Wilson Industries, Inc. v. Aviva America Inc. Bula Oil America Inc. Christina Heflin Trust Montclare Oil Ltd. All Aboard Development Corporation Trade & Development Offshore Properties, L.L.C. Walker Offshore Properties, Inc.

Citations: 185 F.3d 492; 1999 U.S. App. LEXIS 20684Docket: 98-30928

Court: Court of Appeals for the Fifth Circuit; August 30, 1999; Federal Appellate Court

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Wilson Industries, Inc. (Plaintiff-Appellant) appealed a summary judgment from the district court favoring Aviva America Inc. and other defendants (Defendants-Appellees), which ruled that Wilson lacked a lien under the Louisiana Oil Well Lien Act (LOWLA) against the defendants' interests in a well. Wilson argued that the district court erred by denying a continuance for additional discovery. The Fifth Circuit reviewed the case, affirming the district court's decision and finding no abuse of discretion in denying the continuance.

The district court's order, dated July 30, 1998, granted the defendants' motion for summary judgment under Fed. R. Civ. P. 56(b) while denying Wilson's motion for a continuance under Rule 56(f). Wilson sought to enforce a privilege under LOWLA against Aviva, the operator of an oil and gas lease in federal offshore waters, after Aviva drilled the JA-7 well and purchased tubulars from Centerra Tubular Company. Wilson had supplied the materials to Centerra, which subsequently declared bankruptcy, preventing Wilson from recovering payment. After notifying the defendants of an outstanding amount owed by Centerra, Wilson asserted a lien, which was filed with the Clerk of Court. The defendants moved for summary judgment, ultimately leading to the appeal.

Summary judgment is appropriate when, considering the evidence favorably for the non-movant, there is no genuine issue of material fact and the moving party is entitled to judgment as a matter of law, as established in Amburgey v. Corhart Refractories Corp. If the moving party fulfills this initial burden, the non-moving party must then provide evidence of any genuine issue for trial, as stated in Celotex Corp. v. Catrett. The non-movant's evidence cannot consist of mere allegations or minimal evidence, as clarified in Little v. Liquid Air Corp.

The Oil Well Lien Act offers extensive protections to those providing labor and materials for oil well drilling. Specifically, Section 4862 grants certain persons a privilege over property related to operations at well sites. It defines an operator as a lessee bound by contract to a claimant or contractor, while a contractor is identified as someone who contracts with the operator for operations at the well site. Operations encompass all activities related to drilling, completing, testing, producing, reworking, or abandoning a well.

The defendants argue that Wilson lacks a privilege over the property since Wilson did not sell directly to the operator, asserting that privileges are only available if sales were made to a contractor performing operations at the well site. They further contend that under the revised Oil Well Lien Act, only those directly engaged in operations are eligible for a lien, thereby excluding suppliers like Centerra, which did not conduct activities at the well site.

To ascertain Wilson's entitlement to a privilege as a seller to a contractor under the revised Act, the Court will reference state court interpretations of similar statutes, including the Public Works Act and the Private Works Act, which outline the conditions under which sellers can claim privileges based on the sale of movables that are incorporated into or consumed at a construction site.

A supplier of materials to another supplier (materialman of a materialman) does not have the statutory benefits under public contracts law, as the statute protects only creditors of contractors and subcontractors, not materialmen. The classification of a party as a contractor, subcontractor, or materialman depends on their contractual obligations. A materialman is defined as one who supplies materials for construction, and a fabricator that does not incorporate the materials is also considered a materialman. In the present case, Centerra, which supplied tubulars to Aviva, is classified as a supplier rather than a contractor since it did not engage in activities that would incorporate the materials into operations. Evidence shows that Aviva took possession of the tubulars and used them for drilling, confirming that Centerra's role was solely as a supplier. Wilson, as a seller to another supplier, lacks the right to assert privileges under the Louisiana Oil Well Lien Act (LOWLA). Aviva is entitled to summary judgment. 

Additional notes clarify that the Outer Continental Shelf Lands Act (OCSLA) applies to controversies related to resource development on the outer Continental Shelf, and the laws of adjacent states govern such matters. The Act was revised in 1995, affecting claims under LOWLA, particularly concerning privileges for furnishers and suppliers.