WHEN A LIEN WON'T WORK

1. INTRODUCTION
2. TRADITIONAL PROPERTY CODE REMEDIES ARE GENERALLY NOT AVAILABLE FOR FABRICATED & ENGINEERED ITEMS
1. CHAPTER 53: MECHANIC'S, CONTRACTOR'S OR MATERIALMAN'S LIEN
2. CHAPTER 56: LIENS AGAINST MINERAL PROPERTY
3. CHAPTER 162: CONSTRUCTION PAYMENTS, LOAN RECEIPTS AND MISAPPLICATION OF TRUST FUNDS
3. CONSTITUTIONAL LIEN: THE FORGOTTEN REMEDY FOR FABRICATED & ENGINEERED ITEMS
1. BRIEF HISTORY
2. "ARTICLES MADE OR REPAIRED"
3. "OWNER" OF THE PROPERTY
4. MATERIALMAN OR MANUFACTURER
5. NOTICE AND ENFORCEMENT
4. ADDITIONAL STATUTORY REMEDIES
1. TEXAS CIVIL PRACTICE & REMEDIES CODE CHAPTER 62: SEQUESTRATION
2. TEXAS BUSINESS AND COMMERCE CODE / UCC - RECLAIMING GOODS FROM AN INSOLVENT BUYER
1. DOES THE UCC APPLY?
2. UCC §2.702 SELLER'S REMEDIES ON DISCOVERY OF BUYER'S INSOLVENCY
5. CONCLUSION

Abstract

This is an untraditional paper about an untraditional topic: what to do when your client is not paid for work performed on a project that is not afforded the traditional mechanic's lien protection offered by the Texas Property Code.

The typical setting for this conundrum is when you recognize that the work for which your unpaid client invested so much time and effort does not qualify as property for which a statutory mechanic's lien may be claimed, and his customer may lack the means to satisfy a judgment for the value of your client's work. You may also discover that your unpaid client does not fall within any of the classes of "persons" entitled to a statutory mechanic's lien.

The title of this paper is meant to be a bit confusing in order to emphasize that its purpose is to explore unconventional and often overlooked remedies that may often be available to contractors, vendors and suppliers who are otherwise precluded from asserting lien claims under the Texas Property Code. The good news is there may still be lien rights and remedies available to such contractors, vendors and suppliers. While the law may not always be clear, the unconventional and overlooked remedies discussed below enjoy enough legal support to warrant resorting to them in the appropriate circumstances.

The remedies discussed in this paper are particularly important for those of us whose practice includes representing companies involved in performing various types of fabrication services for upstream oil and gas production industries. Examples of the fabricated components and the structures into which they are assembled include:

• Topsides and decks for offshore drilling and production platforms;
• Production modules (such as compressor modules, power generation modules, oil processing skids, etc.) for production platforms;
• Production modules for FPSO's (floating production, storage and offloading systems);
• Offshore quarters and utility buildings (living quarters, generator buildings, motor control centers, etc.);
• Subsea structures (pipeline manifolds, subsea modules, etc.);
• Piping fabrication and/or installation for an offshore facility; and
• Electrical and instrumentation work for an offshore facility.

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