K & H Well Service, Inc. v. Tcina, Inc.

2002 OK 62, 51 P.3d 1219, 73 O.B.A.J. 1983, 156 Oil & Gas Rep. 70, 2002 Okla. LEXIS 64, 2002 WL 1429733
CourtSupreme Court of Oklahoma
DecidedJuly 2, 2002
Docket93,451
StatusPublished
Cited by61 cases

This text of 2002 OK 62 (K & H Well Service, Inc. v. Tcina, Inc.) is published on Counsel Stack Legal Research, covering Supreme Court of Oklahoma primary law. Counsel Stack provides free access to over 12 million legal documents including statutes, case law, regulations, and constitutions.

Bluebook
K & H Well Service, Inc. v. Tcina, Inc., 2002 OK 62, 51 P.3d 1219, 73 O.B.A.J. 1983, 156 Oil & Gas Rep. 70, 2002 Okla. LEXIS 64, 2002 WL 1429733 (Okla. 2002).

Opinion

LAVENDER, J.

¶ 1 Today’s cause requires review of the process employed by K & H Well Service, Inc. [lien claimant or K & H] to secure a money judgment against named leasehold owners, to establish the validity of its 42 O.S.1991 § 144 1 oil and gas well liens, and to foreclose the same.

I

FACTS AND PROCEDURAL HISTORY

¶ 2 K & H provided materials, supplies and well services in the reworking and drilling of several oil and gas wells in Seminole and Pottawatomie counties during a period beginning in July 1998 and ending in November 1998. K & H alleges that it was hired to perform this work by Tcina, Inc., the wells’ operator. Upon not being paid for the rendered services K & H filed (in early December 1998) “oil and gas well lien statements” covering the respective wells in the county clerk’s office of either Pottawatomie or Seminole County, depending upon where the specific well which was -worked on was located. Each lien statement contained a legal description of the lands against which it was intended to be impressed.

¶ 3 On December 10, 1998 K & H brought suit in Seminole County District Court seeking a money judgment and to foreclose its liens.' Tcina, Inc., as operator, and Tcina Holding Co., Ltd. [Tcina or defendants], among others, were named as defendants.

*1222 After the suit’s initiation but before trial commenced, the liens on all wells but the Salma Wells Nos. 3 and 4 2 were discharged by payment of the claimed amounts.

¶ 4 The appealed-from judgment addresses the legal efficacy and effect to be given to K & H’s lien statement filed in Book 7453, Page 62 in the Seminole County Clerk’s office. The challenged lien purports to encumber the following described land:

The Fleet Osborn Gilcrease Unit

W/2 NW/4 and N/2 SW/4 and S/2 Lot 2, Lot 4, Lot 5, Lot 6, all in Sec. 25-T5N-R7E, and E/2 NE/4 and NW/4 NE/4 and East 20 acres of Lot 1, Lot 4, Lot 5, all in Section 25-T5N-R7E, including all riparian rights all in Seminole County, State of Oklahoma.

The Salma Well No. 3 — per a filed Oklahoma Corporation Commission report — was reeom-pleted in the SE/4 NW/4 NW/4 of section 25-. T5N-R7E to the Booch formation; and the Salma Well No. 4 — per a filed Oklahoma Corporation Commission report — was recom-pleted in the W/2 NE/4 SW/4 NW/4 of section 25-T5N-R7E to the Wapanucka formation. The defendants did not contest that K & H performed the work which is the subject of the above lien or the amount charged.

¶ 5 At trial Tcina, Inc. alleged that although it was the contract operator of the Salma wells, it did not possess an interest in the leases covering the lands subject to the lien. Berry Doyal (the principal owner of both Tcina, Inc. and Tcina Holding Co., Ltd.) represented that when negotiating with K & H for the well work to be performed he disclosed (1) that Tcina, Inc. was an agent for the owners of the leasehold estate upon which the well work was to be done and (2) the leasehold owners were going to pay for the requested rework. Tcina, Inc. asserts that its status as a non-leasehold owner and an agent for disclosed principals precludes its liability for the work which K & H performed on the Salma wells.

¶ 6 Tcina Holding Co., Ltd., claims that it owns no interest in the leasehold estate against which K & H’s liens were impressed. Nonetheless, there is recorded in the Seminole County Clerk’s office an assignment, dated December 1, 1997, of an undivided 5% interest in leases (covering the same mineral estates as the leasehold estate against which K & H’s lien was impressed) from Grant Oil and Gas Corporation to Tcina Holding Co., Ltd. At trial Tcina Holding Co., Ltd., asserted that the acquired interest was only a carried working interest. 3 However, the allocation of expenses traditionally associated with a carried interest is nowhere reflected in the assignment’s terms. At trial Tcina Holding Co., Ltd., introduced an unrecorded “Disclaimer and Assignment Without Warranty,” dated May 4, 1999, of its interests in the Salma Wells nos. 3 and 4 to the record owners. Also, Tcina Holding Co., Ltd.’s leasehold interest in formations — other than those formations in which the Salma wells were completed — were apparently reserved by Tcina Holding Co., Ltd. as they were excluded from the disclaimer and assignment’s scope.

¶ 7 After trial judgment was entered in favor of the Tcina entities on K & H’s (a) claim for a money judgment and (b) attempt to foreclose its lien. The trial court also awarded an attorney fee to Tcina, Inc. and Tcina Holding Co., Ltd. K & H appealed and the Court of Civil Appeals [COCA] reversed the trial court’s judgment and remanded the cause. The COCA found that Tcina, Inc. was merely a contract operator of the wells sub *1223 ject to the lien in issue, had disclosed the principals for which it was the agent to K & H, and owned no leasehold interests in the lands subject to K & H’s lien. It concluded that Tcina, Inc. was correctly found to have no liability. Nonetheless, the COCA held that Tcina Holding Co., Ltd. did possess a leasehold interest in the wells subject to the lien and remanded the ease with instructions to allow the foreclosure to proceed. It also determined that K <& H was the prevailing party in the action and vacated the trial court’s attorney-fee award.

¶ 8 The Tcina entities sought certiorari which was granted.

II

THE STANDARD OF REVIEW

¶ 9 The judgment presented for review is a compilation of both findings of facts and conclusions of law. 4 When, as here, the case is tried to the court, its determination of facts are accorded the same force as those made by a well-instructed jury. 5 If any competent evidence supports the trial court’s findings of fact, the same will be affirmed. 6 Whether a lien is perfected under applicable statutes — i.e., whether the facts (once established) demonstrate substantial compliance with applicable statutory requirements — is largely a question of law for the trial court to resolve. 7 Issues of law are reviewed de novo since an appellate court has plenary, independent and non-deferential authority to reexamine a trial court’s legal rulings. Lastly, the trial court’s decision not to allow amendment of the plaintiffs lien statement will be reviewed under an abuse-of-discretion standard. 8 Unless the record clearly discloses that the trial court abused its discretion, its decision will not be disturbed.

Ill

SINCE K & H’S PERFORMANCE OF THE CONTRACT AND THE AMOUNT OWED IS UNDISPUTED, THE TRIAL COURT SHOULD HAVE AWARDED A MONEY JUDGMENT AGAINST THE NAMED LEASEHOLD OWNER

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Bluebook (online)
2002 OK 62, 51 P.3d 1219, 73 O.B.A.J. 1983, 156 Oil & Gas Rep. 70, 2002 Okla. LEXIS 64, 2002 WL 1429733, Counsel Stack Legal Research, https://law.counselstack.com/opinion/k-h-well-service-inc-v-tcina-inc-okla-2002.