Lesikar Oil and Gas Co. v. Legend Swabbing, LLC

Court of Appeals of Texas·Decided August 18, 2011·No. 02-10-00157-CV·Published

Opinion

COURT OF APPEALS

SECOND DISTRICT OF TEXAS

FORT WORTH

NO. 02-10-00157-CV

LESIKAR OIL AND GAS CO. APPELLANT V.

LEGEND SWABBING, LLC APPELLEE

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FROM THE 43RD DISTRICT COURT OF PARKER COUNTY ------------

MEMORANDUM OPINION1

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Appellant Lesikar Oil and Gas Co. (the Company) appeals from the trial court’s judgment in favor of Appellee Legend Swabbing, LLC (Legend) on Legend’s suit for breach of contract and against the Company on its counterclaims. In three issues, the Company argues that the trial court erred by holding that Legend had no liability for the services of subcontractors used to

perform work that Legend was contractually obligated to perform; by holding that 1 See Tex. R. App. P. 47.4.

Legend fully performed under the contract; by refusing to hold that Legend failed to perform in a good and workmanlike manner; by failing to find that the Company had incurred $26,475.64 in expenses as a result of Legend’s failure to perform in a good and workmanlike manner; and alternatively, by issuing findings of fact numbers 17 and 22. The Company also challenges the sufficiency of the evidence to support those findings. Because we hold that the trial court did not err, we affirm the trial court’s judgment. I. Background Facts and Procedural History The Company, which is owned by Lynwood Lesikar, operates the Dalworth No. 1 well in Parker County (the well). In May 2007, the Company hired Legend to repair a casing leak in the well after an independent contractor, Dale Lee, informed Lesikar that he suspected that the well had a leak. Lee introduced Lesikar to Gary Gardner, owner of Legend. The parties entered into a master service contract, which sets out insurance and indemnity requirements for the parties but does not specify the work Legend agreed to perform. Lesikar agreed to pay Legend $265 an hour for its work.

Prior to the repair work, Lesikar met with Gardner and gave him various notes about the condition of the well and possible location of the leak. Lesikar testified that as part of this conversation, he had informed Gardner that the well had previously had two or three squeeze jobs done, some of which had failed. Gardner testified that it was obvious that the casing had been squeezed several times. A squeeze job is a process by which cement is pumped into the pipe and

pushed through holes in the casing. This process, in addition to repairing casing holes, creates a cement barrier between the casing and the area outside the casing. Before injecting the cement into the casing, a removable bridge plug is placed in the pipe below the area to be repaired. Sand is placed on top of the bridge plug to protect it from the cement. After the cement is injected, water is pumped into the well to push down the cement. The well is then ―squeezed‖ to push on the cement, pushing the water out of the cement and dehydrating it. Once the cement has set, the cement in the casing is drilled out. The mud created by this process is circulated out of the casing so that the plug can be retrieved. A cement retainer may be used in the process; a cement retainer is ―a device that . . . you pump through to get cement through it‖ to create an area between the plug and the retainer into which the cement is pumped.

Legend repaired the leak by performing three squeeze jobs on the well.

The first two squeeze jobs that Legend completed did not fix the casing leak. At trial, the parties disagreed about who was at fault for the failure of the first two attempts. Legend argued that for the first attempt, the cement company, Basic Energy Services (Basic), did not keep pressure on the well. Lesikar argued that the problem was the location of the retainer. A Basic employee testified that keeping pressure on the squeeze job would have defeated the squeeze because of the location of the retainer. As for the second attempt, Gardner testified that the squeeze failed because Basic made incorrect cement calculations, resulting

in too little cement being used. A Basic employee testified that Gardner told him how much cement to use on the job.

Basic employee Billy Raines testified that squeeze jobs could take multiple attempts to achieve success without anyone doing anything wrong. Lee testified that Gardner did not do anything wrong on the squeeze jobs. Jack Bradshaw, an expert called by the Company, agreed that everyone can do everything right on the first squeeze but it can still fail, and Bradshaw could not name anything that Gardner had done wrong.

The third squeeze job repaired the casing leak. Within a week, however, the pump became clogged and stopped working. At trial, the parties disputed whether the clog occurred because Legend did not circulate the well with water after completing the third squeeze job. The parties presented conflicting testimony about whether circulation with water is necessary.

Legend billed the Company for its services, and Lesikar refused to pay.

Lesikar disputed the charges on the grounds that Legend had charged the Company for work that did not need to be done (such as swabbing and acidizing) and that some of the charges were for repairing holes caused by Legend rather than the casing leak that it had been hired to repair.

Legend sued the Company for breach of contract due to Lesikar’s failure to pay the invoices. The Company filed a countersuit for breach of contract and fraud. The Company alleged that Legend’s representations in the service agreement that it had adequate equipment and fully trained personnel capable of

performing services were false and a deceptive trade practice. The Company also alleged that Legend’s work was substandard.

The case was tried to the bench. At trial, Gardner testified that he had followed Lesikar’s orders in repairing the leak and that Legend did not have responsibility for the work performed by the service providers (such as Basic) who had provided work or equipment on the job. Gardner also testified that his understanding was that Lee was his supervisor on the job.

The Company disputed that Lee had any supervisory capacity on the job.

The Company argued that Legend was responsible for the work done on the repair job and could not delegate its responsibility to other providers.

At the conclusion of the bench trial, the trial court rendered judgment for Legend and ordered that it recover damages of $58,565 and stipulated attorney’s fees. The judgment ordered that the Company take nothing on its counterclaims.

The Company requested the trial court to enter findings of fact and conclusions of law. The trial court subsequently notified the parties to submit proposed findings and conclusions by April 12, 2010. Legend complied with this instruction, but Lesikar did not. On April 16, 2010, the trial court entered findings of fact and conclusions of law:

Findings of Fact

....

2. [The Company] is the operator of the . . . Well.

3. [Legend] was contracted by [the Company] to repair a casing leak(s) in the . . . Well.

....

5. [Legend] performed three squeeze jobs and one acid job on the . . . well to fix the casing leak(s).

6. [Basic] was contracted to perform the cement work on the squeeze jobs as well as the acid job on the . . . well.

7. [Legend] maintained the failure of the first squeeze job was the fault of [Basic] for not keeping pressure on the squeeze job.

8. . . . Dale Lee[] also maintained the failure of the first squeeze job was the fault of [Basic] for not keeping pressure on the squeeze job.

9. [Legend] maintained the failure of the second squeeze job was the fault of [Basic] for the substandard quality of its cement.

10. . . . Dale Lee[] also maintained the failure of the second squeeze job was the fault of [Basic] for the substandard quality of its cement.

11. [Basic] billed [the Company] the following invoices:

a. $5,285.41 — 1st squeeze job on 6/1/07 b. $3,414.12 — 2nd squeeze job on 6/5/07 c. $1,654.86 — Acid job on 6/11/07 d. $4,165.66 — 3rd squeeze job on 6/12/07

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