Face Challenges Confidently

322 Adobe Oilfield Servs., Ltd. v. Trilogy Operating, Inc.

Thursday, September 3rd, 2015

Richard F. Brown

The following is not a legal opinion. You should consult your attorney if the case may be of significance to you.
Adobe Oilfield Services, Ltd. v. Trilogy Operating, Inc., 305 S.W.3d 402 (Tex. App.— Eastland 2010, no pet.), held that injunctive relief granted to prevent threatened liens from being filed by the drilling contractor’s subcontractors was proper. Pursuant to multiple drilling contracts, Adobe, the drilling contractor, drilled multiple wells for Trilogy, the operator. Trilogy was contacted by a bank which claimed a right to Adobe’s accounts receivable pursuant to a security interest perfected under the Uniform Commercial Code. With the bank and Adobe both claiming the right to receive payment, Trilogy deposited the remaining amount owed to Adobe under the contracts into the registry of the trial court. When Adobe’s subcontractors threatened to file liens on the property, Trilogy filed suit seeking injunctive relief to protect the properties from the threatened liens and to have the trial court determine the parties entitled to the money in the registry. The trial court granted the temporary injunction, Trilogy posted a cash bond, and subcontractors appealed.
A temporary injunction preserves the status quo of the litigation’s subject matter pending trial on the merits. “An applicant for temporary injunction ‘must plead and prove three specific elements: (1) a cause of action against the defendant; (2) a probable right to the relief sought; and (3) a probable, imminent, and irreparable injury in the interim.’”
When the lawsuit was filed, the subcontractors had not filed a lien on the properties. The temporary injunction sought to prevent such liens from being filed, and, therefore, granting the temporary injunction maintained the status quo. Chapter 56 of the Texas Property Code provides that “[a]n owner of land or a leasehold may not be subjected to liability under this chapter greater than the amount agreed to be paid in the contract for furnishing material or performing labor.” Because Trilogy had paid the full contractual obligation to Adobe or into the court, Trilogy had a probable right to the relief sought.
For there to be an irreparable injury, the injured party cannot be adequately compensated in damages or damages cannot be measured on a monetary basis. Trilogy’s president testified at the hearing on the temporary injunction that Trilogy was contractually obligated to protect the land from liens, and, if the liens were filed, the liens would prevent Trilogy from being able to raise money and would negatively affect its reputation. Proof at the hearing was also showed that Trilogy would pay the remaining amounts held in suspense if it knew whom to pay. Accordingly, “Trilogy brought forth evidence showing a probable right to the relief sought and probable, imminent, and irreparable injury that could not be measured by any certain pecuniary standard.”
The significance of this case is the holding that a temporary injunction may be granted to prevent the filing of subcontractor’s liens when the contractor has been fully paid or the balance due has been paid into the court.