Louisiana Materials Co., Inc. v. Atlantic Richfield Co.

493 So. 2d 1141, 93 Oil & Gas Rep. 86, 1986 La. LEXIS 7010
CourtSupreme Court of Louisiana
DecidedSeptember 8, 1986
Docket86-C-0958
StatusPublished
Cited by21 cases

This text of 493 So. 2d 1141 (Louisiana Materials Co., Inc. v. Atlantic Richfield Co.) is published on Counsel Stack Legal Research, covering Supreme Court of Louisiana primary law. Counsel Stack provides free access to over 12 million legal documents including statutes, case law, regulations, and constitutions.

Bluebook
Louisiana Materials Co., Inc. v. Atlantic Richfield Co., 493 So. 2d 1141, 93 Oil & Gas Rep. 86, 1986 La. LEXIS 7010 (La. 1986).

Opinion

493 So.2d 1141 (1986)

LOUISIANA MATERIALS CO., INC.
v.
ATLANTIC RICHFIELD COMPANY.

No. 86-C-0958.

Supreme Court of Louisiana.

September 8, 1986.

*1142 Neal D. Hobson, William T. Finn, John F. Landrum, Milling, Benson, Woodward, Hillyer, Pierson & Miller, P.L.C., New Orleans, for applicant.

John M. Wilson, Frank E. Massengale, James D. McMichael, Liskow & Lewis, New Orleans, for respondent.

CALOGERO, Justice.

Under the Oil, Gas and Water Well Lien Act, R.S. 9:4861-4867, must a lien be recorded within the period specified in the statute in order to have effect?

The question is posed in this case and in I.E. Miller of Eunice, Inc. v. Source Petroleum, Inc., 493 So.2d 1141 (La.1986), the two cases having been consolidated for argument. This opinion will address the question as it affects both cases. A separate brief opinion and decree is today being rendered in connection with the latter case.[1]

In each case an owner hired a general contractor to perform certain services or furnish materials for an oil well. The general contractor in turn hired a subcontractor to provide the services or materials.[2] In each instance after the general contractor failed to pay, the subcontractor sought to enforce a lien or privilege purportedly granted by the Oil, Gas, and Water Well Lien Act against the well and/or production therefrom, notwithstanding the absence of a contractual relationship with the well owner.

Louisiana Materials filed their lien and their lawsuit on August 22, 1984, 364 days after the last delivery of shells to Atlantic Richfield's contractor, Luke Construction Co. In the second case, I.E. Miller of Eunice filed their lien on March 23, 1983, some eight months after completion of their rigging down and hauling service for Source Petroleum's contractor, Aamwell Workover *1143 Services, Inc. They filed their lawsuit on June 1, 1983, within one year of the work.

Atlantic Richfield (ARCO) filed a pair of peremptory exceptions of no cause of action.[3] They were maintained by the district court. On appeal to the Fourth Circuit Court of Appeal this ruling was reversed. However, an exception of prescription, first filed by ARCO while the case was on appeal, was granted. As did Source Petroleum in the companion I.E. Miller case, ARCO claims in support of its exception of prescription that the lien was not recorded within the period set forth in La.R.S. 9:4862. The Fourth Circuit, in this Louisiana Materials case, applied its earlier ruling in C-Craft Marine Services, Inc., v. Llog Exploration Co., 470 So.2d 241 (La. App. 4th Cir.) (Williams, J., dissenting), writ den., 472 So.2d 921 (La.1985), which held that a lien granted by the Well Lien Act must be recorded within the 180 day period specified in La.R.S. 9:4862 in order to have any effect. The Third Circuit Court of Appeal, in I.E. Miller of Eunice, Inc. v. Source Petroleum, followed Continental Casualty Co. v. Associated Pipe and Supply, 310 F.Supp. 1207 (E.D.La. 1969), aff'd, 447 F.2d 1041 (5th Cir.1971) and Beacon Gasoline Co. v. Sun Oil Co., 455 F.Supp. 506 (W.D.1978), which held that the lien need not be recorded within the period specified in La.R.S. 9:4862 in order to be effective.

The common and dispositive issue in the cases under consideration is, therefore, whether a lien granted by the Oil, Gas, and Water Well Lien Act must be recorded within the time provided in La.R.S. 9:4862 in order to be effective, or whether the recordation is necessary only for the purpose of ranking other privileges or mortgages.

For the reasons which follow we answer the question posed at the outset of this opinion in the negative. In order to be effective the lien need not be recorded within the one hundred eighty days specified in La.R.S. 9:4862 (or ninety days if prior to the 1983 amendment to La.R.S. 9:4862).[4] When prescription runs on an unrecorded lien or a lien filed later than one hundred eighty days after service or supply of materials is a matter we need not resolve in this opinion, as will be discussed hereinafter.

An appropriate statutory analysis should begin with an examination of the language of the statute under consideration. According to La.R.S. 1:3, "[w]ords and phrases shall be read with their context and shall be construed according to the common and approved usage of the language."

We must first, therefore, examine the language of the statute. The pertinent provisions of the Well Lien Act are sections 4861, 4862 and 4865 of Title 9.

La.R.S. 9:4861, prior to a 1984 amendment, and pertinent as regards this and the companion case, provided in part as follows:

Any person who performs any labor or service in drilling or in connection with the drilling of any well or wells in search of oil, gas or water, or who performs any labor or service in the operation or in connection with the operation of any oil, gas or water well or wells, has *1144 a privilege on all oil or gas produced from the well or wells, and the proceeds thereof inuring to the working interest therein, and on the oil, gas or water well or wells and the lease whereon the same are located, and on all drilling rigs, standard rigs, machinery, appurtenances, appliances, equipment, building, tanks, and other structures thereto attached or located on the lease, for the amount due for labor or service, in principal and interest, and for the cost of preparing and recording the privilege, as well as ten per cent attorney's fees in the event it becomes necessary to employ an attorney to enforce collection. Any person who does any trucking, towing, or barging, or who makes any repairs, or furnishes any fuel, drilling rigs, standard rigs, machinery, equipment, material or supplies for or in connection with the drilling of any well, or wells in search of oil, gas or water, or for or in connection with the operation of any oil, gas, or water well or wells, whether or not a producing well is obtained and whether or not such materials, machinery, equipment, services and supplies are incorporated in or become a part of the completed oil, gas or water well, has a privilege on all oil or gas produced from the well or wells and the proceeds thereof inuring to the working interest therein and on the oil, gas or water well or wells and the lease whereon the same are located, and on all drilling rigs, .... This privilege is second in rank only to the privilege granted in favor of laborers. (Emphasis added)
La.R.S. 9:4862 provides in part:
If a notice of such claim or privilege, setting forth the nature and amount thereof, is filed for record and inscribed in the mortgage records of the parish where the property is located within one hundred eighty days days after the last day of the performance of the labor or service, in the case of laborers, within one hundred eighty days after the last day of the doing, making, or performing of such trucking, towing, barging, or repairing, in the case of claimants doing, making, or performing such services, and in the case of furnishers of fuel, drilling rigs, standard rigs, machinery, equipment, material or supplies, within one hundred eighty days from the last date of the delivery of such fuel, drilling rigs, standard rigs, machinery, equipment, material or supplies to the well or wells, the privileges are superior to all other privileges or mortgages against the property, except taxes or.... (Emphasis added)

The precatory language of La.R.S. 9:4862

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493 So. 2d 1141, 93 Oil & Gas Rep. 86, 1986 La. LEXIS 7010, Counsel Stack Legal Research, https://law.counselstack.com/opinion/louisiana-materials-co-inc-v-atlantic-richfield-co-la-1986.