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UNITED STATES BANKRUPTCY COURT EASTERN DISTRICT OF LOUISIANA IN RE: CASE NO. 09-11899 VIRGIN OIL COMPANY, INC. CHAPTER 11 DEBTOR SECTION “A” MEMORANDUM IN SUPPORT OF MOTION FOR PARTIAL SUMMARY JUDGMENT BY THE VIRGIN OIL COMPANY, INC. PLAN TRUST The Virgin Oil Company Plan Trust (“Plan Trust”) 1 hereby requests, pursuant to Rule 56 of the Federal Rules of Civil Procedure, made applicable herein through Rules 7056 and 9014 of the Federal Rules of Bankruptcy Procedure, that the Court grant its Motion for Partial Summary Judgment (the “Motion”) and grant summary judgment in its favor in relation to certain claims objections (the “Claims Objections”) 2 filed by the Plan Trust with respect to claims asserted by certain parties (the “Wrong Case Claimants”). 3 The Wrong Case Claimants have each asserted claims against the Debtor, Virgin Oil Company, Inc. (“Virgin Oil”), but which include supporting documentation indicating that their respective services and/or materials were actually provided to a separate and distinct entity, Virgin Offshore USA, Inc. (“Virgin Offshore”). Notwithstanding there being a lack of privity between the Wrong Case Claimants and 1 For purposes of the Motion for Summary Judgment, the Plan Trust appears herein through the firm of Slattery, Marino & Roberts with respect to the objections to the claims by Newpark Environmental Services, LLC and Key Energy Services, Inc. For all other purposes, the Plan Trust appears herein through the firm of Lugenbuhl, Wheaton, Peck, Rankin & Hubbard. 2 See Docket Nos. 1041 (AL of Louisiana, LLC, Geo-Mag MWD, LLC, Hunting Energy Services, Inc., LandTel Communications, Nito-Lift Technologies, LLC, River Rental Tools, Inc., Tarpon Rental, Inc., Tim Morton & Associates, Inc., Trend Services, Inc., Vanguard Vacuum Trucks); Docket No. 1049 (Precision Drilling Company, LP, f/k/a Gray Wolf Drilling, LP); Docket No. 1051 (Newpark Environmental Services, LLC); Docket No. 1055 (Key Energy Services, Inc.); Docket No. 1076 (Frank’s Casing Crew & Rental Tools, Inc.); and Docket No. 1094 (Intracoastal Liquid Mud, Inc.) 3 See Fn. 2, which includes in bold the relevant Wrong Case Claimants. Case 09-11899 Doc 1284-1 Filed 11/09/12 Entered 11/09/12 14:47:58 Memorandum in Support Page 1 of 15

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UNITED STATES BANKRUPTCY COURTEASTERN DISTRICT OF LOUISIANA

IN RE: CASE NO. 09-11899

VIRGIN OIL COMPANY, INC. CHAPTER 11

DEBTOR SECTION “A”

MEMORANDUM IN SUPPORT OF MOTION FOR PARTIALSUMMARY JUDGMENT BY THE VIRGIN OIL COMPANY, INC. PLAN TRUST

The Virgin Oil Company Plan Trust (“Plan Trust”)1 hereby requests, pursuant to Rule 56

of the Federal Rules of Civil Procedure, made applicable herein through Rules 7056 and 9014 of

the Federal Rules of Bankruptcy Procedure, that the Court grant its Motion for Partial Summary

Judgment (the “Motion”) and grant summary judgment in its favor in relation to certain claims

objections (the “Claims Objections”)2 filed by the Plan Trust with respect to claims asserted by

certain parties (the “Wrong Case Claimants”).3

The Wrong Case Claimants have each asserted claims against the Debtor, Virgin Oil

Company, Inc. (“Virgin Oil”), but which include supporting documentation indicating that their

respective services and/or materials were actually provided to a separate and distinct entity,

Virgin Offshore USA, Inc. (“Virgin Offshore”).

Notwithstanding there being a lack of privity between the Wrong Case Claimants and

1 For purposes of the Motion for Summary Judgment, the Plan Trust appears herein through the firm ofSlattery, Marino & Roberts with respect to the objections to the claims by Newpark EnvironmentalServices, LLC and Key Energy Services, Inc. For all other purposes, the Plan Trust appears hereinthrough the firm of Lugenbuhl, Wheaton, Peck, Rankin & Hubbard.

2 See Docket Nos. 1041 (AL of Louisiana, LLC, Geo-Mag MWD, LLC, Hunting Energy Services,Inc., LandTel Communications, Nito-Lift Technologies, LLC, River Rental Tools, Inc., TarponRental, Inc., Tim Morton & Associates, Inc., Trend Services, Inc., Vanguard Vacuum Trucks);Docket No. 1049 (Precision Drilling Company, LP, f/k/a Gray Wolf Drilling, LP); Docket No. 1051(Newpark Environmental Services, LLC); Docket No. 1055 (Key Energy Services, Inc.); DocketNo. 1076 (Frank’s Casing Crew & Rental Tools, Inc.); and Docket No. 1094 (Intracoastal LiquidMud, Inc.)

3 See Fn. 2, which includes in bold the relevant Wrong Case Claimants.

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Virgin Oil, it has been suggested that prior orders of this Court made a qualified finding that

Virgin Oil was the operator of a certain oil well lease (the “Empire Lease”), and that the Wrong

Case Claimants should therefore be permitted to assert their claims in personam against Virgin

Oil. This proposition is untenable based on a plain reading of the relevant prior orders, as well as

applicable nonbankruptcy law.

Moreover, certain of the Wrong Case Claimants—Precision Drilling Company, LP, f/k/a

Gray Wolf Drilling, LP); Newpark Environmental Services, LLC; Key Energy Services, Inc.;

Frank’s Casing Crew & Rental Tools, Inc.; and Intracoastal Liquid Mud, Inc. (collectively, the

“LOWLA Claimants”) have asserted liens and privileges against the interest of Virgin Oil and

Virgin Offshore in the Empire Lease. As set forth hereinbelow, this Court’s prior order

effectively bars the LOWLA claimants from asserting a secured claim against the interests of

Virgin Oil in the Empire Lease.

Insofar as certain of the Prior Orders (as defined below) by this Court are applicable to

the Claims Objections, the Plan Trust respectfully seeks a partial summary judgment that (a)

with respect to the issue of operatorship, (i) the findings regarding operatorship in the March

Pretrial Order (as defined below) and Consent Judgment (as defined below) do not have a

preclusive effect with respect to the instant Claims Objections, or (ii) alternatively, nothing in

this Court’s March Pretrial Order or Consent Judgment, including the finding that Virgin Oil is

the “operator” of the Empire Lease, affords the Wrong Case Claimants an in personam claim

against Virgin Oil; and (b) the LOWLA Claimants, to the extent that they are entitled to any

claim against Virgin Oil, are only entitled to be treated as general unsecured creditors.

I. JURISDICTION

This Court has jurisdiction over this Chapter 11 case, and the parties and property

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affected hereby, pursuant to 28 U.S.C. §1334. This Court also has jurisdiction over the subject

matter of this Motion pursuant to the Order Confirming the Second Amended Plan or

Reorganization Filed by the Official Committee of Unsecured Creditors and CIT Capital USA,

Inc. as of August 26, 2011 as Amended (Docket No. 948) (“Confirmation Order”) and Articles

X and XIII of the Second Amended Plan of Reorganization Filed by the Official Committee of

Unsecured Creditors and CIT Capital USA, Inc. as of August 26, 2011 (Docket No. 761), as

amended and modified by the First and Second Immaterial Modifications (Docket Nos. 813 and

940) and supplemented by the Supplement (Docket No. 812) (collectively, the “Plan”).

II. BACKGROUND

A. Procedural Background

On June 25, 2009 (the “Petition Date”), certain creditors of Virgin Oil initiated this

bankruptcy case by filing an involuntary petition for relief under Chapter 7 of the Bankruptcy

Code. The bankruptcy case was subsequently converted from Chapter 7 to Chapter 11. See

Docket No. 50.

On December 13, 2011, this Court entered the Confirmation Order confirming the Plan.

Docket No. 948. Pursuant to Section M of the Confirmation Order and Section 5.3(F) and

Article X of the Plan, Whistler Energy, L.L.C. exercised its authority as Trustee for the Plan

Trust (“Trustee”) to assert objections to the claims asserted by the Wrong Case Claimants.

B. Claims Subject to Objection

The Plan Trust filed the Claims Objections with respect to the following parties:4

4 In certain instances, the Plan Trust and certain creditors (the “Settling Creditors”) that were subject tothe Claims Objections have reached an agreement with respect to such Claims Objections andappropriate orders have been entered by this Court. For this reason, the Settling Creditors and theirclaims are not the subject of the instant motion for summary judgment.

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Claimant Name Claim No.

a. AL of Louisiana, LLC 23b. Geo-Mag MWD, LLC 78c. Hunting Energy Services, Inc. 83d. LandTel Communications 46e. Nito-Lift Technologies, LLC 79f. River Rental Tools, Inc. 36g. Tarpon Rental, Inc. 41h. Tim Morton & Associates, Inc. 14i. Trend Services, Inc. 47j. Vanguard Vacuum Trucks 43k. Precision Drilling Company, LP, f/k/a Grey Wolf Drilling, LP 1l. Newpark Environmental Services, LLC 18m. Key Energy Services, Inc. 48n. Frank’s Casing Crew & Rental Tools, Inc. 50o. Industrial & Oilfield Services, Inc. 65p. Intracoastal Liquid Mud, Inc. 80

Copies of the relevant claims filed by the Wrong Claimants are attached as exhibits to the

relevant Claims Objections.

Each of the Wrong Case Claimants filed proofs of claim which, on their faces, assert

claims against Virgin Oil. However, attached in support of each of those claims are invoices,

contracts, and other documents which do not reference or evidence any contractual or other

debtor-creditor relationship between the claimant and Virgin Oil, but instead reference and

evidence a contractual and/or other debtor-creditor relationship between the claimant and Virgin

Offshore.

The Plan Trust filed Claims Objection requesting entry of an Order expunging and

disallowing all of the claims identified above in their entirety, arguing that Virgin Oil is not

liable in personam for debts owed to the claimants by Virgin Offshore.

Additionally, because this Court previously found that the liens of CIT Capital USA, Inc.

(“CIT”) encumber the entirety of Virgin Oil’s eighty-five (85%) percent interest in the Empire

Lease and prime any liens or privileges held by the Lien Claimants, with respect to each of the

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LOWLA Claimants, the Plan Trust objected to such claims on the basis that such parties were, at

best, unsecured creditors of Virgin Oil.

C. Prior Orders of the Court in Adversary No. 10-01068

This Court previously reviewed the issue of the validity, rank and priority of certain of

Wrong Case Claimants’ lien rights in certain property of the Virgin Oil, specifically, the Empire

Lease, in the context of an adversary proceeding styled CIT Capital USA, Inc. v. Virgin Oil Co.,

Inc. and Virgin Offshore USA Inc., Adv. No. 10-01068 (the “CIT Adversary”). Certain, but not

all, of the Wrong Case Claimants participated in the CIT Adversary.

1. The March Partial Order

During a trial conducted in the CIT Adversary during February 2011, the Court

considered, inter alia, whether Virgin Oil or Virgin Offshore was the “operator” of the Empire

Lease for the purposes of Virgin Oil’s and Virgin Offshore’s relative rights as to the Empire

Lease and under the relevant joint operating agreement. In fact, Virgin Offshore was the

operator of record with the State of Louisiana during the relevant time periods.

After proceedings were had, the Court issued a partial order with regard to Virgin Oil and

Virgin Offshore’s relative rights in the Empire Lease (Adv. No. 10-06068; Docket No. 215) (the

“March Partial Order”).5 The Court’s March Partial Order stated, inter alia: “IT IS

ORDERED, that Virgin Oil Company, Inc. (“Debtor”) is recognized as the operator of the

Empire lease.” The March Partial Order went on to state:

The Court does not, by this ruling determine the rights of offset or setoff betweenthe Debtor and any party, nor the ranking of any security interest against mineralsproduced or the proceeds received from the Empire lease. Substantivedetermination on these and any other causes of action existing between the partiesto this matter are reserved for further trial on the merits. The rulings set forth

5 A copy of the March Partial Order is attached hereto as Exhibit “A.” The Plan Trust respectfullyrequests that the Court take judicial notice of the March Partial Order pursuant to Federal Rule ofEvidence 201.

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above are only partial. The Court will address the additional claims and issuespresented by the relationships and conduct between Debtor, Virgin Offshore, andtheir creditors at a trial or trials scheduled by the Court in subsequent casemanagement orders.

2. The May Partial Order

Thereafter, the Court conducted an additional trial in the CIT Adversary, the focus of

which was the validity, ranking and priority of the liens of CIT, as well as parties asserting liens

and privileges against the Empire Lease. Following the trial, the Court issued a partial order on

May 12, 2011 (Adv. No. 10-06068; Docket No. 243) (the “May Partial Order,” or, collectively

with the March Partial Order, the “Partial Orders”).6 The May Partial Order made the following

findings that are directly relevant to the instant Motion:

IT IS ORDERED that CIT Capital USA, Inc. holds a valid lien extending to 85%of the products and their proceeds derived from the Empire lease.

IT IS FURTHER ORDERED that the value of the Debtor’s assets are less thanthe prepetition debt owed to CIT.

IT IS FURTHER ORDERED that CIT’s security interests rank before any claimsmade under the Louisiana Oilfield Works Lien Act.

IT IS FURTHER ORDERED that CIT’s claims will not be subordinated, either inequity or by law.

A plain reading of the May Partial Order leads to the inarguable conclusion that to the

extent any of the LOWLA Claimants have asserted a secured claim against Virgin Oil under the

Louisiana Oil Well Lien Act, La. R.S. 9:4861, et seq., such claim is entitled, at best, to be treated

as a general unsecured claim against Virgin Oil.

3. The Consent Judgment

Finally, in connection with the confirmation of a plan by Virgin Oil and a settlement

6 A copy of the May Partial Order is attached hereto as Exhibit “B.” The Plan Trust respectfullyrequests that the Court take judicial notice of the May Partial Order pursuant to Federal Rule ofEvidence 201.

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between Virgin Oil and Virgin Offshore, the parties to the CIT Adversary entered into a consent

judgment (Adv. No. 10-06068; Docket No. 295) (the “Consent Judgment”),7 which

incorporated the Court’s determination from the Partial Order. The Consent Judgment stated:

As of entry of the Partial Order (ECF No. 215) in the above-captioned adversaryproceeding dated March 16, 2011 (the “Partial Order”), and for the purpose ofresolving certain disputes between the Debtor and Offshore relating to therejection of the Empire Lease joint operating agreement (the “Empire JOA”), theDebtor is recognized as the operator of the Empire Lease.

The CIT Adversary was closed shortly thereafter on March 12, 2012.

III. LAW AND ARGUMENT

A. Summary Judgment Standard

A motion for summary judgment shall be granted if the pleadings, depositions and

affidavits show that there is no genuine issue as to any material fact and the moving party is

entitled to judgment as a matter of law.8 When a party seeking summary judgment bears the

burden of proof at trial (as the Wrong Case Claimants do with respect to their asserted claims

against the estate), it must come forward with evidence which would entitle it to a directed

verdict if such evidence were uncontroverted at trial.9 Not until the movant produces such

evidence does the burden shift to the respondent to direct the attention of the court to evidence in

the record sufficient to establish that there is a genuine issue of material fact requiring a trial.

7 A copy of the Consent Judgment is attached hereto as Exhibit “C.” The Plan Trust respectfullyrequests that the Court take judicial notice of the Consent Judgment pursuant to Federal Rule ofEvidence 201.

8 FED. R. CIV. P. 56; Little v. Liquid Air Corp., 37 F.3d 1069 (5th Cir. 1994) (en banc).9 Celotex Corp. v. Catrett, 477 U.S. 317, 324, 106 S.Ct. 2548 (1986).

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B. Applicability and Effect of Res Judicata and Law of the Case

1. Res Judicata

Res judicata is appropriate under the federal standard10 if: 1) the parties to both actions

are identical (or at least in privity); 2) the judgment in the first action is rendered by a court of

competent jurisdiction; 3) the first action concluded with a final judgment on the merits; and 4)

the same claim or cause of action is involved in both suits.11

The four (4) prerequisites of res judicata are present with respect to the Partial Orders and

Consent Judgment (collectively, the “Prior Orders”). First, there is a common identity amongst

certain of the parties to the Claims Objections and the CIT Adversary. In particular, each of the

LOWLA Claimants was a party to the CIT Adversary. Second, this Court was a court of

competent jurisdiction to enter the Prior Orders. Third, the CIT Adversary concluded with a

final judgment on the merits. Fourth, the same claim or cause of action—i.e. lien rights of the

LOWLA Claimants vis-à-vis the Empire Lease and claims against the Virgin Oil bankruptcy

estate—were involved in both the CIT Adversary and the instant Claims Objections.

2. Law of the Case

Law of the case is a distinct concept from res judicata. The Plan Trust avers that law of

the case is applicable in this matter with respect to those Wrong Case Claimants that did not

participate in the CIT Adversary. However, the law of the case doctrine is not a limit on a court's

power, but rather a guide as to how a court should apply its discretion.12 Thus, a court is free to

10 The preclusive effect of a prior federal court judgment is controlled by federal res judicata rules. SeeAgrilectric Power Partners, Ltd. v. General Electric Co., 20 F.3d 663, 664 (5th Cir.1994); Steve D.Thompson Trucking, Inc. v. Dorsey Trailers, Inc., 870 F.2d 1044, 1045 (5th Cir.1989).

11 See United States v. Shanbaum, 10 F.3d 305, 310 (5th Cir.1994).12 Christianson v. Colt Indus. Operating Corp., 486 U.S. 800, 817 (1988).

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revisit its own decisions when circumstances warrant it.13 Moreover, the law of the case doctrine

does not apply when the court has expressly reserved an issue for later determination.14

3. Preclusive Effect of Court’s Prior Orders as to Operatorship

As an initial matter, the Plan Trust concedes that the prerequisites of res judicata are

present with respect to LOWLA Claimants, and that law of the case is applicable to the

remaining Wrong Case Claimants. However, the Prior Orders do not have any preclusive effect

with respect to the issue of whether the designation of “operator” in the March Partial Order is

binding in the context of the Claims Objections. In its March Pretrial Order, this Court

specifically limited the preclusive effect of its findings and reserved issues for later

determination.

The Supreme Court has summarized the federal standard and effect of res judicata as

follows:

The preclusive effect of a judgment is defined by claim preclusion and issuepreclusion, which are collectively referred to as “res judicata.” Under the doctrineof claim preclusion, a final judgment forecloses “successive litigation of the verysame claim, whether or not relitigation of the claim raises the same issues as theearlier suit.” Issue preclusion, in contrast, bars “successive litigation of an issueof fact or law actually litigated and resolved in a valid court determinationessential to the prior judgment,” even if the issue recurs in the context of adifferent claim. By “preclud[ing] parties from contesting matters that they havehad a full and fair opportunity to litigate,” these two doctrines protect against “theexpense and vexation attending multiple lawsuits, conserv[e] judicial resources,and foste[r] reliance on judicial action by minimizing the possibility ofinconsistent decisions.”15

Nevertheless federal courts, including the Fifth Circuit, have recognized an exception to

these general rules that prevents the application of claim or issue preclusion to the Claims

Objections. The doctrines of issue preclusion and claim preclusion do not apply if the court in

13 See id.14 DePinto v. Landoe, 411 F.2d 297 (9th Cir.1969) (where court expressly reserves an issue in its ruling,

its judgment does not establish that issue as law of the case or give it res judicata finality).15 Taylor v. Sturgell, 553 U.S. 880, 892, 128 S.Ct. 2161, 2171 (2008) (internal citations omitted).

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the first action expressly reserves matters for later determination and thereby limits the

preclusive effect of the judgment.16

Here, the Court expressly reserved the determination of the issue of operator status with

respect to other issues to be dealt with in other later trials. In fact, the Court carefully limited the

effectiveness of the March Pretrial Order by finding that “The rulings set forth above are only

partial. The Court will address the additional claims and issues presented by the relationships and

conduct between Debtor, Virgin Offshore, and their creditors at a trial or trials scheduled by the

Court in subsequent case management orders.”

Moreover, the Consent Judgment’s operator finding was limited to the “purpose of

resolving certain disputes between Virgin Oil and Offshore relating to the rejection of the Empire

Lease joint operating agreement.”17

Therefore, the Plan Trust seeks a partial summary judgment finding that the findings with

respect to operatorship in the March Pretrial Order and Consent Judgment do not have a

preclusive effect with respect to the instant Claims Objections.

4. Preclusive Effect of Court’s Prior Orders as to Lien Ranking

The prerequisites for application of res judicata and law of the case are similarly met with

respect to the May Partial Order. It is therefore necessary to determine whether the Court limited

the preclusive effect of the May Partial Order’s findings with respect to the validity and ranking

of the liens of CIT and the LOWLA Claimants. A review of the May Partial Order reveals no

such limitation on the scope of its effectiveness.

16 King v. Provident Life and Accident Ins. Co., 23 F.3d 926 (5th Cir.1994); Centennial Ins. Co. v.Sharp, No. Civ.A. 98–0973, 1998 WL 575105 (E.D.La. Sept. 3, 1998); Restatement (Second) ofJudgments § 26 (1982).

17 See Consent Judgment, at p. 2 (emphasis added).

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After conducting a thorough trial in which all of the LOWLA Claimants participated, this

Court entered its May Partial Order, and held that (a) CIT’s liens encumber the entirety of Virgin

Oil’s eighty-five (85%) percent interest in the Empire Lease, (b) the value of Virgin Oil’s assets

are less than the amount of the CIT debt, and (c) CIT’s liens prime any liens of the LOWLA

Claimants. Each of the Lien Claimants has asserted a lien and privilege against the interest of

Virgin Oil in the Empire Lease. In light of the findings in the May Partial Order, the Plan Trust

is entitled to a partial summary judgment in its favor finding that to the extent that any LOWLA

Claimants are in fact found to have claims against Virgin Oil, such claims must be treated as

general unsecured claims.

C. Even if Virgin Oil Is Deemed the Operator of the Empire Lease for Purposesof the Claims Objections, the Wrong Case Claimants Still Have No ClaimAgainst Virgin Oil Under Applicable Nonbankruptcy Law.

Assuming that the Court adopts its prior finding that Virgin Oil is the operator of the

Empire Lease in the context of the objections to the claims of the Wrong Case Claimants, this

does not entitle the Wrong Case Claimants to in personam claims against the estate of Virgin

Oil. The fact that a party is the “operator” of a well does not, in and of itself, render that party

personally liable to a provider of goods or services with respect to that well. Thus, the operator

designation does not alter the fact that the Wrong Case Claimants only in personam claims are

against Virgin Offshore.

The term “operator” is utilized throughout the Louisiana Revised Statutes in reference to

persons responsible for oil and gas wells. This terminology and designation has significant

ramifications, including responsibility for certain costs, reporting requirements and other duties

in relation to the government agencies charged with regulating oil and gas production.18 A

designation as “operator” also has significance with respect to a private party’s establishment of

18 See, e.g. La. R.S. 30:4, 5.

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lien rights on certain identifiable property with respect to an oil well upon provision of goods or

services for the development or maintenance of that oil well.19

However Louisiana law does not provide any mechanism by which a person designated

as “operator” is, simply by virtue of that designation, liable in personam to parties who have

provided goods and services for the operator’s oil well. This is particularly true where, as here,

the provider’s claim is based upon an agreement with a third party which was personally

obligated to satisfy the alleged debt.

This principle was shown in the case of Terrebonne Fuel & Lube, Inc. v. Austral Oil Co.

Inc., 531 So.2d 1156 (La.App. 4 Cir. 1988). In that case, a tugboat performed services at an oil

well pursuant to a subcontract with general contractor. After the services were performed and

the tugboat company was unpaid, the general contractor filed for Chapter 11 bankruptcy. The

tugboat company then pursued its debt as against the oil well operator, alleging the operator was

liable in personam for the services provided. The Louisiana Fourth Circuit Court of Appeal

noted the trial court’s finding that the relevant contract was between the tugboat company and

the general contractor, and that there was no contract with oil well operator, and that the general

contractor was solely liable for the charges of the tugboat company.20 After conducting a review

of the adequacy of the evidence presented at trial in order to determinate whether the trial court

committed manifest error, the Fourth Circuit affirmed the trial court’s ruling that the oil well

operator was not liable to the tugboat company as there was no contractual privity between the

parties.21

Assuming Virgin Oil was the operator for purposes of the Wrong Case Claimants claims,

the decision in Terrebonne Fuel & Lube demonstrates why the Wrong Case Claimants’ claims

19 See La. R.S. 9:4961, et seq.20 Terrebonne Fuel & Lube, 531 So. 2d at 1157.21 Id., at 1159.

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must fail. Like in that case, the Wrong Case Claimants in this case have not been fully paid by

the party with which they contracted, and are seeking to impose personal liability on the

operator. However, also like the plaintiffs in Terrebonne Fuel & Lube, the Wrong Case

Claimants have no agreement with Virgin Oil and no independent basis to impose liability on

Virgin Oil. The designation of “operator” status has no bearing on this question. Thus, the

Wrong Case Claimants’ claims are not properly asserted as against Virgin Oil.

IV. CONCLUSION

The Plan Trust requests that, after due proceedings had, the Court enter a partial summary

judgment that (a) with respect to the issue of operatorship, (i) the findings regarding operatorship

in the March Pretrial Order (as defined below) and Consent Judgment (as defined below) do not

have a preclusive effect with respect to the instant Claims Objections, or (ii) alternatively,

nothing in this Court’s March Pretrial Order or Consent Judgment, including the finding that

Virgin Oil is the “operator” of the Empire Lease, affords the Wrong Case Claimants an in

personam claim against Virgin Oil; and (b) the LOWLA Claimants, to the extent that they are

entitled to any claim against Virgin Oil, are only entitled to be treated as general unsecured

creditors, and that the Court grant all other general and equitable relief that this Court deems

proper.

Respectfully submitted,

LUGENBUHL, WHEATON, PECK, /s/ Benjamin W. Kadden____________________RANKIN & HUBBARD STEWART F. PECK (#10403)

CHRISTOPHER T. CAPLINGER (#25357)BENJAMIN W. KADDEN (#29927)JOSEPH P. BRIGGETT (#33029)601 Poydras Street, Suite 2775New Orleans, LA 70130Telephone: (504) 568-1990Facsimile: (504) 310-9195

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Email: [email protected]; [email protected];[email protected]; [email protected]

Counsel for The Virgin Oil Company, Inc. PlanTrust (for all Claims Objections except NewparkEnvironmental Services, LLC and Key EnergyServices, Inc.)

AND

/s/ Paul J. GoodwinePaul J. Goodwine, Bar No. 23757Slattery, Marino & Roberts1100 Poydras Street, Suite 1800New Orleans, Louisiana 70163Telephone: (504) 585.7800Facsimile: (504) 585.7890

Special Counsel for the Virgin Oil Company, Inc.Plan Trust (solely for Claims Objections as toNewpark Environmental Services, LLC and KeyEnergy Services, Inc.)

Certificate of Service

I hereby certify that a true and correct copy of the above and foregoing has been servedupon the parties that receive electronic notice via the Court’s CM/ECF System, as well as thefollowing parties via first class mail on this 9th day of November 2012:

AL of Louisiana, LLCIvy Ruth Landry, Owner9600 Longside RoadNew Iberia, LA 70560-0691

Geo-Mag MWD, LLCP.O. Box 921Broussard, LA 70518-0921

Hunting Energy Services, Inc.P.O. Box 203931Houston, TX 77216-3931

LandTel CommunicationsP.O. Box 61567Lafayette, LA 70596-1567

Nitro-Lift Technologies, Inc.P.O. Box 3307Lafayette, LA 70502-3307

River Rental Tools, Inc.109 Derrick RoadBelle Chasse, LA 70037-1109

Tarpon Rental, Inc.P.O. Box 9023Houma, LA 70363

Tim Morton & Associates, Inc.730 E. Kaliste Saloom RoadLafayette, LA 70508-2547

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Trend Services, Inc.P.O. Box 747Broussard, LA 70518-0747

Vanguard Vacuum TrucksP.O. Box 4276Houma, LA 70361-4276

Precision Drilling Company, LP10350 Richmond Avenue, Suite 700Houston, TX

Precision Drilling Company, LPc/o H. Kent Aguillard141 S. 6th StreetP.O. Box 391Eunice, Louisiana 70535

Frank’s Casing Crew & Rental Tools, Inc.Attn: Danny P. Pontiff, ControllerP.O. Box 51729Lafayette, LA 70505

Industrial & Oilfield Services, Inc.c/o Jacque B. Pucheu, Jr.P.O. Box 1109Eunice, LA 70535

Industrial & Oilfield Services, Inc.c/o Earl Anthony Landry, Jr., Agent707 S. Severin StreetErath, LA 70533

Intracoastal Liquid Mud, Inc.c/o Ted M. Anthony, Esq.Babineaux Poché Anthony & Slavich, LLCP.O. Box 52169Lafayette, LA 70505-2169

Intracoastal Liquid Mud, Inc.c/o Mike Calkins, Agent512 Highway 92 NorthScott, LA 70583

/s/ Benjamin W. Kadden____________________

I hereby certify that a true and correct copy of the above and foregoing has been servedupon the parties that receive electronic notice via the Court’s CM/ECF System, as well as thefollowing parties via first class mail on this 9th day of November 2012:

Newpark Environmental Services, LLCc/o Carl Doré, Jr. & Lori V. GrahamDoré Mahoney Law Group, P.C.17171 Park Row, Suite 160Houston, TX 77084

Newpark Environmental Services, LLCP.O. Box 62600 Dept. 1089New Orleans,

Key Energy Services, Inc.c/o Carl Doré, Jr. & Lori V. GrahamDoré Mahoney Law Group, P.C.17171 Park Row, Suite 160Houston, TX 77084

Key Energy Services, Inc.6 Desta Dr., Ste. 4400Midland, TX 79705

/s/ Paul J. Goodwine________________________

Case 09-11899 Doc 1284-1 Filed 11/09/12 Entered 11/09/12 14:47:58 Memorandum in Support Page 15 of 15