Court Opinion

ID: 9559872
Source: CourtListenerOpinion
Date Created: 2023-08-21 17:37:19.744681+00
Date Added: 2024-06-11T09:11:49.780620
License: Public Domain

SUMMERS, Justice,
concurring in part and dissenting in part:
Although I concur in portions of the opinion I must respectfully dissent from the Court’s conclusion that ANR’s lien is ineffective as to any material or services provided more than three years before the lien was perfected by filing. Our recent case of Samuel Roberts Noble Foundation v. Vick, 840 P.2d 619 (Okla.1992) and the earlier decisions on which it relies should dictate a different result.
The majority reasons that the oral agreement between the operator of the oil well and Appleby is the obligation upon which the lien is based. Under 12 O.S.1991 § 95, this obligation — an oral contract — has a three-year statute of limitation. Title 42 O.S.1991 § 23 states that liens are extinguished when the rules governing civil procedure (or more specifically for purposes of this case — the statutes of limitations) dictate that suit may no longer be brought on the principal obligation. The majority opinion then makes the legally insupportable leap that Section 95 bars ANR’s lien for services which occurred more than three years before the lien was perfected by filing. This conclusion is not only contrary to this Court’s holding in Vick and Clark v. Oklahoma Electric Co., 144 Okl. 21, 288 P. 935, 937 (1930), but it disregards the plain language of the governing statutes.
In Vick the central question was when the statute of limitation began to run on a written construction contract. We held that the statute of limitations for a written construction contract does not begin until the construction is completed. The contractor urged that the breach of contract action was barred because the action was brought five years after his portion of the construction was completed. We held that the limitations period did not begin when the individual subcontract was completed, but when the construction of the entire building was completed.
The obligation in favor of an operator of an oil or gas well is Corporation Commission imposed, rather than purely contractual. The duty to operate under such a Corn-*836mission order is a continuing one. Section 23 requires that a lien be extinguished when the statute of limitations bars recovery on the underlying obligation. Here, the underlying obligation was an agreement for the provision of ongoing services. According to Vick and its predecessors, the statute of limitations does not begin to run until the work required under the contract is completed. ANR’s work as the operator of the well under its contract has not yet been completed (as far as we know). The Bank agrees that ANR’s services were ongoing. The statute of limitations did not begin to run until ANR’s services were complete. Thus, Section 23 does not bar recovery on the underlying obligation. In so holding, I do not advocate a “repeal” of Section 23. Section 23 simply does not operate to bar ANR’s lien.
The relevant statutes, 42 O.S.1991 §§ 142 and 144, state that the operator’s lien shall attach as of the date of commencement, but filing is not required until four months after the last date that material or labor is furnished. The statute also provides that compliance with these statutes shall constitute constructive notice to all purchasers and encumbrancers as of the first date that material is furnished. These statutes, designed to specifically address the liens of operators, are clear that the lien attached — although not yet filed — the date the services are commenced. Perfection is not required until four months after the services are completed. While the majority would re-write the language of the statutes to avoid a long delay in filing, my conclusion is that the clear language of the statutes must be followed.
In Clark v. Oklahoma Electric Co., 288 P. at 937, we expressly stated that materi-alman’s and mechanic’s liens for oil and gas well operators differ from other mate-rialman’s liens because of the clear statutory language creating the liens. There,, in holding that electricity provided over a twenty-two month period was not protected by a materialman’s lien, we noted the difference in the statutes which created distinct type of materialman’s liens, and specifically excepted from the holding those situations arising out of the continued operation of an oil and gas well. We explained that when an operator is providing continued services, the express language of the governing statutes provides that the date of attachment of a lien for ongoing services was the date the services were first provided.
In Industrial Tile Co. v. Home Fed. Sav. & Ln Ass’n, 331 P.2d 918 (Okla.1958), we held that a lien for materials and labor attached as of the commencement of the building. This lien has priority over a subsequent encumbrance which was imposed during the course of the construction but prior to the expiration of the period provided for filing the lien. We have also held that where materials are furnished at different times, but all for the same general purpose, the lien will relate back to the first purchase and cover all the material provided. Chickasha Cotton Oil Co. v. Standard Lumber Co., 175 Okl. 15, 52 P.2d 816 (1936). Even more convincing is Cyclone Drilling & Workover Inc. v. Woods, 671 P.2d 688, 690 (Okla.Ct.App.1983) (approved for publication by the Supreme Court), which interpreted Section 144 as follows:
A close reading of [Section 144] discloses that when an oil and gas lien is timely filed, it refers back and applies from the date the first time of material is furnished to the lease or the date the first labor or services are performed on the lease. (Emphasis added)
In Atlas Supply Co v. Bank of Commerce of Okmulgee, 101 Okl. 57, 223 P. 159 (1924), we addressed the question of priority as between a supplier of oil and gas material and a mortgagee. We held that when the supplies are furnished on a ongoing basis as required in the operation of the well, that lien is superior to the mortgage. However, only those supplies provided before the date of the mortgagee’s recording of the mortgage can be the subject of the priority lien.
Under the current language of statutes, the Atlas conclusion would be slightly different because the statutes expressly state that the materials furnished on an ongoing *837basis have priority as of the first date the materials are provided. However, Atlas is important to show that a lien for supplies can have priority even though it has not been filed if the time for filing has not expired. See also Okla. Tool & Supply Co. v. Smith, 118 Okl. 228, 246 P. 1090 (1926). In the present case, under the language of Section 142, the time for filing the lien had not expired.
In In re George Rodman, 38 B.R. 822 (1984), the bankruptcy court held that under Oklahoma law, an open account for the supply of material to an oil and gas rig provided lien rights to the supplier starting on the date that the first supplies are provided. This lien continued until the lien statement is filed or the time for filing expires. Thus, regardless of whether ANR’s operations are characterized as an “open account,” the critical fact is that ANR was providing ongoing services in the operation of a well. Rodman correctly held that the lien rights relate back to the first day supplies are provided.
These cases are contrary to the majority’s position that only those services within three years from the filing date are recoverable by way of a materialman’s lien. Instead, the last date of services or materials supplied relate back to the date that material was first supplied. Section 144 states that this lien shall be preferred over all other liens or encumbrances which arise subsequent to the day the first labor is furnished. It is this first date which is relevant for the purposes of priority. There are no cases in Oklahoma which would require the filing of a lien statement every three years, and which would essentially create a new lien every three years. Rather, this “relation back” doctrine permits only one lien for services and material provided under one contract. This interpretation of the lien statutes is consistent not only with the plain language of the statutes but also with eases like Vick and Chickasha Cotton Oil.
The majority’s position forces ANR to file a lien before his services are completed. Case law holds that any lien statement filed before the completion of the work would be premature and thus the lien would be unenforceable. In Davis v. Bullard, 32 Kan. 234, 4 P. 75 (Kan.1884), the lien statement was filed prior to the completion of the building. The court held that the premature filing made the lien unenforceable. See also Chicago Lumber Co. v. Tomlinson, 54 Kan. 770, 39 P. 694 (1895); Conroy v. Perry, 26 Kan. 472 (1881).
The majority’s apparent concern with this rationale is that it believes there would be a harsh result to a mortgagee. However, a mortgagee who takes as collateral for a loan an interest in oil and gas is not different than other encumbrancers. All encumbrancers are deemed to have constructive notice of the materialman’s lien. 43 O.S.1991 § 144. The legislature made that clear, and it is, not the duty of this Court to re-write statutes to overrule the legislature. It will not impose an unreasonable task for a mortgagee to check with an operator as to any existing lien which may exist for services rendered, even though it has not been filed. The Bank took security interests in Appleby’s oil and gas interests. The Bank’s mortgages were taken after the forced pooling order by the Commission, so the Bank had notice that wells were being drilled or operated. The Bank, in its brief, concedes that the duty to inquire has arisen before with regard to the materialman’s lien of oil and gas well operators. With this sequence of events, I do not believe such a result is harsh, but rather is consistent not only with the knowledge and practice of the Bank, but also with statutory language and prior case law.
I am authorized to state that V.C.J. LAVENDER and J. OPALA join in these views.