DUFRENE PIPE COMPANY INC v. SHIELD ENERGY RESOURCES LLC (2026)

This matter arises out of plaintiff's petition on an open account and for recognition and enforcement of an oil and/or gas well privilege as well as defendant's reconventional demand alleging damages caused by pipe provided by plaintiff and installed in its mineral well. Defendant appeals from two judgments, one granting summary judgment on the open account and enforcement of the privilege, and one granting summary judgment on liability and dismissing the defendant's reconventional demand. For the following reasons, we reverse both judgments.

FACTS AND PROCEDURAL HISTORY

Shield Energy Resources, LLC (“Shield”) is the operator of the Wilbert Mineral Corp. Well No. 84 (“the Well”) located in the Bayou Choctaw Field in Iberville Parish. In March 2022, Shield purchased 7,400 feet of pipe from Dufrene Pipe Company, Inc. (“Dufrene”), and the pipe was installed in the Well. Approximately 68 days after installation, the Well began losing pressure, causing it to stop producing. When Shield entered the Well on June 5, 2022, it discovered that most of the pipe purchased in March showed evidence of extreme corrosion. To replace the corroded pipe, Shield ordered from Dufrene replacement pipe. Dufrene provided the replacement pipe to Shield. On June 7, 2022, Dufrene sent an invoice to Shield for 131.85 feet of replacement pipe for $1,993.10, and around June 9, 2022,¹ Dufrene sent an invoice to Shield for 7,500 feet of replacement pipe for $100,630.00.

On October 4, 2022, Dufrene filed a “Petition for Money Due on Account and Recognition and Enforcement of Oil and/or Gas Well Privilege” contending that Shield refused to pay the June 9, 2022 invoice, and $100,630.00 was still due and owing. Dufrene sought payment pursuant to Louisiana's Open Account Statute, La. R.S. 9:2781, for $100,630.00 as well as interest and attorney fees as provided for in the invoice.² Dufrene further sought a judgment against Shield recognizing and declaring Dufrene's lien and privilege on the property as provided for in the Louisiana Oil Well Lien Act, La. R.S. 9:4861, et. seq.

Shield answered Dufrene's petition and asserted several affirmative defenses including offset, contending any amount due “must be offset by any expenses, costs, or charges owed by Dufrene to Shield.” Shield also filed a reconventional demand contending that there were defects in the pipe and related materials as delivered, and Shield incurred significant costs, losses, and damages related to the failed pipe as “a direct result of Dufrene's delivery of flawed or defective materials.” Shield stated that as a result of the costs, losses, and damages, it withheld payment of the June 9, 2022 invoice. Shield sought reimbursement from Dufrene for the cost of the replacement pipe materials, the costs associated with replacing the failed pipe, related well operations, and all costs associated with investigating and identifying the cause of the failed pipe.

On November 12, 2024, Dufrene filed a motion for summary judgment on liability seeking to summarily dismiss the claims in Shield's reconventional demand. Dufrene argued that Shield cannot prove the existence of a defect in the pipe, which is a necessary element to a redhibition claim or a Louisiana Products Liability Act (“LPLA”) claim, the two legal theories that govern the selling of a defective thing. On the same day, Dufrene also filed a motion for summary judgment under La. R.S. 9:4861 et. seq. and La. R.S. 9:2781 contending that Shield still had not paid the balance for the replacement pipe and that Dufrene is entitled to a judgment against Shield recognizing and declaring its lien and privilege on the property as provided in the Louisiana Oil Well Lien Act and a judgment for the amount due under La. R.S. 2781.

Shield opposed the motion for summary judgment seeking to dismiss its reconventional demand contending that genuine issue of material fact remained as to whether there was a defect in the pipe at delivery. Specifically, Shield pointed out that the parties agreed the pipe failed due to corrosion caused by Acid Producing Bacteria (“APB”) and Shield's expert concluded that based on the evidence, contamination of the tubing with APB prior to the tubing being run into the Well is the most probable explanation for the source of the APB. Shield opposed the motion for summary judgment on the open account and lien contending that disbursement of the funds would be premature prior to a determination of liability and Shield's offsetting affirmative defenses.

On January 10, 2025, the trial court signed two judgments. In the first judgment, the trial court granted summary judgment in favor of Dufrene, and dismissed, with prejudice, all claims asserted by Shield in its reconventional demand. In the second judgment, the trial court granted summary judgment in favor of Dufrene finding Shield liable to Dufrene pursuant to La. R.S. 9:2781 for the total principal amount of $100,630.00, with attorney's fees in the amount of 33 1/3% of the balance due, costs, contractual interest from the due date of the Invoice until the date of the judgment and legal interest thereafter. The trial court also recognized and enforced Dufrene's lien and privilege pursuant to La. R.S. 9:4861, et seq., on the total principal amount awarded.

In so ruling, the trial court determined that none of the reports showed “evidence of the bacteria existing [on the pipe] at the time of delivery.” Shield appealed from both judgments contending that the trial court erred in granting summary judgment on the issue of liability because a genuine issue of material fact remained regarding the source of the APB, and the trial court erred in granting summary judgment on Dufrene's open account and lien claims because the claims were derivative of and dependent upon the trial court's erroneous summary judgment on liability.

SUMMARY JUDGMENT

After an opportunity for adequate discovery, a motion for summary judgment shall be granted if the motion, memorandum, and supporting documents show there is no genuine issue of material fact, and the mover is entitled to judgment as a matter of law. La. Code Civ. P. art. 966(A)(3). In ruling on a motion for summary judgment, it is not the function of the trial court to determine, or even inquire into, the merits of issues raised or to weigh conflicting evidence of material fact. Mitchell v. Chambers, 2024-01526 (La. 2/25/25), 401 So.3d 651 (per curiam). The court must view the record and all reasonable inferences to be drawn from it in the light most favorable to the nonmoving party. Any doubt as to a dispute regarding a material issue of fact must be resolved against granting the motion and in favor of trial on the merits. Mitchell, 401 So.3d 651. Using this criteria, appellate courts review the granting of a summary judgment de novo. Cope v. Board of Supervisors of Louisiana State University and A&M College, 2025-003 5 (La. App. 1st Cir. 7/3/25), 417 So.3d 1048, 1055. A genuine issue is one as to which reasonable persons could disagree; if reasonable persons could reach only one conclusion, summary judgment is appropriate. A fact is considered material if its existence or nonexistence may be essential to a plaintiff's cause of action under the applicable theory of recovery. Ellis v. Circle L Trucking, L.L.C., 2021-0457 (La. App. 1st Cir. 12/30/21), 340 So.3d 985, 989.

The Code of Civil Procedure places the burden of proof on the party filing a motion for summary judgment. La. Code Civ. P. art. 966(D)(1). However, If the mover will not bear the burden of proof at trial, the moving party must only point out to the court the absence of factual support for one or more elements essential to the adverse party's claim, action, or defense. La. Code Civ. P. art. 966(D)(1); Mercadel v. State Through Department of Public Safety and Corrections, 2018-0415 (La. App. 1st Cir. 5/15/19), 2019 WL 2234404 *3(unpublished). The burden then shifts to the non-moving party to produce factual support, through the use of proper documentary evidence attached to its opposition, which establishes the existence of a genuine issue of material fact or that the mover is not entitled to judgment as a matter of law. La. Code Civ. P. art. 966(D)(1). The applicable substantive law determines materiality; thus, whether a particular fact in dispute is material for summary judgment purposes can be seen only in light of the substantive law applicable to the case. Campbell v. Orient-Express Hotels Louisiana, Inc., 2024-00840 (La. 3/21/25), 403 So.3d 573, 579.

Dufrene's Motion for Summary Judgment on Shield's Reconventional Demand

Under either redhibition or the LPLA, the plaintiff must prove each element of its claim by a preponderance of the evidence, including proving a defect.³ A preponderance of the evidence exists when the evidence, direct or circumstantial, taken as a whole, shows that the fact of causation sought to be proved is more probable than not. Summary judgment is appropriate under either a LPLA claim or a redhibition claim if there is no evidence a product is defective. United Fire Group v. Caterpillar, Inc., 2013-2115 (La. App. 1st Cir. 8/18/14), 2014 WL 4067756, at *6 (unpublished).

As noted, there is no dispute that the pipe failed approximately 68-74 days after installation into the Well due to corrosion caused by the presence of APB. In its motion for summary judgment on liability, Dufrene contends that there is an absence of factual support for an element essential to Shield's claim because Shield cannot prove the existence of a defect in the pipe prior to being placed in the Well, which is a necessary element to Shield's redhibition claim or LPLA claim. Specifically, Dufrene contends that there is no definitive or scientific proof that APB existed on the pipe prior to being placed in the Well. Dufrene argues that summary judgment evidence, including evidence provided by experts, must be based on specific facts showing that there is a genuine issue for trial. In support of this argument, Dufrene points out that Dr. Thomas Shelton, the expert for Shield, admitted he did not have any scientific facts to back up his opinion that the pipe actually had APB on it when it was delivered to the Well, and that he based his opinion on the history of APB at the Well. Dufrene also pointed to the deposition of Dr. James Garber who was hired on behalf of Shield to analyze and draft a report addressing why the pipe failed. Dr. Garber testified during his deposition about his report. In the report, Dr. Garber concluded that APB caused the pipes to fail. When asked if his report determined an origination point for the APB, Dr. Garber answered “no.” However, when asked if his report stated that APB originated in the Well, Dr. Garber stated, “It had to” and said, “it couldn't have happened, you know, while it was out of the [W]ell.”

While we agree with Dufrene that Shield did not present direct evidence that the pipe was contaminated with APB prior to its placement in the Well, Shield did present circumstantial evidence by way of Dr. Shelton's expert opinion that the most probable explanation was that the pipe was contaminated with APB prior to its placement in the Well. Dr. Shelton's report concludes that the tubing failed as a result of pitting corrosion from the exterior surface of the tubing, and “[b]ased upon the evidence available contamination of the tubing with APB prior to the tubing being run into the hole is the most probable explanation for the source of the APB.” Dr. Shelton acknowledged that he did not rely on any objective testing for his conclusion, but based his conclusion on when APB appeared on the pipe, and that APB has not been present after removal of the “failed pipe.” Specifically, Dr. Shelton noted that there was “no history of APB in the [W]ell site” before this string of pipe went into the Well or failure of the pipe before this string of pipe, and “the next string of pipe didn't fail as a result of the APB.” Dr. Shelton opined that APB could have attached to the pipe during storage or absorbed during the coating process, but acknowledged that he had no knowledge of how the pipe was stored. Dr. Shelton agreed that there was no objective evidence that APB existed prior to going into the Well.

Shield also introduced the deposition of David Bacque, the corporate representative for Shield, who stated in his deposition that he operated the Well from 2014-2022, and Shield “never had [APB] in [its] well” before this incident and since he removed the pipe, Shield has “gone two years and two months without a loss due to anything, any corrosion.” Shield also pointed out the deposition testimony of Gene Manuel, the owner of Core Oilfield Services who provided chemical services for Shield, who acknowledged that he is not an expert and cannot prove the source of the APB, but stated “[t]he only thing that changed out there in corrosion is when the new pipe went in the hole. When that new pipe went in the hole and came out, that's when everything fell apart.”

During a trial, Shield's burden of proof by a preponderance of the evidence, may be met by either direct or circumstantial evidence, and if circumstantial evidence is used, it must exclude other reasonable hypotheses with a fair amount of certainty, but it is not necessary to negate all possible causes. See Weber v. Fidelity & Casualty Insurance Company of New York, 259 La. 599, 250 So.2d 754, 757 (La. 1971). After review of the summary judgment evidence, we find that although primarily circumstantial, Shield produced factual support establishing the existence of a genuine issue of material fact as to the source of the APB and whether the pipe was actually defective when it was placed into the Well. Furthermore, the deposition testimony of Dr. Garber and the report of Dr. Shelton reached different conclusions regarding the source of the APB on the pipe and neither expert provided direct evidence of the source of the APB, which raises a genuine issue for trial. Accordingly, we reverse the trial court's summary judgment dismissing Shield's reconventional demand.

Dufrene's Motion for Summary Judgment under La. R.S. 9:4861 et. seq. and La. R.S. 9:2781

In its final assignment of error, Shield contends that the trial court erred in granting summary judgment on Dufrene's open account and lien claims because the claims were derivative of and dependent upon the trial court's summary judgment on liability. In its answer, Shield contends that Dufrene's open account claim must be offset by any expenses, costs, or charges owed by Dufrene to Shield based on the failed pipe Dufrene provided to Shield.

Compensation or “set-off’ has long been recognized in our civil law as a mode of partial extinguishment of one person's obligation to another through offsetting an opposing obligation owed by the latter to the former. Bridges v. Lyondell Chemical Co., 2005-1535 (La. App. 1st Cir. 6/9/06), 938 So.2d 786, 790 n.7, writ denied, 2006-2196 (La. 11/17/06), 942 So.2d 541 see also La. Civ. Code arts. 1893, et seq. A party claiming set-off, or compensation, as an affirmative defense has the burden of proving the claim. Richard v. Vidrine Automotive Services, Inc., 98-1020 (La. App. 1st Cir. 4/1/99), 729 So.2d 1174, 1179. An affirmative defense raises a new matter which, assuming the allegations in the petition to be true, constitutes a defense to the action and will have the effect of defeating the plaintiff's demand on its merits. Buck's Run Enterprises, Inc. v. Mapp Const. Inc., 1999-3054 (La. App. 1st Cir. 2/16/01), 808 So.2d 428, 431. Judicial compensation takes place when a court decides two parties are mutually indebted to each other and adjusts the amounts owed in fixing the judgment. Buck's Run Enterprises, Inc., 808 So.2d at 432.

Since we reversed the grant of summary judgment on the issue of liability for the pipe Dufrene provided to Shield, we find there are genuine issues of material fact remaining regarding whether Shield is entitled to damages that would set off the amount owed to Dufrene on the open account. See Advanced Leveling & Concrete Solutions v. Lathan Company, Inc., 2020-0040 (La. App. 1st Cir. 12/10/20), 316 So.3d 509, 515. Therefore, we reverse the trial court's grant of summary judgment in favor of Dufrene pursuant to La. R.S. 9.2781 and La. R.S. 9:4861, et seq.,

CONCLUSION

For the foregoing reasons, we reverse the January 10, 2025 judgments granting summary judgment in favor Dufrene. All costs of the appeal are assessed to Dufrene Pipe Company, Inc.

REVERSED.

FOOTNOTES

1.   The invoice was originally dated June 9, 2022, but has markings indicating it was re-dated to June 23, 2022, edited by a handwritten notation.

2.   The June 9 invoice provided that “All sums owed in connection with the above described work are due and payable within thirty (30) days of invoicing and if not paid then interest will be charged at the rate of 1 1/2% per month and if this account is referred to ․ an attorney for collection, the undersigned customer agrees to pay a collection fee of 33 1/3% of the balance due.”

3.   While there are multiple elements of proof for a redhibition or LPLA claim, Dufrene's motion for summary judgment primarily contends that Shield cannot prove the existence of a defect in the pipe Dufrene delivered to Shield. Dufrene also argues that Shield cannot prove that Dufrene is a manufacturer. Under the LPLA, “manufacturer” is defined as “a person or entity who is in the business of manufacturing a product for placement into trade or commerce.” “Manufacturing a product” is defined as “producing, making, fabricating, constructing, designing, remanufacturing, reconditioning or refurbishing a product.” Manufacturer also means a “seller of a product who exercises control over or influences a characteristic of the design, construction or quality of the product that causes damage.” La. R.S. 9:2800.53(1)(b). The testimony of Dufrene's president, Weldon Dufrene, that Dufrene had coating applied to the pipe sold to Shield raises a genuine issue regarding whether Dufrene is a manufacturer under the LPLA.

HESTER, J.