PRE-LIEN NOTICE: Oklahoma Appellate Court First to Interpret 2001 Pre-Lien Notice Statute

In a prior article, we explained Oklahoma’s pre-lien notice statute and what action should be taken and when in order to comply with its provisions. The importance of properly complying with its terms, as we explained, lies in the language of the statute wherein the “[f]ailure of the claimant to comply with the pre-lien notice requirements … shall render that portion of the lien claim for which no notice was sent invalid and unenforceable.” In short, our advice was that pre-lien notice should be delivered to the parties identified in the statute no later than seventy-five (75) days after the earliest date material, services, labor, or equipment which are to be included in a lien claim has been furnished. This conclusion is based upon a plain reading of the pre-lien notice statute which contemplates invalidation and unenforceability of that portion of a potential lien claim that falls outside the 75 day notice period.

In the recent case of Purcell Investments v. Express Fire Protection, Division I of the Oklahoma Court of Appeals came to a different conclusion. In Purcell, the Court of Appeals concluded that the 75 day notice period begins to expire when the lien claimant last supplies material, services, labor, or equipment, rather than the date of first supply. Purcell is the first opportunity an Oklahoma Appellate Court has been called upon to interpret the pre-lien notice statute. We believe the Court’s conclusion is plainly inconsistent with the language of the pre-lien notice statute. Nevertheless, it now has precedential value in other disputes involving pre-lien notice and, some would say, is the law of the land on the subject of when pre-lien notice must be given in order to preserve a lien claim.

We believe the court has incorrectly interpreted the statute and an adjustment in the law will eventually result. Until then, we recommend that if pre-lien notice is required with respect to your lien claim, you continue to adhere to the advice we provided in our October 2009 newsletter. There is little risk in following the advice we provided in the October 2009 newsletter. On the other hand, there is considerable risk in complying with the pre-lien notice statute in reliance on the court’s conclusion expressed by Purcell.

Our advice (based on the plain language of the statute) is that pre-lien notice should be given in accordance with the pre-lien notice statute within 75 days after the first supply of material, services, labor, or equipment on a project for which you have not been paid. For instance, if you first supply material and labor on a project on May 15, 2010 and in each of the 6 months following, your first pre-lien notice deadline should be not later than July 29, 2010 (May 15 + 75 days). If, before July 29, 2010, you are paid for the material and labor furnished beginning on May 15, 2010, the next pre-lien notice deadline can be extended to 75 days after the first supply of material, services, labor, or equipment for which you have not been paid. In the alternative, and to bypass the need to continually track payments and deadlines, you may simply comply with the first pre-lien notice deadline (75 days after the first supply) because the pre-lien statute permits one pre-lien notice to satisfy the notice requirements for all later provided material, services, labor, or equipment on the particular project.

If any of this is unclear, or if you have questions, please contact the author, or Steve Metcalf, Chair of the Firm’s Construction Law Practice Group. He will be happy to speak with you in more detail about pre-lien notice and lien filing requirements generally or with respect to a particular set of circumstances.

William Hayden Spitler