|H2K Technologies v. WSP USA, 2021 OK 59
|Mechanics and Materialmen’s Lien
|Nov. 16, 2021
|District Court of Garvin County; Judge Edwards
|Route to this Court:
|Appeal of Order of Summary Judgment; Retained by Supreme Court on Court’s Motion
|The case concerns an action to foreclose a materialman’s lien filed by a sub-subcontractor against an oil refinery. WSP USA, Inc. (WSP) was the original contractor. WSP entered into a subcontract with Techsas, Inc. (Techsas). The Techsas contract contained a waiver clause whereby Techsas waived all liens and claims, statutory or otherwise, resulting from labor done and materials furnished on the project. Techsas entered into a subcontract with H2K Technologies, Inc. (H2K). The contract between Techsas and H2K did not contain any lien waiver terms. Techsas failed to pay H2K and H2K filed a lien statement against the oil refinery. WSP bonded over the lien and H2K proceeded to foreclose against the substituted security. The trial court ruled that H2K is charged with constructive notice of the subcontract between Techsas and WSP and that because Techsas had waived its rights to a lien, H2K could not obtain any greater rights than the subcontractor Techsas. Therefore, the trial court found that H2K did not have a legal right to impress a lien on the oil refinery. H2K appealed.
|Standard of Review:
|The waiver of lien clause in the subcontractor’s contract with the original contractor does not automatically flow down to the sub-subcontractor. Title 42 O.S. § 142 provides that a subcontractor may obtain a lien “from the same time, in the same manner, and to the same extent as the original contractor…” Title 42 O.S. § 143 provides that a sub-subcontractor may obtain a lien “in the same manner, and to the same extent as the subcontractor…”
While Oklahoma courts have long held that the rights of subcontractors, materialmen, and workmen to a lien is controlled by the terms of the original contract and all such parties are charged with notice of the terms of the original contract, The Technas contract with H2K is not the original contract. The original contract between the owner and the original contractor is what controls the obligation of the owner.
There is no evidence that H2K ever agreed to a flow down provision that would bind H2K to the lien waiver contained in the Techsas contract with WSP, a contract to which H2K was not a party. The Court has been opposed to the idea that parties to a contract could waive the statutory rights of third persons who were not parties to such contract.
|Reversed and Remanded.
|Darby, C.J., Kane, V.C.J., Kauger, Winchester, Edmondson, Combs (author), Gurich, Kuehn, JJ., concur. Rowe, J., concurs in part, dissents in part (but did not write separately).
|The Court also discussed 15 O.S. 2011, § 821(B)(1) and (B)(2), which declares certain provisions in construction contracts unenforceable in Oklahoma as against public policy. The Court finds that (B)(2), which H2K argued makes a materialman’s lien waiver unenforceable, in not applicable to Title 42 mechanic and materialmen’s liens.