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SFELD ENGINEERING, INC. v. FRANKLIN SUPPLY CO.

July 13, 1990.

SFELD ENGINEERING, INC., Appellee,
v.
FRANKLIN SUPPLY COMPANY, Defendant, and MOBIL OIL CORPORATION f/k/a NORTHERN NATURAL GAS PRODUCING COMPANY, Appellant.



The opinion of the court was delivered by

This is a civil action where Mobil Oil Corporation (Mobil) appeals the district court decision granting Sfeld Engineering, Inc., (Sfeld) summary judgment. The district court found that Sfeld held three valid mechanics' liens for foreclosure on Mobil's oil and gas leases.

The parties stipulated to the facts: Mobil placed an order with Franklin Supply Company (Franklin Supply) for three fiberglass

[247 Kan. 147]

      water tanks to be delivered to Mobil's location and unloaded by Franklin Supply. Franklin Supply, in turn, placed an order with Sfeld for the specified water tanks. Sfeld delivered the requested tanks to Mobil lease sites and billed Franklin Supply for each of the tanks. Sfeld shipped and delivered each tank in two parts. At the lease site, Sfeld bolted the parts together, lined the inside with fiberglass and installed fittings as directed by a Mobil representative. After each tank was unloaded and assembled by Sfeld, the tanks were installed and put into operation by an independent contractor, F & O Roustabouts. Each tank was placed in a hole partially below ground and connected by a water line to a well. Mobil paid Franklin Supply for the tanks delivered by Sfeld. Franklin Supply took bankruptcy and has failed or refused to pay Sfeld for the tanks, whereupon Sfeld filed mechanics' liens upon Mobil's oil and gas leases.

  The sole issue presented is whether Sfeld is within the statutory classification entitled to assert mechanics' liens on Mobil's oil and gas leases.

  K.S.A. 55-207 to 55-210, inclusive, confer special oil and gas mechanics' lien rights not affected by general lien statutes. We have consistently held that mechanics' lien laws are to be strictly construed against a claimant and that their scope is restricted to that clearly granted by the legislature. Interlake, Inc. v. Kansas Power & Light, 231 Kan. 251, 253, 644 P.2d 385 (1982).

  K.S.A. 55-208 provides:
"Lien of subcontractor or materialman on gas and oil leasehold or pipe line. 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 by K.S.A. 55-207."
In Interlake, we stated:
  "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

[247 Kan. 148]

      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 materials 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." 231 Kan. at 254.

  Our ultimate inquiry, therefore, is a determination of the legal relationships between the parties. To come under K.S.A. 55-208, we must find Franklin Supply a contractor and Sfeld a subcontractor or materialman in order for Sfeld to hold valid liens on the leases.

  Interlake, Inc. v. Kansas Power & Light, 231 Kan. 251, is factually similar to the case at hand. In Interlake, KP&L ordered materials from Continental Pipe for construction of a pipeline. KP&L directed Continental Pipe to ship the pipe to Plexco for coating. Continental Pipe, in turn, purchased the pipe from Interlake and directed Interlake to ship the pipe to Plexco. J & B Construction constructed the pipeline utilizing KP&L's materials, and when the project was completed KP&L paid Continental Pipe. Continental Pipe, however, was insolvent and failed to pay Interlake for the pipe it had supplied. 231 Kan. at 252.

  Interlake alleged it had lien rights on the pipeline property under K.S.A. 55-208 as a supplier of materials to either a subcontractor or contractor. We declined to adopt the broad definition of contractor as "one who contracts" and chose instead to adopt a more limited and specified definition which excludes suppliers of materials from being classed as contractors or sub-contractors. 231 Kan. at 253-56.

  We determined that Continental Pipe furnished materials to KP&L but did not install or improve the pipe in any way. Thus, Continental Pipe was a materialman and Interlake merely a supplier to a materialman, "a class so far removed from the owner that only the `plainest expressions of law' must be used to entitle the class to lien protection." 231 Kan. at 256. Upon arriving at this conclusion, we reversed the district ...


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