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Southern Coil Tubing, Inc. v. Oracle Gas, LLC

Court of Appeals of Louisiana, Third Circuit

December 13, 2017



          Daniel C. Hughes COUNSEL FOR DEFENDANTS/APPELLANTS: Delphi Oil, Inc. Robert E. Brooks

          L. Lane Roy Brown Sims, PC COUNSEL FOR PLAINTIFF/APPELLEE: Southern Coil Tubing, Inc.

          Court composed of Marc T. Amy, Shannon J. Gremillion, and Phyllis M. Keaty, Judges.

          MARC T. AMY JUDGE.

         This appeal arises out of a claim brought by the plaintiff for a sum allegedly due on an open account and for which the plaintiff also asserted a claim under the Louisiana Unfair Trade Practices Act. The trial court rendered judgment in favor of the plaintiff for $51, 000.00 plus legal interest against all three defendants. Two of the defendants appeal. For the following reasons, we reverse in part.

         Factual and Procedural Background

         The plaintiff, Southern Coil Tubing, Inc., is a company located in Lafayette, Louisiana. The plaintiffs brief to this court described the type of service work performed by the company as "involving] the use of expensive and highly specialized equipment being brought to existing producing [oil] wells for the purposes of taking certain measures ... to cause the well to become unclogged and produce additional minerals from the existing well." As owner of all stock in Southern Coil Tubing, Inc., Mr. Carl Guidroz testified before the trial court on behalf of the plaintiff company regarding the events surrounding this dispute.

         Mr. Guidroz explained that in the summer of 2014, he received a phone call from Robert Brooks, who "was soliciting some service work" on an oil well in Laurel, Mississippi, and told him "[t]hat the well was for Burke's[1] Energy" (hereinafter "Burke's"). Mr. Guidroz indicated that the coil tubing unit owned by the plaintiff company "was designated and designed strictly for offshore. It can be done for land, it's just a little cumbersome. Takes a little more transportation and trucks to get there." Therefore, Mr. Guidroz testified that he suggested that Mr. Brooks use a local company in Mississippi, because doing so would be quicker, more convenient, and less expensive. Mr. Guidroz explained that, in response, "[Mr. Brooks] said he would provide the trucks and also the crane to complete the service. He would provide all the transportation and the cost of the crane to take the unit from Lafayette to location and return." Testifying on behalf of the defense, Mr. Brooks recalled that, in their initial discussions, Mr. Guidroz estimated that the cost would be "between eleven thousand and fifteen thousand five hundred per day" and that the job "would take about a day." The record includes no indication that these discussions were reduced to writing.

         Mr. Brooks said that, because he would be traveling via airplane and unreachable by telephone on the day that the job was to be completed, he had signed a check in advance and "instructed the drilling supervisor on the rig that when Mr. Guidroz's hands presented a bill, they were to write the check for the amount[, ] which [he] was anticipating to be thirty thousand plus or minus maybe a little more." Mr. Guidroz testified that, upon completing the job, the plaintiff received an Oracle Gas, LLC check[2] for the invoice total of $51, 000.00 with "R.E. Brooks" as the signature and dated August 6, 2014, explaining: "[The check] was provided ... by the supervisor on location . . . and was given to [the plaintiffs] supervisor for payment of the services rendered." However, Mr. Guidroz said that "after depositing the check, " he received notice from the bank "that those funds were refused and there was a stop payment on that particular check." In response, Mr. Brooks explained that he was responsible for issuing the stop payment order upon learning that the check had been written in the amount of $51, 000.00. He clarified that he issued the order because he had anticipated that the invoice total would be between $30, 000.00 and $35, 000.00, not $51, 000.00.

         Mr. Guidroz set forth the plaintiffs reasons for the alleged discrepancy between the invoice price and what Mr. Brooks believed to be the quoted price. First, Mr. Guidroz testified that Mr. Brooks ultimately supplied only "[o]ne of three" trucks required for transporting the equipment and that "[t]he truck that showed up on lot to pick up the equipment was a [Delphi] [D]rilling truck." Mr. Guidroz explained that, when he notified Mr. Brooks that more trucks were needed, "[Mr. Brooks] asked [the plaintiff] to provide the transportation and [Mr. Brooks] would pay for it no problemf.]" Thereafter, Mr. Guidroz said that the plaintiff hired and paid a third-party to supply the remaining two trucks.

         Additionally, after the equipment made it to the job site and the project began, Mr. Guidroz stated that nitrogen services were required to perform the job. Mr. Guidroz testified that, when he explained this to Mr. Brooks, "[Mr. Brooks] asked [Mr. Guidroz] to provide [nitrogen services] and out of Louisianaf, ]" despite Mr. Guidroz's recommendation to use a local Laurel company instead. As with the transportation company, the plaintiff paid the third-party nitrogen company. With regard to both the third-party transportation and nitrogen services, the record contains no indication that these conversations were reduced to writing.

         Further, Mr. Guidroz explained that, even though he and Mr. Brooks had discussed the approximate cost and length of time for the job in their initial conversations, "[n]one of the perimeters were provided ... If some of the perimeters for the log in data would have been provided, [he] could have made a better estimate. But, just a cold call . . . It's speculation." Mr. Guidroz testified that he explained to Mr. Brooks that "[the job] could be one to two days" and that the plaintiffs employees "don't know, not until [they] actually get on location and see what the conditions are."

         After the stop payment order, Mr. Guidroz and Mr. Brooks attempted to settle the dispute, but an agreement was never reached. Mr. Guidroz testified that he subsequently determined that Mr. Brooks had connections with both Oracle Gas, LLC ("Oracle") and Delphi Oil, Inc. ("Delphi").[3] Ultimately, the plaintiff brought a suit on open account against Mr. Brooks, Oracle, and Delphi. Burke's was not included as a defendant. The plaintiff also filed an amended and supplemental petition to add an additional cause of action under the Louisiana Unfair Trade Practices Act.[4]

         Following a hearing at which Mr. Guidroz and Mr. Brooks testified, the trial court ruled in favor of the plaintiff, finding Mr. Brooks, Oracle, and Delphi liable jointly, severally, and in solido for the full sum of the invoice ($51, 000.00) as well as legal interest from the date of the original demand. In oral reasons for judgment, the trial court explained:

"[I]n looking at the totality of the circumstances, [defendant] or his wife are either members, agents, or officers of all three [sic] corporations, and given the irregular behavior and seemingly some fraudulent conduct or actions of defendant, the Court will pierce the corporate veil and find the defendants, Robert Brooks and Oracle Gas, liable in solido for the full sum of fifty-one thousand dollars ($51, 000.00).

         The trial court continued: "Delphi as well. . . In solido, all three of them."

         Thereafter, the defendants requested reasons for judgment. In response, the court provided the following minute entry:

The Plaintiff has carried its burden of proving its' [sic] case by a preponderance of the evidence. It clear [sic] from the evidence that Plaintiff, Southern Coil[, ] rendered certain oil [sic] tubing services as requested by Defendants, Oracle and Delphi. It is clear that Defendant, Brooks[, ] was an agent for [Burke's] Energy, Delphi, and Oracle and acting with authority from those corporations, acted in a manner which assured Southern Coil that it would receive payment for services rendered.
The evidence shows that Mr. Brooks testified on the stand that he was acting as agent for defendants. Evidence showed that at no time did Mr. Brooks mention to Southern Coil that he was representing other companies. Southern Coil was not aware that Brooks was acting in the capacity of agent for defendant corporations. Testimony revealed that the ...

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