Mobile Components, Inc. v. Layon

• Decision Date: 25 November 1980
• Docket Number: No. 51141,51141
• Parties: MOBILE COMPONENTS, INC., a corporation, et al. Appellees, v. Verlee C. LAYON, Executrix of the Estate of Thomas Layon, Sr., Deceased, Appellant. Verlee C. LAYON, Executrix of the Estate of Thomas Layon, Sr., Deceased, Appellant, v. FIRST NATIONAL BANK OF TULSA; The Outrigger, Inc.; Universal Contracting Corporation, a foreign corp.; Marti Stratton dba Marti's Commercial Interiors; Lewis Avenue Investment Company, an Oklahoma general partnership with Jack R. Sowles and James M. Metzker; Planned Residential Communities Construction Company of Oklahoma, Inc.; Hamilton Investment Trust, a voluntary business association of Massachusetts with Paul Stillman as a Trustee; Marvin Lasater dba Lasater Electric; D. McGlumphy dba Mac's Electric Co.; Concrete Specialties of Tulsa, Inc.; Raymond P. Semones dba Trilites Manufacturing Co.; Tom B. Childers; Murphy Paint & Drywall, Inc.; Professional Investors Life Insurance Company; Miller Construction Co. of Tulsa, Inc.; Turner Roofing and Sheet Metal, Inc.; Mobile Components Corporation, a foreign corporation; The Board of County Commissioners of Tulsa County, Oklahoma; Duoskin, Inc.; and Sizemore, Sack & Sizemore, Appellees.
• Court: Oklahoma Supreme Court

Page 591

623 P.2d 591

1980 OK 173

MOBILE COMPONENTS, INC., a corporation, et al. Appellees, v. Verlee C. LAYON, Executrix of the Estate of Thomas Layon, Sr., Deceased, Appellant.

Verlee C. LAYON, Executrix of the Estate of Thomas Layon, Sr., Deceased, Appellant, v. FIRST NATIONAL BANK OF TULSA; The Outrigger, Inc.; Universal

Contracting Corporation, a foreign corp.; Marti Stratton dba

Marti's Commercial Interiors; Lewis Avenue Investment

Company, an Oklahoma general partnership with Jack R. Sowles

and James M. Metzker; Planned Residential Communities

Construction Company of Oklahoma, Inc.; Hamilton Investment

Trust, a voluntary business association of Massachusetts

with Paul Stillman as a Trustee; Marvin Lasater dba Lasater

Electric; D. McGlumphy dba Mac's Electric Co.; Concrete

Specialties of Tulsa, Inc.; Raymond P. Semones dba Trilites

Manufacturing Co.; Tom B. Childers; Murphy Paint & Drywall,

Inc.; Professional Investors Life Insurance Company; Miller

Construction Co. of Tulsa, Inc.; Turner Roofing and Sheet

Metal, Inc.; Mobile Components Corporation, a foreign

corporation; The Board of County Commissioners of Tulsa

County, Oklahoma; Duoskin, Inc.; and Sizemore, Sack &

Sizemore, Appellees.

No. 51141.

Supreme Court of Oklahoma.

Nov. 25, 1980.

Rehearing Denied Feb. 17, 1981.

An Appeal from the District Court of Tulsa County; William W. Means, judge.

Appeal from order sustaining motion for summary judgment declaring the Oklahoma Mechanics' and Materialmen's Lien Statute, 42 O.S.1971, § 141, et seq., unconstitutional. Judgment of the trial court reversed and cause remanded.

REVERSED AND REMANDED.

Joseph A. McCormick and Robert L. Roark, of Hall, Sublett & McCormick, Tulsa, for appellees, First Nat. Bank of Tulsa & The Outrigger, Inc.

John R. Barker, of Gable, Gotwals, Rubin, Fox, Johnson & Baker, Tulsa, for appellees, The Trust of Hamilton Inv. Trust, and Planned Residential Communities Const. Co. of Oklahoma, Inc.

Wesley R. Thompson, Sapulpa, for appellant.

Thomas A. Landrith, Jr., Tulsa, for amicus curiae, Almond Elec. Co., Inc.

David Noss, of Rheam & Noss, Tulsa, for amicus curiae, Wilson Fire Protection, Inc.

Paul E. Garrison, of Garrison, Pigman, Comstock & Thurston, Tulsa, for amicus curiae, Auxier-Scott Supply, Inc., Palmer Plumbing, Heating & Air Conditioning Co., Inc., Benjamin F. Mott dba Mott Roofing & Sheet Metal Co.

William J. Doyle, III, of Jones, Givens, Brett, Gotcher, Doyle & Bogan, Inc., Tulsa, for amicus curiae, Hale Plumbing, Inc.

J. Patrick Cremin, of Hall, Estill, Hardwick, Gable, Collingsworth & Nelson, Tulsa, for amicus curiae, Fred J. and Mary Ann Zalokar.

SIMMS, Justice:

This appeal concerns two lien foreclosure actions consolidated by the trial court. In 1973, Lewis Avenue Investment Company, as landowner, contracted to have a total of 975 apartment units constructed on two tracts of land, one in Tulsa and one in Broken Arrow. The carpeting for the units on both tracts was sub-contracted to Century Interiors, Inc. On July 17, 1974, Century filed a materialmen's lien statement in the amount of $17,115.37. The lien statement incorrectly described the Tulsa property for which the carpeting was furnished, but correctly described the property in Broken Arrow.

Appellant, as the assignee of these lien claims, sued below for foreclosure. Appellee Planned Residential Community Construction Company (PRCCC) bought the Broken Arrow property in January, 1975, with notice of the lien claim. Appellee Outrigger bought the Tulsa property in September, 1974, at which time, because of the incorrect description on the statement, it had no notice of the lien claim. Appellant, after the commencement of this action, was allowed to amend the lien statement to correctly describe the Tulsa property.

Appellees' motion for summary judgment was sustained at the pretrial conference. The trial judge ruled that the Oklahoma Mechanics' and Materialmen's Lien laws, 42 O.S.1971, §§ 141, et seq., were unconstitutional as a deprivation of property without due process of law. The constitutionality of these statutes is the only issue on appeal. ¹

We do not now determine if the trial court erred by allowing the description amendment to the lien statement, or by allowing one lien statement to suffice for two noncontiguous tracts of land.

42 O.S.1971, §§ 141, et seq., provide the statutory scheme through which a mechanic or materialman may claim a lien on real estate. A general contractor must file a lien statement within four months after the date upon which the last labor is performed, or materials last furnished, in the office of the clerk of the county where the land is located. The statement need only provide: the amount claimed and the items thereof as nearly as practicable; the names of the owner(s), the contractor, and the claimant; and a legal description of the property, all verified by affidavit. 42 O.S.1971, § 142.

The relevant provisions for subcontractors are the same, except that the lien statement must be filed within ninety days from the date of the last work performed or material furnished, and notice of the claim must be served to the owner. 42 O.S.1971 § 143. ² The lien statement constitutes constructive notice of the claim to all purchasers subsequent to the date of the furnishing of the first material or performance of the first labor. 42 O.S.1971, § 141.

The claimant has one year to commence suit to enforce the lien. 42 O.S.1971, § 172. If no action is commenced within one year, the lien is canceled by limitation of law. 42 O.S.1971, § 177. ³

The landowner may bring an action to discharge the lien at any time. 42 O.S.1971, § 177. He can also discharge the lien by posting a cash bond in a suitable amount. 42 O.S.1971, § 147. He has no other remedy. There is no provision that the claimant must post bond to indemnify the landowner for costs he might incur in clearing title to his property.

Appellant makes no claim that the liens it asserts were not the result of state action, but only that no significant property interest is deprived by the mere filing of the lien statement.

Appellees' constitutional attack on the Oklahoma lien statutes is based primarily on four recent decisions by the United States Supreme Court concerning the requirements of due process where a state statute gives a creditor prejudgment relief.

In Sniadach v. Family Finance Corp., 395 U.S. 337, 89 S.Ct. 1820, 23 L.Ed.2d 349 (1969), a Wisconsin statute allowing a creditor to freeze the wages of an alleged debtor was held to be unconstitutional. The Court ruled that before the debtor could be deprived, even temporarily, of his wages, due process of law required that he be given notice and an opportunity to be heard.

Three years later, in Fuentes v. Shevin, 407 U.S. 67, 92 S.Ct. 1983, 32 L.Ed.2d 349 (1972), the Court invalidated prejudgment replevin statutes of Florida and Pennsylvania, which allowed property to be seized by an ex parte application of one claiming a right in the property. The Court held that due process required that, except in unusual circumstances, the debtor must be given notice and an opportunity to be heard before he can be deprived, even temporarily, of any significant property interest.

In Mitchell v. W. T. Grant Co., 416 U.S. 600, 94 S.Ct. 1895, 40 L.Ed.2d 406 (1974), a Louisiana statute allowing sequestration of property sold under an installment sale was upheld. The Court distinguished Fuentes, by saying that in this case the seizure was necessary to protect the rights of the seller in the collateral, as he had a valid vendor's lien. The statute did not provide for notice and a hearing, but did have other procedural safeguards that the Court found to be a sufficient accommodation of the respective interests involved. The statute required: an affidavit of facts; review by a judge; a bond to be posted by the creditor; and a prompt post seizure hearing.

Most recently in North Georgia Finishing Inc. v. Di-Chem, Inc., 419 U.S. 601, 96 S.Ct. 719, 42 L.Ed.2d 751 (1975), the Court overturned a Georgia statute allowing the freezing of a commercial bank account. The statute required an affidavit to be filed with the court clerk, and a bond posted for twice the amount claimed. The Court held this statute unconstitutional because it provided for no prior notice and opportunity to be heard, nor any judicial participation in the proceeding before garnishing the account.

These cases enunciate the current due process standards required for prejudgment garnishment and replevin statutes. In the absence of extraordinary circumstances, certain procedural safeguards must be followed before a person is deprived of a significant property interest. Generally, he must be given notice of the creditor's claim, and an opportunity to be heard before his property may be seized. However, if the interests of the creditor cannot be protected by allowing such prior notice and hearing, then there must be other procedural safeguards to sufficiently protect the property rights of the alleged debtor. These standards are meant to be flexible, to constitutionally accommodate the rights of all parties involved.

These requirements attach only when there has been a deprivation of a significant property interest. Appellees claim that a clear title is such a property interest. A lien, they argue, (1) clouds the title, and (2) restricts the alienation of the land, or at least reduces the market value; (3) the filing of the lien statement constitutes a taking; and (4) the provisions of the Oklahoma Mechanics' and Materialmen's lien statutes do not have the sufficient procedural safeguards required by the above cases, and are therefore unconstitutional.

The mere filing of the lien statement does not entitle the claimant to a lien on the land. 42 O.S.1971, § 141 provides that only a person who has in fact done work or furnished material on the property is entitled to a lien. ⁴ This presupposes a judicial determination....