Tabco Exploration, Inc. v. Tadlock Pipe & Equip., Inc.

617 So. 2d 606, 126 Oil & Gas Rep. 247, 1993 La. App. LEXIS 1441, 1993 WL 105692
CourtLouisiana Court of Appeal
DecidedApril 7, 1993
Docket92-532
StatusPublished
Cited by8 cases

This text of 617 So. 2d 606 (Tabco Exploration, Inc. v. Tadlock Pipe & Equip., 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
Tabco Exploration, Inc. v. Tadlock Pipe & Equip., Inc., 617 So. 2d 606, 126 Oil & Gas Rep. 247, 1993 La. App. LEXIS 1441, 1993 WL 105692 (La. Ct. App. 1993).

Opinion

617 So.2d 606 (1993)

TABCO EXPLORATION, INC., Plaintiff-Appellant,
v.
TADLOCK PIPE & EQUIPMENT, INC., Defendant-Appellee.

No. 92-532.

Court of Appeal of Louisiana, Third Circuit.

April 7, 1993.
Rehearing Denied May 25, 1993.

*607 Karl E. Boellert, Lake Charles, for Tabco Exploration Inc.

David Frank Dwight, Milo Addison Nickel, Jr., Lake Charles, for Tadlock Pipe & Equipment Inc.

Before STOKER, THIBODEAUX and SAUNDERS, JJ.

THIBODEAUX, Judge.

This is an appeal by Tabco Exploration, Inc. of a judgment finding it liable for half of the operation expenses incurred by intervenor, Tadlock Properties, Inc. The expenses were found to have been incurred by Tadlock Properties pursuant to an oral agreement with a partnership between Tabco and Tadlock Pipe & Equipment, Inc. For the following reasons, we amend and affirm.

FACTS

This suit arises out of an alleged partnership agreement formed between the president of Tabco, Tom A. Blankenship, and the president of Tadlock Pipe and Tadlock Properties, Robert Tadlock. In mid-January of 1989, Atlantic Richfield Corporation (ARCO), through its Director of Business Development, Kenneth Trahan, approached Robert Tadlock about purchasing the Buster-Baker Number 1 Well in East Texas. ARCO had been operating the well but could not afford to continue and was looking for someone to step in immediately to finish the job.

Tadlock examined technical data supplied by Trahan and decided the well looked promising. He then contacted Tom Blankenship for the alleged purpose of proposing a partnership in the exploration and production of oil or other minerals from the Buster-Baker well. After Blankenship examined the technical data, he agreed to participate, provided he could supply some pipe, his own workover rig and supervision. His oral agreement allegedly formed the partnership between Tabco and Tadlock Pipe.

Due to time constraints, the well was purchased by Robert Tadlock under the *608 name of Tadlock Properties. Tadlock Properties is a corporation created for the purpose of oil exploration. It is alleged that the partners agreed to have Tadlock Properties conduct all operations and pay all expenses. These expenses would be reimbursed at the completion of the well. It is further alleged that the partners were made aware by Trahan of the responsibility to plug, clean, and abandon the well in the event of a dry hole.

The transfer from ARCO to Tadlock Properties took place on January 26, 1989. Blankenship contacted Mike Caswell, a petroleum engineer who had been Blankenship's agent in Texas, and asked him to oversee drilling operations. Caswell began running casing on January 27, 1989. Shortly thereafter, drilling was completed and Tadlock informed Blankenship his workover rig would be needed. Blankenship stated he could not provide the workover rig at that time and would no longer be involved with the well.

As a result of Blankenship's actions, Tadlock Properties was forced to rent a workover rig. Shortly thereafter, it became apparent the well was a dry hole and further exploration would not be feasible. It was plugged and the site was cleaned and abandoned. No demand was made at that time by Tadlock Properties for any expenses owed by Tabco or Blankenship.

On September 9, 1989, Tabco sued Tadlock Pipe for the return or current market value of seventy-three sections of drill pipe. The drill pipe had allegedly been stored for Tabco at Tadlock Pipe's place of business.

Tadlock Pipe filed an answer and reconventional demand pleading the affirmative defenses of settlement, compromise, accord and satisfaction or set-off. It also requested damages as a result of Tabco breaching a partnership or joint venture formed for the purpose of exploring and producing oil and other petroleum products.

Tadlock Properties then intervened, suing Tabco and Blankenship for their half of the expenses incurred in operating the well. It asserted an agreement with the partnership between Tabco and Tadlock Pipe, that Tadlock Pipe had paid its half of the expenses and Tabco was responsible for the remainder. It further asserted the suit was on open account and requested attorney's fees.

The matter came to trial on June 26, 1990. It was taken under advisement and judgment was rendered on March 9, 1992. The trial judge found a partnership was created by an oral agreement between Tabco and Tadlock Pipe. He found the partners entered into an oral agreement to have Tadlock Properties control and operate the well and that they would supply equipment and supervision and share all profits and expenses.

The trial judge also found sufficient evidence of the expenses incurred by the partnership, which he determined was $120,138.18. He then cast Tabco in judgment for half, or $60,069.09. In his reasons for judgment, the trial judge correctly identified Tadlock Properties as the prevailing party but erroneously signed a judgment in favor of Tadlock Pipe & Equipment. We take notice of this error, despite its not being raised, and will amend the judgment to reflect the proper party.

ISSUES

Tabco raised several assignments of error from which we frame the following issues:

(1) Whether the trial judge committed manifest error in finding an oral partnership agreement, and an oral agreement between the partnership and Tadlock Properties for the purpose of operation and control of the Buster-Baker Well;
(2) Whether or not the oral agreement between the partnership and Tadlock Properties is valid; and,
(3) Whether an employee hired, paid and released by one corporation can be considered the employee of an oral partnership or another corporation.

LAW & ANALYSIS

A. Existence of Partnership

LSA-C.C. art. 2801 defines partnership:

*609 A partnership is a juridical person, distinct from its partners, created by a contract between two or more persons to combine their efforts or resources in determined proportions and to collaborate at mutual risk for their common profit or commercial benefit.

For the trial judge to have found an oral partnership agreement, he must have been satisfied the evidence met the foregoing criteria. These criteria require findings of fact. Findings of fact by a trial judge are to be given great discretion and will only be disturbed where they are manifestly erroneous. Rosell v. ESCO, 549 So.2d 840 (La.1989).

The trial judge's fact finding duties were made easier due to certain sworn statements made by Blankenship which show his intent to form a partnership. On cross-examination, the following exchange took place:

Q: (Counsel for both Tadlock corporations)... [D]id you propose to them or did they propose to you that y'all go in as partners or joint adventurers or together or however you want to call it, on the Buster-Baker Well?
A: Yes, they offered me the opportunity to go in.
Q: And what was your response?
A: Provided I could use my equipment and I could do the supervision, I would be interested in it.

Blankenship also made the following statement regarding paying half of the purchase price of the well. He stated:

I told [Bob Tadlock] if I was able to participate in the deal by furnishing my rig and my equipment I'd be able to pay half of the costs.

Again, in direct examination by his own counsel, Blankenship made the following statement:

Q: Mr.

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617 So. 2d 606, 126 Oil & Gas Rep. 247, 1993 La. App. LEXIS 1441, 1993 WL 105692, Counsel Stack Legal Research, https://law.counselstack.com/opinion/tabco-exploration-inc-v-tadlock-pipe-equip-inc-lactapp-1993.