04-19-00088-CV
Tex. App.Oct 9, 2019Background
- ELG contracted Turn‑Key to add natural gas bullet storage tanks at the KDB Central Treatment Facility; Turn‑Key subcontracted Stranco to perform work.
- Stranco sued Turn‑Key and ELG claiming, among other things, a mineral subcontractor’s lien against ELG’s property; after Turn‑Key’s bankruptcy Stranco’s claims against ELG were severed and Stranco moved for summary judgment to foreclose the lien.
- Stranco’s summary judgment proof relied primarily on its owner’s affidavit claiming Stranco performed hydrostatic testing, torqueing, dewatering, drying, and furnished materials “in connection with constructing, repairing, or maintaining oil or gas pipelines and the pipeline terminal station.”
- ELG submitted affidavits from a project manager and engineer stating the Facility was operational before the contract, the Turn‑Key scope was limited to adding bullet tanks inside the Facility, and the Facility’s import/export pipelines are segregated from Facility piping.
- The court held Stranco was required to conclusively establish its labor and materials were “used in” statutorily defined mineral activities (per Adams) and found Stranco’s affidavit conclusory because it failed to show how the tank work was connected to oil/gas pipelines; summary judgment was reversed and the case remanded.
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Whether Stranco furnished materials/machinery/supplies "used in" mineral activities | Stranco: materials and supplies supplied for the tank work were used in operating/completing/maintaining pipelines | ELG: work was limited to adding tanks inside Facility; pipelines are segregated and not part of the Facility work | Court: Stranco failed to conclusively show materials were "used in" mineral activities; summary judgment reversed |
| Whether Stranco performed labor "used in" mineral activities | Stranco: performed hydrostatic testing, torqueing, dewatering, drying tied to pipeline-related activities | ELG: the work was internal to the Facility and did not serve the segregated pipelines | Court: owner’s affidavit was conclusory and did not establish the necessary link; Stranco did not meet its summary judgment burden |
| Whether proof that work was merely "related to" mineral activities suffices | Stranco: statute should be liberally read; "related to" or "used in" are satisfied by tank work that serves pipelines | ELG: statutory language requires work to be "used in" the listed mineral activities per statutory definitions | Court: must show work was "used in" mineral activities (Adams); "related to" argument insufficient without facts proving the link |
| Whether Stranco was "under contract with a mineral contractor" as required | Stranco: subcontract with Turn‑Key makes it a mineral subcontractor | ELG: contested factual relationship and scope | Court: did not reach this question because Stranco failed to prove the "used in" element |
Key Cases Cited
- Schlumberger Tech. Corp. v. Pasko, 544 S.W.3d 830 (Tex. 2018) (summary‑judgment de novo review; resolve doubts for nonmovant)
- Adams v. Starside Custom Builders, LLC, 547 S.W.3d 890 (Tex. 2018) (courts must adhere to statutory definitions when applying mineral lien statute)
- Gonzales v. Shing Wai Brass & Metal Wares Factory, Ltd., 190 S.W.3d 742 (Tex. App.—San Antonio 2005) (affidavits must state facts, not mere conclusions)
- Lenoir v. Marino, 469 S.W.3d 669 (Tex. App.—Houston [1st Dist.] 2015) (conclusory affidavits lack probative force)
- Wesco Distrib., Inc. v. Westport Group, Inc., 150 S.W.3d 553 (Tex. App.—Austin 2004) (liberal statutory construction cannot override statutory language)