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Midwestern Well Service, Inc. v. Sorrels

United States District Court, Tenth Circuit

November 15, 2013

Midwestern Well Service, Inc., Plaintiff,
v.
Jerry R. Sorrels, individually and doing business as Cheyenne Oil Properties, Defendant.

MEMORANDUM AND ORDER

RICHARD D. ROGERS, District Judge.

This matter is presently before the court upon the motion for partial summary judgment of plaintiff and counter-defendant Midwestern Well Service, Inc. Having carefully reviewed the arguments of the parties, the court is now prepared to rule.

I.

Midwestern brought this diversity action against Jerry Sorrels, individually and doing business as Cheyenne Oil Properties, to collect sums for work performed on oil and gas wells that Cheyenne operated in Sumner County, Kansas. In response, Cheyenne asserted a counterclaim against Midwestern alleging the work was defective and caused the complete loss of one of the oil and gas wells. Cheyenne contended that it was entitled to damages for (1) repairs to the well undertaken after the work of Midwestern; and (2) the cost to drill a new well.

In the instant motion, Midwestern contends that Cheyenne is not entitled to damages for the cost to drill a new well to replace the one that it allegedly damaged. Midwestern disputes that Cheyenne is entitled to any relief, but in this motion, argues only that Cheyenne cannot recover in damages for the cost of drilling a new well.

II.

Summary judgment is appropriate if the pleadings, depositions, answers to interrogatories, and admissions on file, together with the affidavits, if any, show that there is no genuine issue of material fact and that the moving party is entitled to judgment as a matter of law." Fed.R.Civ.P. 56(c). The requirement of a genuine issue of fact means that the evidence is such that a reasonable jury could return a verdict for the nonmoving party. See Anderson v. Liberty Lobby, Inc. , 477 U.S. 242, 248 (1986). Essentially, the inquiry is whether the evidence presents a sufficient disagreement to require submission to a jury or whether it is so one-sided that one party must prevail as a matter of law. Id. at 251-52.

The moving party bears the initial burden of demonstrating the absence of a genuine issue of material fact. This burden may be met by showing that there is a lack of evidence to support the nonmoving party's case. See Celotex Corp. v. Catrett , 477 U.S. 317, 325 (1986). Once the moving party has properly supported its motion for summary judgment, the burden shifts to the nonmoving party to show that there is a genuine issue of material fact left for trial. See Anderson , 477 U.S. at 256. A party opposing a properly supported motion for summary judgment may not rest on mere allegations or denials of [its] pleading, but must set forth specific facts showing that there is a genuine issue for trial. Id . Therefore, the mere existence of some alleged factual dispute between the parties will not defeat an otherwise properly supported motion for summary judgment. See id. The court must consider the record in the light most favorable to the nonmoving party. See Bee v. Greaves , 744 F.2d 1387, 1396 (10th Cir. 1984), cert. denied, 469 U.S. 1214 (1985). The court notes that summary judgment is not a "disfavored procedural shortcut;" rather, it is an important procedure "designed to secure the just, speedy and inexpensive determination of every action." Celotex , 477 U.S. at 327 (quoting Fed.R.Civ.P. 1).

III.

Cheyenne contracted with Midwestern to perform work on the Wentworth # 1 and Coggins # 1 wells in Sumner County, Kansas. Midwestern was hired to perform certain tasks (a squeeze job and an acid job) on Wentworth # 1 and to bring it back online for the production of oil and gas. Midwestern worked on the Wentworth # 1 well from June 14, 2010 through July 14, 2012. Midwestern billed Cheyenne $63, 910.99 for the work performed and goods provided on Wentworth # 1. Midwestern then went to work on the Coggins # 1 well. Midwestern worked on Coggins # 1 from July 14, 2010 to July 29, 2010. Midwestern billed Cheyenne $16, 700.42 for work on the Coggins # 1 well. Cheyenne has not paid Midwestern for any portion of the amounts billed for the work performed and the goods provided for the two wells.

Cheyenne alleges that the actions of Midwestern on July 6, 2010 caused damage to the Wentworth # 1 well. Cheyenne alleges that Midwestern caused damage to the casing. Cheyenne had work done on Wentworth # 1 in August and September 2010. Cheyenne was billed $36, 615.41 for this work. Cheyenne now contends that Wentworth # 1 is a complete loss because of the casing holes and the only way to produce the oil reserves is from a new well.

The prior history of Wentworth # 1 shows that in July 2007 Cheyenne began working to re-complete and re-establish it. The well had previously been abandoned when it developed holes in the casing. After the work was completed, Cheyenne estimated the well could produce 2 to 3 barrels per day. The well was put on the pump to produce but it kept gas locking and the well was shut in. There was no production from Wentworth # 1 from the time the well was shut in after the July 2007 work until January 2009. Some work was done on the well in January 2009, but swabbing showed only slight oil. The well was worked on again in March 2009. The swabbing again indicated only a slight show of oil and the well was again shut in. Cheyenne worked on the well again in November 2009. The only production records from Wentworth # 1 were from December 10 to December 26, 2009. The well produced 73.6 barrels of fluid. There is no indication that any of this fluid was sold.

On April 1, 2010, Cheyenne assigned a 100% working interest in Wentworth # 1 and other wells to Kelley Edgar Oil & Gas Operations, LLC. On May 1, 2012, Kelley Edgar Oil & Gas & Operations, LLC assigned its ...


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