Opinion ID: 2517229
Heading Depth: 1
Heading Rank: 9

Heading: Did Elkhorn's Lien Statement set forth both a mechanic's lien claim and an oil and gas lien claim?

Text: [¶ 38] Title 29 of the Wyoming Statutes is entitled Liens. [8] Title 29 is divided into eight chapters, the first three of which are pertinent to this discussion. Chapter 1 is entitled General Provisions. Chapter 2 is entitled Contractors or Materialmen. Chapter 3 is entitled Mines, Quarries, Oil, Gas or Other Wells. At the risk of stating the obvious, we will note that Chapter 1 applies to all liens governed by Title 29, mechanic's liens are governed by Chapter 2, and oil and gas liens are governed by Chapter 3. [9] [¶ 39] Elkhorn filed only one Lien Statement, which reads in pertinent part as follows: NOTICE is hereby given that pursuant to and in accordance with Section 29-1-301 et seq. and Section 29-3-101 et seq., Wyoming Statutes, 2007, Elkhorn Construction, Inc., whose mailing address is ..., has and claims a lien against the leasehold interest and improvements hereinafter described and all production of oil, gas, ore and minerals in solid form, or proceeds therefrom in the amount of $4,880,588.83, plus interest, late charges, attorney's fees and costs from January 16, 2009, for materials furnished and delivered and labor supplied for the improvement of said property by Elkhorn Construction, Inc. (Emphasis in original.) [¶ 40] KM argues that, by referencing only § 29-1-301, which governs all lien statements as part of the general provisions of Chapter 1, and § 29-3-101, which governs oil and gas liens under Chapter 3, Elkhorn did not make a mechanic's lien claim under § 29-2-101, which is part of Chapter 2. Elkhorn contends, to the contrary, that use of the conjunctive and between the phrases describing leasehold interests and improvements, on the one hand, and oil and gas production, on the other, shows the intent of the Lien Statement to set forth both a mechanic's lien claim and an oil and gas lien claim. Further, Elkhorn argues that § 29-1-301(b), which lists the information that must be contained in all lien statements, does not require a reference to the particular statutory section under which the lien is being claimed. Finally, Elkhorn notes that it sent KM a notice of its intent to file a lien, as required by the mechanic's lien statutes, but not the oil and gas lien statutes, and that in its pleadings throughout the case, KM expressly recognized that Elkhorn had filed both a mechanic's lien and an oil and gas lien. [¶ 41] We have said many times that statutory liens are in derogation of common law, that the lien statutes must be strictly construed, and that, to establish a valid lien, there must be full compliance with the statutes. Foster Lumber Co. v. Hume, 645 P.2d 1176, 1180 (Wyo.1982); Tottenhoff v. Rocky Mountain Constr. Co., 609 P.2d 464, 466 (Wyo.1980); American Bldgs. Co. v. Wheelers Stores, 585 P.2d 845, 847 (Wyo.1978). At the same time, however, in recognition of the equitable principles underlying the lien statutes, we have also repeatedly found a lien to be valid even though it contained inadvertent inaccuracies or omissions that were not prejudicial. See, e.g., Kirby Bldg. Sys. v. Independence P'ship No. One, 634 P.2d 342, 346 (Wyo.1981); Engle, 590 P.2d at 830-32; United Pacific, 455 P.2d at 673-76; Phelan v. Cheyenne Brick Co., 26 Wyo. 493, 188 P. 354, 358 (1920). [¶ 42] In the instant case, KM does not claim to be prejudiced by Elkhorn's omission from its Lien Statement of a specific reference to Wyo. Stat. Ann. § 29-2-101. Rather, KM simply argues that, because of that omission, Elkhorn did not file a mechanic's lien. That position is inconsistent with the position that KM took during the proceedings in district court. For instance, in a reply filed on July 16, 2009, in support of its motion to dismiss Elkhorn's oil and gas lien foreclosure claim, KM made the following statement: Elkhorn's purpose of filing both § 29-3-103 and § 29-2-101 liens is therefore revealedbecause a § 29-2-101 contractor's lien appears most applicable under the facts presented, Elkhorn has chosen to not only file a lien under that section, but to also attempt to impermissibly acquire a lien against the hydrocarbon production being treated by the Amine Plant under § 29-3-101. [¶ 43] We find that the Lien Statement is sufficiently clear in its intent to state both a mechanic's lien and an oil and gas lien. It certainly cannot be said that, as a matter of law, the language is statutorily inadequate, and it is clear from the record that KM was not mislead and suffered no prejudice. While the lien statutes, themselves, are to be strictly construed, and while compliance with their mandates is required, it would defeat the equitable purposes behind the statutes to create a means of payment for labor and materials that might otherwise go unpaid were we to find invalid every lien that contained any discrepancy or omitted any information, whether or not material.