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Mesa Southern CWS Acquisition, LP v. Deep Energy Exploration Partners, LLC

Court of Appeals of Texas, Fourteenth District

November 21, 2019

MESA SOUTHERN CWS ACQUISITION, LP D/B/A MESA SOUTHERN WELL SERVICING, Appellant
v.
DEEP ENERGY EXPLORATION PARTNERS, LLC, Appellee

          On Appeal from the 151st District Court Harris County, Texas Trial Court Cause No. 2018-10732

          Panel consists of Justices Jewell, Bourliot, and Zimmerer.

          MEMORANDUM OPINION

          Kevin Jewell Justice

         In this dispute involving mineral liens, appellant Mesa Southern CWS Acquisition, LP appeals an adverse summary judgment on its claims against appellee Deep Energy Exploration Partners, LLC. Pursuant to a contract, Mesa provided labor and materials to an oil and gas operator, Deep Operating, LLC. Claiming that it did not receive payment for the full value of its services, Mesa filed three mineral liens in Milam County encumbering certain real, mineral, and personal property. After Deep Operating filed for bankruptcy protection, Mesa filed this suit against Deep Operating's parent company, appellee Deep Energy. Deep Energy moved for summary judgment on Mesa's claims, arguing that Mesa contractually waived its right to assert liens against Deep Operating's wells and waived its right to seek payment on the contract from any entity other than Deep Operating. The trial court granted Deep Energy's motion and dismissed Mesa's claims. Because we agree that the contract between Mesa and Deep Operating forecloses all of Mesa's claims against Deep Energy, we affirm the trial court's judgment.

         Background

         Mesa provides services and supplies to oil and gas operators, such as Deep Operating. In October 2016, Mesa and Deep Operating signed a Master Service Agreement ("MSA") that established the terms and conditions of any work performed by Mesa for Deep Operating. The MSA identified Mesa as "CONTRACTOR," Deep Operating as "COMPANY," and "the services . . . to be performed and/or the materials . . . to be supplied" as the "Work." As relevant here, the MSA included a provision relating to "Payment of Claims," which stated in its entirety:

CONTRACTOR shall promptly pay all bills, other indebtedness for labor and for materials furnished or purchased by it involved in or arising out of this Agreement, and shall exhibit receipted payrolls for all labor employed, and receipted statements or invoices for all material used. To the maximum extent permitted by applicable law, CONTRACTOR agrees that, in consideration for entering into this Agreement, CONTRACTOR irrevocably waives any and all rights to lien, sequester, attach, seize or assert a privilege over the Work performed by CONTRACTOR, the real property upon which the Work is located and any hydrocarbon product associated with the Work. CONTRACTOR acknowledges that in entering into this Agreement, CONTRACTOR is relying on the creditworthiness of COMPANY and shall look solely and exclusively to COMPANY for payment and shall not rely on any statutory, common law or other right to seize, attach, sequester, assert a privilege, lien or otherwise encumber the real property of COMPANY or upon which the Work is located or any hydrocarbon associated therewith. Accordingly, CONTRACTOR agrees to keep and maintain the Work free from any liens or privileges asserted by CONTRACTOR or any of its subcontractors both during and after completion of the Work under this Agreement.

         Mesa performed work for Deep Operating on three wells and mineral leaseholds, identified as Key #2 Well, Owens Grindle #1 Well, and Von Goten #2 Well, all located in Milam County. Mesa invoiced Deep Operating for work it performed in the latter part of 2016 and early 2017, but, according to Mesa, Deep Operating did not pay Mesa the full amount owed.

         Deep Operating filed for bankruptcy protection under United States Bankruptcy Code Chapter 11 on June 8, 2017. In the bankruptcy proceeding, Deep Operating asserted that it was a "wholly owned subsidiary of Deep Energy Exploration Partners, LLC."

         Shortly after Deep Operating filed its bankruptcy petition, Mesa filed a lien against the Key #2 Well for $104, 944.99, a lien against the Owens Grindle #1 Well for $69, 838, and a lien against the Von Goten #2 Well for $17, 540. In supporting affidavits, Mesa swore that it performed labor and furnished materials as a contractor under a contract with Deep Operating and/or Deep Energy, who Mesa identified as the operator or operators and/or mineral property owner or owners of the land, oil, gas, or other mineral leasehold subject to the liens.

         Mesa also filed this suit against Deep Energy, asserting claims for: (1) breach of duty under chapter 162 of the Texas Property Code; (2) recovery of "trapped funds" under chapter 56 of the Texas Property Code; and (3) declaratory relief and request for an order of sale for foreclosure of the three lien claims.

         Deep Energy denied Mesa's allegations and asserted counterclaims for breach of contract and fraudulent lien. On the same day it filed its answer, Deep Energy moved for traditional summary judgment on all of Mesa's claims. Deep Energy argued that all of Mesa's claims were barred by the MSA, in which Mesa contractually waived its rights to: (1) seek payment from any entity other than Deep Operating; and (2) file the liens at issue.

         The trial court granted Deep Energy's motion without specifying the grounds for its ruling and dismissed Mesa's claims with prejudice. The court also ordered that Mesa file a release of any lien filed against Deep Energy in Milam County relating to the work Mesa performed for Deep ...


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