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I came across an article this past weekend about a contractor who filed over 1.2 million in mechanics liens against a wind farm in Oklahoma, and it reminded me of how long it’s been since we commented on mechanics lien claims in the green industry. Is this worthy of a discussion separate from mechanics lien claims against ordinary construction projects? Read on.
Will The Mechanics Liens Against The Oklahoma Wind Farm Stand?
To introduce our general discussion about mechanics lien claims in the “green” industry, I’ll analyze the 1.2 million in claims filed against the Oklahoma wind farm. A hat tip to EnidNews.com for reporting on the liens.
The situation in Oklahoma involved U.S. Concrete On Site, Inc., who filed 147 total liens in Garfield County (and 12 additional liens in Grant County) against the M.A. Mortenson Co. project known as the Chisholm View Wind Project. This project involved the construction of a 235-megawatt wind farm.
These mechanics lien claims are very interesting because the wind farm project stretched across two counties and over 150 individual parcels. Each of the liens, in fact, were filed for the very same amount: $1,273,923, which is the total due for all the work performed by U.S. Concrete On Site, Inc. The liens named the developer (Chisholm View Wind Project LLC), the former developer (Trade Wind Energy) and each of the individual property owners across the many parcels.
Is There A Mechanics Lien Right For Wind Farms In Oklahoma?
This is one of those challenges with the “green” industry. Mechanics lien laws are written with traditional construction projects in mind. Some energy projects like wind farms aren’t exactly traditional, and there is some question as to whether the participants are building anything at all. Is the erecting of wind mills a construction project? Is it entitled to mechanics lien protection?
In Oklahoma, the answer here will likely be yes. 42 Oklahoma Statute §141 dictates who does have lien rights in the state, and it appears to be broad enough to include the erecting of wind farms:
Any person who shall…perform labor, furnish 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…
There is an interesting issue with §141 that may come into play with the Chisholm View Wind Project depending on the furnishing by U.S. Concrete on Site, Inc.
As you can see from the above snippet from the statute, all labor and materials are protected with mechanics lien rights whenever work is “for the erection, alteration or repair of any building, improvement or structure.” On the other hand, if the work is for “putting up any fixtures, machinery in, or attachment to, any such building, structure or improvements…,” only labor is protected, and it doesn’t appear there is any protection for supplying material.
Accordingly, depending on what the lien claimant performed on this project, and how the courts classify the wind farm “structures,” there could be some restrictions on what is recoverable.
When Green Project Cross Parcels – How Is The Lien Filed?
When U.S. Concrete On Site decided it wanted to file a mechanics lien they likely stumbled upon a problem. The wind farm crossed through multiple counties and parcels. While only owed a single amount of money for the work done across the parcels, there isn’t anything in the Oklahoma Statutes that guides them on how to file the lien.
Do they file a single lien that includes every parcel and owner? Do they file a lien for each parcel and divide the amount due to them amongst the parcels? Or, as they chose, do they file a lien for each parcel and file each lien in the full amount of their claim?
As we’ve explored on this blog in the past there are some states that contemplate this situation. In California, for example, a single mechanics lien can be filed against multiple parcels in these circumstances. The Oklahoma statutes, however, give no such guidance.
Whether U.S. Concrete on Site made the right decision here will be something to analyze. Ultimately, however, I think the court gives them the nod and their liens are upheld. It’s unfortunate they were required to file more than 150 documents (and one day will need to cancel those documents). It’s an unnecessary and excessive expense and the Oklahoma legislature should consider amending the mechanics lien laws to provide an alternative in the future.
Special Mechanics Lien Needs for Green Industry?
As you can see from the above-discussion, the green industry can present unique circumstances that do not neatly fit within the traditional mechanics lien framework. Solar panels, solar panel farms, wind mills and wind farm, spray foam installations, smart homes, etc., etc. There are little details that implicate complicated questions about mechanics lien rights.
We’ve written about some of these issues on this blog in the past under the Green tag. Also, we have a section on Levelset’s mechanics lien resources that discuss particular needs of different construction industries.