The district court correctly held that the mineral lien affidavits contained
a sufficient property description to establish a lien on the entire leasehold at
issue. Chapter 56 of the Texas Property Code requires the lien claimant to file
an affidavit that includes, among other information, “a description of the land,
leasehold interest, pipeline, or pipeline right-of-way involved.” Appellants
contend that cases such as Long Trusts v. Griffin, 222 S.W.3d 412 (Tex. 2006)
which involved almost 200 leases and property interests, are controlling on the
issue of the sufficiency of the affidavit’s property description. However, the cases
cited by the Appellants, including Griffin, are statute of fraud cases that involve
a conveyance of property which impose a higher standard than other liens under
Texas law. See id. at 416 (determining that the contracts at issue involving
almost 200 leases were subject to the statute of frauds that required property
identification with the exactness established under Texas law); see also Morrow
v. Shotwell, 477 S.W.2d 538, 539 (Tex. 1972). We note that a mechanic’s lien,
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whose standard is less than that required by a conveyance under the statute of
fraud, requires a “legally sufficient” description. See T EX. P ROP. C ODE A NN. §
53.054(a)(6) (Vernon 2007). But, the description needed to obtain a mineral’s
lien is even less by omitting the “legally sufficient” language and by requiring
only a description of the property involved with the mineral lien. See T EX. P ROP.
C ODE A NN. § 56.022(a)(4) (Vernon 2007).
Here, the affidavits filed satisfied the requirements of Section 56.022
because the attached plats provide an adequate description of the property
involved which would enable a party familiar with the locality to identify with
reasonable certainty the premises intended. See Blanco, Inc. v. Porras, 897 F.2d
788, 791 (5th Cir. 1990); Trevor Rees-Jones, Trustee for Atkins Petroleum Corp.
v. Trevor Rees-Jones, Trustee for Apache Servs., Inc., 799 S.W.2d 463, 467 (Tex.
App.–El Paso 1990, writ denied). The lower court correctly held that affidavits
which attached either a plat or a plat and a Texas Railroad Commission Form
W-1 provided an adequate description under the statute.
Mineral Liens Include the Entire Lease under Section 56.003
Appellants claim that the lien does not attach to the entire lease. We
disagree. In Mercantile Nat. Bank at Dallas v. McCullough Tool Co., 259 S.W.2d
724, 729 (Tex. 1953), the Texas Supreme Court gave a materialman a lien on an
entire lease for work done on just one well under what is now Sections 56.001
and 56.003. Similarly, a Texas Court of Appeals interpreted what is currently
Chapter 56 to hold that the statutory language allows a lien to exist upon an
entire leasehold interest upon which materials were delivered to or used.
Dunigan Tool & Supply Co. v. Burris, 427 S.W.2d 341, 344 (Tex. Civ.
App.–Eastland 1968, writ ref’d n.r.e.).
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In the instant case, Appellees provided goods and services in the drilling,
completion, and operation of the wells. Their affidavits, while not sufficient
under the statute of frauds standard, does meet the standard required by
Section 56.022(a)(4). The mineral liens are applicable to the entire lease as
provided by Section 56.003(a)(2) because the information provided helped to
identify the nucleus of information that would identify relevant leases even
without a complete lease attached. See Blanco, 897 F.2d at 791. Such
identification is sufficient.
Accordingly, the judgment of the district court is AFFIRMED.
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