Central Oklahoma Pipeline, Inc. v. Hawk Field Services, LLC

2012 Ark. 157, 400 S.W.3d 701, 2012 WL 1222196, 2012 Ark. LEXIS 174
CourtSupreme Court of Arkansas
DecidedApril 12, 2012
DocketNo. 11-992
StatusPublished
Cited by35 cases

This text of 2012 Ark. 157 (Central Oklahoma Pipeline, Inc. v. Hawk Field Services, LLC) is published on Counsel Stack Legal Research, covering Supreme Court of Arkansas primary law. Counsel Stack provides free access to over 12 million legal documents including statutes, case law, regulations, and constitutions.

Bluebook
Central Oklahoma Pipeline, Inc. v. Hawk Field Services, LLC, 2012 Ark. 157, 400 S.W.3d 701, 2012 WL 1222196, 2012 Ark. LEXIS 174 (Ark. 2012).

Opinion

COURTNEY HUDSON GOODSON, Justice.

11Appellant Central Oklahoma Pipeline, Inc., d/b/a/ CenOk Pipeline, Inc., appeals the grant of summary judgment on its claims against appellees Hawk Field Services, LLC; Petrohawk Operating, Inc., a wholly owned subsidiary of Petrohawk Energy Corporation; Petrohawk Operating Company; Petrohawk Operating Company, LLC; Lee Hallmark; and John Does 1, 2, and 3. For reversal, appellant asserts that the circuit court erred (1) by ruling that Arkansas Code Annotated section 17-25-103(d) (Repl.2010) barred its claims for breach of contract and a violation of the Arkansas Deceptive Trade Practices Act (ADTPA); (2) in ruling that section 17-25-103(d) does not violate article 2, section 13 of the Arkansas Constitution; (3) by ruling that Arkansas Code Annotated section 17-25-313 (Repl.2010) 12does not impose a tort duty on engineers who fail to inform prospective bidders that they must have a contractor’s license; (4) in ruling that section 17-25-103(d) bars its negligence claims against appellee Hallmark and the John Doe defendants and its tort claims against the Hawk defendants based on respondeat superior; and (5) by ruling that its constitutional claim and tort claims are barred by principles of res judicata.

Procedural History and Factual Background

On March 18, 2009, appellant filed suit against Hawk Field Services, LLC; Petro-hawk Operating, Inc.; Petrohawk Operating Company; Petrohawk Operating Company, LLC (collectively “Hawk” or “Hawk defendants”); and Crafton, Tull, Sparks & Associates, Inc. (“CTS”). In its complaint, appellant asserted against Hawk claims for breach of contract, a violation of the ADT-PA, and for the establishment of a mechanics’ and materialmen’s lien, as well as a miners’ lien. According to the complaint, in July 2008, Hawk publicly solicited and later accepted appellant’s bids for the construction of a twelve-mile, natural-gas pipeline located partially in Conway County (“South Section Project”) and partially in Conway and Van Burén Counties (“North Section Project”) on easements held by Petrohawk Operating Company. Subsequently, the parties modified the contract for the North Section Project, wherein Hawk engaged appellant to build the “Phase One” and “Loop” pipelines in Van Burén County. Appellant alleged that it had provided substantial amounts of labor and materials for the completion of the projects, which included, among other things, clearing the pipeline right of way; digging ditches; breaking, blasting, and cutting rock; welding pipe; installing pipe fittings; burying pipe; and installing tie-ins. In addition, appellant asserted that Insubstantial amounts of labor and materials were provided by subcontractors that it hired in connection with its performance of the contracts.

As its claim for breach of contract, appellant asserted that Hawk terminated without cause its contract to construct the Phase One pipeline project on December 16, 2008, and that Hawk ordered it to cease all operations on January 31, 2009, for the stated reason that appellant was not licensed to perform work as a contractor, as required by section 17-25-103. Appellant alleged that Hawk subsequently terminated both the North Section and the South Section contracts on February 2, 2009, because appellant was not licensed by the Arkansas Contractors Licensing Board and that Hawk took the position, in reliance on section 17-25-103(d), that it would not pay amounts owed for labor and materials because appellant did not possess a contractor’s license. Appellant claimed that Hawk had refused to pay $7,469,917.21 for work it had completed.

Appellant asserted that Hawk violated the ADTPA by treating appellant in a deceptive and unconscionable manner. In this regard, appellant alleged that, during a meeting held on January 13, 2009, Hawk asserted that appellant would be penalized for not completing work on the projects on time but that, several days later, Hawk assured appellant that penalties would not be imposed and that appellant would be paid for the sums it was owed. Appellant stated that, based on these assurances, it continued to work on the projects. It alleged that Hawk actually had no intention of foregoing penalties and of paying appellant and that Hawk made these assurances in an effort to keep appellant working without pay. Appellant contended that Hawk behaved in a deceptive and unconscionable manner by stringing it |4along under the false promise of pay and waiting until near the completion of the work to assert that it would not be paid because it did not have a contractor’s license.

As its claim against CTS, appellant alleged that CTS prepared contract drawings for the projects and that it was the engineer on the projects. Appellant asserted that CTS had a duty to inform it of the necessity of having a contractor’s license under the provisions of section 17-25-313 and that CTS was negligent for failing to give notice of this requirement.1

Hawk Field Services, LLC, filed a separate answer disputing the material allegations of the complaint. Pleading affirmatively, it alleged that, based on section 17-25-103(d), appellant was barred from asserting claims for breach of contract and a violation of the ADTPA because appellant failed to obtain a contractor’s license from the Arkansas Contractors Licensing Board. Hawk Field Services also asserted a counterclaim for breach of contract, alleging that appellant overcharged for its services and that it did not complete the projects by the deadlines set forth in the contracts because it failed to supply sufficient labor, equipment, and materials for the projects. It contended that, as a result, it was required to employ other contractors to complete the work at considerable expense. Petrohawk Operating, Inc., and Petrohawk Operating Co. answered the complaint and also alleged, as an affirmative defense, that appellant’s claims were barred by section 17 — 25—103(d) because appellant did not hold a contractor’s license.

The Hawk defendants subsequently filed a joint motion for summary judgment on the ground that section 17 — 25—103(d) barred appellant’s claims for relief. Along with their motion hand brief, they submitted the affidavit of Lee Hallmark, the Director of Operations for Hawk Field Services, LLC. Hallmark averred that the pipeline was constructed on right-of-way easements obtained from private landowners along the pipeline route and that no land upon which the pipeline traverses is owned by the Hawk defendants with the exception of a small section measuring 8,162.29 feet that is owned by One Tec, a subsidiary of Petrohawk Energy Company. Further, Hallmark stated that the pipeline is utilized by other companies to transport natural gas, such as Chesapeake Energy, which leases space on the pipeline to transport natural gas. In its response, appellant argued that, based on Arkansas Code Annotated section 17 — 25—101(a)(1) (Repl.2010), for the statutory bar to apply the work must be done “on public or private property for lease, rent, resale, public access, or similar purpose” and that Hawk had failed to prove that the easements in question were leased. Appellant also contended that, if a license was required, Hawk’s engineers had an affirmative duty to inform it about this requirement based on section 17-25-313.

On April 1, 2010, appellant filed an amended complaint to assert that section 17-25-103(d) is unconstitutional as a violation of article 2, section 13 of the Arkansas Constitution.2

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Cite This Page — Counsel Stack

Bluebook (online)
2012 Ark. 157, 400 S.W.3d 701, 2012 WL 1222196, 2012 Ark. LEXIS 174, Counsel Stack Legal Research, https://law.counselstack.com/opinion/central-oklahoma-pipeline-inc-v-hawk-field-services-llc-ark-2012.