PHAC Services, Inc. v. Seaways Intern., Inc.

403 So. 2d 1199
CourtSupreme Court of Louisiana
DecidedSeptember 8, 1981
Docket80-C-2915, 80-C-2928 and 81-C-0366
StatusPublished
Cited by24 cases

This text of 403 So. 2d 1199 (PHAC Services, Inc. v. Seaways Intern., Inc.) is published on Counsel Stack Legal Research, covering Supreme Court of Louisiana primary law. Counsel Stack provides free access to over 12 million legal documents including statutes, case law, regulations, and constitutions.

Bluebook
PHAC Services, Inc. v. Seaways Intern., Inc., 403 So. 2d 1199 (La. 1981).

Opinion

403 So.2d 1199 (1981)

P. H. A. C. SERVICES, INC.
v.
SEAWAYS INTERNATIONAL, INC., Pennzoil Company and Pennzoil Producing Company.
ACOUSTICAL SPRAY INSULATORS, INC.
v.
PENNZOIL COMPANY et al.

Nos. 80-C-2915, 80-C-2928 and 81-C-0366.

Supreme Court of Louisiana.

September 8, 1981.

*1200 John E. Ortego, and Silas B. Cooper, of Cooper, Ortego & Woodruff, Abbeville, for plaintiff-applicant.

Amos H. Davis, and John W. Hutchison, of Voorhies & Labbe, Lafayette, Donald G. Cave, of Cave & McKay, Baton Rouge, Michael J. McNulty, Jr. of Bauer, Darnall, McNulty & Boudreaux, Franklin, for defendants-respondents.

DIXON, Chief Justice.

This is a suit instituted by two unpaid subcontractors who supplied labor and materials for the construction of an offshore drilling platform living quarters unit; defendants are the general contractor and the owner. The primary issue is what, if any, privileges are available to these plaintiffs.

The unit involved in this litigation is a three story steel structure which was built on blocks at a construction site in St. Mary Parish. It was then transported by the owner, Pennzoil Company and Pennzoil Producing Company, and attached to an offshore drilling platform located in the Gulf of Mexico off the coast of Texas.

Pennzoil contracted with Seaways International, Inc. for construction of the unit. This contract was not recorded and no bond was required of Seaways as contractor. Seaways contracted with P. H. A. C. Services, Inc. for installation of plumbing, heating and air conditioning in the unit, and with Acoustical Spray Insulators, Inc. for labor and acoustical materials for the unit.

It is uncontested that P. H. A. C. and Acoustical performed their work in accordance with their subcontracts with Seaways, and that they have not been paid. They *1201 have timely filed lien affidavits, and have instituted suit[1] to enforce their privileges.

Three statutes are relied upon by plaintiffs: R.S. 9:4801 et seq. (Private Works Act); R.S. 9:4861 et seq. (dealing with privileges on oil, gas and water wells); and, in the alternative, R.S. 9:4502 (dealing with privileges on movables). The trial court ruled that the only privilege available to plaintiffs is that granted by R.S. 9:4861 et seq. The Court of Appeal disagreed, and held that only the Private Works Act, R.S. 9:4801 et seq. is applicable. P. H. A. C. Services, Inc. v. Seaways International, Inc., 393 So.2d 117 (La.App. 1st Cir. 1980). This court granted writs on application of all parties.[2] 398 So.2d 527 (La.1981).

R.S. 9:4861 et seq.

R.S. 9:4861 creates a privilege in favor of certain persons who perform work in connection with the exploration for oil, gas or water. That statute provides:

"Any person who performs any labor or service in drilling or in connection with the drilling of any well or wells in search of oil, gas or water, or who performs any labor or service in the operation or in connection with the operation of any oil, gas or water well or wells, has a privilege on all oil or gas produced from the well or wells, and the proceeds thereof inuring to the working interest therein, and on the oil, gas or water well or wells and the lease whereon the same are located, and on all drilling rigs, standard rigs, machinery, appurtenances, appliances, equipment, buildings, tanks, and other structures thereto attached or located on the lease, for the amount due for labor or service, in principal and interest, and for the cost of preparing and recording the privilege, as well as ten per cent attorney's fees in the event it becomes necessary to employ an attorney to enforce collection. Any person who does any trucking, towing, or barging, or who makes any repairs, or furnishes any fuel, drilling rigs, standard rigs, machinery, equipment, material or supplies for or in connection with the drilling of any well or wells in search of oil, gas or water, or for or in connection with the operation of any oil, gas, or water well or wells, whether or not a producing well is obtained and whether or not such materials, machinery, equipment, services and supplies are incorporated in or become a part of the completed oil, gas or water well, has a privilege on all oil or gas produced from the well or wells and the proceeds thereof inuring to the working interest therein and on the oil, gas or water well or wells and the lease whereon the same are located, and on all drilling rigs, standard rigs, machinery, appurtenances, appliances, equipment, buildings, tanks and other structures thereto attached for drilling, equipment and operation of the well or lease, for the amount due for such trucking, towing, barging, repairs, fuel, drilling rigs, standard rigs, machinery, equipment, material, or supplies, in principal and interest, and for the cost of preparing and recording the privilege, as well as ten per cent attorney's fees in the event it becomes necessary to employ an attorney to enforce collection thereof. This privilege is second in rank only to the privilege granted in favor of laborers."

This statute confers a privilege to furnishers of labor or services whose work was done "in drilling or in connection with the drilling of any well," or "in the operation or in connection with the operation of any oil, gas or water well." The parties and the lower courts have focused on whether the work done by plaintiffs is the type of work intended to be protected by this statute. Specifically, the parties' concern has been on whether it is significant that the work done by plaintiffs was performed at a construction site miles away from the lease site.

*1202 Pennzoil maintains that, since the unit was under construction and had never been brought to the well site, the unit was not identified with any particular lease. Plaintiffs point out that at all times the unit was designated for, and was eventually transported to, a specific well site.

It is clear from the statute that in some cases a lien might secure a claim for work performed away from the well or lease. The statute specifically includes persons who perform trucking, towing and barging, even though such services are generally performed away from the leased premises. In the case before us, the living quarters unit was constructed onshore because this was more practical than building it on the well location over the outer continental shelf; the unit at all times was designated for Pennzoil's High Island Block 340 platform.

In interpreting statutes granting liens and privileges for working material furnished, courts have generally construed the statutes strictly against the claimant; the usual contest arises when ultimate liability will be placed on the owner, even though he might have previously paid the contractor, who failed to pay the claimant.

The claim in this case does not appear to be covered by R.S. 9:4861. First, the lien is granted to "any person ... who performs any labor or service ... in connection with the operation" of any oil or gas well. The privilege, however, is on the production, the well, the lease, and "machinery, ... equipment, buildings, tanks, and other structures thereto attached or located on the lease." The lien is further granted for transporting or furnishing "material or supplies ... for or in connection with the operation" of any well; however, the privilege granted is on the production, the well, the lease and "buildings, tanks and other structures thereto attached for the ... operation of the well."

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Bluebook (online)
403 So. 2d 1199, Counsel Stack Legal Research, https://law.counselstack.com/opinion/phac-services-inc-v-seaways-intern-inc-la-1981.