Sfeld Engineering, Inc. v. Franklin Supply Co.

782 P.2d 357, 14 Kan. App. 2d 81, 107 Oil & Gas Rep. 10, 1989 Kan. App. LEXIS 782
CourtCourt of Appeals of Kansas
DecidedNovember 17, 1989
DocketNo. 63,764
StatusPublished

This text of 782 P.2d 357 (Sfeld Engineering, Inc. v. Franklin Supply Co.) is published on Counsel Stack Legal Research, covering Court of Appeals of Kansas primary law. Counsel Stack provides free access to over 12 million legal documents including statutes, case law, regulations, and constitutions.

Bluebook
Sfeld Engineering, Inc. v. Franklin Supply Co., 782 P.2d 357, 14 Kan. App. 2d 81, 107 Oil & Gas Rep. 10, 1989 Kan. App. LEXIS 782 (kanctapp 1989).

Opinion

Brazil, J.:

Mobil Oil Corporation (Mobil) appeals a district court decision granting Sfeld Engineering, Inc., (Sfeld) summary [82]*82judgment and finding that Sfeld had valid liens on three oil and gas leases and could foreclose the liens against Mobil. We affirm.

The parties stipulated to the facts of the case. Mobil placed an order with Franklin Supply Company (Franklin) to purchase three water tanks to be delivered and set up at three of Mobil’s lease locations. Franklin requested Sfeld to supply and deliver the tanks to Mobil. Each of the tanks was shipped to a leasehold site in two parts. There, Sfeld bolted the halves together, lined the insides with fiberglass, and placed the fittings as directed by the Mobil representative. The tanks were further installed and put into operation by F & O Roustabouts, an independent contractor retained by Mobil. Mobil paid Franklin, but Franklin refused to pay Sfeld. Sfeld filed a statement of lien claim covering the delivered equipment within six months of the delivery dates. Sfeld filed an action to foreclose on the three liens and a motion for summary judgment. The trial court granted summary judgment to Sfeld and determined that Sfeld possessed three valid liens covering Mobil’s oil and gas leases, which Sfeld was entitled to foreclose.

The facts in this case are undisputed. Summary judgment is appropriate where there is no genuine issue of material fact and the moving party is entitled to judgment as a matter of law. When reviewing a grant of summary judgment, this court must read the record in the light most favorable to the party who defended against the motion. Danes v. St. David’s Episcopal Church, 242 Kan. 822, 830, 752 P.2d 653 (1988). This case involves a determination of the legal relationship between the parties and is subject to unlimited review. Hutchinson Nat’l Bank & Tr. Co. v. Brown, 12 Kan. App. 2d 673, 674, 753 P.2d 1299, rev. denied 243 Kan. 778 (1988).

Liens on oil and gas leases are created and governed by the provisions of K.S.A. 55-207 to 55-210 inclusive. “Oil and gas lien laws confer special privileges, are to be strictly construed against one claiming the privilege, and their scope is not to be extended beyond that clearly granted by the legislature.” Interlake, Inc. v. Kansas Power & Light, 231 Kan. 251, 253, 644 P.2d 385 (1982). Sfeld must establish that it is statutorily authorized to assert a lien. K.S.A. 55-207 provides in relevant part:

[83]*83“Any person, corporation, or copartnership who shall under contract, express or implied, with the owner of any leasehold for oil and gas purposes, ... or with the trustee or agent of such owner, who shall perform labor or furnish material . . . used in . . . completing, operating or repairing of any oil or gas well or who shall furnish any oil-well supplies or perform any labor in constructing or putting together any of the machinery used, in . . . operating, completing or repairing of any gas well, shall have a lien upon the whole of such leasehold . . . .”

K.S.A. 55-208 provides:

“Any person, copartnership or corporation who shall furnish such machinery or supplies to a subcontractor under a contractor, or any person who shall perform such labor under a subcontract with a contractor, or who as an artisan or day laborer in the employ of such contractor, and who shall perform any such labor, may obtain a lien upon said leasehold for oil and gas purposes or any gas pipe line or any oil pipe line from the same tank and in the same manner and to the same extent as the original contractor for the amount due him or her for such labor, as provided in K.S.A. 55-207.”

The Interlake court, in discussing the categories afforded protection by K.S.A. 55-208, said:

“K.S.A. 55-208 expressly affords protection to: (1) a legal entity furnishing machinery or supplies to a subcontractor under a contractor; (2) a person performing labor under a subcontract with the contractor; and (3) an artisan or day laborer employed by a contractor. Protection was judicially extended to a fourth category in [Mountain Iron & Supply Co. v. Branum, 200 Kan. 38, 434 P.2d 1015 (1967)]. That fourth category is suppliers of material to a contractor. It would, after all, be wholly illogical if protection were afforded to a materialman supplying a subcontractor but not to a materialman supplying a contractor. Mountain Iron represents basically a judicial correction of a statutory omission rather than an extension of the scope of the statute.” Interlake, Inc. v. Kansas Power & Light, 231 Kan. at 254.

In Interlake, KP&L was expanding a natural gas pipeline in southwest Kansas. KP&L issued a purchase order for pipe to Continental Pipe & Tube Corporation and contracted with a separate construction company to construct the pipeline. Continental contracted with Interlake to furnish the pipe; Interlake shipped the pipe to Plexco, another KP&L contractor, to coat the pipe. Continental failed to fully pay Interlake, so Interlake filed an oil and gas mechanic’s lien against KP&L. 231 Kan. at 252. The trial court held and this court affirmed that Interlake had a valid lien under K.S.A. 55-208. 231 Kan. at 254. The Supreme Court re[84]*84versed and concluded that Continental must be considered to be a materialman, that Interlake served as a supplier to a materialman, and that a supplier to a materialman is afforded no protection under the oil and gas lien statutes. 231 Kan. at 256-57. In reversing, the court relied on the following discussion of the various classes of potential lien claimants found in 53 Am. Jur. 2d, Mechanics’ Liens §§ 71, 72, 73:

“ ‘§ 71. Materialmen.
“ ‘The right to assert a mechanic’s lien is now generally extended to materialmen or those persons who supply materials for the structure and have no other connection with the work. But materialmen, to be entitled to a lien, must be specifically referred to within the statute, for it cannot be extended to that class by construction. Thus, materialmen are not generally within the term “contractor” or “subcontractor.”
“ ‘§ 72. Contractors or subcontractors distinguished.

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Related

Hutchinson National Bank & Trust Co. v. Brown
753 P.2d 1299 (Court of Appeals of Kansas, 1988)
Interlake, Inc. v. Kansas Power & Light Co.
644 P.2d 385 (Supreme Court of Kansas, 1982)
Danes v. St. David's Episcopal Church
752 P.2d 653 (Supreme Court of Kansas, 1988)
Mountain Iron & Supply Co. v. Branum
434 P.2d 1015 (Supreme Court of Kansas, 1967)

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Bluebook (online)
782 P.2d 357, 14 Kan. App. 2d 81, 107 Oil & Gas Rep. 10, 1989 Kan. App. LEXIS 782, Counsel Stack Legal Research, https://law.counselstack.com/opinion/sfeld-engineering-inc-v-franklin-supply-co-kanctapp-1989.