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Progress Drilling & Marine, Inc. v. American Oilfield Exchange, Inc. (In re Progress Drilling & Marine, Inc.)

Citations: 122 B.R. 62; 5 Tex.Bankr.Ct.Rep. 72; 1990 Bankr. LEXIS 2673Docket: Bankruptcy Nos. 85-07495-H3-11, 85-08464-H3-11, 85-08465-H3-11, 86-05090-H2-11 and 85-07494-H3-11

Court: United States Bankruptcy Court, S.D. Texas; July 2, 1990; Us Bankruptcy; United States Bankruptcy Court

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American Oilfield Exchange, Inc. (American) filed a claim against Debtor Progress Drilling Marine, Inc. (PDMI) for a $70,000 commission related to the sale of an oil rig to Petra Drilling Corporation, along with $20,000 in attorney’s fees. The claim was based on theories of an oral contract and quantum meruit.

Key findings include:

1. PDMI filed for Chapter 11 bankruptcy on November 15, 1985.
2. American submitted its proof of claim on December 23, 1985.
3. Evidence presented during hearings on February 23 and March 5, 1990, included an unexecuted sales agreement indicating that any commission owed would be paid by Petra, not PDMI.
4. The rig was sold for $1,400,000, and a taped phone conversation between PDMI's president and an agent from American suggested a belief in entitlement to a commission, but did not establish a clear contract.
5. The conversation indicated that services were rendered for Petra, not PDMI.

Legal conclusions included:

1. Contracts for the sale of personal property exceeding $500 must adhere to the Texas Business and Commerce Code.
2. Oral contracts require clear and convincing evidence and must define essential terms.
3. American failed to meet the burden of proof for both an oral contract and quantum meruit, as the services were not rendered for PDMI and the commission was to be paid by Petra.

Based on these findings, the court upheld the Debtor’s objection and disallowed American's claim.