503 P.3d 1177
Okla.2021Background
- Wynnewood (owner) contracted with WSP (prime) for environmental work; WSP subcontracted with Techsas; Techsas subcontracted with H2K to supply materials/labor.
- The WSP–Techsas subcontract contained a lien-waiver clause and required Techsas to flow it down to its subs; H2K’s subcontract did not contain a similar waiver.
- Techsas filed bankruptcy after receiving some payments; H2K was unpaid, served a preliminary lien notice, and filed a materialmen’s lien and foreclosure action.
- WSP and its surety posted a bond to discharge the lien and were substituted as defendants; the trial court granted summary judgment for defendants, holding the subcontract waiver barred H2K’s lien.
- H2K appealed, arguing (1) a subcontractor’s waiver cannot bind a non‑party materialman, and (2) 15 O.S. §821(B)(2) renders such waiver provisions void as against public policy. The Oklahoma Supreme Court retained the appeal.
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Does a lien‑waiver in a subcontract bind a non‑party materialman (H2K)? | H2K: No — third parties cannot be stripped of statutory lien rights by a contract they did not sign. | WSP: Yes — subcontractor is charged with notice of the original contract and waiver "flows down," so H2K can claim no greater rights than Techsas. | Waiver in Techsas–WSP subcontract does not automatically bind H2K; absent H2K’s own waiver, it may assert a statutory lien (remand for further proceedings). |
| Does 15 O.S. §821(B)(2) (public policy) invalidate lien waivers affecting mechanics’/materialmen’s liens? | H2K: §821(B)(2) voids contract clauses that disallow or alter rights under the Act — it should apply and make such waivers unenforceable. | WSP: §821(B)(2) does not govern mechanics’/materialmen’s liens (located in title 42); it does not control this dispute. | §821(B)(2) addresses the payment/suspension/resumption statutory scheme in title 15 and does not clearly apply to title 42 lien rights; it does not render mechanics’/materialmen’s lien waivers per se invalid. |
| Is the choice‑of‑law clause (New York law) in the subcontract enforceable? | H2K: The New York choice‑of‑law provision is void as against Oklahoma public policy. | WSP: (relied on the subcontract but trial court struck choice‑of‑law). | The trial court correctly held the foreign‑law provision void under 15 O.S. §821(B)(1); Oklahoma law governs. |
| Did the trial court properly grant summary judgment based on the subcontract waiver? | H2K: No — factual development and discovery needed; waiver cannot bind non‑party. | WSP: Yes — waiver barred H2K as a matter of law. | Court reversed summary judgment and remanded so parties can pursue discovery and trial as necessary. |
Key Cases Cited
- Consolidated Cut Stone Co. v. Seidenbach, 75 P.2d 442 (Okla. 1937) (interpreting "to the same extent" language as limiting owner’s liability under subcontractor liens).
- Thacher v. Int'l Supply Co., 54 P.2d 376 (Okla. 1936) (refusing to allow contracting parties to extinguish statutory rights of non‑parties).
- Hudson‑Houston Lumber Co. v. Parks, 215 P. 1072 (Okla. 1923) (discussing subcontractors being charged with notice of the original contract).
- Treece v. Carpenter, 222 P. 230 (Okla. 1923) (describing subcontractor lien rights as "to the same extent" as the original contractor).
- Riffe Petroleum Co. v. Great Nat. Corp., Inc., 614 P.2d 576 (Okla. 1980) (statutory liens are in derogation of common law and must be confined to statutory terms).
- Biantrav Contractor, LLC v. Condren, 489 P.3d 522 (Okla. 2020) (mechanics’/materialmen’s lien purpose—protecting subcontractors and securing payment).