Oklahoma Case: Lack of Preliminary Notice Leads to Invalidated Mechanics LienNCS Credit - June 24, 2014
Mechanics Lien laws are rarely straightforward and courts across the nation generally require strict compliance to these often complex statutes. The case of Mel Stevenson & Associates, Inc. v. Giles, 2004 OK CIV APP. 96, 103 P.3d 631 (2004), illustrates how a simple mistake, due to confusing language in statute, can lead to invalidation of your entire mechanics lien.
In Mel Stevenson, the defendant, Roy Giles, owned and occupied a Newcastle, Oklahoma residence which was completely destroyed by a fire. Giles elected to rebuild the home in the same location and engaged Wes-Star Construction, Inc. to act as contractor. Giles lived in another location while the home was being reconstructed, but kept his mailing address and phone number. Once the home became habitable, Giles promptly moved back.
Giles learned of a special type of roofing offered by Mel Stevenson & Associates, doing business as Spec Building Materials, herein referred to as Spec. Giles consulted with Spec about their roofing materials and explained to the company the situation with the fire and the reconstruction of his home. Spec provided the roofing materials and windows to the project on account with Wes-Star. During this time, the County Assessor removed the property from the improved tax rolls due to the fire.
Later, a dispute arose between Spec and Wes-Star. Spec was not paid for the materials it had supplied. It filed a materialman’s lien but did not provide preliminary notice to Giles as required under 42 O.S.2001, § 142.1.2. In court, Giles claimed Spec’s lien was invalid due to lack of notice. Spec, on the other hand, urged that notice was not required under Oklahoma law because Giles was not occupying the dwelling.
The court turned to the statutory language of 42 O.S.2001, § 142.1.2. Under this provision, no lien which affects property presently occupied by an owner is enforceable unless written notice was provided prior to furnishing of the materials. The statute sets out the language which the notice must include. The question then became whether Spec was required to send notice to owner to Giles because he was not currently occupying the home. The court looked to prior case law on the issue and found much dissention on the subject. The court ultimately found the issue turned on whether Giles had begun occupying the property before construction, and therefore his absence was merely temporary, or whether he was deemed to have first occupied the property upon his taking of possession once it was habitable.
The court found that under the circumstances, Giles absence was temporary because he never intended to leave the property permanently. Thus, it reasoned, Giles was entitled to notice. The court also found persuasive the fact that Giles stated he was unaware Spec could file a lien against his property in the event of nonpayment by the contractor. After addressing all issues, the appellate court held Spec’s mechanics lien to be invalid.
In Mel Stevenson, the Oklahoma law concerning the notice to owner was far from clear, given the circumstances of the absent owner and destroyed home.
Best Practice: NCS recommends serving a copy of the preliminary notice upon all parties within the contractual chain, even when it appears no notice is required. The old adage is true: “better safe than sorry!”