A federal judge in Louisiana has dished out some harsh criticism of contractors who don’t reduce their contracts to writing. The case involves the decommissioning of 26 orphaned oil and gas wells near Baton Rouge. The defendant orally hired the plaintiff in 2013 to perform a portion of the cleanup and remediation work after deciding the plaintiff was a “junkyard dog like me.” The plaintiff commenced work shortly thereafter based on a handshake deal because he considered himself “kind of old school” and a “man of his word.” He subsequently sent the defendant invoices, on a time and materials basis, totaling over $1.6 million. A dispute inevitably ensued. The central issue was whether the plaintiff was entitled to payment on a time and materials basis, or whether the plaintiff was entitled to receive only the scrap value of the salvaged equipment. That dispute was complicated by the undisputed fact that the parties never reduced their agreement to writing.
In his 59-page decision released last week – some 12 years after the dispute began – U.S. District Judge John deGravelles waded through the parties’ conflicting testimony as to the existence and terms of the parties’ agreement. He ultimately sided with the plaintiff on the central issue, awarding roughly $750,000 plus interest – but not before offering this stern advice for parties who neglect the most basic task of putting their agreements in writing:
The Court repeats: it is astounding that this contract involving the expenditure of millions of dollars by both parties and untold hours of work was not reduced to writing. [Defendant] claimed he didn’t reduce the agreement to writing because [Plaintiff] was a “junkyard dog like me.” [Plaintiff] said he did the “handshake … deal” because he is a “man of his word,… kind of old school ….” This colossal failure of good business practice and common sense on both sides led to an extensive pre-lawsuit dispute, eventually this lawsuit, and undoubtedly the payment of significant sums by both sides in attorney fees.
The case is Belden Investments, LLC v. Pharaoh Oil and Gas, Inc., 2025 WL 795689 (Mar. 12, 2025, M.D. La., Civil Action No. No. 22-62-JWD-SDJ), and a copy of the court’s opinion can be found here.
If you are a “junkyard dog” and need assistance reducing your construction contracts to writing or have questions about this case, please give John Mark Goodman a call.