In re Lurgi-Knost, Inc.

380 F. Supp. 400
CourtDistrict Court, M.D. Louisiana
DecidedAugust 13, 1974
DocketNo. BK-73-081
StatusPublished
Cited by5 cases

This text of 380 F. Supp. 400 (In re Lurgi-Knost, Inc.) is published on Counsel Stack Legal Research, covering District Court, M.D. Louisiana primary law. Counsel Stack provides free access to over 12 million legal documents including statutes, case law, regulations, and constitutions.

Bluebook
In re Lurgi-Knost, Inc., 380 F. Supp. 400 (M.D. La. 1974).

Opinion

E. GORDON WEST, District Judge.

This is an appeal from an order of the Bankruptcy Judge holding invalid a materialman’s lien claimed by Eckco Fabricators, Inc. against the plant property of Enjay Chemical Company (now Exxon), in Baton Rouge, Louisiana. The suit grows out of the bankruptcy proceeding entitled “In the Matter of Lurgi-Knost, Inc., a/d/b/a Crown Builders, Chemical & Industrial Supply and Process Insulators.” The facts are undisputed. Eckco Fabricators sold certain materials, principally carbon steel pipe and fittings, to Lurgi-Knost for use in construction of certain additions to the Enjay Chemical Company plant. Lurgi-Knost was performing the work for Enjay. There was no written or recorded contract between Enjay and Lurgi-Knost. Lurgi-Knost became a bankrupt, and at the time of filing its petition in bankruptcy, it owed Eckco $3,230.16 for the materials furnished for the Enjay job. The day before the petition in bankruptcy was filed, Eckco filed, in the office of the Clerk and Recorder for the Parish of East Baton Rouge, Louisiana, what purported to be a lien affidavit for the purpose of establishing itself as a preferred lien creditor. During the bankruptcy proceedings, the Trustee in Bankruptcy filed a petition seeking the cancellation of Eckco’s purported lien on the ground that the affidavit filed by Eckco was not sufficiently explicit to create a lien under the Louisiana lien statutes. After hearing, the Bankruptcy Judge, on July 6, 1973, held that the affidavit filed by Eckco was defective and that the recordation of the lien should be cancelled. Thereafter, the Bankruptcy Judge, on his own motion, held a rehearing on this matter, and in a well reasoned opinion, dated October 16, 1973, and filed in the record of this case, reaffirmed his prior decision holding the lien to be invalid. This appeal followed. Now, after careful consideration of this record, and the exhaustive briefs filed by counsel, this Court affirms the decision of the Bankruptcy Judge.

The attack upon Eckco’s lien affidavit is grounded upon the contention that it does not adequately describe the property upon which the lien is claimed. The materialman’s right to a lien is created by La.R.S. 9:4801, which provides, in pertinent part, that a “* * * furnisher of material * * * has a privilege for the payment in principal and interest of such * * * materials * * * furnished, and for the cost of recording such privilege, upon the land and improvements on which the work or labor has been done, or the materials, * * * furnished.” The method by which this lien is preserved is provided for by La.R.S. 9:4812, as follows:

* * any person furnishing service or material or performing any la-* bor on the said building or other work may record in the office of the clerk of court or recorder of mortgages in the parish in which the said work is being done or has been done, an affidavit of his claim, which recordation, if done within sixty days after the date of the affidavit of completion or if no affidavit of completion is filed within sixty days after the date of the last delivery of all material upon the said property or the last furnishing of services or the last performance of labor upon the same, by the said furnisher of material or services or the said laborer, shall preserve a privilege upon the building or other structure and upon the land upon which it is situated, in favor of any such person who shall have furnished service or material or performed any labor in [402]*402connection with the said work or improvement, as his interest may appear. The said claim, recorded as aforesaid, shall preserve, a privilege against the property for a period of one year from the date of its recordation, and may be enforced by a civil action in any court of competent jurisdiction in the parish in which the land is situated and such cause of action shall prescribe within one year from the date of the recordation of the claim in the mortgage records of the office of the clerk of court or the office of the recorder of mortgages. The effect of the recordation of the claim shall cease and the privilege preserved by the recordation shall perempt unless a notice of filing of a suit (giving the name of the court, the title and number of the proceedings, and date of filing, a description of the property and a reference to the recorded claim), on said claim is recorded within one year from the date of the recordation of the inscription of said claim. Such notice of filing suit shall preserve the privilege until the court in which the suit is filed shall order the cancellation of the said inscription of the said claim and the notice of the filing of suit on said claim or until the claimant authorizes the clerk of court or recorder of mortgages to cancel the said inscriptions.”

The lien affidavit filed by Eckco, after setting forth the amount claimed to be due, simply stated:

“That this account represents building materials, principally carbon steel pipe and fittings sold and delivered to the said Lurgi-Knost, Inc., contractor, and Enjay Chemical Co., for use in and were actually used in the construction of additions at the plant site described as follows, to-wit:
“Enjay Chemical Co., Baton Rouge, Louisiana.
“This affidavit is made for the purpose of preserving the lien and privilege granted by law to Eckco Fabricators, Inc., on the buildings and grounds above described and with full reservation of its rights to assert its claim for personal liability for the aforesaid sum against the Enjay Chemical Co.; that said debt, plus the cost of filing this affidavit, is passed due, owing and unpaid and all just credits have been allowed.”

The only question presented here is whether or not this affidavit adequately describes the property on which the lien is asserted. We must conclude that it does not. While at first blush a reading of the above quoted excerpt from R.S. 9:4812 might seem to require a description of the property only in a notice of a suit filed on the claim, and not in the affidavit originally filed to establish the lien, a close reading of the statute does not justify that conclusion. Since the filing of the affidavit “shall preserve a privilege upon the building or other structure and upon the land upon which it is situated,” it necessarily follows that if the filing of the affidavit is to be notice to third parties of the claimed lien, “the building or other structure and * * * the land upon which it is situated” must be clearly set forth in the affidavit. To omit these descriptions, or to give inadequate descriptions, would make it impossible for third parties to know what property is subject to the lien. When the statute then specifically provides for preservation of the lien beyond one year by the filing of a notice of lis pendens, and provides that such notice must contain a “description of the property” and “a reference to the recorded claim,” it seems obvious that it is simply requiring that the notice of lis pendens contain the same specific description of the property upon which the lien is claimed as is required in the affidavit filed to initially assert the lien. It would make little sense to hold that a lien could be asserted and maintained on undescribed property when the purpose of the affidavit is to give notice to third parties that certain property is encumbered with a lien. In Julius Aaron & Son v. Keyser, et al, 2 [403]*403La.App. 649

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380 F. Supp. 400, Counsel Stack Legal Research, https://law.counselstack.com/opinion/in-re-lurgi-knost-inc-lamd-1974.