Tcina Inc. v. Noco Investmant Co. Inc‪.‬

__ P.3d __ Mandate Issued: 07/22/2004 1 The issue on appeal concerns the priority of conflicting liens asserted by TCINA, Inc., and NOCO Investments against the working interest of Grant Oil & Gas Corporation in a secondary recovery unit known as the Fleet-Osborn Gilcrease Unit. This unit, located in Seminole County, was approved by the Oklahoma Corporation Commission on January 27, 1981, and was operating during the time the conflicting lien claims arose. In the trial court, TCINA stressed that the lien it seeks to enforce is based on 52 O.S.2001 287.8 which grants a first and prior lien on participating interests in the unit for the operating expenses of the unit. There was no dispute that Grant Oil & Gas was delinquent in paying operating expenses assessed to its working interest. NOCO asserted priority, the statutory language notwithstanding, based on a mortgage filed December 31, 1999, which predates TCINA's commencement as operator. NOCO also asserts that even if TCINA did perform operating services prior to the recording of the NOCO mortgage, TCINA never filed a lien statement to perfect a lien. The trial court ruled that the statutory operating expense lien had priority and NOCO appeals. 2 NOCO contends that the only way the trial court could find the statutory operating expense lien had priority over its mortgage was to treat the lien as automatically perfected upon the land-record filing of the order approving the unit. Citing Fourth National Bank of Tulsa v. Appleby, 1993 OK 153, 864 P.2d 827, NOCO points out that the Oklahoma Supreme Court refused to recognize automatic perfection of a similar operating expense lien granted by 52 O.S.1981 87.1(e) to the operator of a forced pooled unit. In Appleby, the Oklahoma Supreme Court concluded that ""the legislature intended that 87.1(e) liens be perfected and enforced under the terms of [42 O.S.1981] 146 in the same way as 144 [oil and gas labor/material] liens are enforced."" Id. at 16, 864 P.2d at 832. Noting that both liens arise from oil and gas operations which may go on for years, the court further stated, ""we believe the legislature would have said so had it intended that 87.1(e) [forced pooling operator] liens be enforced differently than 144 [oil and gas labor/material] liens."" Id.