     Case: 11-20777     Document: 00511794479         Page: 1     Date Filed: 03/20/2012




            IN THE UNITED STATES COURT OF APPEALS
                     FOR THE FIFTH CIRCUIT  United States Court of Appeals
                                                     Fifth Circuit

                                                                            FILED
                                                                          March 20, 2012
                                     No. 11-20777
                                   Summary Calendar                        Lyle W. Cayce
                                                                                Clerk

In the Matter of: WAVE ENERGY, INCORPORATED, also known as Wave
Resources, Incorporated,

                                                  Debtor



STOKES & SPIEHLER ONSHORE, INCORPORATED,


                                                  Appellant
v.

ROBERT E. OGLE, Liquidating Trustee of the Wave Energy Liquidating
Trust,

                                                  Appellee



                   Appeals from the United States District Court
                        for the Southern District of Texas
                              USDC No. 4:11-CV-287



Before REAVLEY, SMITH, and PRADO, Circuit Judges.
PER CURIAM:*


        *
         Pursuant to 5TH CIR. R. 47.5, the court has determined that this opinion should not
be published and is not precedent except under the limited circumstances set forth in 5TH CIR.
R. 47.5.4.
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      Under Texas law, for a document to be considered an affidavit, it must
contain a jurat. This case deals with whether the mineral lien filed by Stokes
& Spiehler Onshore in this bankruptcy action contained such a jurat. Because
we agree with the district court that the statement by the notary in this case was
insufficient to meet Texas’s requirements for a jurat, we AFFIRM.
                              I. BACKGROUND
      On July 1, 2009, Wave Energy, Inc. (“Wave”) became the subject of an
involuntary Chapter 7 bankruptcy case, which was later converted to a Chapter
11 case. When the case was converted to a Chapter 11 case, the bankruptcy
court directed the U.S. Trustees to appoint a Chapter 11 trustee, a post to which
Appellee Robert E. Ogle was appointed. Wave’s primary assets were three gas-
producing wells in Zapata County, Texas (the “De Garza Wells”). In February
2008, Wave entered into a Joint Operating Agreement (the “JOA”) with Whitson,
as operator, to drill and complete the De Garza Wells. Whitson, in turn, hired
various vendors to perform services on the De Garza Wells, including Appellant
Stokes & Spiehler Onshore, Inc. (“S&S”). S&S performed engineering services
for Whitson and charged him $150,026.54, which is not disputed. Whitson, as
he did to many vendors, failed to pay S&S. In an effort to recover, S&S timely
filed and properly recorded its “Affidavit Claiming Lien on Mineral Property,”
pursuant to Texas Property Code § 56.003(a), against the De Garza Wells. S&S
filed its claim against Wave with the bankruptcy court on January 21, 2010, and
Ogle objected on April 8. In the interim, the bankruptcy court approved a
mediated settlement agreement through which other vendors settled their
claims against Wave for the principal amount plus five percent interest.
      The first sentence of S&S’s lien filing states: “Affiant, Bruce M. Jordan, on
oath swears that the following statements are true and are within his personal
knowledge.” Jordan, who is the president of S&S, then states that the filing “is



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made to perfect a lien against the mineral property described below.” At the end
of the document and below Jordan’s signature stands the following:

         This instrument was acknowledged before me on May 21st, 2009, by
         Bruce M. Jordan, as President of Stokes and Spiehler Onshore, Inc.,
         a Louisiana corporation, on behalf of said corporation.
                                               /s/ Raymond E. Beyt
                                               Notary Public in and for the
                                               State of Louisiana

In his objection, Ogle contends that these statements are insufficient to
constitute the required jurat under Texas law.
         The bankruptcy court granted summary judgment to Ogle on his objection
to S&S’s claim on the De Garza Wells. S&S appealed that order to the district
court pursuant to 28 U.S.C. § 158(a), which affirmed. S&S timely appealed that
affirmance to this court, invoking our jurisdiction under 28 U.S.C. § 1291.
            II. STANDARD OF REVIEW AND APPLICABLE LAW
         In reviewing a bankruptcy appeal from the district court, this court applies
the same standard to the bankruptcy court’s findings of fact and conclusions of
law that the district court applied—reviewing conclusions of law de novo and
findings of facts for clear error. In re Lothian Oil, Inc., 650 F.3d 539, 542 (5th
Cir. 2011). Texas law governs the dispute in this case. In resolving issues of
Texas law, we look to the decisions of the Texas Supreme Court. Packard v.
OCA, Inc., 624 F.3d 726, 730 (5th Cir. 2010). If there is no decision directly on
point, then we must determine how that court, if presented with the issue, would
resolve it. Id.        In making this determination, “[t]he decisions of Texas
intermediate appellate courts may provide guidance, but are not controlling.”
Id.




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                                    III. DISCUSSION
A.      Lien Affidavit
        Ogle’s objection to S&S’s claim is that S&S failed to secure a lien against
the De Garza Wells. Under Chapter 56 of the Texas Property Code, to secure a
lien against mineral property, a lien claimant must file an affidavit with the
county clerk of the county in which the property is located. Tex. Prop. Code
§ 56.021(a). Texas law defines an affidavit as a “statement in writing of a fact
or facts signed by the party making it, sworn1 to before an officer authorized to
administer oaths, and officially certified to by the officer under his seal of office.”
Tex. Gov’t Code § 312.011(1). That is, an affidavit must be sworn to or affirmed
before an authorized third party (such as a notary), who must certify that the
affiant so swore to or affirmed the statement at issue. Guinn v. Bosque Cnty.,
58 S.W.3d 194, 198 (Tex. App.—Waco 2001, pet. denied). This certification is
known as the “jurat.” Id. Without a jurat, a statement is not an “affidavit.” Id.
A mere acknowledgment that a document was executed for a particular purpose
is insufficient. Blanco, Inc. v. Porras, 897 F.2d 788, 792 (5th Cir. 1990); see also
Perkins v. Crittenden, 462 S.W.2d 565, 568 (Tex. 1970)
        The central dispute is whether the notary’s certification in this case was
a jurat or just a mere acknowledgment. The crux of this inquiry is whether the
affiant was sworn in the notary’s presence. This distinction between a valid
jurat and a mere acknowledgment becomes clear when we compare two cases we
discussed in Blanco—Norcross v. Conoco, Inc. and Crockett v. Sampson. In
Norcross, the Fourth Court of Appeals found a valid jurat where a notary
certified a document containing the language

        Before me, the undersigned authority, on this day personally
        appeared JOHN W. NORCROSS, the defendant in the above


       1
           The term “sworn” includes that which is “affirmed.” Tex. Gov’t Code § 312.011(16).

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      entitled and numbered cause, and after having been duly sworn, did
      state that . . .

720 S.W.2d 627, 629–630 (Tex. App.—San Antonio 1986, no writ) (emphasis
added); see also Choctaw Properties, L.L.C. v. Aledo I.S.D., 127 S.W.3d 235, 242
(Tex. App.—Waco 2003, no pet.); Griffin v. Baylor College of Medicine, 945
S.W.2d 158, 159–60 (Tex. App.–Houston 1997, no writ). In Crockett, by contrast,
the Third Court of Appeals found invalid a document that stated, “Sidney
Sampson, Affiant, makes oath and says . . . ” and the notary certified

      Before me, Edith Ricketson, a Notary Public, in and for the State
      and County aforesaid, on this day personally appeared Sidney
      Sampson known to me to be the person whose name is subscribed
      to the foregoing instrument, and acknowledged to me that he
      executed the same for the purpose and consideration therein
      expressed.

439 S.W.2d 355, 357, 360 (Tex. App.–Austin 1969, no writ); see also Perkins, 462
S.W.2d at 566, 568. Therefore, under Texas law, where the notary fails to certify
that it he witnessed the oath, there is no jurat.
      This distinction accords with our holding in Blanco. There, we held valid
“Blanton’s self-styled ‘affidavit,’” which began: “‘[B]efore me, the undersigned
authority, personally appeared ZANE BLANTON, president of Blanco, Inc., . . .
who, upon his oath, deposed and stated . . . ’ and conclude[d] with a notary’s seal
and acknowledgement that the document was executed as the act of Blanco.”
Blanco, 897 F.2d at 792. In Blanco, like in Norcross, the notary specifically
referenced the affiant’s oath.
      This case strikes us as quite similar to Crockett. Like Crockett, Jordan in
his purported affidavit makes his statements under oath. Compare supra
(“Affiant, Bruce M. Jordan, on oath swears . . . ”) with Crockett, 439 S.W.2d at
355 (“Sidney Sampson, Affiant, makes oath and says . . . ”). Also like Crockett,
the certification does not contain any language showing that the oath was sworn

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in the notary’s presence. Absent such a certification, there is no jurat and
consequently, no valid affidavit. Crockett, 439 S.W.2d at 358.
B.      Third-Party Beneficiary
        S&S alternatively argues that its rights as a secured creditor of Wave are
conferred by its status as a third-party beneficiary to the JOA. The Texas
Supreme Court has explained

        there is a presumption against conferring third-party-beneficiary
        status on noncontracting parties. In deciding whether a third party
        may enforce or challenge a contract between others, it is the
        contracting parties’ intent that controls. The intent to confer a
        direct benefit upon a third party must be clearly and fully spelled
        out or enforcement by the third party must be denied. Incidental
        benefits that may flow from a contract to a third party do not confer
        the right to enforce the contract. A third party may only enforce a
        contract when the contracting parties themselves intend to secure
        some benefit for the third party and entered into the contract
        directly for the third party’s benefit.

S. Tex. Water Auth. v. Lomas, 223 S.W.3d 304, 306 (Tex. 2007) (internal citations
and quotation marks omitted).
        S&S points specifically to Section V.D.3 of the JOA, which provides

        Protection from Liens: Operator [Whitson] shall pay, or cause to be
        paid, as and when they become due and payable, all accounts of
        contractors and suppliers and wages and salaries for services
        rendered or performed, and for materials supplied on, to or in
        respect of the Contract Area or any operations for the joint account,
        and shall keep the Contract Area free from liens and encumbrances
        except for those resulting from a bona fide dispute as to services
        rendered or materials supplied.

To be sure, this section contemplates benefits flowing to subcontractors, like
S&S, as it obliges Whitson to pay subcontractors in order to ensure that the De
Garza Wells are kept free from involuntary liens. When read along with the
other provisions of the JOA, it is clear that any benefit to S&S was merely


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incidental. Sections V.A and VII.B both act to block any third-party rights that
may arise under the JOA. Section V.A sets out that “Operator [Whitson] shall
not be deemed, or hold itself out as, the agent of the Non-Operators [Wave] with
authority to bind them to any obligation or liability assumed or incurred by
Operator as to any third party,” like S&S. Additionally, Section VII.B states,
“[N]o party shall have any liability to third parties to satisfy the default of any
other party in the payment of any expense or obligation.”
      We find persuasive, as the district court did, the Texas courts’ decisions in
J.P. Morgan Chase Bank, N.A. v. Texas Contract Carpet, Inc., 302 S.W.3d 515
(Tex. App.—Austin 2009, no pet.), and Tawes v. Barnes, 340 S.W.3d 419 (Tex.
2011). In J.P. Morgan Chase, the court dealt with a provision similar to JOA
Section V.D.3, which read, “[Agape] will duly pay and discharge, or cause to be
paid and discharged, before the same shall become overdue all claims for labor,
materials, or supplies that if unpaid might by law become a lien or charge upon
any of its property . . . .” 302 S.W.3d at 532 (alteration and ellipsis in original).
The court held that “[a]lthough the provisions acknowledge that subcontractors
would be paid out of the funds in the account, none of the provisions clearly and
fully express an intent to confer a benefit on the subcontractors.” Id. Similarly,
in Tawes, the Texas Supreme Court found that a contract provision that
required royalty payments to be made to third parties lacked “sufficient[]
cl[arity] and unequivocal language demonstrating an intent to directly benefit”
any third party.2 340 S.W.3d at 428. In doing so, the court noted that JOAs are

      2
          More specifically, the Texas Supreme Court stated,

               Barnes claims that the JOA Royalty Provision directs Tawes, as
               a consenting party, to pay the royalties owed to her pursuant to
               her oil and gas lease with Dominion. Because the payment of
               royalties to Barnes would satisfy a legal duty owed by Dominion,
               her lessee, Barnes argues she received a direct, non-incidental
               benefit, and therefore qualifies as a third-party beneficiary.
               Tawes responds that the parties to the Dominion-Moose

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used in part to shield non-operators from liability from costs or other obligations.
Id. at 426. The court also noted that the lack of “specificity,” in not identifying
a specific sum owed, counseled against extending third-party beneficiary status.
Id. at 428. The similarities between these cases and our present one bolster our
conclusion that S&S was merely an incidental beneficiary under the JOA and
therefore cannot enforce any rights under it as a third-party beneficiary. Lomas,
223 S.W.3d at 306. Accordingly, we hold that the JOA does not give S&S rights
as a secured creditor.
                                IV. CONCLUSION
      For the foregoing reasons, we AFFIRM the district court’s affirmance of
the bankruptcy court’s grant of summary judgment to Ogle.
      AFFIRMED.




            Agreements relied on the JOA to govern the relationships
            between the operators and non-operators of wells drilled on the
            Baker Unit. By allocating general expenses among the parties
            consenting to the drilling of additional, non-consent wells, Tawes
            asserts that the JOA Royalty Provision was not intended to
            directly benefit any lessor of a Baker Unit lease, but to provide
            clarity to the operator who must keep an accurate record of
            accounting. We consider Tawes’s position to be more accurate
            and conclude that the parties did not intend to directly benefit
            Barnes. Rather, any benefit received by her was merely
            incidental.

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