Spartan Directional, L.L.C. v. Energy Services South, LLC

STATE OF LOUISIANA
COURT OF APPEAL, THIRD CIRCUIT

22-445

SPARTAN DIRECTIONAL, L.L.C.

VERSUS

ENERGY SERVICES SOUTH, L.L.C.

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APPEAL FROM THE
FIFTEENTH JUDICIAL DISTRICT COURT
PARISH OF LAFAYETTE, NO. 20213899
HONORABLE VALERIE GOTCH GARRETT, DISTRICT JUDGE

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D. KENT SAVOIE
JUDGE

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Court composed of D. Kent Savoie, Charles G. Fitzgerald, and Gary J. Ortego,
Judges.

AFFIRMED.

Fitzgerald, J., concurs without assigning reasons.
Ortego, J., concurs without assigning reasons.

Cade A. Evans
Robert A. Robertson
Allen & Gooch, APLC
2000 Kaliste Saloom Road, #400
Post Office Box 81129
Lafayette, Louisiana 70508
(337) 291-1310
COUNSEL FOR PLAINTIFF/APPELLANT:
Spartan Directional, L.L.C.

Robert H. Ford
Melissa Gutierrez Alonso
Bradley Arant Boult Cummings LLP
600 Travis Street, Suite 4800
Houston, Texas 77002
(713) 576-0356
COUNSEL FOR DEFENDANT/APPELLEE:
Energy Services South, L.L.C.

SAVOIE, Judge.

Plaintiff Spartan Directional, L.L.C. (Spartan) appeals the judgment of the

trial court, granting the exceptions of improper venue and prematurity filed by

Defendant Energy Services South, L.L.C. (ESS) and dismissing Spartan’s claims

without prejudice. For the following reasons, we affirm.

FACTS AND PROCEDURAL HISTORY

ESS entered into a prime contract with Plains GP, LLC (Plains) for ESS to

serve as the general contractor to perform work on the construction of a crude oil

pipeline from Arkansas to Tennessee. ESS subsequently entered into a subcontract

with Spartan to construct drilling and crossing services at several locations along

the pipeline. Spartan alleges ESS informed Spartan that Plains refused to pay for

work, material, and services under a change order, which included a total of

$827,684.34 that was owed to Spartan. Spartan further alleges that as a result, ESS

gave Spartan $100,000.00, with a promise of future work in an amount that would

equal or surpass the amount that Spartan was supposed to be paid under the change

order. ESS failed to follow through with future work.

Several years later, in March 2021 and once the pipeline was completed,

Spartan maintains that it discovered that it had been misled by ESS, and ESS had

received payment from Plains under the change order for the total amount of

$1,972,000.00. Consequently, Spartan filed a federal lawsuit on May 28, 2021, in

the United States District Court for the Western District of Louisiana, asserting

claims for fraud, unfair trade practices, breach of contract, and/or negligence.

Spartan then filed the instant lawsuit in the Fifteenth Judicial District Court,

alleging the same claims in the federal lawsuit. Spartan eventually dismissed the

federal lawsuit. In response to the present lawsuit, ESS filed exceptions of

prematurity and improper venue, arguing that, pursuant to the subcontract at issue,

Spartan’s claims are subject to arbitration, and venue for all litigation and

arbitration is proper in Dallas County, Texas.

The trial court granted ESS’s exceptions, finding that a valid contract exists

between the parties and that Spartan’s claims are governed by the contract. The

trial court further found:

While La. C.C.P. art. 76.1 provides that “[a]n action on a contract may
be brought in the parish where the contract was executed or the parish
where any work or service was performed or was to be performed
under the terms of the contract” (emphasis added) that statute is
superseded by the forum selection clause included in the contract.

The trial court stated, “[b]ecause the parties did not attempt to arbitrate the

conflicts before filing suit, and because the suit was filed in Lafayette Parish rather

than in Arkansas as agreed in the forum selection clause, [Spartan’s] petition is

both untimely and in improper venue.”

In response to the trial court’s ruling, Spartan filed both a notice of intent to

seek supervisory writs and a motion to appeal the judgment in the case. A panel of

this court issued a writ ruling on the same issues that are now on appeal on June 14,

2022, denying the writ and finding “no error in the trial court’s ruling.”

We will now review Spartan’s appeal.

ASSIGNMENTS OF ERROR

1. The trial court committed manifest error and/or abused its discretion when

granting ESS’s exception of venue and/or prematurity.

2. The trial court committed manifest error and/or abused its discretion when

ruling that Arkansas is the correct jurisdiction and/or venue with regard to

the claims arising under the subcontract.

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LAW AND DISCUSSION

First, we will address ESS’s argument that the law of the case doctrine

applies to this matter. As previously noted, Spartan filed both a notice of intent to

seek writs and a motion to appeal the judgment in response to the trial court’s

judgment. Spartan’s writ application and motion for appeal set forth the same

arguments. As such, ESS contends that we should refrain from considering the

arguments made on appeal by Spartan based on the law of the case doctrine

because this court denied Spartan’s supervisory writ, finding no error in the trial

court’s ruling.

In Louisiana Land & Exploration Co. v. Verdin, 681 So.2d 63 (La.App. 1

Cir.), writ denied, 692 So.2d 1067 (La.1996), cert. denied, 520 U.S. 1212, 117 S.Ct.

1696 (1997), the defendants filed a writ application on the issue of subject matter

jurisdiction with the appellate court. The appellate court denied the writ, finding

no error with the trial court’s ruling. After trial, the defendants filed an appeal and

assigned as error the issue of subject matter jurisdiction. The plaintiff contended

that the subject matter jurisdiction issue was already decided by the appellate court;

and therefore, the law of the case doctrine applied. The appellate court explained:

The law of the case principle is a discretionary guide which
relates to (a) the binding force of a trial judge’s ruling during the later
stages of trial, (b) the conclusive effects of appellate rulings at trial on
remand, and (c) the rule that an appellate court ordinarily will not
reconsider its own rulings of law on a subsequent appeal in the same
case. Glenwood Hospital, Inc. v. Louisiana Hospital Service, Inc., 419
So.2d 1269 (La.App. 1 Cir.1982). It applies to all prior rulings or
decisions of an appellate court or the supreme court in the same case,
not merely those arising from the full appeal process. Brumfield v.
Dyson, 418 So.2d 21 (La.App. 1 Cir.), writ denied, 422 So.2d 162
(La.1982). Reargument in the same case of a previously decided point
will be barred where there is simply a doubt as to the correctness of
the earlier ruling. However, the law of the case principle is not applied
in cases of palpable error or where, if the law of the case were applied,

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manifest injustice would occur. Glenwood Hospital, Inc. v. Louisiana
Hospital Service, Inc., 419 So.2d 1269 (La.App. 1 Cir.1982).

The reasons for the “law of the case” doctrine is to avoid
relitigation of the same issue; to promote consistency of result in the
same litigation; and to promote efficiency and fairness to both parties
by affording a single opportunity for the argument and decision of the
matter at issue. Day v. Campbell–Grosjean Roofing and Sheet Metal
Corp., 260 La. 325, 256 So.2d 105 (1971).

When an appellate court considers arguments made in
supervisory writ applications or responses to such applications, the
court’s disposition on the issue considered usually becomes the law of
the case, foreclosing relitigation of that issue either at the trial court
on remand or in the appellate court on a later appeal. Easton v.
Chevron Indus., Inc., 602 So.2d 1032 (La.App. 4 Cir.), writ
denied, 604 So.2d 1315 (La.1992). However, where a prior
disposition is clearly erroneous and will create a grave injustice, it
should be reconsidered. Dodson v. Community Blood Center of
Louisiana, Inc., 633 So.2d 252 (La.App. 1 Cir.1993), writs
denied, 93–3158, 93–3174 (La.3/18/94), 634 So.2d 850, 851. In the
instant case, we find no such error. Therefore, our prior ruling that
state court does have subject matter jurisdiction over this matter is law
of the case and we will not review this issue on appeal.

Id. at 65. See Richman v. Travelers Indem. Co., 21-459 (La.App. 3 Cir. 6/8/22),

344 So.3d 77, rev’d on other grounds, 22-1059 (La. 11/1/22), 348 So.3d 1279.

Similarly, in Billeaudeau v. Opelousas General Hospital Authority, 16-846

(La. 10/19/16), 218 So.3d 513, the defendant filed a supervisory writ that was

denied by the appellate court. On appeal, the defendant assigned as error the same

issue that was the basis for the writ. The court explained, “This court has already

ruled on this exact issue in an application for supervisory writs. Thus, the

discretionary ‘law of the case’ doctrine is clearly applicable.” Id. at 564. This

court then reviewed the ruling of the trial court to determine if there was palpable

error.

“A very marked distinction can be drawn between cases in which writs are

simply denied and those in which writs are denied on a finding that the trial court

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did not err.” Waller v. State, Dep’t. of Health & Hosps., 11-643, p. 4 (La.App. 3

Cir. 11/9/11), 79 So.3d 1085, 1089, writ denied, 11-2692 (La. 2/10/12), 80 So.3d

488. “A considered writ denial constitutes law of the case.” Id.

Based on the foregoing, we will review this matter to determine if palpable

error resulting in manifest injustice would occur if the law of the case doctrine is

applied. The parties do not dispute that the Subcontract includes an arbitration

clause and a forum selection clause. The only dispute is whether the Subcontract

applies to the claims made in Spartan’s petition.

Spartan asserts that while the written subcontract applied to the initial work

that was to be completed by Spartan at the Waverly Road and Ten Mile Bayou

Drills, it does not apply to drilling and crossing services that were to be performed

at the Piney Creek location pursuant to a change order. The request for Spartan to

perform additional services at the Piney Creek location was not made until

sometime after the written subcontract was executed. This litigation stems from

work performed at the Piney Creek location. Therefore, it is Spartan’s contention

that the subcontract does not apply to this matter.

Spartan further contends that ESS failed to comply with the notice provision

in the Subcontract which specifies that Spartan be notified of any additional drill

work and be allowed to accept the additional work. Consequently, Spartan argues

that because ESS failed to add the Piney Creek Drill to the subcontract through

written notice, the provisions of the subcontract do not apply to the drill work

which was done at Piney Creek pursuant to the change order. Spartan additionally

maintains that the written subcontract does not apply because its claims arise out of

a settlement agreement which was induced by fraud. Spartan alleges that ESS

tricked it into accepting $100,000.00 and a promise of future work that would

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equal the amount owed under the change order. Thus, Spartan argues that the

agreement with ESS to accept the $100,000.00 and promise of additional work was

separate and distinct from the written subcontract which required the parties to

submit their claims for dispute resolution.

The subcontract between ESS and Spartan is dated November 7, 2016, and

states that ESS entered into a contract with Plains to perform construction work on

the Diamond Spread 3 Project. Under “Terms and Conditions,” the subcontract

states:

Terms and Conditions

1. Scope of Subcontract Work. Unless expressly excluded or
otherwise noted by this Subcontract, Subcontractor shall
furnish and pay for everything that is required to perform
and complete the work described in the attached EXHIBIT
A (the “Work”), including: all labor, materials, taxes,
permits, royalties, fees, supplies, equipment, insurance,
testing, and each and every item and expense.
Subcontractor’s Work shall strictly comply with the
Contract, this Subcontract and be performed in a high
quality manner according to applicable law, regulations,
ordinances, and the highest industry codes and practices.

Exhibit A sets forth the scope of work associated with the project, explaining:

If a drill number is listed below, it means that Contractor has selected
that specific drill to be completed by the Subcontractor, the
Subcontractor has accepted the assignment, and the specific drill
becomes part of the scope of Work. The item number(s) refer to the
same item number(s) shown in the List of Potential Drills included in
Exhibit E, and that same table has the agreed upon costs for each
specific drill.

If a drill is not listed below, it has not been assigned by the Contractor
and is not part of the scope of Work. Contractor is not obligated to
provide any minimum volume or units of Work.

Without triggering a Change, as shown in paragraph 14 of the
Subcontract, Contractor can add to this list by having any employee of
Contractor provide written Notice to Subcontractor that specifies any
additional drill or drills from the list in Exhibit E and subsequently

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receiving Notice back from Subcontractor accepting the additional
drill(s).

Item No.
42 – Waverly Road & Ten Mile Bayou

Exhibit E to the Subcontract contains a list of potential drills included in the

Diamond Spread 3 Project, with pricing details, that may be assigned to Spartan.

Listed among these additional drills is the Piney Creek Drill. Exhibit E explains,

“[ESS] may request Spartan to perform different and various drills, bores

and/or crossings of an amount to be determined by ESS as the project

proceeds[.]”

Spartan relies on a provision in Exhibit A to the Subcontract, describing one

way in which ESS can add a drill to the scope of work. Spartan complains that

proper notice was not given; therefore, the work performed on the Piney Creek

Drill is not covered by the Subcontract. Paul Sparkman, the president of ESS,

testified that ESS assigned to Spartan the Piney Creek Drill pursuant to the

Subcontract and that Spartan performed work on the Piney Creek Drill. This

evidence was not contested.

Further, the Subcontract defines “Notice” under Section 29 “Miscellaneous

Provisions” (Emphasis Added). It states:

29.10 Notices. Any notices required or permitted under this
Subcontract must be made in writing to the parties at the
addresses listed on the first page of this Subcontract. Notice
must be deemed received when delivered, if personally
delivered (including overnight courier), or properly transmitted
if by facsimile transmission or email, or when delivered or
refused after properly sent by registered or certified mail, return
receipt requested and postage prepaid. Any notice delivered by
any party in any manner other than those described above
must be deemed properly given if and when received.

29.11 Conclusiveness of Certain Communications. Subcontractor’s
failure to provide written notice of any objections or disputes

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with ESS’s notice of termination, proposed change order,
proposed payment, or other communication from ESS within 2
days of receipt conclusively establishes Subcontractor’s
stipulation to all matters stated in the communications.

Paul Sparkman testified that ESS assigned the Piney Creek Drill to Spartan.

Spartan did, in fact, perform work on the Piney Creek Drill as this work forms the

basis of this litigation. Therefore, it follows that Spartan was clearly notified of the

addition of the Piney Creek Drill assignment. As noted in the Subcontract, “[a]ny

notice delivered by any party in any manner other than those described above must

be deemed properly given if and when received.” Further, there is no evidence in

the record that Spartan objected to the way in which they were notified of the

additional assignment within two days as required per the Subcontract.

Consequently, Spartan’s lack of notice argument fails.

Paragraph 14 of the Subcontract entitled “Changes” specifically states, “ESS

may make changes in the Subcontract Work without invalidating this

Subcontract.” (Emphasis added). A list of potential drills included in the

Diamond Spread 3 Project was attached to the Subcontract at the time of its

execution. The purpose of the Subcontract between ESS and Spartan was for

Spartan “to perform work on a construction project described as” the Diamond

Spread 3 Project. The Piney Creek Drill was listed as an additional potential drill

upon which “[ESS] may request Spartan to perform” work. Spartan undeniably

received notice of the additional work on the Piney Creek Drill as it did perform

work on said drill. The lack of payment for Spartan’s completion of work on the

Piney Creek Drill is the basis for this litigation.

Spartan executed a Subcontract with ESS to perform work. Within that

Subcontract, Spartan agreed to an arbitration clause and a forum selection clause.

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The trial court found that the Subcontract governs the claims made by Spartan in

its petition. For the reasons above, we find no palpable error that would result in

manifest injustice has occurred in either the trial court’s granting of ESS’s

exceptions of prematurity and improper venue or this court’s denial of Spartan’s

writ application.

Finally, in both the Reason for Ruling and Judgment, the trial court

incorrectly states that the lawsuit should be filed in Arkansas rather than Dallas

County, Texas. Paragraph 21.6 of the Subcontract states: “[T]he exclusive venue

for any lawsuits arising out of or related to the Subcontract is in Dallas County

District Court of the State of Texas.” Paragraph 29.5 of the Subcontract explains:

Governing Law. The parties’ rights and duties arising out [of] or
related to this Subcontract [] are governed by the laws of the state in
which the Project is located.

The Diamond Spread 3 Project was located in Arkansas. Thus, venue is proper in

Dallas County, Texas, but Arkansas law applies to the litigation.

The judgment does not transfer the case to Arkansas. Therefore, Spartan is

not compelled to file suit in Arkansas. The judgment merely grants the exceptions

and dismisses the case without prejudice, leaving Spartan free to re-file its lawsuit

in whatever venue is proper.

DECREE

The judgment of the trial court is affirmed. Costs of this appeal are assessed

against Spartan Directional, L.L.C.

AFFIRMED.

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