Hobbs v. Central Equip. Rentals, Inc.

382 So. 2d 238, 66 Oil & Gas Rep. 487, 1980 La. App. LEXIS 3509
CourtLouisiana Court of Appeal
DecidedMarch 5, 1980
Docket7490
StatusPublished
Cited by12 cases

This text of 382 So. 2d 238 (Hobbs v. Central Equip. Rentals, Inc.) is published on Counsel Stack Legal Research, covering Louisiana Court of Appeal primary law. Counsel Stack provides free access to over 12 million legal documents including statutes, case law, regulations, and constitutions.

Bluebook
Hobbs v. Central Equip. Rentals, Inc., 382 So. 2d 238, 66 Oil & Gas Rep. 487, 1980 La. App. LEXIS 3509 (La. Ct. App. 1980).

Opinion

382 So.2d 238 (1980)

H. C. HOBBS et al., Plaintiffs-Appellants,
v.
CENTRAL EQUIPMENT RENTALS, INC., et al., Defendants-Appellees.

No. 7490.

Court of Appeal of Louisiana, Third Circuit.

March 5, 1980.
Rehearing Denied April 25, 1980.

*240 J. Phil Haney, New Iberia, for plaintiffs-appellants.

Onebane, Donohoe, Bernard, Torian, Diaz, McNamara & Abell, Herman E. Garner, Jr., Lafayette, Daniel Nail, Napoleonville, Plauche, Hartley, Lapeyre & Ottinger, Patrick S. Ottinger, Lafayette, for defendants-appellees.

Before DOMENGEAUX, FORET and SWIFT, JJ.

FORET, Judge.

The basic facts upon which this lawsuit is based were succinctly set out by the trial court and we take the liberty of quoting therefrom:

"On November 6, 1974, the plaintiffs filed this suit against Central Equipment Rentals, Inc., Sam Hance and Bonnie Rose Crawford Hance, seeking $329,811.86, alleging that they were the owners of a two-thirds interest in a mineral lease executed by the St. Martin Land Company on June 20, 1950. They claim that the defendants arranged for the removal of certain property and equipment located on three wells affected by this lease belonging in part to the plaintiffs and in part to the defendants, and converted the materials to their own use, which had a value insofar as the two-thirds interest of the plaintiffs is concerned of the amount claimed.

"The defendants brought into this lawsuit Fred Setoon and Condor Pipe Company but after the trial on the merits, by consent they were dismissed from the case.

"The defendants filed an answer on April 14, 1975, and a reconventional demand alleging that it was necessary to employ certain parties to salvage the three wells and clean them up, and that the defendant paid $19,951.60 for this, as well as $2,024.82 to the tax collector of St. Martin Parish for the 1973 ad valorem taxes, showing that Mrs. Hance, a defendant, was in partnership with the two Hobbs plaintiffs, and she spent that money on their account and should be reimbursed by them in the amount of two-thirds of the money spent."

The trial court rendered judgment in favor of defendants-appellees granting their reconventional demand and against plaintiffs-appellants, rejecting their claims. From this judgment, plaintiffs have appealed.

The record shows that the two Mr. Hobbs, and the former husband of Mrs. Hance, W. D. Hance, were partners in the operation of three oil wells located on state leases covering the bed of Lake Henderson, Plumb Bob Field, St. Martin Parish. There was no written partnership agreement and no written management or operating agreement between the parties. W. D. Hance was the owner of Central Equipment Rentals, Inc. (hereinafter Central) until his death. W. D. Hance had acquired his 1/3 interest from Central by virtue of an assignment. Although there is no written evidence of record as to a transfer by Central to W. D. Hance, it is undisputed that the interest was in fact vested in Mr. Hance individually. Upon Mr. W. D. Hance's death, his interest was inventoried in his succession, and his widow, Bonnie Rose Hance, was placed in possession of the succession. Mrs. Hance later executed a general power of attorney to her son, Sam Hance, authorizing him to conduct her business affairs. In addition, Sam Hance was named as president of Central.

There was an unwritten agreement between these parties similar to, if not identical to, the agreement which existed between Mrs. Hance's former husband, W. D. Hance and the two Hobbs. Essentially, the agreement was that Mr. Hance was to provide a laborer to work on the wells, in addition to his share of the financial expenditures *241 relating to the operation of the wells. The Hobbs were to maintain the wells and perform any related activities which were required from time to time to keep the well or wells in the proper working condition, the basis for this agreement being the Hobbs' expertise in this particular area of oil and gas production. Mr. W. D. Hance, on the other hand, was not an expert and had a limited amount of knowledge in this field. The three partners shared equally in any and all profits. As stated before, the Hobbs brothers performed the physical work on the wells and H. C. Hobbs also drew a salary as a consultant from the partnership for work done on the wells. Only one of the three wells actually produced income for the partnership. The proceeds from the production of the well were deposited into an account and all costs and expenses were drawn on that account. A Mr. Marion Rizzuto was employed by the partnership to keep its records and accounts.

Some time in February of 1973, the producing well ceased production. Subsequent attempts to re-work the well were unsuccessful, and the partners decided to end their joint operations and plug the well. The record shows that Central Equipment Rentals, Inc. had been designated as operator of the well on Department of Conservation records. Chevron Oil Company, the original lessee and assignor of the mineral leases to Central and the Hobbs, subsequently made demands on the lessees, in particular, Sam Hance, to clean, plug and abandon the wells pursuant to their legal obligations set out in the original leases and assignments.

It was agreed between the partners that it would be necessary to perform their legal obligations and to have the wells plugged and abandoned. H. C. Hobbs procured a bid from one W. L. Estis to plug and abandon the wells, dismount the derricks and production platforms, and pull all pilings. The Estis bid was for $49,435.00, plus the salvage rights to all of the recoverable downhole and surface equipment. Based on Mr. Hobbs' opinion, this bid was rejected by the partners as being too high. This was done at a meeting held in September of 1973.

From this juncture, communications began to deteriorate between the parties, in particular, the Hobbs and Mrs. Hance and/or her representative, Sam Hance. It is undisputed that it was agreed between all parties that each would actively seek bids for the plugging and abandoning of these wells being that the Estis bid was rejected. Complications arose when the Hobbs Brothers informed Mrs. Hance that they were not financially able to and would not contribute to the clean-up operations. That being the case, Sam Hance took it upon himself to find a contractor or contractors to perform the necessary work. Subsequently, Sam Hance entered into contracts with Condor Pipe Company (hereinafter Condor), Setoon Oil Field Contracting Company (hereinafter Setoon), and McBroom Rig Building Service, Inc. (hereinafter McBroom).

Setoon was to pull the pilings, unload the derrick, and pick up flow lines. The bid given by Setoon for their services was $16,462.60, which bid was ultimately accepted. Condor agreed to assist in the pulling of the pipe and dismantling of the platforms, and their consideration was that they would get the salvage pipe and equipment without any cost to Mrs. Hance other than the cost of the dismantling of the rig, which was done by McBroom for the sum of $3,489.00. Ultimately, Setoon, Condor, and McBroom performed their services pursuant to the contracts they had entered with the Hances, i. e., the wells were plugged and abandoned, surface casing was removed, and some production pipe was salvaged. Up until this point, all parties seemed to be content with the operations as they had been performed. Mrs.

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Bluebook (online)
382 So. 2d 238, 66 Oil & Gas Rep. 487, 1980 La. App. LEXIS 3509, Counsel Stack Legal Research, https://law.counselstack.com/opinion/hobbs-v-central-equip-rentals-inc-lactapp-1980.