Petition — First National Bank of Tulsa v. Layon
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Office -Supreme Court, U.S.
MAY 19 1981
No.
ALEXANDER L. STEVAS,
CLERK
In the Supreme Court of the United States
OCTOBER TERM, 1980
FIRST NATIONAL BANK OF TULSA, et al.,
Petitioner
v.
VERLEE C. LAYON, Executrix of the Estate of
THOMAS LAYON, SR., Deceased
Respondent
PETITION FOR A WRIT OF CERTIORARI
TO THE SUPREME COURT OF THE
STATE OF OKLAHOMA
Joseph A. McCormick
John W. Sublett, Jr.
Sublett, McCormick, Andrew & Keefer
Suite 1776, One Williams Center
Tulsa, Oklahoma 74172
(918) 582-8815
Attorneys for Petitioners
First National Bank of Tulsa, and
The Outrigger, Inc.
{Additional Counsel Listed on Inside Cover]
(x) corotem Printing Co. © 323 E.3rd © Tulsa, Okla. 74120 ¢ Phone (918) 582-1234
John R. Barker
Gable, Gotwals, Rubin, Fox
Johnson & Baker
2010 Fourth National Bank Bldg.
Tulsa, Oklahoma 74119
(918) 582-9201
Attorneys for Petitioner
Planned Residential Communities Construction
Company of Oklahoma, Inc., and
Hamilton Investment Trust
—_—(—
QUESTION PRESENTED
Whether the mechanics’ and materialmen’s lien laws
of the State of Okiahoma violate the Federal Constitu-
tion by depriving persons of property without due process
of law.
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TABLE OF CONTENTS
Page
TUNIS tivo create x caacsrtavin te eecan viene i, 3
SE EN orev ca sk vn acess beeeh sane vice eamah ea ee eh 2
RO TT ETE EO TET TEPER ESTO CTR ES PETITE 2
DURNEEY FURY DRVGEVEE oie sc nce the pacaseeesceseas 3
OI RG inks cknarencdecnaexentdsvsvivesys co@e
PUOCOUNS OR UG THE COOUE oon kc pear ctssccrvedvernss 4
Proceedings in the Oklahoma Supreme Court............... 6
PES GOT CIC I PRUE bsp ccesccucdiyecesecicess 10
Proposition I: The Decision in this Case Conflicts with
Decisions of Other State Courts of Last Resort....... 13
Proposition Il: The Decision in the Case Below is in Con-
flict with Applicable Decisions of this Court on the Im-
portant Question of What is Constitutionally Permis-
sible Under the Due Process Clause for Prejudgmeni
Selcure af DeDtors POGeTty oo occ ce svecvecscccesces 18
Proposition III: The Issue in this Case Involves an Impor-
tant Question of Federal Law Which Has Not Been but
Should be Settled by this Court ........0. 6666 e cues 21
DES Cutan veces Cue Saa Read hace eR aan oe Ob wien 23
Appendices:
Appendix A— Judgment and Opinion of Supreme
—ili—
Court of the State of Oklahoma,
a | A-1
Appendix B— Dissenting Opinion to the Judgment
of the Supreme Court of the State
of Oklahoma, November 25, 1980...... B-1
Appendix C—Order Denying Rehearing, Supreme
Court of the State of Oklahoma,
FOI Te eee vec cchvececaaeeines C-1
Appendix D—Mechanics’ and Materialmen’s Lien
Statutes of the State of Oklahoma;
42 0.S. (1971) 141 et seq... ....cceeees D-1
Appendix E—Due Process Clause of the
Fourteenth Amendment to the
United States Constitution ............ E-1
Appendix F —Order of the District Court of
Tulsa County, State of Oklahoma,
Cs a ee ee ne sere F-1
Appendix G—Petition in Error, Supreme Court
of the State of Oklahoma,
BL NPE cas doen ie cenakerbaaes G-1
Appendix H—Appellant’s Brief in Chief, Supreme
Court of the State of Oklahoma,
PEN Gs OUTS 6 wa ere encce cadences H-1
Appendix I— Appellees’ Answer Brief, Supreme
Court of the State of Oklahoma,
SO Ta UOT vs se v6 cadens caunet ne I-1
ox JY) ame
Page
AUTHORITIES CITED
CASES:
Barry Properties, Inc., v. Flick Brothers Roofing Co.,
5d Pie Zan CEB. TOTG) oc ccciccccses 7, 8, 14, 15, 16
Brookhollow Associates v. J. E. Green,
Jp F.. Sapp. 1502 GP. Comm, 1G7S) 6.0 oc scvccscccers 22
Connolly Development Inc. v. Supreme Court of
Merced County
EE pa cinaaas cae neag ened ee kana eT 15, 16
Fuentes v. Shevin,
407 U.S. 67, 92 S.Ct. 1983,
ef ES er rer 7,19, 24
Fusari v. Steinberg,
419 U.S. 379, 391, 95, S.Ct. 533, 541, 42 L.Ed.2d 521,
PD 554-46 s sack oak kosae ae eae nee eeu teens 22
Metropolitan Water Co. v. Hild,
415 P.2d 970, 971 (Okla. 1966) ..... cc ccccccccceces 16
Mitchell v. W. T. Grant Company,
416 U.S. 600, 94 S.Ct. 1895,
ee Po eee 7, 8, 19, 20, 24
North Georgia Finishing, Inc. v. Di-Chem, Inc.,
419 U.S. 601, 95 S.Ct. 719,
i we ey | 7, 8, 20, 23, 24
Roundhouse Construction Corp. v. Telesco Masons
Supplies Company, Inc.,
168 Conn. 371, 362 A.2d 778, 784, vacated and
remanded for determination whether decision rests on
state or federal constitutional grounds, 423 U.S. 809,
96 S.Ct. 20, 46 L.Ed. 2d 29 (1975), reaffirmed on
both state and federal grounds, 170 Conn. 155,
«
_ vy
365 A.2d 393, cert. denied, 97 S.Ct. 246 (1976). ....7, 15
Sniadach v. Family Finance Corp.,
395 U.S. 337, 89 S.Ct. 1820, 23 L.Ed.2d 349
A eer Peer re Te Per re ee 7, 19, 24
Spielman-Fond, Inc. vs. Hanson’s Inc.,
379 F. Supp. 997
Pe MTEE sctcisessceaseocens 6, 9, 17, 18, 20, 22
STATUTES:
SR ae Side A 2
Title 42, O.S., 1971, Sections 141, 142
OO BUT ccacchcccccvevceeee 3, 10, 16, 21
CO cae eke cesedsdeeoeeresss 3
REFERENCES:
The Oklahoma Bar Association Journal,
ee ee ue gNbebiseceenes 2
ae eed
In the Supreme Court of the United States
OCTOBER TERM, 1980
MOBILE COMPONENTS, INC., a corporation
Petitioner
Vv.
VERLEE C. LAYON, Executrix of the Estate of
THOMAS LAYON, SR., Deceased
Respondent
Consolidated With
FIRST NATIONAL BANK OF TULSA, et al.,
Petitioner
Vv.
VERLEE C. LAYON, Executrix of the Estate of
THOMAS LAYON, SR., Deceased
Respondent
PETITION FOR A WRIT OF CERTIORARI
TO THE SUPREME COURT OF THE
STATE OF OKLAHOMA
Petitioners! request that a Writ of Certiorari issue to review
the judgment of the Supreme Court of Oklahoma in this case.
! Petitioners are First National Bank of Tulsa; The Outrigger Inc.; Planned
Residential Communities Construction Company of Oklahoma, Inc., and
Hamilton Investment Trust, a voluntary business association of Massachusetts
with Paul Stillman as a Trustee.
=
OPINIONS BELOW
The opinion of the Oklahoma Supreme Court is yet to be
reported in the Pacific Digest. The opinion appears in The
Oklahoma Bar Association Journal at 51 O.B.A.J. 2852 and is
reprinted in Appendix A to this Petition. The Oklahoma Su-
preme Court revised and remanded the Order sustaining Motion
for Summary Judgment of the District Court of Tulsa County,
Oklahoma. The trial court’s Order Sustaining Motion for Sum-
mary Judgment, which granted judgment to Petitioners herein,
is reprinted in Appendix F.
JURISDICTION
The judgment of the Oklahoma Supreme Court was
entered on November 25, 1980. On February 18, 1981, the
Oklahoma Supreme Court, upon Petitioners’ timely filing of
Petition for Rehearing, entered an order denying rehearing.
(Pet. App. C). The jurisdiction of this Court is invoked under
28 U.S.C. 1257(3).2
2 The opinion which the Petitioners seek to have reviewed is not a final judg-
ment granting or denying relief. However, that opinion does finally determine
an important right in issue; namely the validity of the Oklahoma mechanic's
and materialmen’s lien statutes when challenged as being repugnant to the
Fourteenth Amendment to the Constitution of the United States.
The jurisdictional statute (28 USC 1257) permits the Court to review a
judgment of the highest court in the state whenever a threshold federal issue
has been decided by the state court and further proceedings cannot remove or
otherwise affect this threshold federal issue. New York v. Cathedral Academy
(1977) 434 US 125, 98 S. Ct. 340, 54 L.ed.2d 346. Further, this Court's
jurisdiction to review the Oklahoma Supreme Court’s decision is supported by
cases such as Cox Broadcasting, in which Justice White stated that cases in
which the federal issue, finally decided by the highest court in the state will
survive and require decision regardless of the outcome of future state court
proceedings, the decision is final for purposes of review to this Court. Cox
Broadcasting Corp. v. Cohn (1975) 420 US 469, 95 S. Ct. 1029, 43 L.ed.2d
328. The reversal by this Court of the Oklahoma Supreme Court on the issue
of the Constitutionality of Oklahoma's mechanic's and materialmen’s lien laws
=
QUESTION PRESENTED
Whether the mechanics’ and materialmen’s lien laws of the
State of Oklahoma violate the Federal Constitution by depriv-
ing persons of property without due process of law.
STATUTORY PROVISIONS INVOLVED
This case involves the Oklahoma Statutes which allow cer-
tain persons to file liens against real property for work per-
formed thereon (Title 42, Oklahoma Statutes, 1971, Sections
141, 142, 143, 147, 172, 175, 177)3 and the due process clause of
the Fourteenth Amendment to the United States Constitution
(U.S. Const. amend. XIV, §1). They are reprinted in Appendix
D and Appendix E.
STATEMENT OF THE CASE
This petition arises from two related mechanic’s lien
foreclosure actions consolidated by the trial court. These suits
involved lien claims against the record owners and the holders
of mortgages on two tracts of land, one in Tulsa and one in Bro-
ken Arrow. The large number of parties to these consolidated
actions tend to confuse the facts material to a consideration of
the basic issue presented. However, these facts may be summar-
ized as follows:
In July, 1974, Century Interiors, Inc. filed a mechanic’s lien
Footnote 2 continued... .
would be preclusive of any further litigation in this cause of action. This issue
is, “. . . too important to be denied review and too independent of the cause
itself to require that appelate consideration be deferred until the whole case is
adjudicated.” Local No. 438 Construction & General Laborers’ Union v.
Curry (1963) 371 U.S. 542, 83 S.Ct. 531, 9 L.ed.2d 514.
3 This action concerns only 42 O.S. 1971, §§141, et sey. Later amendments to
those statutes are not in question here. For example, the Legislature amended
the statute in 1977 to provide for notice of the claim to the landowner from the
contractor and subcontractor. 42 O.S. Supp. §143.1.
a
in the amount of $17,115.37 against two separate properties in
Tulsa County. The lien statement referred to work performed
on land which was owned at the time by Lewis Avenue Invest-
ment Company. In September, 1974, Petitioner Outrigger ac-
quired title to one of the above tracts, located in Tulsa. Si-
multaneously, Petitioner First National Bank took a mortgage
covering the same property.
Planned Residential Communities Construction Company
of Oklahoma, Inc., (PRCC) acquired title to the Broken Arrow
tract by virtue of a certain Quit Claim Deed executed by the
previous owner, Lewis Avenue Investment Company, in Janu-
ary, 1975. The Trustees of the Hamilton Investment Trust
(“Hamilton”) at that time (1975) held a first mortgage from
Lewis Avenue Investment Company recorded in December
1972. PRCC subsequently executed a certain second mortgage
to Hamilton in December, 1975. Thus, both PRCC, as the pre-
sent owner of the subject property and Hamilton, as the holder
of mortgage liens covering the subject property, were joined as
party defendants in the two lien foreclosure actions brought
relating to the two separate tracts in Broken Arrow and Tulsa.
PROCEEDINGS IN THE TRIAL COURT
On April 22, 1975, Respondent’s decedent filed his Petition
in Case C-75-1071 seeking to foreclose the lien which he claimed
on the properties located in both Tulsa and Broken Arrow. Re-
spondent obtained leave on May 20, 1975, to amend his original
lien statement to include the correct legal description of both
tracts of property upon which the lien was being claimed.
On March 30, 1976, the trial court ordered that the action
commenced by Respondent’s decedent be consolidated with
Case No. C-75-1960, a lien foreclosure action filed on August 7,
1975, by another contractor on the Broken Arrow property,
=
Mobile Components, Inc. Thomas Layon, Sr., the originally
named Plaintiff in Case No. C-75-1071, subsequently died, and
his Executrix was substituted as Plaintiff (Respondent herein).
On February 2, 1977, Petitioners Outrigger and First National
Bank filed their Motion for Summary Judgment in Case No.
C-75-1071 asking that Respondent’s case be dismissed on
grounds that the mechanics’ and materialmen’s lien statutes for
Oklahoma are unconstitutional under the due process clause of
the Fourteenth Amendment. The federal question sought to be
reviewed herein was first raised at that stage in the proceedings.
The questionable constitutionality of Oklahoma’s mechan-
ic’s lien statutes was extensively examined by Petitioners in their
Brief supporting this Motion, Counsel for Petitioners summa-
rized his constitutional examination of these statutes by stating:
“. . . the conclusion is inescapable that the Oklahoma
laws fail in every single aspect to pass constitutional
muster. The lien laws of Oklahoma are constitutionally
impermissible in the first instance because they fail to
provide notice or opportunity to be heard prior to the
time the lien is said to attach. Denial of due process
permeates the entire statutory scheme in that nowhere in
the proceedings are there any provisions for judicial par-
ticipation or review of the facts and circumstances upon
which the lien is predicated. The lien statement itself,
furthermore, contains impermissible conclusory state-
ments, rather than sufficient facts to support the claim.
Nowhere in these lien laws is there any provision requir-
ing a prompt post-svizure hearing on the probable validi-
ty of the contractor’s or lienor’s claim. Rather, the title to
the property in question may be clouded for a year, or
even longer if suit is eventually filed, thereby depriving
the owner or his successor in interest of the full use and
enjoyment of the property, namely the right to sell, al-
ienate, or further mortgage the property.
oo
The Motion for Summary Judgment was sustained on May
31, 1977, and the Court’s Order was subsequently entered on
July 18, 1977, the Honorable Judge Means ruling specifically
that the mechanic’s and materialmen’s lien statutes of the State
of Oklahoma are unconstitutional because they fail to provide
due process of law. (Appendix F).
PROCEEDINGS IN THE OKLAHOMA SUPREME COURT
Respondent filed his Petition in Error in the Supreme
Court of Oklahoma on June 28, 1977, urging the Court to find
the state’s mechanic’s lien laws constitutional (Appendix G).
Respondent argued that “clear logic and the weight of current
legal authority show Oklahoma’s mechanic’s lien statutes are
not unconstitutional.” In support of this argument Respondent
relied primarily on a series of state and federal district court
decisions which have upheld the validity of their respective
state’s mechanic’s lien statutes. Emphasis was placed on the case
of Spielman-Fond, Inc. vs. Hanson’s Inc., 379 F. Supp. 997 (D.
Ariz., 1973), in which the court upheld the Arizona statute un-
der a constitutional due process challenge, reasoning that the fil-
ing of a mechanic’s lien does not amount to a taking of a signifi-
cant property interest.
Petitioners filed their Answer Brief on December 27, 1977, in
which they described the procedure for (and the impact of) fil-
ing a mechanic’s or materialmen’s lien in Oklahoma, pointing
out that the lien laws fail to provide for any type of timely notice
or hearing on the probable merits of the claim against the own-
er’s property, or for any judicial participation at an early stage
of the proceedings, or for any type of bond or security to pro-
tect the owner against a wrongful taking. Petitioner dis-
tinguished Spielman-Fond and the other cases cited by the
Respondent by noting that the Oklahoma statutes contain fewer
a
due process protections for the property owner than any of
those states ir, which the lien laws had been upheld. Petitioner
compared the case at bar to Sniadach v. Family Finance Corp.,
395 U.S. 337, 89 S.Ct. 1820, 23 L.Ed. 2d 349 (1969); Fuentes v.
Shevin, 407 U.S. 67, 92 S.Ct. 1983, 32 L.Ed. 2d 556 (1972); Mit-
chell v. W. T. Grant Company, 416 U.S. 600, 94S.Ct. 1895, 40
L.Ed.2d 406 (1974); and North Georgia Finishing, Inc. v. Di-
Chem, Inc., 419 U.S. 601, 95 S.Ct. 719, 42 L.Ed.2d 751 (1975),
in which this Court enunciated what is constitutionally permissi-
ble under the due process clause before a debtor may be sub-
jected to prejudgment garnishment or replevin. In making this
comparison, Petitioner advanced the argument that the due
process tesi which the Supreme Court applied to garnishment
and replevin statutes cannot be disregarded by the states in their
formulation of mechanic’s and materialmen’s lien statutes. The
same test should apply because in all of these cases the property
owner is deprived of a substantial property interest.
Finally, the Petitioner urged the Oklahoma Court to renounce
the position, heretofore taken by a few jurisdictions, chat the ef-
fect of a mechanic’s lien on property is “de minimis.” Rather,
the Oklahoma Justices were encouraged to adopt the position
taken by the Supreme Courts of Maryland and Connecticut —
that a mechanic’s lien is a prejudgment creditor remedy which
does deprive the owner of a significant property interest. Barry
Properties, Inc. v. Flick Brothers Roofing Co., 353 A.2d 222
(Md. 1976); Roundhouse Construction Corp. v. Telesco
Masons Supplies Company, Inc., 362 A.2d 778 (Conn. 1975).
Petitioner quoted directly from Barry Properties:
“In short, the Maryland mechanic’s lien law permits an
owner to be deprived of a significant property interest
without notice or a prior hearing, and thus is uncorstitu-
tional unless it provides protections such as those dis-
niles
cussed in Mitchell and North Georgia Finishing or it is
deemed to be within the “extraordinary circumstances”
exception. Barry Properties, Inc., supra, 353 A.2d
231-232.
On November 25, 1980, the Supreme Court of Oklahoma,
by an 8-1 decision, upheld the constitutionality of Oklahoma’s
mechanic’s and materialmen’s lien laws, thus reversing the
Order of the trial court.
In its majority opinion, the Oklahoma Court stated that
the filing of a mechanic’s lien against real estate does not
amount to a taking of a significant property interest. The Court
reasoned that due process scrutiny does not apply to mechanic’s
lien statutes because the filing of such a lien is not an actual
physical taking of the property. Equating the notice function of
a mechanic’s lien with that of a notice of lis pendens, the Court
held that, “On balance, the notice function, as well as ad-
ministrative necessity, Outweighs the minimal interference to
property resulting from mere filing of the claim.” Acknowledg-
ing that some jurisdictions have held that the filing of the lien
statement constitutes a significant taking of a property interest,
the majority declared that “we cannot do so.” On the contrary
“.. . the filing of a lien statement under our mechanic’s and
materialmen’s lien statutes is only a de minimis interference with
the use and enjoyment of the property involved.”
The dissenting opinion of Justice Hodges represents a total
endorsement of the arguments put forth by the Petitioners in
their Answer Brief (Appendix B). The dissatisfaction-of Justice
Hodges with the majority decision is immediately apparent. His
opinion even contains a parody of the majority’s holding:
“While some courts have elected to adhere to the theory
that the filing of a mechanics’ lien is a de minimis taking
of property not worthy of due process protection, I can-
aaties
not do so. I am persuaded by the rationale adopted by
other jurisdictions which holds that the imposition of a
mechanics’ lien without any judicial assessment of its
merits constitutes a significant taking of property and is
violative of due process. (Footnotes omitted.)
The dissent stressed the practical consequences of lien
claims which may be “frivolous, malicious, or fraudulent.” In
the words of Justice Hodges:
“The greatest advantage in owning land is often not the
actual possession of the property, but the collateral ben-
efits which are derived from ownership. These include
the right to alienate, encumber, mortgage, lease, and ac-
quire equity. A mechanics’ lien has a drastic effect on
these privileges. (Footnote omitted.)
Petitioners filed a timely petition for rehearing. Among
other things, the petition stressed the fact that the majority
followed the so-called de minimis holding of Spielman-Fond
and its successor cases without even taking note of the obvious
procedural deficiencies of Oklahoma’s lien statutes when com-
pared to the lien statutes of those other jurisdictions. Petitioners
pointed out that every state mechanic’s lien statute which has
been found constitutional contained safeguards for the property
owner which Oklahoma’s statutes lack. And, concerning the
majority’s opinion that a mechanic’s lien statement is “much the
same as the lis pendens notice,” Petitioners discussed the dif-
ferences between the two legal concepts, specifically on the
aspect of due process. While the owner of property under a
mechanic’s lien (in Oklahoma) is either subjected to a one-year
cloud on his title or must initiate a civil action himself to remove
the cloud, the owner of property under lis pendens receives ac-
tual and almost immediate notice of the claim against his prop-
erty and may avail himself of all the procedures and remedies
available to a defendant in a civil action. Under lis pendens,
—
therefore, the property owner does receive the guarantees of due
process in the form of actual and prompt notice of the claim
and a prompt hearing on the probable merits of the claim. Fur-
thermore, the mechanic’s or materialmen’s lien attaches as of
the date the first labor is performed or first material furnished
on the property, while the lis pendens claimant obtains priority
over other creditors only after having filed suit.
The petition for rehearing was denied by the Oklahoma Su-
preme Court by Order entered on February 18, 1981.
REASONS FOR GRANTING THE WRIT
In this case, the Supreme Court of Oklahoma, in a divided
opinion, reversing the Order of the trial court, has determined
that the filing of a mechanic’s or materialmen’s lien statement,
under Oklahc ma’s lien statutes, does not amount to a taking of
significant property interest. In upholding the constitutionality
of this state’s mechanic’s lien laws, the Oklahoma Court has an-
nounced a far-reaching rule which affects every owner and
potential owner, of real estate in Oklahoma, as well as the rest
of the nation. The Oklahoma Supreme Court has contributed to
the growing breach between those states which have upheld
their mechanic’s lien laws and those states which have struck
them down as depriving persons of their property without due
process of law. The gravity of this decision is all the mere evi-
dent because the statutes upheld by the Oklahoma Court con-
tain even fewer due process protections for the owner of proper-
ty than any statutes heretofore reviewed by other state or federal
courts. There are few decisions in recent years with more sig-
nificance to owners of property, purchases of property, lenders,
and the construction industry.
As the Court below indicated, the only issue in this case is
the constitutionality of 42 O.S. 1971, §§141, et seq. We submit
—11—
that the decision below is unsupported by constitutional law.
The statutes in question offend and violate standards of due
process established by this Court. The most glaring defect in 42.
O.S. 1971, §§141, et seq. is the failure to provide for notice or
opportunity to be heard prior to the time the lien attaches. The
lien is filed with the Court Clerk of the County in which the
prooerty is situated, without the slightest hint of judicial par-
ticipation. The lien statement must contain only the names of
the owner, contractor and claimant, the amount claimed, items
furnished, and a description of the property subject to the lien.
There is no prompt post-seizure hearing on the validity of the
contractor’s claim. The lien claimant may continue to cloud the
title for a year following the filing of his statement. The proper-
ty owner may never have notice that any lien has been filed
against his property because the contractor is not compelled to
furnish any notice to him prior to, or eveii after, filing his lien.
The lien claimant does does not have to post any type of bond
or security which would afford protection against any damages
due to wrongful attachment.
Finally, the Oklahoma statutes provide that the lien may be
discharged by the property owner by filing with the Court Clerk
the amount the lien claimant alleges to be owing, in cash, ac-
companied by a bond to protect the claimant against attorney’s
fees, costs and interest should the claimant prevail at trial. Such
a scheme, whereby the debfor is required to post a bond for the
protection of the creditor, but the creditor has no reciprocal re-
quirement to secure the debtor against any damages, epitomizes
the lack of due process pervasive in the Oklahoma lien laws.
The Oklahoma Court has totally ignored the numerous de-
ficiencies in the Oklahoma law. When faced with judicial prece-
= =
dent closely aligned to the issues and laws facing it,4 the majori-
ty chose to “agree” instead with “the majority of jurisdictions
which have considered the issue, that the filing of the lien state-
ment is a de minimis taking to which due process protection
does not attach.”5 By blindly following the example of other
states —states whose lien statutes do not contain the above con-
stitutional deficiencies — the Oklahoma Court has rendered even
more indistinct the gray area into which a prejudgment attach-
ment procedure may intrude without satisfying the well-recog-
nized standards of due process.
This case raises a significant constitutional question which
4 Jurisdictions declaring their mechanics’ lien statutes unconstitutional on the
grounds that they are violative of due process include: Roundhouse Construc-
tion Corp. v. Telesco Masons Supplies Co., Inc., 362 A.2d 778, 168 Conn.
371, vacated 423 U.S. 809, on remand 365 A.2d 393, 170 Conn. 155, cert. den.
429 U.S. 889 (1976) (Conn. 1974); Barry Properties, Inc. v. Fisk Bros. Roof-
ing Co., 353 A.2d 222, 277 Md. 15 (Md. 1976). Jurisdictions upholding the
constitutionality of their mechanics’ lien statutes on the grounds that they con-
tain procedural safeguards sufficient to satisfy due process include:
Connolly Development, Inc. v. Superior Court of Merced County, 553 P.
2d 637, 132 Cal. Rptr. 477, 17 C.3d 803, appeal dismissed 97 S.Ct. 778 (Cal.
1976); Ruocco v. Brinker, 380 F.Supp. 432 (Fla. 1974).
5 Jurisdictions upholding the constitutionality of their mechanics’ lien statutes
on the ground that the filing of a mechanic’s lien does not constitute the taking
of a significant property interest include: Spielman-Fond v. Hanson's Inc., 379
F.Supp. 997, affirmed 417 U.S. 901 (Ariz. 1973); Nelson-American
Developers, Lid. v. Enco Engineering Corp., 337 So.2d 729, (Ala. 1976);
Banker's Trust Co. v. El Paso Pre-Cast Co., 560 P.2d 457 (Colo. 1977);
Tucker Door & Trim Corp. v. 15th St. Co., 221 §.E.2d 443, 235 Ga. 727 (Ga.
1975); Keith Young & Sons Const. Co. v. Victor Senior Citizens Housing,
Inc., 262 N.W.2d 554 (lowa 1978); Carl A. Morse, Inc. v. Rentar Industries
Development Corp., 391 N.Y.S.2d 425 (N.Y.1975); B&P Development Co. v.
Walker, 420 F.Supp. 704 (Penn. 1976); Cook v.Carlson, 364 F.Supp. 24
(S.Dak. 1973); In re Thomas A. Cary, Inc., 412 F.Supp. 667 (Va. 1976);
Home Bldg. Corp. v. The Ventura Corp., and Housing Authority of the City
of Nevada, Missouri, 568 S.W.2d 799 (Mo. 1978); Silverman v. Gossett, 553
S.W.2d 581 (Tenn. 1977); (So. Cent. Dist. Pentecostal Church of God of
America, Inc. v. Bruce-Rogers Co., Ark.
—13—
has received conflicting treatment by the highest courts of
several states. Neither property owners, lenders, nor even the
courts in those states yer to wrestle with this issue can live with a
system in which the mechanic’s lien laws of those states may or
may not be constitutional —depending upon whether dues pro-
cess scrutiny is applied. Review by this Court is necessary to cor-
rect a statutory scheme—sanctioned by some courts, stricken
down by other courts, and yet to be determined by a third group
of courts--which permits varying degrees of prejudgment
seizure of property with no guarantees of due process.
The Decision in This Case Conflicts With Decisions
of Other State Courts of Last Resori.
It is well settled that before the issue can be reached of
whether a mechanic’s lien statute violates d) e process, two
threshoid questions must be resoived: (1) whether the statutory
scheme involves “state action,”’? and, (2) whether the property
owner is being deprived of a “significant property interest” by
virtue of the attachment of the lien.
Of the sixteen reported cases in which the courts have ad-
dressed the issue of the constitutionality of state mechanic’s lien
statutes, none has held that state action was not involved. On
the other hand, the same courts have not agreed on the second
threshold question. Of the sixteen reported cases, four have
stated clearly that the imposition of a mechanic’s or material-
men’s lien constitutes a taking of a significant property interest?
(one of these four cases is a federal district court decision§).
6 Jackson v. Metropolitan Edison Co., 419 U.S. 345, 95 S.C.. 449, 42 L.Ed.
2d 477 (1974).
7See footnote 5.
8 Ruocco v. Brinker, 380 F. Supp. 432 (Fla. 1974).
~~ th=
Twelve courts have ruled that the filing of a mechanic’s lien does
not constitute the taking of a significant property interest (four
of these twelve cases are from federal district courts9). Conse-
quently, three state courts of last resort have held that a
mechanic’s lien does involve deprivation of a significant proper-
ty interest of the owner, while eight state courts have reached
the opposite result.
Petitioners submit that it cannot be seriously disputed that
the imposition of a mechanic’s or materialmen’s lien constitutes
a taking of a significant property interest. The highest court of
Maryland had little difficulty concluding that the attachment of
such a lien is a significant taking of property:
“Under . . . the Maryland statute, there is a “subsisting
lien” as soon as materials are supplied or work is per-
formed, . . . which constitutes a cloud on the property
owner’s title. Although possession will not be wrested
from the owner until a purchaser acquires title through a
foreclosure sale and the owner can still legally alienate or
further encumber the property until that time, in reality,
since he no longer has unfettered title, not only will it be
extremely difficult for him to do so but additionally his
equity will be diminished to the extent of the lien. Barry
Properties, Inc. v. Flick Bros. Roofing Co., 227 Md. 15,
353 A.2d 222, 228 (1976).
In footnote 6 the Maryland court noted that “when timely
filed, the claimed lien additionally becomes an encumbrance of
record.” 353 A.2d at 228 n.6.
9 Spielman-Fond v. Hanson’s Inc., 379 F. Supp. 997, affirmed 417 U.S. 901
(Ariz. 1973)
B & P Development Co. v. Walker, 420 F.Supp. 704 (Penn. 1976)
Cook v. Carlson, 364 F.Supp. 24 (S.Dak. 1973)
In re Thomas A. Cary, Inc., 412 F.Supp. 667 (Va. 1976)
~_
The holding in Barry and the reasons upon which it is based
apply with full force to Oklahoma’s lien laws and the case at
bar. The critical elements which formed the basis for the court’s
finding of a significant property interest are likewise present in
Oklahoma. The statutes under constitutional challenge in Mary-
land and Oklahoma were nearly indentical. Yet the highest
courts of these two states reached opposite results.
Similarly, the California Supreme Court concluded in Con-
nolly Development Inc. v. Supreme Court of Merced County
that the imposition of a mechanic’s lien deprives the landowner
of a significant property interest and accordingly constitutes a
“taking” within the meaning of the due process clause. 553 P.2d
at 664. The court stated:
But although the imposition of a mechanics’ lien
does not deprive the owner of the interim use of his prop-
erty, it may severely hamper his ability to sell or en-
cumber that property. Subsequent purchasers whose title
will be subject to the lien may be unwilling to purchase a
lawsuit with the land; lenders may refuse a loan on prop-
erty subject to lien claims; the owner may in some cases
be forced to pay a possible invalid lien in order to clear
title to his property in time for a pending transaction to
be consummated.
A deprivation need not reach the magnitude of a
physical seizure of property in order to fall within the
compass of the due process clause. 553 P.2d at 643 (foot-
note omitted, emphasis added).
The Connecticut Supreme Court reached the same conclu-
sion in Roundhouse Construction Corp. v. Telesco Masons
Supply Co., 168 Conn. 371, 362 A. 2d 778, 784, vacated and
remanded for determination whether decision rests on state or
federal constitutional grounds, 423 U.S. 809, 96 S.Ct. 20, 46
L.Ed. 2d 29 (1975), reaffirmed on both state and federal
—
grounds, 170 Conn. 155, 365 A.2d 393, cert. denied, 97 S.Ct.
246 (1976).
The reasoning in Connolly is applicable to Oklahoma law
as well since materialmen’s liens attach to and follow the proper-
ty and are enforceable against any subsequent purchaser or
transferee. 42 O.S. §141; Metropolitan Water Co. v. Hild, 415
P.2d 970, 971 (Okla. 1966). Thus, as a practical matter, the ef-
fect of such a lien is to render an owner’s property inalienable.
Furthermore, as the court in Barry so astutely recognized, not
only will, in reality, the owner’s ability to alienate be almost
nonexistent, but additionally his equity will be diminished to the
extent of the lien.
The highest courts in eight states have reviewed the hard-
ships imposed upon the property owner by the attachment of a
mechanic’s lien and have concluded that there is no taking of a
significant property interest. Curiously, these state courts have
relied upon the rationales expounded by each other in reaching
this conclusion —just as the Oklahoma court has done. These
courts have committed three serious errors in relying upon the
so-called “de minimis” argument. They have ignored the prac-
tical consequences resulting from the filing of the lien state-
ment. They have failed to note the procedural differences be-
tween the various statutes in the states they rely upon as prece-
dent. And they refuse to apply the precedent of landmark deci-
sions handed down by this Court involving the effect of the due
process clause upon prejudgment creditor remedies.
With regard to the first major error, the majority of the
court below minimized the consequences of the mechanic’s lien
by simply acknowledging the arguments put forth by Petitioners
herein! and then proceeding to borrow the rationale of the
10 At page 5 of the majority opinion, the Oklahoma Court paraphrased the
arguments of Petitioners:
a ee
federal district court of Arizona in Spielman-Fond. The
Oklahoma court quoted directly from Spielman-Fond at page 8
of its opinion:
“Here, a lien is filed against the property and clouds title.
It cannot be denied that the effect of such lien may make
it difficult to alienate the property. If the plaintiffs can
find a willing buyer, however, there is nothing in the stat-
utes or the liens which prohibits the consummation of
the transaction. Even though a willing buyer may be
more difficult to find, once he is found there is nothing
to prevent plaintiffs from making the sale to him.” (379
F.Supp. at 999).
Justice Hodges, in his dissent to the court below, has more
realistically assessed the effect of filing such a lien. Compare the
language of Spielman-Fond with the description by Justice
Hodges of the drastic effect of a mechanic’s lien on the right to
alienate, encumber, mortgage, lease, and acquire equity in
property:
A mechanics’ lien has a drastic effect on these privileges.
It clouds the title to the property, making it extremely
difficult or even impossible to sell or mortgage the land.
Even if a willing buyer is found, the owner often has to
accept much less than the actual value of the property,
and may, in some instances, be forced to pay an invalid
claim in order to clear title to his property in time for a
pending transaction to be consummated. The fact that
some improvements have been made on the land is little
comfort to the owner whose property has suffered a sub-
Footnote 10 continued . . .
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.
~18—
stantial diminution in value, especially when the lien is
invalid or was filed because the owner has refused to pay
for improvements which have been done in a shoddy or
unworkmanlike manner. (Page 9 of Dissent.)
The Oklahoma Court has chosen to blindly follow the de
minimus holding in Spielman-Fond without even taking note of
the obvious procedural differences between the Arizona lien
statute and Oklahoma’s lien statute. For example, suit had to be
brought within six months of the filing of the lien in Arizona,
while the lien claimant in Oklahoma can wait one year before he
must bring suit to foreclose his lien. In addition, the time
periods for filing a lien for contractors and subcontractors were
90 and 60 days respectively, while Oklahoma permits the filing
within 120 and 90 days respectively. The Arizona statutes which
were held constitutional provided for notice to the owner if he
was in the county. The Oklahoma statute in effect at the time of
this litigation did not provide for any notice to the property
owner by the contractor.
The differences between the Oklahoma law and other state
statutes prompted Justice Hodges to declare, “Almost all of the
state statutes which have been found constitutional contain
safeguards that Oklahoma’s laws lack.” Further investigation by
Petitioners has disclosed that every state statute which has been
found constitutional contains due process protections lacking in
the Oklahoma law.!!
The Decision in the Case Below is in Conflict with
Applicable Decisions of this Court on the Important
Question of What is Constitutionally Permissible Under
1! Proposition VII of the Petition for Rehearing contains a discussion of the
statutes which have been held constitutional by other jurisdictions.
~_ =
the Due Process Clause for Prejudgment Seizure of Deb-
tor’s Property.
While there is no United States Supreme Court decision
enunciating the due process requirements with respect to
mechanic’s liens, we submit that the Oklahoma court has erred
in failing to follow the precedent this Court has established in
four landmark decisions involving prejudgment creditor rem-
edies.
In Sniadach v. Family Finance Corp., 395 U.S. 337, 89
S.Ct. 1820, 23 L.Ed.2d 349 (1969) this Court struck down as un-
constitutional a Wisconsin prejudgment garnishment statute
which permitted a creditor to freeze the wages of an alleged deb-
tor without prior notice or hearing. The summons was issued by
the court clerk, at the request of the creditor’s attorney, without
any judicial participation. This Court held that absent notice
and a prior hearing the prejudgment garnishment procedure
violated the fundamental principles of due process.
In Fuentes v. Shevin, 407 U.S. 67, 92 S.Ct. 1983, 32
L.Ed.2d 556 (1972) the Supreme Court held that the prejudg-
ment replevin statutes of Florida and Pennsylvania violated due
process. The statutes under consideration authorized the is-
suance of writs ordering state agents to seize a person’s posses-
sions simply upon the ex parte application of any person claim-
ing a right in the property conditioned upon the posting of a
security bond. The Court reiterated that, except in unusual
situations, notice and opportunity for an adversary-type hearing
must be provided before an alleged debtor can be deprived of
his property.
The limits of due process were refined in Mitchell v. W T.
Grant Co., 416 U.S. 600, 94 S.Ct. 1895, 40 L.Ed 2d 406 (1974).
This Court upheld a Louisiana statute allowing, without prior
=~ =
notice or an Opportunity for a hearing, prejudgment sequestra-
tion of personal property to enforce the vendor’s lien of a cre-
ditor who made an installment sale of goods. However, to ob-
tain the writ, the creditor had to specify in an affidavit the facts,
not conclusions, supporting his claim. The affidavit was ex-
amined by a judge before the writ was issued. The creditor was
required to file a bond which would compensate the debtor if
the sequestration was unjustified. The debtor was provided a
prompt post-seizure hearing, and if the creditor could not sub-
stantiate his claim, the debtor recovered his property, attorney’s
fees and any damages sustained. With four Justices dissenting,
the Court concluded that the judicial participation in these pro-
ceedings, and the protections afforded creditor and debtor, suf-
ficiently satisfied the requirements of due process.
The Supreme Court’s most recent decision dealing with pre-
judgment garnishment remedies and due process is North
Georgia Finishing, Inc., v. Di-Chem, Inc., 419 U.S. 601, 95
S.Ct. 719, 42 L.Ed.2d 751 (1975). The Court overturned as con-
trary to due process, a Georgia statute authorizing prejudgment
garnishment of a commercial bank account. To garnish the ac-
count, the claimant had to file an affidavit with the court clerk,
stating the amount claimed, and post a bond equal to twice that
amount. The Court held this statute unconstitutional because it
provided no prior notice or hearing, nor did it satisfy the stan-
dards set in Mitchell, requiring judicial participation in the pro-
ceedings, absent notice and hearing.
These four United States Supreme Court cases have estab-
lished clear standards of due process for prejudgment creditor
remedies. A statutory prejudgment creditor remedy which even
temporarily deprives a debtor of a significant property interest
without notice and an opportunity for a prior hearing violates
due process. If prior notice and hearing are not provided, Mit-
= es
chell requires that if an ex parte order is issued, there must be
judicial participation in its issuance; the creditor must produce a
sworn affidavit alleging specific facts; there must be a prompt
post-seizure hearing; and the creditor must post a bond to pro-
tect the debtor against any damages and attorney fees resulting
from a wrongful taking of his property.
Petitioners assert that even a cursory examination of 42
O.S. 1971, §§141 et seq. will show that Oklahoma’s mechanic’s
lien statutes unequivocally violate those well recognized stan-
dards of due process.
it
The Issue in this Case Involves an Important Ques-
tion of Federal Law Which Has Not Been but Should be
Settled by this Court.
Justice Hodges points out in his dissent to the decision
below that, “Even though the United States Supreme Court has
had an opportunity to consider the constitutionality of
statutorily created liens, it has failed to do so, and thus no clear
precedent exists.”!4 A large number of the cases relied upon by
the Oklahoma Court cite the decision by the U.S. District Court
of Arizona in Spielman-Fond for the proposition that
mechanic’s and materialmen’s liens do not constitute the taking
of a significant property interest. On appeal to the United States
Supreme Court, Spielman-Fond was summarily affirmed with-
out any discussion. This has created a great amount of confu-
sion because many courts have taken this to be a final deter-
mination of the constitutionality of a// mechanic’s lien laws.
Furthermore, the same courts have blindly accepted the ra-
tionale of Spielman-Fond that a mechanic’s lien is only a de
minimis interference with the ownership of real property.
12 Justice Hodges dissenting opinion at page 8.
att.
Even the majority opinion below, however, acknowledged
that a summary affirmance by the United States Supreme
Court, without opinion, has limited precedential value. Chief
Justice Burger stated in Fusari v. Steinberg, 419 U.S. 379, 391,
95, S.Ct. 533, 541, 42 L.Ed.2d 521, 530 (1975):
“When we summarily affirm without opinion the judg-
ment of a three-judge District Court, we affirm the judg-
ment but not necessarily the reasoning by which it was
reached. An unexplicated summary affirmance settles
the issues for the parties, and is not to be read as a renun-
ciation by this Court of doctrines previously announced
in our opinions after full argument.” (Emphasis added)
Applying these precepts, the court in Brookhollow
Associates v. J.E. Green, 389 F. Supp. 1322 (D. Conn. 1975)
observed in a footnote:
“The lower court’s reasoning may not have been the
basis of the Supreme Court summary affirmance, as
Chief Justice Burger warned in his recent concurring
opinion in Fusari v. Steinberg, . . . The Court may have
reasoned instead that there was interference with a signif-
icant property interest but that on balance the state’s pro-
cedures provided sufficient due process protection.”
(Emphasis added) 389 F. Supp. 1327 (n. 7)
Petitioners submit that the summary affirmance of
Spielman-Fond was not a proclamation that the mechanic’s lien
statutes of all other states do not amount to a taking of a signifi-
cant property interest. Indeed, there are serious differences be-
tween the lien laws of Arizona and Oklahoma. The precedential
value which the highest courts of eight states have attached to
the summary affirmance in Spielman-Fond is even more doubt-
ful when one considers a subsequent statement by this Court
issued eight months after the affirmance of Spielman-Fond:
“We are no more inclined now than we have been in
~
the past to distinguish among different kinds of property
in applying the Due Process Clause.” North Georgia
Finishing, Inc. v. Di-Chem, 419 US 601, 608 (1975).
The acceptance by the Oklahoma Court of the so called “de
minimis” rationale of Spielman-Fond is representative of the
abundance of dubious constitutional assumptions accepted by
the highest courts of several states. The Oklahoma Court, for
example, cited the Supreme Court of Missouri in pointing out
that the owner of property to which a mechanic’s lien is attached
still retains physical possession of the property.!5 We are
unaware of any statement by the United States Supreme Court
that property must be physically seized in order to subject the
challenged action to due process scrutiny.
CONCLUSION
Petitioners submit that the decision below is in error. To
hold that mechanic’s and materialmen’s liens do not amount to
a “significant property interest,” or otherwise have only a “de
minimis” effect on the property owner’s right to deal freely with
his property, is to ignore fundamental practical considerations,
and indeed the realities of the setting in which real estate tran-
sactions occur. When exposing Oklahoma’s mechanic’s lien laws
to the due process test announced by this Court, and following
the lead of the State Supreme Courts of Maryland and Connec-
ticut, the conclusion is inescapable that the Oklahoma laws fail
to pass constitutional muster.
13 The Oklahoma Supreme Court majority cites with approval at page 8 of its
opinion the economic effect of a mechanic’s lien as described in Home
Building Corp. v. The Ventura Corp., et al, 368 S.W. 2d 799 (Mo. 1978}:
“. , .but that does not deprive the owner of a significant property in-
terest. The possession and use of the property is retained and the
owner may sell, lease or encumber... .”
niin
The rule accepted by the Oklahoma Court (and those
courts in ag.eement) that the due process clause of the Four-
teenth Amendment does not apply to mechanic’s and material-
men’s lien statutes effectively jeopardizes the effectiveness of
the due process clause. The highest courts of nine states have
now ruled that the well established standards of due process, an-
nounced by this Court in Sniadach, Fuentes, Mitchell, and
North Georgia Finishing, have absolutely no application to
mechanic’s lien laws — no matter how those laws might favor the
rights of the contractor over the rights of the property owner. If
this decision is allowed to stand, the legislatures and courts of
those states yet to face this issue will have no due process stan-
dards by which to measure their statutes. Sixteen state and
federal courts have been called upon to rule on the constitu-
tionality of the mechanic’s lien laws in their respective jurisdic-
tions. With no effective guidelines from this Court, we foresee
no reason why the number of constitutional challenges will not
continue to grow. For these reasons, it is respectfully submitted
that this petition for a writ of certiorari should be granted.
Joseph A. McCormick
John W. Sublett, Jr.
Sublett, McCormick, Andrew & Keefer
Suit 1776, One Williams Center
Tulsa, Oklahoma 74172
Attorneys for Petitioners
First National Bank of Tulsa, and
The Outrigger, Inc.
John R. Barker
Gable, Gotwals, Rubin, Fox Johnson & Baker
mies
2010 Fourth National Bank Bldg.
Tulsa, Oklahoma 74119
Attorneys for Petitioners’
Planned Residential Communities Construction
Construction Company of Oklahoma, Inc.,
and Hamilton Investment Trust
atin
APPENDIX A
FOR OFFICIAL PUBLICATION
No. 51,141
IN THE SUPREME COURT OF THE
STATE OF OKLAHOMA
FILED
SUPREME COURT
State of Oklahoma
NOV 25, 1980
ROSS N. LILLARD, JR.
Clerk
MOBILE COMPONENTS, INC., a corporation;
PLANNED RESIDENTIAL COMMUNITIES
CONSTRUCTION COMPANY OF OKLAHOMA,
INC., formerly PLANNED RESIDENTIAL
COMMUNITIES OF OKLAHOMA, a corp.;
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.;
RAYMOND P. SEMONES dba
TWILITES MFG. CO.;
TUM B. CHILDERS dba TOM
B. CHILDERS GRADING &
ESCAVATING, INC.;
MURPHY PAINT & DRYWALL, INC.;
ee
MILLER CONSTRUCTION CO. OF TULSA, INC.;
R.A. YOUNG & SON, INC.,
a foreign corporation;
BOARD OF COUNTY COMMISSIONERS OF
TULSA COUNTY, OKLAHOMA;
IRRIGATION CONSTRUCTION CO.;
REX INVESTMENT CORPORATION;
RAMON L. KING;
PATRICIA A. KING;
PLYWOOD OF TULSA, a division of
International Forest Products Corporation;
BANK OF OKLAHOMA formerly NATIONAL
BANK OF TULSA;
UNITED BANK;
TULSA CONTAINER, INC.;
UNIVERSAL CONTRACTING CORPORATION,
a corporation;
JACK R. SOWLES and JAMES C.
METZKER, Individually and dba
LEWIS AVENUE INVESTMENT COMPANY
MIDLAND MORTGAGE CO., INC.;
EVANS AND MITCHELL, a
Georgia corporation;
UNITED STATES OF AMERICA;
GERALD W. BLAKELEY, JR., et al.,
Trustees of CABOT, CABOT, AND
FORBES LAND TRUST, Massachusetts
Business Trust;
AMULCO ASPHALT CO.;
JERRY WENDLAND;
CHARLES WENDLAND;
GENERAL ELECTRIC COMPANY;
SOUTHWEST MANUFACTURING CO.;
~ v
JOHN F. CANTRELL, Treasurer of
Tulsa County, Oklahoma;
PAUL F. HELMUTH HALL & DOOR;
GREENHILL CONSTRUCTION CO.;
DUOSKIN, INC.;
SIZEMORE, SACK & SIZEMORE;
and ANSLIE PERRAULT
Appellees
vs.
VERLEE C. LAYON, Executrix of the Estate of
THOMAS LAYON, SR., Deceased
Appellant
Consolidated With
VERLEE C. LAYON, Executrix of the Estate of
THOMAS LAYON, SR., Deceased
Appellant
vs.
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.;
a
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
AN APPEAL FROM THE DISTRICT COURT OF TULSA COUNTY,
OKLAHOMA, HONORABLE WILLIAM W. MEANS, JUDGE
—A-5-
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, Oklahoma
John R. Barker, of Gable,
Gotwals, Rubin, Fox,
Johnson & Baker,
Tulsa, Oklahoma
Wesley R. Thompson,
Sapulpa, Oklahoma
Thomas A. Landrith, Jr.,
Tulsa, Oklahoma
David Noss, of
Rheam and Noss,
Tulsa, Oklahoma
Paul E. Garrison, of
Garrison, Pigman, Comstock
and Thurston,
Tulsa, Oklahoma
For Appelles, First
National Bank of Tulsa &
The Outrigger, inc.
For Appellees, The Trust
of Hamilton Investment
Trust, and Planned Resi-
dential Communities Const.
Co. of Oklahoma, Inc.
For Appellant.
Attorney for Amicus Curiae,
Almond Electric Co., Inc.
For Amicus Curiae, Wilson
Fire Protection, Inc.
For Amicus Curiae,
Auxier-Scott Supply, Inc.,
Palmer Plumbing, Heating
& Air Conditioning Company,
Inc., Benjamin F. Mott dba
Mott Roofing & Sheet
Metal Co.
a
William J. Doyle, III, of
Jones, Givens, Brett, Gotch-
er, Doyle and Bogan, Inc. For Amicus Curiae,
Tulsa, Oklahoma Hale Plumbing, Inc.
J. Patrick Cremin, of Hall, For Amicus Curiae,
Estill, Hardwick, Gable, Fred J. and Mary Ann
Collingsworth & Nelson Zalokar.
Tulsa, Oklahoma
SIMMS, J:
This appeal concerns two lien foreclosure actions con-
solidated 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 Con-
struction Company (PRCCC) bought the Broken Arrow prop-
erty 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 state-
ment, 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,
aye
et seq., were unconstitutional as a deprivation of property with-
out due process of law. The constitutionality of these statutes is
the only issue on appeal.!
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 noncontigious 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 with-
in four months after the date upon which the last labor is per-
formed, 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 fur-
nishing 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
! This action concerns only 42 O.S.1971, §§ 141, et seq., the later amendments
to those statutes, 42 O.S.Supp.1979, §§ 141, et seq., are not in question here.
2 The Legislature amended the statue in 1977 to provide for notice of the claim
to the landowner from the contractor as well as the subcontractor, 42
O.S.Supp. § 143.1. .
ee an
year, 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 post-
ing 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 Uni-
ted 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 pre-
judgment 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 pro-
cess required that, except in unusual circumstances, the debtor
must be given notice and an opportunity to be heard before he
3 Under our Title Examination Standards, 16 O.S.1971, Ch. 1, App., St.14.1,
unreleased liens may be disregarded where foreclosure has not been filed
within the statutory time, and the Clerk requested to release same pursuant to
42 O.S. § 177.
—~A-9—
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 col-
lateral, as he had a valid vendor’s lien. The statute did not pro-
vide for notice and a hearing, but did have other procedural
safeguards that the Court found to be a sufficient accomoda-
tion 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 re-
quired 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 cred-
itor cannot be protected by allowing such prior notice and hear-
ing, then there must be other procedural safeguards to suffi-
ciently protect the property rights of the alleged debtor. These
~A1e—
standards are meant to be flexible, to constitutionally ac-
comodate the rights of all parties involved.
These requirements atiach only when there has been a dep-
rivation 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 suf-
ficient procedural safeguards required by the above cases, and
are therefore unconstitutional.
The mere filng 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 deter-
mination. We said in Hartford Accident and Indemnity v. Orr,
OKl., 321 P.2d 373, 376-377, (1958):
“The filing of a lien claim is not ordinarily deemed the
equivalent of the fact of the indebtedness which it con-
cerns. As was said in Beebe v. Redward, 35 Wash.615, 77
P. 1052, 1055: ‘It is at most only a tentative charge
against the property it purports to bind, and is liable to
be defeated * * * by showing that the indebtedness, or
some considerable part thereof, is not owing.’ ”
The lien claimant gets nothing before judgment. The only pre-
judgment charge against the property is the notice of the lien
claim. This notice serves the important functions of protecting
the workman’s claim from subsequent assignment of the proper-
ty by the landowner, and of informing potential buyers of a pos-
4 Under our slander of ittle action, 160.S.1971 §79 the landowner may recover
costs, attorney fees and damages suffered for a slanderous notice of claim. 42
O.S.Supp. 1980 §142.2 makes it a felony for any original contractor to falsify a
lien statement to any owner of a dwelling.
—A-11-—
sible economic charge running with the land. Real property law
in this country is founded upon principles of notice. To hold
that the notice alone can constitute a taking of a significant
property interest would severely restrict its entire purpose. The
Supreme Court of Colorado, in rejecting a very similar constitu-
tional attack to their lien statutes observed, in Bankers Trust
Co. v. El Paso Pre-Cast Co., et al., Colo. 560 P.2d 457,
462-463, (1977):
“To require the full panoply of due process protections
before filing a lien statement would impair the notice
function of the lien statements. In the interval between
the time of the work, the furnishing of materials or ser-
vices giving rise to lien claim and the hearing on the lien,
prospective purchasers would have no notice of the po-
tential lien. The very ‘deprivation’ complained of by [ap-
pellant], the difficulty in alienating property against
which a lien has been filed, indicated the effectiveness
and importance of the notice function of lien
statements.”
The issue of the constitutionality of lien statutes relative to
federal due process requirements has been considered by many
other jurisdictions in the past few years. While some hold that
the filing of the lien statement constitutes a significant taking of
a property interest,5 we cannot do so. We are more persuaded
by the rationale adopted by the majority of jurisdictions which
5 Jurisdictions declaring their mechanics’ lien statutes unconstitutional on the
grounds that they are violative of due process include: Roundhouse Construc-
tion Corp. v. Telesco Masons Supplies Co., Inc., 362 A.2d 778, 168 Conn.
371, vacated 423 U.S. 809, on remand 365 A.2d 393, 170 Conn. 155, cert.den.
429 U.S. 889 (1976)(Conn. 1974); Barry Properties, Inc. v. Fisk Bros. Roofing
Co., 353 A.2d 222, 277 Md. 15 (Md.1976). Jurisdictions upholding the con-
stitutionality of their mechanics’ lien statutes on the grounds that they contain
procedural safeguards sufficient to satisfy due process include: Connolly
Development, Inc. v. Superior Court of Merced Country, 553 P.2d 637, 132
Cal. Rptr. 477, 17 C.3d 803, appeal dismissed 97 S.Ct. 778 (Cal. 1976); Ruocco
v. Brinker, 380 F.Supp. 432 (Fla.1974).
—A-12—
have considered the issue, that the filing of the lien statement is
a de minimis taking to which due process protection does not at-
tach.6 The landowner is not deprived of substantial use and en-
joyment of the property. The statement merely gives notice to
all that a claim may be enforced against the land. Without suit
being filed, the claim itself expires by limitation of law. 42
O.S.1971, § 177. In this regard, it is much the same as the lis
pendens notice required when a suit is commenced concerning
title to land. Appellees contend that the statute allows lien
claimants to “extort” their claim from the landowner who wants
to discharge the lien. We do not think that his danger is so ap-
parent: If so, common sense would require a pre-filing hearing
on the merits of a claim, not only for lien suits, but for any civil
action, resulting in an unbearable administrative burden on the
courts. On balance, the notice function, as well as ad-
ministrative necessity, outweighs the minimal interference to
property resulting from mere filing of the claim. We agree with
the view expressed by the Missouri Supreme Court in Home
Building Corp. v. The Ventura Corp., et al., Mo., 568 S.W.2d
799 (1978), where the court noted that the existence of the lien
may have an economic effect and said:
6 Jurisdictions upholding the constitutionality of their mechanics’ lien statutes
on the grounds that the filing of a mechanics’ lien does not constitute the tak-
ing of a significant property interest include: Spielman-Fond v. Hanson's Inc.,
379 F.Supp. 997, affirmed 417 U.S. 901 (Ariz.1973); Nelson-American
Developers, Lid. v. Enco Engineering Corp., 337 So. 2d 729 (Ala.1976);
Banker's Trust Co. v. El Paso Pre-Cast Co., 560 P.2d 457 (Colo. 1977); Tucker
Door & Trim Corp. v. 15th St.Co., 221 S.E. 2d 443, 235 Ga. 727 (Ga.1975);
Keith Young & Sons Const. Co. v. Victor Senior Citizens Housing, Inc., 262
N.W.2d 554 (lowa 1978); Carl A. Morse, Inc. v. Rentar Industries Develop-
ment Corp., 391 N.Y.S.2d 425 (N. Y.1975); B&P Development Co. v. Walker,
420 F.Supp. 704 (Penn. 1976); Cook v. Carlson, 364 F.Supp. 24(S. Dak. 1973);
In re Thomas A.Cary, Inc., 412 F.Supp. 667 (Va.1976); Home Bldg. Corp. v.
The Ventura Corp. and Housing Authority of the City of Nevada, Missouri,
568 S.W.2d 799 (Mo.1978); Silverman v. Gossett, 553 S.W.2d 581
(Tenn. 1977); So.Cent. Dist. Pentecostal Church of God of America, Inc. v.
Bruce-Rogers Co., Ark., 599 S.W.2d 702 (1980).
=--13—
“... but that does not deprive the owner of a significant
property interest. The possession and use of the property
is retained and the owner may sell, lease or encumber.
The situation is comparable to several others wherein a
pending suit has some economic impact on an owner but
does not deprive it of a significant property interest . . .
It is comparable to the filing of a lis pendens notice. Such
suits are instituted and maintained without the require-
ment of a hearing before filing to test the validity of the
asserted claim.” (At 774).
The United States Supreme Court has spokeii only indirect-
ly on the constitutionality of mechanics’ lien statutes by its sum-
mary affirmance of Spielman-Fond, Inc. v. Hansons, Inc., 379
F.Supp. 997 (D.Ariz. 1973), aff'd. 417 U.S. 901, 94 §.Ct. 2596,
41 L.Ed 2d 208 (1974). In this case, the Arizona lien statutes
were upheld by the district court. While we realize the Supreme
Court’s summary affirmance does not necessarily show approv-
al of the reasoning used by the District Court’, we agree with the
rationale expressed therein where it was said:
“Here, a lien is filed against the property and clouds title.
It cannot be denied that the effect of such lien may make
it difficult to alienate the property. If the plaintiffs can
find a willing buyer, however, there is nothing in the
statutes or the liens which prohibits the corisummation
of the transaction. Even though a willing buyer may be
7The United States Supreme Court summarily affirmed Spielman-Fond
without opinion. The precedential significance of a summary affirmance by
the United States Supreme Court was discussed by Justice Burger in Fusari v.
Steinberg, 419 U.S. 379, 95 S.Ct. 533, 541, 42 L.Ed 2d 521 (1975), when he
wrote: “When [the Supreme Court] summarily affirm[s] without opinion the
judgment of a three-judge district court [the Court] affirm[s] the judgment but
not necessarily the reasoning by which it was reached. An unexplicated sum-
mary affirmance settles the issues for the parties, and is not to be read as a
renunciation by this Court of doctrines previously announced in our opinions
after full argument. Indeed, upon fuller consideration of an issue under
plenary review, the Court has not hesitated to discard a rule which a line of
summary affirmances may appear to have established.”
aie
more difficult to find, once he is found there is nothing
to prevent plaintiffs from making the sale to him.” (379
F.Supp. at 999).
Appellees claim that this is an “unrealistic” appraisal of the ef-
fect the lien filing has on the property. We need only note that
in the case at bar, Lewis Avenue Investment Company, the orig-
inal landowner in this case, was in fact able to sell the Broken
Arrow property to appellee PRCC notwithstanding the ex-
istence of the very lien statement complained of here.
Appellees cite two state cases where the states’ mechanics’
lien laws were held unconstitutional on due process grounds,
and urge us to adopt the rationale expressed therein. Round-
house Construction Corp. v. Telesco Masons Supplies, Conn.,
362 A.2d 778, vacated and remanded 423 U.S. 809 (1975),
reaff'd on both state and federal grounds, Conn., 365 A.2d 393,
Cert. denied, 429 U.S. 889 (1976). Barry Properties Inc. v. Fick
Bros. Roofing Co., Md. 353 A.2d 222 (1976). We do not find
these cases persuasive. In Barry, the court found the lien
statutes unconstitutional because the lien attached to the prop-
erty as soon as the work was performed or the materials sup-
plied. It then upheld the validity of the lien claimed in that case
by “excising” the offending portion and construing the statute
to mean that the lien claimant really had only a possibility of a
lien before judicial determination. Therefore, the court rea-
soned, the lien statement did not legally divest the landowner of
any interest in his property prior to such judicial determination,
which, of course, afforded adequate due process. We do not see
how this result is consistent with the court’s holding that the lien
deprives the landowner of a significant property interest. We
agree with the dissenting opinion at page 237 (dissenting only to
result) that:
“Appellant was either deprived of due process or he was
=16—
not, and if he was, the deprivation cannot be rectified by
acknowledging it on the one hand and ignoring it on the
other. If it is the view of the majority that appellant suf-
fered no denial of due process, that holding is dispositive
of the case and this Court has no business in purporting
to hold the lien facially unconstitutional.”
In the Roundhouse case, we note that the United States
Supreme Court denied certiorari because the judgment rested
on adequate state ground, at 429 U.S. 889, °7 S.Ct. 246, 50
L.Ed 2d, (1976). We think it is reasonable to conclude, as the
court did in South Central District, etc., v. Bruce-Rogers Co.,
Ark., 599 S.W.2d 702 (1980), see footnote 2, that the United
States Supreme Court considered its summary affirmance in
Spielman-Fond, Inc. v. Hansons, Inc. supra, to be applicable,
or the state ground would have been immaterial.
Moreover, we agree with the opinion expressed by the court in
Home Building Corp. v. Ventura Corp., et al, supra, at 775,
about these two cases that:
“They impose a very strict limitation on the reasonable
efforts of a state to protect those who supply labor and
materials to make improvements to real estate. Such re-
sults, in our judgment, are not dictated by the decisions
in Sniadach, Fuentes, Mitchell, and North Georgia.”
We hold that the filing of a lien statement under our
mechanics’ and materialmen’s lien statutes in only a de minimis
interference with the use and enjoyment of the property in-
volved.’ As such, it does not amount to a taking of a significant
8 The legislature, since the filing of this action, has become more sensitive to
the kinds of issues raised by appellants, evidenced by its recent enactments of
protective provisions for the landowner. 42 O.S.Supp.1979 §143.1 now re-
quires notice be given the landowner by any lien claimant (see fn.2). 42
O.S.Supp.1980 §§142.1, 142.2 require an original contractor to furnish the
owner of property occupied as a dwelling a notice, before the commencement
of any work or furnishing of any material, to be signed by the owner, inform-
—A-16—
property interest to which the requirements of either state or
federal due process attach. Therefore, the summary judgment
granted appellees holding those statutes unconstitutional is
REVERSED.
REVERSED AND REMANDED.
LAVENDER, C.J., IRWIN, V.C.J., and WILLIAMS,
BARNES, DOOLIN, HARGRAVE, & OPALA, JJ., CON-
CUR.
HODGES, J., DISSENTS.
Footnote 8 continued... .
ing the owner of certain rights and liabilities to which he is subject under the
lien laws. Failure to give such notice, dated and signed by the landowner,
renders the lien unenforceable.
= 8-1 —
APPENDIX B
FOR OFFICIAL PUBLICATION
No. 51,141
IN THE SUPREME COURT OF THE
STATE OF OKLAHOMA
FILED
SUPREME COURT
State of Oklahoma
NOV 25, 1980
ROSS N. LILLARD, JR.
Clerk
MOBILE COMPONENTS, INC., a corporation;
PLANNED RESIDENTIAL COMMUNITIES
CONSTRUCTION COMPANY OF OKLAHOMA,
INC., formerly PLANNED RESIDENTIAL
COMMUNITIES OF OKLAHOMA, a corp.;
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.;
RAYMOND P. SEMONES dba
TWILITES MFG. CO.;
TOM B. CHILDERS dba TOM
B. CHILDERS GRADING &
ESCAVATING, INC.;
MURPHY PAINT & DRYWALL, INC.;
=
MILLER CONSTRUCTION CO. OF TULSA, INC.;
BOARD OF COUNTY COMMISSIONERS OF
TULSA COUNTY, OKLAHOMA;
IRRIGATION CONSTRUCTION CO.;
REX INVESTMENT CORPORATION;
RAMON L. KING;
PATRICIA A. KING;
PLYWOOD OF TULSA, a division of
International Forest Products Corporation;
BANK OF OKLAHOMA formerly NATIONAL
BANK OF TULSA;
UNITED BANK;
TULSA CONTAINER, INC.;
UNIVERSAL CONTRACTING CORPORATION,
a corporation;
JACK R. SOWLES and JAMES C.,
METZKER, Individually and dba
LEWIS AVENUE INVESTMENT COMPANY
MIDLAND MORTGAGE CO., INC.;
EVANS AND MITCHELL, a
Georgia corporation;
UNITED STATES OF AMERICA;
GERALD W. BLAKELEY, JR., et al.,
Trustees of CABOT, CABOT, AND
FORBES LAND TRUST, Massachusetts
Business Trust; .
AMULCO ASPHALT CO.;
JERRY WENDLAND;
CHARLES WENDLAND;
GENERAL ELECTRIC COMPANY;
R. A. YOUNG & SON, INC.,
a foreign corporation;
—B-3—
SOUTHWEST MANUFACTURING CO.;
JOHN F. CANTRELL, Treasurer of
Tulsa County, Oklahoma;
PAUL F. HELMUTH HALL & DOOR;
GREENHILL CONSTRUCTION CO.;
DUOSKIN, INC.;
SIZEMORE, SACK & SIZEMORE;
and ANSLIE PERRAULT
Appellees
vs.
VERLEE C. LAYON, Executrix of the Estate of
THOMAS LAYON, SR., Deceased
Appellant
Consolidated With
VERLEE C. LAYON, Executrix of the Estate of
THOMAS LAYON, SR., Deceased
Appellant
vs.
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.;
—B-4—
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;
R. A. YOUNG & SON, INC.,
a foreign corporation;
THE BOARD OF COUNTY COMMISSIONERS
OF TULSA COUNTY, OKLAHOMA;
DUOSKIN, INC.;
and SIZEMORE, SACK & SIZEMORE;
Appellees
AN APPEAL FROM THE DISTRICT COURT OF TULSA COUNTY,
OKLAHOMA, HONORABLE WILLIAM W. MEANS, JUDGE
—B-5—
HODGES, J., Dissenting.
I cannot agree with the majority opinion that the filing of a
lien statement under the Oklahoma Mechanics’ and Material-
men’s lien statutes constitute only a de minimis interference with
the use and enjoyment of real property! or that it does not ap-
proach a taking of a significant property interest requiring the
protection of state and federal due process. Nor am I persuaded
that because the original landowner in this case was “in fact able
to sell the Broken Arrow property to appellee, PRCC, not-
withstanding the existence of the very lien statement complained
of here” that the filing of the lien statement was not detrimental,
and that the statutes are not unconstitutional. The decision in
this case has a sweeping effect throughout the state and the
building industry. Reliance on the facts in this particular case
exemplifies the old saw, “bad facts make bad law.”
1 The mischief which may be wrought by frivolous, malicious, or fraudulent
lien claimants is graphically illustrated by an article which appeared in The
Daily Oklahoman in 1979:
BANKS, OFFICIALS LAUNCH SEARCH
Liens Tie Up Billions in Colorado
DENVER (AP)—A search continued Saturday for a “landowner and
generai entrepreneur,” who filed at least $154.5 billion in liens against property
owned by neaily a score of Coloradans, including Denver’s mayor, district at-
torney and police chief.
Authorities said Kenneth Winchell filed nearly 100 liens in various courts
in Denver and Surnmit County.
A bench warrant for Winchell’s arrest was issued by Denver County
Judge George Manerbino. Authorities said Winchell could face charges rang-
ing from second-degree perjury to criminal mischief.
Denver District Judge Joseph Lilly also issued an order barring Winchell
from filing more liens.
Winchell, who listed no home address, owns some land near Vail. Some
of the liens he filed were against two banks which are suing him for alleged
nonpayment of funds totaling more than $25,000.
—B6—
The effective statutory provisions permit a general contrac-
tor to file a lien statement within four months after the date
upon which the last labor is performed, or materials supplied to
the job in the office of the clerk of the county where the land is
situated. The statement needs only to divulge: the amount
claimed and the items thereof as nearly as practicable; the
names of the owner; the contractor and the claimant; and a le-
gal description of the property.2 The statute which is the subject
of this appeal contains no provision for notice to the land-
owner.3 There is no protective legislation to prevent the filing of
Footnote | continued .. .
“We think he may be part of some right-wing group that files these kinds
of things,” said one official, who asked not to be identified.
Authorities in Nebraska say the courts in that state have been besieged
since May by a spate of similar liens and lawsuits. The court actions are filed
by persons angered by bureaucracy, authorities say.
“We think they’re part of an organized group, but we’re not sure,” said a
Nebraska official.
The liens, which cost only $2 to file, are legal documents claiming some
interest in a property, usually a debt owed by the owner. They may be filed
without showing any cause and, even if they have no basis in fact, can stop any
sale, transfer or re-mortgage of the property. Fighting a lien can cost hundreds
of dollars in legal fees.
The liens filed by Winchell protest income taxes and water laws and ac-
cuse one of four banks named in the liens of violating his constitutional rights.
“It’s certainly a new twist,” said one of the lien targets, who asked not to
be identified. “You don’t often hear of somebody who owes money filing
liens. It’s usually the other way around.”
Winchell reportedly owes money to at least three Denver banks.
The liens he filed claim damages ranging from $2 million to $950 million.
They name, among others, bank directors and officers, Denver Mayor Bill
McNichols, District Attorney Dale Tooley and Police Chief Art Dill.
242 O.S. 1971 § 142.
3 The statute was amended in 1977 to provide for notice by mail to the land-
owner. See 42 O.S. Supp. 1977 § 143.1.
= *
an exaggerated or inflated claim, nor is there a provision which
requires the posting of a bond to indemnify the landowner for
costs and expenses he might incur in clearing title to his proper-
ty.
The relevant provisions relating to subcontractors are the
same as for general contractors, except that the lien statement
must be filed within ninety days from the date of the last work
performed or supplies furnished by the subcontractor and no-
tice of the filing of the lien must be served on the owner.4 There
is no requirement that a foreclosure action be commenced for
up to one year subsequent to the filing date.5 A landowner may
clear title to his property by posting bond in a suitable amount®
or commencing a quiet title action. There is no other available
remedy.
It is contended by the appellees that the Mechanics’ and
Materialmen’s Lien Laws of the State of Oklahoma involve state
action, and violate both the State and Federal Constitutions by
depriving persons of property without due process of law be-
cause the statutes fail to provide for: any type of timely notice
or hearing on the probable merits of the claim against the
owners’ property; and judicial participation at an early state of
the proceedings; or for any type of bond or security to protect
the owner against a wrongful taking.
Before the due process clause of the United States Con-
stitution can be invoked, it must be shown that state action is in-
442 O.S. 1971 § 143.
542 O.S. 1971 § 172, 177.
642 O.S. 1971 § 147.
-i6—
volved in the proceedings. Private action, however harmful, is
not unconstitutional.” The fact that a state legalizes an action
does not automatically mean that there has been state action.
Mechanics’ liens are created by the legislature. The filing o/ the
lien involves a gamut of steps, all of which are mandated by
state statutes. For a contractor to perfect his claim, he must file
with the court clerk an affidavit stating the facts surrounding his
claim which must be verified. The claim becomes a matter of
public record, recorded by state employees in a state court-
house, and ultimately adjudicated in a state court. There can be
no question but that the filing of the mechanics’ lien involves a
substantial amount of state action, and invokes the due process
clauses of the State and Federal Constitutions.
This is a case of first impression in Oklahoma, and the
United States Supreme Court has not decided specifically what
the due process clause of the Fourteenth Amendment requires
concerning mechanics’ liens. Resolution of the issue before us,
consequently, turns not upon the application of specific prece-
dent, but upon the general principles established by a line of
decisions involving creditors’ remedies.
In Snidach v. Family Finance Corp., 395 U.S. 337, 89 S.Ct.
1820, 23 L. Ed. 2d 349 (1969), the United States Supreme Court
voided a Wisconsin prejudgment garnishment statute which
permitted a creditor to freeze the wages of an alleged debtor,
without prior notice or hearing, even though the creditor had no
previous interest in the wages. The summons was issued by the
7 Shelly v. Kraemer, 334 U.S. 1, 13, 68 S. Ct. 836, 92 L. Ed. 1161 (1948).
8See Barry Properties, Inc. v. Fish Bros. Roofing Co., 353 A.2d 222 (Md.
1976); Connally Development, Inc. v. Superior Court of Merced Co., 553
P.2d 637 (Cal. 1976).
oie
court clerk, at the request of the creditor’s attorney, without any
judicial participation. The court held that, absent extraordinary
circumstances, this statutory scheme violated the fundamental
principles of due process.
Three years later, in the case of Fuentes v. Shevin, 407 U.S.
67, 92 S. Ct. 1983, 32 L. Ed. 2d 556 (1972), the court invalidated
prejudgment replevin statutes in Florida and Pennsylvania,
which allowed state agents to seize a person’s personal property
upon the ex parte application of another person claiming a right
in the property. There was no prior notice or hearing concerning
the writ, nor was there any judicial participation in its issuance.
The court reiterated that: except in unusual situations, notice
and an opportunity to an adversary-type hearing must be pro-
vided before an alleged debtor can be deprived of his property;
the fact that the deprivation may be temporary and non-final is
irrelevant; and due process protection extends to any significant
property interest.
There was some clarification by the court in Mitchell v. W.
T. Grant Co., 416 U.S. 600, 94 S. Ct. 1895, 40 L. Ed. 2d 406
(1974). A Louisiana statute permitting sequestration of per-
sonalty to enforce the vendor’s lien of a creditor who had made
an installment sale of goods was upheld. The sequestration was
made without prior notice or hearing. However, to obtain the
writ, the creditor had to specify in an affidavit the facts, not
conclusions, which supported his claim. The affidavit was ex-
amined by a judge, and upon his determination that it was ade-
quate, the writ was issued. The creditor was required to file a
bond which would compensate the debtor if the sequestration
was unjustified. The debtor was allowed a prompt post-seizure
hearing, and if the creditor failed to substantiate his claim, the
debtor recovered not only his property, but also damages and
attorneys’ fees. The Court concluded that the judicial participa-
— B-10—
tion in these proceedings, and the protection afforded both
sides, sufficiently accommodated the conflicting interests of the
parties and satisfied the requirements of due process.
The Supreme Court’s most recent opinion dealing with pre-
judgment garnishment remedies and due process is North
Georgia Finishing, Inc. v. Di-Chem, Inc., 419 U.S. 601, 95 S.
Ct. 719, 42 L. Ed. 2d 751 (1975). In this case, the Court over-
turned, as contrary to due process, a Georgia statute authoriz-
ing garnishment in the form of freezing a commercial bank ac-
count. To obtain the garnishment, the claimant had to file an
affidavit with the court clerk, stating the amount claimed, then
post bond equal to twice that amount. The debtor could also
dissolve the claim by filing a bond. The Court held this statutory
scheme unconstitutional because it provided no prior notice or
hearing, nor did it meet the Mitchell standard, which requires
judicial participation in the proceedings, absent notice and
hearing.
In analyzing these cases to determine the current due pro-
cess standards for prejudgment garnishment statutes, it appears
that in the absence of extraordinary circumstances, there are
two avenues which are constitutionally permissible. Snidach and
Fuentes indicate that before a debtor can be deprived of a
significant property interest, the creditor must provide him with
prior notice and hearing on the probable merits of the creditor’s
claim. If prior notice and hearing are not provided, Mitchell re-
quires that: if an ex parte order is issued, there must be judicial
participation in its issuance; the creditor must produce a sworn
affidavit alleging specific facts entitling him to possession; there
must be a prompt post-seizure hearing; and the creditor must
post bond to protect the debtor against any damages, including
attorney fees which he might incur as a result of the wrongful
taking of his property.
—B-11—
IV
Although the majority relies heavily on Spielman-Fond v.
Hanson’s, Inc., 379 F. Supp. 997 (D. Ariz. 1973); aff'd. 94 S.
Ct. 2596, 417 U.S. 901, 41 L. Ed. 2d 208 (1974)9, this case is of
little assistance in interpreting the Oklahoma lien laws. The per-
tinent Arizona Statutes, A.R.S. § 33-981, et seq., provide pro-
cedural safeguards which the Oklahoma Statutes, 42 O.S. 1971
§ 141, et seq., lack. Actions to foreclose liens in Arizona must
be brought within six months of filing, or the lien is discharged.
The property owner may also dissolve the lien by posting a bond
one and one-half times the amount claimed. If the lien is filed by
one other than the contractor, the contractor must defend the
action at his own expense. When the claim is filed, copies of the
notice of the lien must be supplied to the county recorder where
the property is located, and to the property owner, if he is
within the county.
While the Oklahoma statutes do not contain some of the
safeguards provided by the Arizona statutes, we would further
disagree with the holding in Spielman-Fond that the deprivation
caused by the filing of the mechanics’ lien was de minimis. The
Arizona court reasoned that the lien deprived the owner of
neither the possession, nor the use of his property, and that,
although the ability to sell or obtain credit on the property
9To file a mechanics’ lien in Arizona, the claimant must file the claim with the
county recorder, and serve a copy of this claim with the property owner if he is
within the county where the property is located. If the owner is not in the
county, it is not necessary to provide him with notice. The claim must include
a description and location of the property, the name of the owner, name of the
claimant, the amount due and the date the work was completed. The claim is
made under oath. The original contractor must file the lien within ninety days
of completion of the work, all others have sixty days, The lien stays in effect
for six months unless an action is brought within that time to foreclose. The
owner can discharge the lien by posting bond in the amount of one and one-
half times the amount of the claim.
-B-12—
might be curtailed, the owner was not legally deprived of his
right to sell or encumber the land. The court followed the ra-
tionale of Cook v. Carlson, 364 F. Supp. 24 (D.S.D. 1973) and
ascertained that, although the lien may diminish the value of the
land to the owner, the harm is often offset by the value added
by the improvement upon which lien is based. The court also de-
cided, even though securing a buyer might be difficult, the
owner still had the right to alienate and that the lien did not
deprive the owner of this right.
Even though the United States Supreme Court has had an
opportunity to consider the constitutionality of statutorily
created liens, it as failed to do so, and thus no clear precedent
exists.!0 While some courts have elected to adhere to the theory
that the filing of a mechanics’ lien is a de minimis taking of
property not worthy of due process protection, !! I cannot do so.
I am persuaded by the rationale adopted by other jurisdictions
which holds that the imposition of a mechanics’ lien without any
judicial assessment of its merits constitutes a significant taking
10See majority opinion, note 4.
1! Jurisdictions upholding the constitutionality of their mechanics’ lien statutes
on the grounds that the filing of a mechanics’ lien does not constitute the tak-
ing of a significant property interest include:
Spielman-Fond v. Hanson's, Inc., 379 F. Supp. 997 (D. Ariz. 1973) affd.
417 U.S. 901 (1974); B & P Development Co. v. Walker, 420 F. Supp. 704
(W. D. Penn. 1976); In re Thomas A. Cary, Inc., 412 F. Supp. 667 (E.D.
Va. 1976); Cook v. Carlson, 364 F. Supp. 24 (D.S.D. 1973); Home
Building Corp. v. The Ventura Corp. and Housing Authority of the City
of Nevada, Missouri, 568 S.W.2d 769 (Mo. 1978); Keith Young & Sons
Construction Co. v. Victor Senior Citizens Housing, Inc., 262 N.W.2d
554 (lowa 1978); Bankers Trust Co. v. El Paso Pre-Cast Co., 560 P.2d
457 (Colo. 1977); Carl A. Morse, Inc. v. Rentar Industries Development
Corp., 391 N.Y.S.2d 425 (N.Y. 1977); Silverman v. Gossett, 553 S.W.2d
581 (Tenn. 1977); Nelson-American Developers, Ltd. v. Enco Engineer-
ing Corp., 337 So. 2d 729 (Ala. 1976); Tucker Door & Trim Corp. v. 15th
St. Co., 235 Ga. 727, 221 S.E.2d 433 (1975).
— B-13—
of property and is violative of due process. !2
The purpose of the due process clauses is to rest the right of
all persons upon the same rule under similar circumstance. !3
The imposition of a mechanics’ lien without notice results in a
significant taking of property. A great deal of time, effort and
money is required to dislodge the cloud on the landowner’s title.
While the lienor is not required to post a bond to protect the
owner from losses he might incur from the lien, or bear any
other expense in order to impose a possibly invalid lien; the
landowner is required to post a bond equal to the amount of the
claim, attorneys’ fees, court costs and interest.!4 This does not
provide equal protection to the debtor and the claimant.
The greatest advantage in owning land is often not the ac-
tual possession of the property, but the collateral benefits which
are derived from ownership.!5 These include the right to
alienate, encumber, mortgage, lease, and acquire equity. A
mechanics’ lien has a drastic effect on these privileges. It clouds
12 Jurisdictions declaring their mechanics’ lien statutes unconstitutional on the
grounds that they are violative of due process include:
Roundhouse Construction Corp. v. Telesco Masons Supplies Co., Inc.,
168 Conn. 371, 362 A.2d 778 (1975), vacated 423 U.S. 809, on remand
179 Conn. 155, 365 A.2d 393, cert. den. 429 U.S. 889 (1976); Barry Prop-
erties, Inc. v. Fisk Bros. Roofing Co., 277 Md. 15, 353 A.2d 222 (1976).
Jurisdictions upholding the constitutionality of their mechanics’ lien statutes
on the grounds that they contain procedural safeguards sufficient to satisfy
due process include:
Ruocco v. Brinker, 380 F. Supp. 432 (S.D. Fla. 1974); Connolly Develop-
ment, Inc. v. Superior Court of Merced County, 132 Cal. Rptr. 477, 17
Cal. 3d 803, 553 P.2d 637, appeal dismissed 97 S. Ct. 778 (1976).
13 Frost v. Corp. Comm’n., 278 U.S. 515, 522, 49 S. Ct. 235, 73 L. Ed. 483
(1929).
14See 42 O.S. 1971 § 147.
ISD. F. Lowry, Jr., “Creditors’ Rights: The Constitutionality of Ok'ahoma’s
Mechanics’ Lien Law,” 31 Okla. L. Rev. 148, 159 (1978).
-%14-
the title to the property, making it extremely difficult or even
impossible to sell or mortgage the land. Even if a willing buyer is
found, the owner often has to accept much less than the actual
value of the property, and may, in some instances, be forced to
pay an invalid claim in order to clear title to his property in time
for a pending transaction to be consummated. The fact that
some improvements have been made on the land is little comfort
to the owner whose property has suffered a substantial diminu-
tion in value, especially when the lien is invalid or was filed
because the owner has refused to pay for improvements which
have been done in a shoddy or unworkmanlike manner.
V
The Mechanics’ and Materialmen’s Lien Statutes of the
State of Oklahoma, 42 O.S. 1971 § 141, et seq., violate both the
State and Federal Constitutions because they deprive persons of
a significant property interest without due process of law. The
Oklahoma statutes fail to meet either Fuentes or Mitchell stan-
dards. There is no prior notice or hearing, nor is there any
judicial participation in the process. Almost all of the state
statutes which have been found constitutional contain safe-
guards that Oklahoma’s laws lack.!6 The Arizona statutes which
were held constitutional in Spielman-Fond provided for notice
to the owner if he was in the county. The Oklahoma statute, in
effect at the time of this litigation did not provide for any notice
to the property owner by the contractor.
With the exception of lack of notice to the landowner, the
most apparent deficiency in the Oklahoma Mechanics’ Lien
Law is the absence of any provision for an immediate post-filing
hearing to determine the validity of the lien. In Connolly Dev.,
16 See note 11, supra.
—B-15—
Inc. v. Superior Court, 17 Cal. 3d 803, 822, 553 P.2d 637, 650,
132 Cal. Rptr. 477 (1976), the California Supreme Court deter-
mined that the recordation of a mechanics’ lien deprived the
property owner of a significant property interest, and con-
stituted a taking within the meaning of the federal and state due
process clauses. The court reasoned, however, that the Califor-
nia lien laws comported with due process requirements because
twenty days before recording a mechanics’ lien the claimant was
required to serve a preliminary notice upon the owner, the con-
tractor, and the construction lender.!7 By granting the owner
twenty days advance notice of the lien, [a safeguard not provid-
ed by the sequestration law upheld in Mitchell], the California
statutes permit the owner to investigate the basis of the lien, and
seek a hearing before the lien becomes effective. This is a much
greater protective device than the Mitchell right to ex parte
judicial review of the application for a writ of sequestration. In
California, upon receipt of the notice from one not entitled to
claim a lien, the owner or lender may immediately file suit to en-
join the assertion of the lien.'8 By utilization of a temporary
restraining order if necessary,!9 the property owner may secure
a hearing before the lien is imposed, or he may seek immediate
declaratory relief.20 Actions for declaratory relief in California
may claim priority on the calendar of the trial court.2! The
Oklahoma statutes do not provide for priorities on the court’s
calendar, and a property owner seeking relief pursuant to 42
O.S. 1971 § 177 would be subject to the same delays as in any
civil action.
17Cal. Code Civ. Process §§ 3097, 3114, 3160.
18 Cal. Code Civ. Proc. § 526.
19Cal. Code Civ. Proc. § 527.
20Cal. Code Cov. Proc. § 1060.
21 Cal. Code Civ. Proc. § 1062 (a).
— B-16—
Because mechanics’ liens are imposed ex parte by the
creditor and significantly affect the rights of the property
owner, the imposition thereof poses a serious problem of pro-
cedural due process. The United States Supreme Court has clar-
ified the requirements necessary to guarantee due process of
law. In Fuentes, the Court held that due process requires prior
notice, and an opportunity to be heard.22 Mitchell held that a
reasonable alternative is judicial participation in the process,
and the posting of a bond to insure against any damages and at-
torney fees incurred. Even if the due process clauses do not re-
quire notice and hearing prior to every deprivation of a signifi-
cant property interest, they do require a hearing at a meaningful
time in a meaningful manner.23 In failing to provide for an im-
mediate post-perfection hearing, the mechanics’ lien law leaves
the debtor at the mercy of his creditor without providing any
additional protection for the interest of the debtor. The pro-
cedural deficiencies of the Oklahoma lien laws render them un-
constitutional.
22See Mullane v. Central Hanover Bank and Trust Co., 339 U.S. 306,
313-315, 70 S. Ct. 652, 657, 94 L. Ed. 865, 872-874 (1949); and Bomford v.
Socony Mobil Oil Co., 440 P.2d 713, 719 (Okla. 1968).
23 Armstrong v. Manzo, 380 U.S. 545, 552, 85 S. Ct. 1187, 14 L. Ed. 2d 62
(1965). See also J. P. Ward, “The Constitutional Validity of Mechanics’ Liens
Under The Due Process Clause — A Reexamination After Mitchell and North
Georgia, 55 B.U.L. 263 (1975).
anu
APPENDIX C
FILED
SUPREME COURT
State of Oklahoma
FEB 18, 1981
ROSS N. LILLARD, JR.
Clerk
IN THE SUPREME COURT OF THE
STATE OF OKLAHOMA
Wednesday, February 18, 1981
THE CLERK IS DIRECTED TO ISSUE THE FOLLOWING
ORDERS:
51,141 Mobile Components, Inc. v. Verlee C. Layon etc.
Rehearing denied.
S/S Pat Irwin
Chief Justice
eS
APPENDIX D
“$141. Right to lien-Priority-Enforceability against property-
Constructive notice
Any person who shall, under oral or written contract with
the owner of any tract or piece of land, perform labor, or fur-
nish material for the erection, alteration or repair of any
building, improvement or structure thereon or perform labor in
putting up any fixtures, machinery in, or attachment to, any
such building, structure or improvements . . . shall have a lien
upon the whole of said tract or piece of land, the buildings and
appurtenances. . . Such liens shall be preferred to all other liens
or encumbrances which may attach to or upon such land, build-
ings or improvements or either of them subsequent to the com-
mencement of such building, the furnishing or putting up of
such fixtures or machinery, . . . or the making of any such
repairs or improvements; and such lien shall follow said proper-
ty and each and every part thereof, and be enforceable against
the said property wherever the same may be found, and com-
pliance with the provisions of this Article shall constitute con-
structive notice of the claimant’s lien to all purchasers and en-
cumbrancers of said property or any part thereof, subsequent to
the date of the furnishing of the first item of material or the date
of the performance of the first labor.
“$142. Statement to be filed
Any person claiming a lien as aforesaid shall file in the of-
fice of the clerk of the district court of the county in which the
land is situated a statement setting forth the amount claimed
and the items thereof as nearly as practicable, the names of the
owner, the contractor, the claimant, and a description of the
property subject to the lien, verified by affidavit . . . Such state-
ment shall be filed within four months after the date upon
—
which material was last furnished or labor last performed under
contract as aforesaid... .
“$143. Lien by or through subcontractor
Any person who shall furnish any such material or perform
such labor as a subcontractor, or as an artisan or day laborer in
the employ of the contractor, may obtain a lien upon such land,
or improvements, or both from the same time, in the same man-
ner, and to the same extent as the original contractor for the
amount due him for such material and labor . . . by filing with
the clerk of the district court of the county in which the land is
situated, within ninety (90) days after the date upon which ma-
terial was last furnished or labor last performed under such sub-
contract, a statement, verified by affidavit, setting forth [same
as in §142] and by serving a notice in writing of the filing of such
lien upon the owner of the land, or improvements, or both
”
.
“$147 Discharge of lien
Any person against whom a claim is filed under the provi-
sions of the law relating to mechanics’ and materialmen’s liens
may at any time upon three (3) days notice in writing to the
claimant discharge such lien by depositing with the Court Clerk
in whose office such lien claim has been filed the amount of
such claim in cash and executing and filing with such Court
Clerk a good and sufficient bond to the claim and with ade-
quate, solvent sureties conditioned that such person will pay any
reasonable attorney’s fee and all court costs, and interest, that
may be adjudged against him finally by any Court of competent
jurisdiction in the event such claimant recovers judgment on
such claim in the amount for which such claim is filed; Provid-
ed; the deposit of such cash and the execution and filing of such
>
~~
bond shall not operate to discharge such lien until the expiration
of five (5) days after the deposit of such cash and the filing of
such bond, during which time the lien claimant may apply to
such Clerk to have the surety on such bond increased, and if
upon such investigation the bond proves to be insufficient the
Clerk shall immediately require such additional surety thereon
as may be necessary to make such bond solvent, and the lien
shall not be discharged until any additional surety ordered shall
have been given and approved.”
“$172. Enforcement by Civil action-Limitations-Practice,
pleading and proceeding-Amendment of lien statement
Any lien provided for by this Chapter may be enforced by
civil action in the District Court of the County in which the land
is situated, and such action shall be brought within one year
from the time of the filing of said lien with the Clerk of said
Court . . . [I]n case of action brought, any lien statement may be
amended by leave of court in furtherance of justice as pleadings
may be in any matter, except as to the amount claimed.
*+_ * *
Ҥ175. Sale of property after judgment
In all cases where judgment may be rendered in favor of
any person or persons to enforce a lien under the provisions of
this Chapter, the real estate or other property shall be ordered
to be sold as in other cases of sales of real estate, such sales to be
without prejudice to the rights of any prior encumbrancer, own-
er or Other person not a party to the action.
*_ * *
“$177. Suite by owner to determine lien and cancelation of lien
on docket
—~D-4—
If any lien shall be filed under the provisions of this
Chapter, and no action to foreclose such lien shall have been
commenced, the owner of the land may file his petition in the
district court of the county in which said land is situated, mak-
ing said lien claimants defendants therein, and praying for an
adjudication of said lien so claimed, and if such lien claimant
shall fail to establish his lien, the court may tax against said
claimant the whole, or such portion of the costs of such action
as may be just: Provided, that if no action to foreclose or ad-
judicate any lien filed under the provisions of this chapter shall
be instituted within one year from the filing of said lien, the
clerk of the district court shall enter under the head of “Re-
marks,” in the mechanics’ lien docket hereinbefore named, that
said lien is canceled by limitation of law.”
=
APPENDIX E
CONSTITUTION
Section 1. All persons born or naturalized in the United
States, and subject to the jurisdiction thereof, are citizens of the
United States and of the State wherein they reside. No State
shall make or enforce any law which shall abridge the privileges
or immunities of citizens of the United States; nor shall any
State deprive any person of life, liberty, or property, without
due process of law; nor deny to any person within its jurisdic-
tion the equal protection of the laws.
=
APPENDIX F
No. C-75-1071
IN THE DISTRICT COURT IN AND FOR
TULSA COUNTY, STATE OF OKLAHOMA
FILED
DISTRICT COURT
State of Okla. Tulsa County
JUL 18, 1977
DON E. AUSTIN
Clerk
VERLEE C. LAYON, Executrix of the Estate of
THOMAS LAYON, SR., deceased
Substituted Plaintiff
vs.
FIRST NATIONAL BANK OF TULSA;
THE OUTRIGGER, INC.;
UNIVERSAL CONTRACTORS CORPORATION,
a foreign corporation;
MARTI STRATTON, d/b/a MARTY’S
COMMERCIAL INTERIORS;
LEWIS AVENUE INVESTMENT COMPANY,
an Oklahoma general partnership with
Jack R. Sowles and James C. Metzker;
PLANNED RESIDENTIAL COMMUNITIES
CONSTRUCTION COMPANY OF
OKLAHOMA, INC.;
and HAMILTON INVESTMENT TRUST,
a voluntary business association of Massachusetts
with Paul Stillman as a Trustee
Defendants
=~ =
ORDER GRANTING SUMMARY JUDGMENT
NOW on this 31st day of May, 1977, the Court having con-
sidered the Motion for Summary Judgment filed in this case by
Plaintiff and the Motion for Summary Judgment filed in this
case by the Defendants, THE OUTRIGGER, INC., FIRST NA-
TIONAL BANK OF TULSA, PLANNED RESIDENTIAL
COMMUNITIES CONSTRUCTION COMPANY OF OKLA-
HOMA, INC. and HAMILTON INVESTMENT TRUST, and
having carefully considered the authorities cited in the briefs
submitted by counsel and having considered the argument made
by counsel does hereby find as follows:
(1) The Motion for Summary Judgment filed by the Plain-
tiff should be overruled because certain issues of fact are in
dispute.
(2) The Third Amended Petition of Plaintiff should be dis-
missed because it is based entirely upon the mechanic’s and ma-
terialmen lien statutes of the State of Oklahoma [42 O.S. §141,
et seq. (1971)] and those statutes are unconstitutional and void
because they fail to provide due process of law as required by
the Fourteenth Amendment of the United States Constitution
and Article 2, Section 7 of the Oklahoma Constitution.
(3) All other issues raised by the Motions for Summary
Judgment need not be ruled upon by the Court because ruling
on said issues is deemed unnecessary in light of the above find-
ings.
IT IS THEREFORE ORDERED, ADJUDGED AND DE-
CREED that:
(1) The Motion for Summary Judgment filed by the Plain-
tiff is hereby overruled.
(2) The Third Amended Petition of Plaintiff is hereby dis-
-F—.3—
missed because it is based entirely upon the mechanic’s and ma-
terialmen lien statutes of the State of Oklahoma and those stat-
utes are unconstitutional and void because they fail to provide
due process of law as required by the Fourteenth Amendment of
the United States Constitution and Article 2, Section 7 of the
Oklahoma Constitution.
(3) No other issues raised by the Motions for Summary
Judgment are ruled upon at this time because ruling on said
issues is unnecessary in light of this Order.
William W. Means
Judge
APPROVED AS TO FORM:
S/S Wesley R. Thompson
Wesley R. Thompson, Attorney for
the Plaintiff
S/S Joseph A. McCormick
Joseph A. McCormick, Attorney for
the Defendants, First National Bank of
Tulsa and The Outrigger, Inc.
S/S John R. Barker
John R. Barker, Attorney for the
Defendants, Planned Residential
Communities Construction Company
of Oklahoma, Inc. and Hamilton
Investment Trust
ae Ye
APPENDIX G
No. 51141
IN THE SUPREME COURT OF THE
STATE OF OKLAHOMA
FILED
SUPREME COURT
State of Oklahoma
JUN 28, 1977
ROSS N. LILLARD, JR.
Clerk
MOBILE COMPONENTS, INC., a corporation
Appellee
vs.
VERLEE C. LAYON, Executrix of the Estate of
THOMAS LAYON, SR., Deceased
Appellant
PLANNED RESIDENTIAL COMMUNITIES
CONSTRUCTION COMPANY OF OKLAHOMA,
INC., formerly PLANNED RESIDENTIAL
COMMUNITIES of Oklahoma, a corporation;
HAMILTON INVESTMENT TRUST, a voluntary
business association of Massachusetts with Paul
Stillman as a Trustee;
MARVIN LASATER d/b/a LASATER ELECTRIC;
D. McGLUMPHY d/b/a MAC’S ELECTRIC CO.;
RAYMOND P. SEMONES d/b/a TWILITES MFG. CO.;
TOM B. CHILDERS d/b/a TOM B. CHILDERS
a@2—
GRADING & ESCAVATING, INC.;
MURPHY PAINT & DRYWALL, INC.;
MILLER CONSTRUCTION CO. OF TULSA, INC.;
R. A. YOUNG & SON, INC., a foreign corporation;
BOARD OF COUNTY COMMISSIONERS OF TULSA
COUNTY, OKLAHOMA;
IRRIGATION CONSTRUCTION CO.;
REX INVESTMENT CORPORATION;
RAMON L. KING;
PATRICIA A. KING;
PLYWOOD OF TULSA, a division of International
Forest Products Corporation;
BANK OF OKLAHOMA formerly NATIONAL BANK
OF TULSA;
UNITED BANK;
TULSA CONTAINER, INC.;
UNIVERSAL CONTRACTING CORPORATION, a
corporation;
JACK R. SOWLES and JAMES C. METZKER,
Individually and d/b/a LEWIS AVENUE
INVESTMENT COMPANY;
MIDLAND MORTGAGE CoO., INC.:
EVANS AND MITCHELL, a Georgia corporation;
UNITED STATES OF AMERICA;
GERALD W. BLAKELEY, JR., et al, Trustees of
CABOT, CABOT, AND FORBES LAND TRUST,
a Massachusetts Business Trust;
AMULCO ASPHALT CO.;
JERRY WENDLAND;
CHARLES WENDLAND;
GENERAL ELECTRIC COMPANY;
R. A. YOUNG & SON, INC.,a foreign corporation;
=< =
SOUTHWEST MANUFACTURING CO.;
JOHN F. CANTRELL, Treasurer of Tulsa County,
Oklahoma;
PAUL F. HELMUTH HALL & DOOR;
GREENHILL CONSTRUCTION CO.;
DUOSKIN, INC.;
SIZEMORE, SACK & SIZEMORE; and
ANSLIE PERRAULT
Appellees
Consolidated With
VERLEE C. LAYON, Executrix of the Estate of
THOMAS LAYON, SR., Deceased
Appellant
vs.
FIRST NATIONAL BANK OF TULSA;
THE OUTRIGGER, INC.;
UNIVERSAL CONTRACTING CORPORATION,
a foreign corporation;
MARTI STRATTON d/b/a 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 d/b/a LASATER ELECTRIC;
D. McGLUMPHY d/b/a MAC’S ELECTRIC CO.;
CONCRETE SPECIALTIES OF TULSA, INC.;
ee
RAYMOND P. SEMONES d/b/a TWILITES
MFG. 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;
R. A. YOUNG & SON, INC., a foreign corporation;
THE BOARD OF COUNTY COMMISSIONERS of
TULSA COUNTY, OKLAHOMA;
DUOSKIN, INC.; and
SIZEMORE, SACK & SIZEMORE
Appellees
PETITION IN ERROR
COMES NOW the Appellant, VERLEE C. LAYON,
Executrix of the Estate of Th mas Layon, Sr., Deceased, by
and through her attorney of record, Wesley R. Thompson, and
states to the Court as follows, to wit:
That on May 31, 1977, in Consolidated Cases Numbered
C-75-1960 and C-75-1071, in the District Court of Tulsa Coun-
ty, State of Oklahoma, wherein the above styled Appellant and
Appellees were parties, the Honorable Judge William Means en-
tered a final judgment sustaining Motions for Summary Judg-
ment filed by the Appellees, Trustees of Hamilton Investment
Trust; Planned Residential Communities Construction Com-
pany of Oklahoma, Inc.; First National Bank of Tulsa; and,
=-@5—
The Outrigger, Inc., ruling that the Oklahoma Mechanics and
Materialmen Lien Law, 42 O.S. §141, et seq., was unconstitu-
tional and dismissed Appellant’s cause.
Appellant brought her action for foreclosure of a Ma-
terialman’s lien upon property located in Tulsa County, Okla-
homa. On May 31, 1977, at the pre-trial conference of said
cause, the Honorable Judge Means declared the Oklahoma
Mechanic’s and Materialmen Lien Law unconstitutional, there-
by sustained the Motions for Summary Judgment filed by the
Appellees, Trustees of Hamilton Investment Trust; Planned
Residential Communities Construction Company of Oklahoma;
First National Bank of Tulsa; and, The Outrigger, Inc., and fur-
ther overruled Appellant’s Motion for Summary Judgment.
Appellant at this time urges that the Honorable Judge
Means erred and was incorrect since the Oklahoma Mechanics
and Materialmen Lien Law, 42 O.S. §141, et seq. is constitu-
tional; Further, the trial court erred when it sustained the Ap-
pellees, Trustees of Hamilton Investment Trust; Planned Res-
idential Communities Construction Company of Oklahoma;
First National Bank of Tulsa; and, The Outrigger, Inc., Mo-
tions for Summary Judgment; Further, said trial court erred
when it did not sustain Appellant’s Motion for Summary Judg-
ment at the pre-trial conference on May 31, 1977, since no ma-
terial fact controversy remained for trial and Appellant was en-
titled to judgment as a matter of law.
Further, the trial court erred in its rulings because the ver-
dict and judgment is not sustained by the pleadings and ev-
idence on file in this cause, and is contrary to law.
Appellant hereby attaches her Designation of Record of
Appeal in this cause marked Exhibit “A” and by this reference
made a part hereof.
«tie
WHEREFORE, Appellant prays said judgment dismissing
Plaintiff's cause and overruling her Motion for Summary Judg-
ment, entered May 31, 1977, in the District Court of Tulsa
County, State of Oklahoma, be reversed, set aside, and held for
naught, and that judgment be rendered in favor of Appellant
and against the Appellees upon the facts as disclosed by the
record on appeal and upon the law applicable thereto, and that
Appellant be restored to all her rights lost by the rendition of
the above stated judgment, and for all other further relief this
Court might deem just and proper.
WESLEY R. THOMPSON
Attorney for Appellant
S/S Wesley R. Thompson
Post Office Box 1364
Sapulpa, OK 74066
wit a
APPENDIX H
No. 51141
IN THE SUPREME COURT OF THE
STATE OF OKLAHOMA
FILED
SUPREME COURT
State of Oklahoma
NOV 16, 1977
ROSS N. LILLARD, JR.
Clerk
MOBILE COMPONENTS, INC., a corporation
Appellee
vs.
VERLEE C. LAYON, Executrix of the Estate of
THOMAS LAYON, SR., Deceased
Appellant
PLANNED RESIDENTIAL COMMUNITIES
CONSTRUCTION COMPANY OF
OKLAHOMA, INC., et al
Appellees
Consolidated With
VERLEE C. LAYON, Executrix of the Estate of
THOMAS LAYON SR., Deceased
Appellant
vs.
FIRST NATIONAL BANK OF TULSA, et al
Appellees
a= 1-2 =
ACTION TO FORECLOSE MECHANICS’ LIEN
APPEAL FROM DISTRICT COURT OF TULSA COUNTY, OKLAHOMA
HONORABLE JUDGE WILLIAM MEANS
APPELLANT'S BRIEF IN CHIEF
STATEMENT OF FACTS
Prior to August 3, 1973, Universal Contracting Corpora-
tion acted as a prime contractor and entered into a contract or
contracts with, the landowner, Lewis Avenue Investment Com-
pany, to erect 700 apartment units on the property described as:
LOT ONE (1), AND LOT TWO (2), BOTH IN BLOCK
THREE (3), CROWN IMPERIAL ADDITION TO THE CITY
OF TULSA, ACCORDING TO THE RECORDED PLAT
THEREOF, and 275 apartment units on the property described
as: ALL OF LOT ONE (1), BLOCK ONE (1), CROWN IM-
PERIAL SECOND ADDITION, AN ADDITION TO THE
CITY OF BROKEN ARROW.
Thereafter, but still prior to August 3, 1973, Universal
Contracting Corporation in pursuance of its contract to build
these 975 apartment units subcontracted to Marti Stratton
d/b/a Marti’s Commercial Interiors, work to be done upon all
the apartment units mentioned in paragraph above; specifically
the job of carpeting all the said apartment units on the property
described in paragraph above.
Century Interiors, Inc., as a sub-sub-contractor contracted
with Marti Stratton d/b/a Marti’s Commercial Interiors on
August 3, 1973, to perform the job of carpeting all the apart-
ments mentioned above, and this work was performed as a sub-
sub-contractor under the prior contracts mentioned above.
On July 17, 1974, lien claimant Century Interiors, Inc.,
ee
filed a Mechanics’ Lien No. 61251 in the amount of $17,115.37
for work done under a contract to install carpeting in apart-
ments on these two (2) tracts of land, one located in Tulsa and
referred to in the lien by street address, and the other in Broken
Arrow referred to by legal description. Both pieces of property
were then owned by Lewis Avenue Investment Company. Cen-
tury Interiors’ lien was properly recorded by the Tulsa County
Court Clerk and indexed by landowners name placing all per-
sons on notice of this lien claim.
That on or about July 29, 1974, lien claimant Century In-
teriors, Inc. served Notice of filing of Mechanics’ and Mate-
rialmen’s Lien upon the then owner of all the above property,
Lewis Avenue Investment Company.
On or about December 4, 1974, the above lien No. 61251
was legally and properly assigned to Thomas Layon, Sr., in the
manner provided by Oklahoma Law.
In May, 1975, an Amended Mechanics’ and Materialmen’s
Lien was filed by Thomas Layon, Sr., amending the above lien
to describe both the Broken Arrow and Tulsa tracts by legal de-
scription. Thomas Layon, Sr., has since become deceased and
his executrix, Verlee C. Layon, has been substituted as the party
plaintiff.
On May 31, 1977, at the pretrial conference in this cause
the Motions for Summary Judgment filed by Appellees, Trustee
of Hamilton Investment Trust; Planned Residential Communi-
ties Construction Company of Oklahoma, Inc.; First National
Bank of Tulsa; and The Outrigger, Inc., was sustained by the
Honorable Judge Means when he found the Oklahoma Me-
chanics’ and Materialmen’s Lien Law, 42 O.S. §141, et seq, un-
constitutional and dismissed Appellant’s case; further, at the
same hearing, said Judge further overruled Appellant’s Motion
ay
for Summary Judgment. From these rulings Appellant appeals
to this Court. (Record pp. 427-428).
ARGUMENTS
I. Clear logic and the weight of current legal authority show
Oklahoma’s Mechanic’s Lien Statutes are not unconstitutional:
Defendants, Appellees herein, argue that the Oklahoma
Lien Statutes which are similar to Lien Statutes in many other
States are suddenly in violation of the Fourteenth Amendment
to the United States Couastitution because they do not require
the prospective lien claimant to give the land owner advance
notice and some form of judicial hearing on his right to file,
prior to filing a lien claim statement with the Court Clerk. Since
Oklahoma has no ruling decision on this point reference to the
decisions in other jurisdictions is in order. There appears to be a
variance of opinion as to how and why these statutes do not
violate the due process clause of the Constitution but the clear
weight of authority shows these lien statutes are not constitu-
tionally defective. Quotations hereafter are somewhat lengthy in
order to present a clear picture of the reasoning involved in
these decisions.
In the case entitled Spielman-Fond, Inc., vs. Hanson’s,
Inc., 379 F. Supp. 997 (D. Ariz., 1973) the Court found the
Arizon» Mechanic’s and Materialmen’s lien statute constitu-
tional and stated as follows, to wit:
“Plaintiffs rely on McClellan v. Commercial Credit
Corp., 350 F. Supp. 1013 (D.R.I. 1972), aff'd 409 U.S.
1120, 93 S. Ct. 935, 35 L. Ed. 2d 253 (1973). There a
Three-Judge Court held the Rhode Island attachment
statutes unconstitutional, relying on Snidach, Goldberg
and Fuentes. The case is inapposite because there, unlike
here, property, viz. automobiles, was taken from the
physical possession of the plaintiffs.
— 15 —
For the same reason, plaintiffs’ reliance on a long
series of cases is misplaced because they all involved an
actual taking or deprivation of property, rights or en-
titlements. Stanley v. Illinois, 405 U.S. 645, 92 S. Ct.
1208, 31 L. Ed. 2d 551 (1972) (unwed father’s right to
association with his children): Bel// vs. Burson, 402 U.S.
535, 91 S. Ct. 1586, 29 L. Ed. 2d 90 (1971) (driver’s li-
cense); Adams vs. Egley, 338 F. Supp. 614 (S.D. Cal.
1972) (goods); Tindall v. Hardin, 337 F. Supp. 563
(W.D. Pa. 1972) (food stamps): White v. Minter, 330 F.
Supp. 1194 (D. Mass. 1971) (mother’s association with
children pending determination of her fitness): Davis vs.
Weir, 328 F. Supp. 317 (N.D. Ga., 1971) (water): Crow
vs. California Dept. of Human Resources, 325 F. Suppl
1314 (N.D. Cal 1970) (employment compensation bene-
fits): Desmond v. Hatchey, 315 F. Supp. 328 (D. Me.
1970) (freedom from incarceration for failure to pay a
Gebt): Golliday v. Robinson, 305 F. Supp. 1224 (N.D.
Ill. 1969) (welfare benefits).
Plaintiffs claim that there has been in effect a taking
here. A lien, it is argued, clouds title and can in many
situations amount to an absolute prohibition on the right
to alienate property. Thus, by taking away the right to
alienate property freely, the lien statues have taken away
a significant property interest. Plaintiffs cite Shelley v.
Kramer, 331 U.S.1. 68 S. Ct. 836, 92 L. Ed. 1161 (1947):
Buchanan v. Warley, 245 U.S. 60, 38 S.Ct. 16, 62 L. Ed.
149 (1917), and Kass v. Lewin, 104 So. 2d 572 (Fla.
1958), as authority for their argument that the right to
alienate property is a right which cannot be infringed.
Those cases did, indeed, reaffirm the importance of the
right to alienate property. But all the cases involved di-
rect and total prohibitions on the right to alienate. The
prohibitions involved were such that, even if a seller
could find a willing buyer, the statutory or contractual
prohibitions involved prevented consummation of the
transaction. That is a different situation from the case at
-6—
bar. Here, a lien is fiied against the property and clouds
title. It cannot be denied that the effect of such lien may
make it difficult to alienate the property. If the plaintiffs
can find a willing buyer, however, there is nothing in the
statutes or the liens which prohibits the consummation
of the transaction. Even though a willing buyer may be
more difficult to find, once he is found there is nothing
to prevent plaintiffs from making the sale to him. The
liens do nothing more than impinge upon economic
interests of the property owner. The right to alienate has
not been harmed, and the difficulties which the lien
creates may be amcliorated through the use of bonding
or titled insurance.
We conclude, therefore, that the filing of a mechanics’
and materialmen’s lien does not amount to a taking of a
significant property interest, and that, accordingly,
A.R.S. §33 981 et seq. are not violative of due process of
law under the Fourteenth Amendment for failing to pro-
vide for notice and hearing prior to the filing of the lien.”
Spielman-Fond at 999-1000.
In the case of Cook v. Carlson, 364 F. Supp. 24 (S.D. So.
Dakota, 1973) the Court found that no prior notice and oppor-
tunity to be heard is constitutionally necessary before a me-
chanics’ and materialmen’s lien claim is filed. The Court there
stated:
“This court is presented with a challenge to a previously
unscathed creditors’ remedy—the mechanics’ lien. The
test against which the validity of the lien must be
measured and possibly the most concise statement of the
weighing process referred to above, is set forth in Boddie
v. Connecticut, 401 U.S. 371, 378-379, 91 S. Ct. 780.
786. 28 L. Ed. 2d 113 (1971):
What the Constitution does require is “an opportunity
* * * sranted at a meaningful time and in a meaningful
manner,” “for [a] hearing appropriate to the nature of
tT an
the case.” The formality and procedural requisites for
the hearing can vary, depending upon the importance of
the interests involved and the nature of the subsequent
proceedings. That the hearing required by due process is
subject to waiver and is not fixed in form does not affect
its root requirement that an individual be given an op-
portunity for a hearing before he is deprived of any sig-
nificant property interest, except for extraordinary situa-
tions where some valid governmental interest is at stake
that justifies postponing the hearing until after the event.
In short “within the limits of practicability,” a State must
afford to all individuals a meaningful opportunity to be
heard if it is to fulfill the promise of the Due Process
Clause. (citations omitted) (emphasis added).
Whether the mechanics’ and materialmen’s lien with-
stands constitutional attack, then, is dependent upon
two considerations: (1) whether the deprivation can be
classified as “insignificant” or “de minimis”: and, (2)
whether the lien constitutes that “extraordinary situation
. . . that justifies postponing the hearing until after the
event.”
In the view of this Court, the deprivation which results
from the filing of a mechanics’ lien is de minimis. The
creditors’ remedies thus far invalidated have completely,
though temporarily, deprived the owner of the use of his
property. Snidach v. Family Finance Corp., 395 U.S.
337, 89S. Ct. 1820, 23 L. Ed. 2d 349 (1969) (garnishment
“freezes” wages and prevents their use by debtor):
Fuentes v. Shevin, 407 U.S. 67, 92 S.Ct. 1983, 32 L. Ed.
2d 556 (1972) (writ of replevin authorizes sheriff to seize
the property, depriving debtor of possession and use):
Hall v. Garson, 468 F. 2d 845 (Sth Cir. 1972) (landlords’
lien allows landlord to seize tenants’ personal property as
security for rent payments): Adams v. Egley, 338 F.
Supp. 614 (S. D. Cal. 1972) (self-help repossession rem-
edies authorize creditor to peaceably seize collateral
upon default in payments): Straley v. Gassaway Motor
mY
Co., Inc., 359 F. Supp. 902 (U.S.D.C.S.W. Va. 1973)
(garagemen’s lien remedies allow repairmen to retain
possession of an automobile pending payment or posting
of bond by owner): Lake Arrowhead Estates, Inc. v.
Cumming, 360 F. Supp. 1085 (U.S.D.C.Me. 1973) (pre-
judgment real property attachment remedies place the
real estate “in custodia legis,” in the custody of the court,
preventing the transfer or encumbrance of the land). The
mechanics’ and materialmen’s lien, however neither de-
prives the owner of the possession nor of the use of his
property. Although the use of the property might be said
to be curtailed, in that selling of the property, borrowing
on the property, or renting the property may be more
difficult or less profitable, the owner is not legally
prevented from selling, encumbering, renting or other-
wise dealing with his property as he chooses. Although
the value of the property may be diminished due to the
existence of the lien two factors tend to mitigate that
harm: (1) while the value of the property may be di-
minished by the amount of the lien the improvements, at
least theoretically, have increased the value of the pro-
perty by the amount of the lien, thereby minimizing
harm to the owner: and, (2) the owner can force an ex-
peditious adjudication on the merits, .. .
[3] The primary purpose of the mechanics’ and material-
men’s lien, of course, is to provide construction contrac-
tors with security. A secondary purpose, however, is to
give notice to subsequent purchasers and encumbrancers
that there is a charge on the property and that they will
take subject to that charge. In that regard, it is similar to
the lis pendens notice. In fact, the statute authorizing lis
pendens notice refers to the notice of a mechanic’s lien as
a substitute for lis pendens notice in the applicable situa-
tion. S.D. Comp. L. Ann. 15-10-1 (1967). It is the pur-
pose of lis pendens notice to inform purchasers and en-
cumbrancers that there is pending litigation. Although
the notice incidentally hampers use, it in no way prevents
—H-9—
sale, encumbrance or lease of the property, lis pendens
notice exists, at least in part, as a matter of public policy
in that it prevents multiplicity of litigation. The requiring
of a hearing prior to the filing of lis pendens notice
would destroy its effectiveness, since it would result in an
interim period during which bona fide purchasers and
encumbrancers could tie into the property, complicating
the process of litigation and disappointing the expecta-
tions of the litigants. All of the above could also be said
of the mechanics’ and materialmen’s lien. It is not meant
to deprive the owner of possession, but to give interim
protection to laborers and materialmen by giving notice
of a change on the property. [Emphasis Added] Cook at
26-28.”
In the case of Connolly Development, Inc. vs. Superior
Court of Merced County, 553 P. 2d 637 (S. Ct. Calif. 1976) the
Court used the following reasoning to find the California Me-
chanic’s and Materialmen’s Lien Law constitutional:
No one questions that the imposition of such a lien
deprives the owner of a property interest; the dispute
turns on whether this is a significant deprivation.
Pending trial of the suit to foreclose the lien, the land-
owner retains the possession, use, and enjoyment of his
property. Subject to the lien, he may lawfully sell or
encumber the property. In view of the owner’s right to
use and dispose of the realty, some courts have con-
sidered the deprivation of property occasioned by the
recording of a mechanics’ lien as de minimis, and hence
unworthy of constitutional protection. [Citation Omit-
ted]
This protective policy continues to serve the needs of the
construction industry. As was pointed out in Cook v.
Carlson, supra, 364 F. Supp. 24, 29: “Labor and material
contractors [in the construction industry] are in a par-
ticularly vulnerable position. Their credit risks are not as
diffused as those of other creditors. They extend a bigger
—H-10—
block of credit, they have more riding on one transac-
tion, and they have more people vitally dependent upon
eventual payment. They have much more to lose in the
event of default. There must be some procedure for the
interim protection of contractors in this situation.”
Without such interim protection, the improvement may
be completed, the loan funds disbursed, and the land
sold before the claimant can obtain an adjudication on
the merits of his claim.
In summary, we conclude that the recordation of a me-
chanics’ lien, or filing of a stop notice, inflicts upon the
owner only a minimal deprivation of property; that the
laborer and materialman have an interest in the specific
property subject to the lien since their work and mate-
rials have enhanced the value of that property; and that
state policy strongly supports the preservation of laws
which give the laborer and materialman security for their
claims. In measuring these values, we do not deal in cold
abstractions; we take into account the social effect of the
liens and the interests of the workers and materialmen
that the liens are designed to protect. We measure these
valued interests against the loss, if any, caused to the
owner. The balance tips in favor of the worker and the
materialman; we conclude that the safeguards provided
by California law to protect property owners against un-
justified liens are sufficient to comply with due process
requirements. We therefore uphold the constitutionality
of the mechanics’ lien and stop notice laws.”
The case of Carl A. Morse, Inc., vs. Rentar Industrial
development Corp., 392 N.Y.S. 2d 425 (1977) found the New
York Mechanics’ and Materialmen’s Lien statute constitutional
in the following manner, to wit:
“It is in recognition of the foregoing minimal intrusion
which results from the filing of 2 mechanic’s lien that we
conclude that due process of law in this context does not
require prior notice or the opportunity to be heard, for,
—H-11—
as the Supreme Court noted in Boddie v. Connecticut,
401 U.S. 371, 378-79, 91 S. Ct. 780, 786, 28 L. Ed. 2d
113 “[w]hat the Constitution does require is * * * that an
individual be given an opportunity for a hearing before
he is deprived of any significant property interest” (ac-
cord Fuentes v. Shevin, 407 U.S. 67, 90, n. 21, 92S. Ct.
1983, 32 L. Ed. 2d 556, supra; Sniadach v. Family Fi-
nance Corp. of Bay View, 395 U.S. 337, 342, 89 S. Ct.
1820, 23 L. Ed. 2d 349, supra [concurring op. per Har-
lan, J.]; emphasis supplied). We, however, are of the
opinion that the filing of a mechanic’s lien does not result
in the deprivation of any “significant property interest”
(accord Spielman-Fond v. Hanson’s, 379 F. Supp. 997,
affd. 417 U.S. 901, 94S. CT. 2596, 41 L. Ed. 2d 208,
supra; Ruocco v. Brinker, 380 F. Supp. 432, 436 [D.C.,
Fla., 1974, three-Judge court]; Cook v. Carlson, 364 F.
Supp. 24 [D.C., S.D., 1973]; see Brook Hollow Assoc. v.
J.E. Greene, Inc. 389 F. Supp. 1322 [D.C., Conn.,
1975]; Carl A. Morse, Inc. at 429-30.
The case of B&P Development Co. v. Walker 420 F. Supp.
704 (D.C.W.D. Penn., 1976) found the Pennsylvania Me-
chanics’ Lien Law valid as a matter of Federal Constitution Law
citing with strong approval the Spielman-Fond case supra.
For the above reasons, the court concludes that it is
bound to follow the summary affirmance of Spielman.
Three other federal courts have also relied on the prec-
edential value of Spielman in recent cases. In re Thomas
A. Cary, Inc., 412 F. Supp. 667 (E.D. Va. May 7, 1976),
upheld the Virginia Mechanics Lien Law. (see discussion
of Spielman at pp. 670, 671). Matter of Northwest
Homes of Chehalis, Inc., 526 F. 2d 505 (9th Cir. 1975),
upheld the Washington pre-judgment attachment stat-
ute. (see discussion of Spielman at p. 506). In re the
Oronoka, 393 F. Supp. 1311 (N.D. Me. 1975) upheld
Maine’s real estate attachment lien statute (see discussion
of Spielman at pp. 1316, 17). B&P Development Co. at
=-H-12—
708.
The Case of Bankers Trust Company vs. El Paso Pre-Cast
Company 560 P. 2d 457 (S. Ct., Colo., 1977) found the Col-
orado mechanics’ and materialmen’s Lien Law constitutional by
stating as follows, to wit:
The Supreme Court has spoken only indirectly on
mechanics’ liens by its summary affirmance of Spielman-
Fond, Inc. v. Hanson’s Inc., 379 F. Supp. 997 (D. Aris.
1973), aff'd, 417 U.S. 901, 94 S.Ct. 2596, 41 L.Ed. 2d
208. A summary affirmance is, nonetheless, a decision
on the merits, having precedential value. Hicks v. Miran-
da, 422 U.S. 332, 95 S.Ct. 2281, 45 L. Ed. 2d 223. In-
deed, several lower federal courts have given great weight
to the affirmance of Spielman-Fond. Matter of North-
west Homes of Chehalis, Inc., 526 F. 2d 505 (9th Cir.
1975) cert. denied, 425 U.S. 907, 96 S. Ct. 1501, 47 L.
Ed. 2d 758; In re Thomas A. Cary, Inc., 412 F. Supp.
667 (E.D. Va. 1976); Brook Hollow Associates v. J.E.
Greene, Inc., 389 F. Supp. 1322 (D. Conn), vacated, 535
F. 2d 1240 (2d Cir. 1975).
We therefore regard the holding of Spielman-Fond,
supra, as especially instructive. In considering whether
the filing of a mechanics’ lien against real property con-
stituted a taking of a significant property interest, . . .
*+*_ * *
For these reasons, the court found no deprivation of
constitutional dimensions and thus no due process viola-
tion. We agree with the rationale of that case.
To require the full panoply of due process protections
before filing a lien statement would impair the notice
function of the lien statements. In the interval between
the time of the work, the furnishing of materials or ser-
—H-13—
vices giving rise to the lien claim and the hearing on the
lien, prospective purchasers would have no notice of the
potential lien. The very “deprivation” complained of by
Bankers, the difficulty in alienating property against
which a lien has been filed, indicates the effectiveness
and importance of the notice function of lien statements.
Bankers at 461-62.
The case of Weather Engineering and Manufacturing, Inc.,
vs. Pinon Springs Condominium Inc., 563 P. 2d. 346 (S. Ct.,
Colo., 1977) reaffirmed Bankers Trust Company, supra in this
statement.
Dovenmuehle argues next that Colorado’s mechanics’
lien statutes deny construction lenders due process of
law. This assertion of unconstitutionality was rejected in
Bankers Trust Company v. El Paso Pre-Cast Co., supra,
and we decline to reconsider it here.
The reasonings presented in the above decisions from other
jurisdictions is sound. In the interest of fairness and justice
these decisions should be followed by this Court.
Il. A finding today that the Oklahoma Mechanics’ Lien Law is
unconstitutional will necessitate a finding tomorrow that the
long established doctrine of Lis Pendens: The Oklahoma Tax
Lien Statutes: and numerous other well established laws of Ok-
lahoma are unconstitutional.
It is hereby submitted that a finding of this Court that the
Oklahoma Mechanics’ Lien Statutes are unconstitutional will
necessitate a finding in the future for the same reasons, that the
doctrine of Lis Pendens; the Oklahoma Tax Lien Statutes and
numerous other long established laws of the State of Oklahoma
and the Nation are unconstitutional.
Lis Pendens is an ancient doctrine formulated by Sir Fran-
cis Bacon in 1618 as the 12th of his “Ordinances in Chancery.” It
—H-14—
has been said that the doctrine of Lis Pendens is older in law
than in equity, and was adopted from the common law court in
Analogy to the rule existing in real actions to the effect that, if
“defendant aliens after pendenancy of the writ, the judgment in
the action will overrule such alienation.” 54 CJS Lis Pendens, §1
(at p. 571). Oklahoma Lien Statutes have been likened to the
notice of Lis Pendens. Sawyer v. Schick 120 P. 581 (S.Ct. Ok.,
1911). The Oklahoma Law on Lis Pendens is contained in 12
O.S. §180 et seq. 12 O.S. §180 states:
When the petition has been filed, the action is pending,
so as to charge third persons with notice of its pendency,
and while pending no interest can be acquired by third
persons in the subject matter thereof as against the plain-
tiff’s title; but such notice shall be of no avail unless the
summons be served or the first publication made within
sixty days after the filing of the petition.
12 O.S. §180.1 states:
No action pending in either a State or Federal Court shall
constitute notice with respect to any real property sit-
uated outside of the county in which said action is on file
until such time as a notice of the filing of such action
identifying the case and the Court in which it is pending
and describing the land affected by the action, is filed in
the office of the County Clerk where said land is situ-
ated.
68 O.S. §230 et seq., contain provisions for State Tax Liens
against real property in the State of Oklahoma. No provisions
for notice or opportunity to be heard by a landowner before a
lien attaches is contained in these sections. Further numerous
other liens, which have been long engrained in Oklahoma Law
require no notice or opportunity to be heard. Eg. Attorney’s
Lien 5 O.S. §6.
If appellees are correct and the Oklahoma Lien Law is un-
—H-15—
constitutional because no notice and opportunity to be heard is
allowed a landowner before a laborer can file a Mechanics’
Lien, it is obvious the above stated liens regarding Lis Pendens,
Tax Liens, and numerous other liens are objectionable for the
same reasons. Plaintiff, Appellant herein, submits that “due
process of law” as contained in the Constitution of the United
States was never meant to be interpreted in such a way as to
frustrate the laws which Appellees now would have struck
down.
In view of the foregoing it is clear that the Oklahoma
Mechanics’ Lien laws are constitutional and do not violate the
due process provisions of the Constitution. Therefore, Ap-
pellees’ Motion for Summary Judgment should have been de-
nied by the Court below. Further, pursuant to Rule 13 of the
District Court Rules since “no substantial controversy as to any
material fact” remains for trial, Appellant’s Motion for Sum-
mary Judgment should be sustained.
S/S Wesley R. Thompson
Wesley R. Thompson, Attorney
for Appellant.
P.O. Box 1364
Sapulpa, Oklahoma 74066
ates
APPENDIX |
No. 51141
IN THE SUPREME COURT OF
THE STATE OF OKLAHOMA
FILED
Supreme Court
State of Oklahoma
DEC 27, 1977
Ross N. Lillard. Jr.
Clerk
MOBILE COMPONENTS, INC., a corporation
Appellee
VERSUS
VERLEE C. LAYON, Executrix of the Estate of:
THOMAS LAYON, SR., Deceased;
Appellant
PLANNED RESIDENTIAL COMMUNITIES
CONSTRUCTION COMPANY OF
OKLAHOMA, INC., et al.
Appellees
Consolidated With
VERLEE C. LAYON, Executrix of the Estate of:
THOMAS LAYON, SR., Deceased.
Appellant
VERSUS
FIRST NATIONAL BANK OF TULSA, et al.
Appellees
APPELLEES’ ANSWER BRIEF
= a
STATEMENT OF CASE
This is the Answer Brief of Appellees, The Outrigger, Inc.
and First National Bank of Tulsa, Defendants below in Tulsa
County District Court Case No. C-75-1071. Appellant, Verlee
C. Layon, Executrix of the Estate of Thomas Layon, Sr., De-
ceased, Plaintiff below in said case, appeals from a ruling by the
Honorable William W. Means, entered in the consolidated cases
No. C-75-1071 and C-75-1960, holding that the mechanics’ and
materialmen’s lien laws of the State of Oklahoma are un-
constitutional, and thereby dismissing Appellant’s action to
foreclose a lien filed against certain property in Tulsa County
owned by Appellee Outrigger. The single and exclusive issue
presented to this Court is strictly a question of law, that being
the constitutional validity of Oklahoma’s mechanics’ and mate-
rialmen’s lien statutes. The facts of this case are therefore of
secondary importance, but are useful in developing the setting
in which this crucial issue arises. Appellees’ Statement of the
Case does not differ in any substantial respect from the State-
ment of Facts set forth in Appellant’s Brief, with but one excep-
tion.
On July 17, 1974, Century Interiors, Inc. filed mechanics’ lien
number 61251 with the Court Clerk in Tulsa County, claiming a
materialmen’s lien in the amount of $17,115.37 against two sep-
arate properties identified in the lien statement by street address
and legal description, respectively. This lien, while referred to in
many pleadings by reference, was never filed in the foreclosure
action originated by the Plaintiff. It therefore does not appear
in the record on appeal, but is, of course, a matter of public re-
cord on file with the Court Clerk of Tulsa County. In said lien
statement, Century Interiors first claims that it furnished mate-
rials and performed work at “8805 S. Lewis, Tulsa, Oklahoma.”
Elsewhere in the same lien statement, Century describes the
mies.
property upon which work was performed as “all of Lot one (1),
Block one (1), CROWN IMPERIAL SECOND ADDITION, an
Addition to the City of Broken Arrow, Tulsa County, State of
Oklahoma, according to the recorded plat thereof.”
As Appellant points out in her Statement of Facts, this lien
statement refers to work performed on two separate tracts of
land, both of which were owned by Lewis Avenue Investment
Company at the time the work was performed. The legal de-
scription set Out above accurately describes an apartment pro-
ject located in Broken Arrow upon which work was performed.
The street address in the City of Tulsa, however, although refer-
ring in fact to property in which Lewis Investment had some in-
terest, incorrectly identified the actual property on which work
was being performed. The correct address of the property on
which Century had performed work was 8600 South Lewis and
Delaware Streets, as correctly stated in the written contract
which Century executed with Commercial Interiors, appearing
as Contract ‘E’ attached to Plaintiff's first foreclosure petition
(R. 183-196).
In September, 1974, Appellee Outrigger acquired title to
the apartment project in the City of Tulsa, described as “Lots
One (1) and Two (2), Block Three (3), CROWN IMPERIAL
ADDITION to the City of Tulsa,” or as referred to above, 8600
South Lewis and Delaware Streets. Simultaneously, Appellee
First National Bank took a mortgage covering this same proper-
ty.
Century filed an assignment of its lien No. 61251, purport-
ing to transfer its interest to Appellant’s decedent on December
4, 1974. On April 22, 1975, Appellant’s decedent filed his Peti-
tion in Case No. C-75-1071 seeking to foreclose the lien which
he claimed on the properties located in both Tulsa and Broken
Arrow (R. 183-196). On May 20, 1975, Appellant’s decedent ob-
mbit
tained leave of court to amend his original lien statement to in-
clude the correct legal description of both tracts of property up-
on which the lien was being claimed. (R. 206-210). Thus, Ap-
pellant’s decedent changed the original lien statement to refer to
the correct legal description of the property located in the City
of Tulsa, as opposed tc the incorrect street address which had
previously appeareci in the original statement, thereby giving
Appellees their first actual and constructive notice that an ad-
verse interest was being claimed against Appellees’ property, a
claim which clearly did not appear in the public record when
Appellees acquired their interests in September of 1974.
On March 30, 1976, the Court ordered that the action com-
menced by Appellant’s decedent be consolidated with Tulsa
County District Court Case No. C-75-1960 (R. 341-342), a lien
foreclosure action filed on August 7, 1975 by Appellee Mobile
Components, Inc. against the Broken Arrow property (R. 1-10).
Layon, the originally named Plaintiff in Case No. C-75-1071,
subsequently died, and his Executrix was substituted as the
named Plaintiff below and Appellant herein (R. 415). Shortly
thereafter, Appellees Outrigger and First National Bank filed
their Motion for Summary Judgment in Case No. C-75-1071
asking that Appellant’s case be dismissed on grounds that the
mechanics’ and materialmen’s lien statutes are unconstitutional
(R. 372-374; 377-386). The Motion was sustained or May 31,
1977, and the Court’s Order was subsequently entered on July
18, 1977 (R. 427-428), after which Appellant perfected his ap-
peal.
ARGUMENT AND AUTHORITIES
PROPOSITION
THE MECHANICS’ AND MATERIALMEN’S LIEN LAWS
OF THE STATE OF OKLAHOMA VIOLATE BOTH THE
a
STATE AND FEDERAL CONSTITUTIONS BY DEPRIV-
ING PERSONS OF PROPERTY WITHOUT DUE PROCESS
OF LAW.
A. The mechanics’ and imaterialmen’s lien laws fail to
provide for any type of timely notice or hearing on
the probable merits of the claim against the owner’s
property, or for any judicial participation at an early
stage of the proceedings, or for any type of bond or
security to protect the owner against a wrongful tak-
ing.
An appropriate starting point is the statutory scheme pro-
vided in the Oklahoma Statutes which allows certain persons to
file liens against real property for work performed thereon. See
generally Title 42, Oklahoma Statutes, 1971, the pertinent sec-
tions of which are set forth below as they existed at the time this
action arose, and prior to the amendments added in 1977:
“$141. Right to lien-Priority-Enforceability against
property-Constructive notice
Any person who shall, under oral or written con-
tract with the owner of any tract or piece of land, per-
form labor, or furnish material for the erection, altera-
tion or repair of any building, improvement or structure
thereon or perform labor in putting up any fixtures,
machinery in, or attachment to, any such building, struc-
ture or improvements . . . shall have a lien upon the
whole of said tract or piece of land, the buildings and ap-
purtenances . . . Such liens shall be preferred to all other
liens or encumbrances which may attach to or upon such
land, buildings or improvements or either of them subse-
quent to the commencement of such building, the fur-
nishing or putting up of such fixtures or machinery, . . .
or the making of any such repairs or improvements; and
such lien shall follow said property and each and every
part thereof, and be enforceable against the said proper-
ty wherever the same may be found, and compliance
— 16 —
with the provisions of this Article shall constitute con-
structive notice of the claimant’s lien to all purchasers
and encumbrancers of said property or any part thereof,
subsequent to the date of the furnishing of the first item
of material or the date of the performance of the first
labor.
“$142. Statement to be filed
Any person claiming a lien as aforesaid shall file in
the office of the clerk of the district court of the county
in which the land is situated a statement setting forth the
amount claimed and the items thereof as nearly as prac-
ticable, the names of the owner, the contractor, the
claimant, and a description of the property subject to the
lien, verified by affidavit . . . Such statement shall be
filed within four months after the date upon which mate-
rial was last furnished or labor last performed under con-
tract as aforesaid .. .
“$143. Lien by or through subcontractor
Any person who shall furnish any such material or
perform such labor as a subcontractor, or as an artisan
or day laborer in the employ of the contractor, may ob-
tain a lien upon such land, or improvements, or both
from the same time, in the same manner, and to the same
extent as the original contractor for the amount due him
for such material and labor . . . by filing with the clerk of
the district court of the county in which the land is sit-
uated, within ninety (90) days after the date upon which
material was last furnished or labor last performed under
such sub-contract, a statement, verified by affidavit, set-
ting forth [same as in §142] and by serving a notice in
writing of the filing of such lien upon the owner of the
land, or improvements, or both. . . .”
* * *
Ҥ147. Discharge of lien
Any person against whom a claim is filed under the
poms
provisions of the law relating to mechanics’ and materi-
almen’s liens may at any time upon three (3) days notice
in writing to the claimant discharge such lien by depos-
iting with the Court Clerk in whose office such lien claim
has been filed the amount of such claim in cash and ex-
ecuting and filing with such Court Clerk a good and suf-
ficient bond to the claim and with adequate, solvent
sureties conditioned that such person will pay any
reasonable attorney’s fee and all court costs, and in-
terest, that may be adjudged against him finally by any
Court of competent jurisdiction in the event such claim-
ant recovers judgment on such claim in the amount for
which such claim is filed; Provided, the deposit of such
cash and the execution and filing of such bond shall not
operate to discharge such lien until the expiration of five
(5) days after the deposit of such cash and the filing of
such bond, during which time the lien claimant may ap-
ply to such Clerk to have the surety on such bond in-
creased, and if upon such investigation the bond proves
to be insufficient the Clerk shall immediately require
such additional surety thereon as may be necessary to
make such bond solvent, and the lien shall not be dis-
charged until any additional surety ordered shall have
been given and approved.”
* + ao
“$172. Enforcement by Civil action-Limitations-Prac-
tice, pleading and proceeding-Amendment of
lien statement
Any lien provided for by this Chapter may be en-
forced by civil action in the District Court of the County
in which the land is situated, and such action shall be
brought within one year from the time of the filing of
said lien with the Clerk of said Court . . . [I]n case of ac-
tion brought, any lien statement may be amended by
leave of court in furtherance of justice as pleadings may
be in any matter, except as to the amount claimed.
> * +
=
“$175. Sale of property after judgment
In all cases where judgment may be rendered in
favor of any person or persons to enforce a lien under
the provisions of this Chapter, the real estate or other
property shall be ordered to be sold as in other cases of
sales of real estate, such sales to be without prejudice to
the rights of any prior incumbrancer, owner or other per-
son not a party to the action.
* * *
“$177. Suite by owner to determine lien and cancelation
of lein on docket
If any lien shall be filed under the provisions of this
Chapter, and no action to foreclose such lien shall heve
been commenced, the owner of the land may file his peti-
tion in the district court of the county in which said land
is situated, making said lien claimants defendants there-
in, and praying for an adjudication of said lien so
claimed, and if such lien claimant shall fail to establish
his lien, the court may tax against said claimant the
whole, or such portion of the costs of such action as may
be just: Provided, that if no action to foreclose or ad-
judicate any lien filed under the provisions of this chap-
ter shall be instituted within one year from the filing of
said lien, the clerk of the district court shall enter under
the head of “Remarks,” in the mechanics’ lien docket
hereinbefore named, that said lien is canceled by lim-
itation of law.”
Appellees assert that the statutory scheme described above
unequivocally violates the traditional and wel!-recognized stan-
dards of due process which have been enunciated by the Su-
preme Court of the United States in construing and applying the
Fourteenth Amendment. The same basic guarantees of due pro-
cess of law are guaranteed to the citizens and residents of
Oklahoma by Article II, Section 7 of the Constitution of the
State of Oklahoma. A discussion of due process requirements
uti
under the Fourteenth Amendment must necessarily begin with
the landmark case of Snidach v. Family Finance Corp., 395 US
337, 89 S.Ct. 1820, 23 L.Ed. 2d 349 (1969). The Supreme Court
there ruled unconstitutional a Wisconsin prejudgment garnish-
ment statute which permitted a creditor, without notice or prior
hearing, to freeze the wages of an alleged debtor, although the
creditor had no prior interest in the wages. It is significant to
observe that the Court Clerk, under the Wisconsin Law, issued
the summons at the request of the creditor’s attorney, without
any judicial participation. The court concluded that because no
extraordinary circumstances justified the statutory scheme, ab-
sent notice and a prior hearing, the prejudgment garnishment
procedure violated the fundamental principles of due process.
Three years later, in the case of Fuentes v. Shevin, 407 US
67, 92 S. Ct. 1983, 32 L.Ed. 2d 556 (1972), the Supreme Court
invalidated prejudgment replevin statutes in Florida and Penn-
sylvania. The court characterized the statutes as authorizing is-
suance of writs ordering state agents to seize a person’s posses-
sions simply upon the ex parte application of any other person
who claims a right in the property, conditio
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