Kansas Artisan's & Mechanic's Liens an Unnecessary Tangle
| Publication year | 1994 |
| Pages | 28 |
| Citation | Vol. 63 No. 09 Pg. 28 |
63 J. Kan. Bar Assn. September, 28 (1994). KANSAS ARTISAN'S & MECHANIC'S LIENS AN UNNECESSARY TANGLE
September, 1994
Copyright (c) 1994 by the Kansas Bar Association; John K. Pearson
Kansas, like most common law states, has a series of statutes designed to assure that an artisan, mechanic, or other person furnishing goods and services will be repaid. For the most part, the statutes permit the mechanic or artisan to enforce a lien against certain types of personal property [FN1] to collect the bill for goods or services furnished. Unfortunately, there is little consistency to the operation and enforcement of the statutes, and the statutes do not mesh with the provisions of the Uniform Commercial Code. It is time that the legislature considered a single, simple mechanic's and artisan's lien statute which would provide a single form for creation of a lien, a single place for filing the lien form, and mesh the provisions for filing and enforcement of the lien with those of the U.C.C. While there are numerous individual statutes involved, the various liens in Kansas fall into three broad categories: mechanic's and artisan's liens, warehouse liens, and miscellaneous liens relating to agriculture. [FN2]
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In General: The U.C.C. does not apply to the creation or enforcement of a statutory lien on personal property or fixtures in favor of a mechanic, contractor, thresher, or agister. 9-104(c); [FN3] see also 9-310. Kansas, like most states, has long recognized that a person performing repairs, supplying parts or materials, feeding or caring for livestock, or harvesting crops should have a lien on the subject of their effort to secure payment for the services or materials. Unfortunately, the legislation has been adopted piecemeal and with little regard for consistency, resulting in statutes that provide for a bewildering variety of mechanic's, artisan's, harvester's, thresher's, agricultural, veterinarian, and other liens with different procedures for creation, perfection, and enforcement. The interaction with the U.C.C. is also imperfect in that some of the liens take priority over competing security interests in the same collateral while others do not. Some require that the artisan or mechanic retain possession to enforce the lien. Others do not require possession, but require some sort of filing to preserve the lien. Most require prompt action to enforce the lien through sale or foreclosure, but apparently permit foreclosure without notice to those claiming competing liens.
There are other statutory lien statutes, such as those for hotel owners, K.S.A. 36-201, et seq., adopted to deal with the peculiar problems of various industries. Some, such as those for hotel owners, recognize perfected liens. K.S.A. 36-202. Some give precedence to their lien, such as that for veterinary services. K.S.A. 47-836.
Lien vs. Security interest
What follows is an attempt to briefly outline the lien process for a variety of situations. At the outset, counsel should be aware of the distinction in terminology between lien and security interest recognized implicitly in the U.C.C. Specifically in the Bankruptcy Code: A lien is a charge against or interest in property to secure payment of a debt; a security interest is a lien created by agreement. Thus a lien can be imposed unilaterally by the mechanic or artisan upon the furnishing of services or material at the request or with the consent of the owner of personal property. A security interest, however, must be specifically created by the owner of the property to repay a present or future debt. While the distinction may be minor in practice, the imposition of a lien involves different formalities and procedures than a security interest. The analysis will focus on: (1) types of liens; (2) work or materials which may result in a lien; (3) creation of the lien; (4) perfection of the lien; (5) enforcement of the lien; (6) priorities among competing liens and security interests; and (7) lapse of the lien.
For the sake of simplicity, the terms "artisan's or mechanic's liens" will be used to describe generic liens.
Mechanic's Liens
In General: The general personal property mechanic's lien is created by K.S.A. 58-201, et seq. It applies to work done on a broad range of personal property, including "any goods, personal property, chattels, horses, mules, wagons, buggies, automobiles, trucks, trailers, locomotives, railroad rolling stock, barges, aircraft, equipment of any kinds, including but not limited to construction equipment, vehicles of all kinds, and farm implements of whatsoever kind,..." K.S.A. 58-201. If properly created and perfected, it has priority over a preexisting U.C.C. security interest. 9-310; K.S.A. 58-201; Hockaday Auto Supply Co. v. Huff, 121 Kan. 113, 245 P. 1013 (1926); but cf. National Supply Co. v. Case Oil & Gas, Inc., 13 Kan. App. 2d 430, 772 P.2d 1255 (1989). In a simpler world, the general statute would serve as a model for all mechanics and artisans liens.
Creation: The owner must consent to or request the work before a lien can attach. Olson v. Orr, 94 Kan. 38, 145 P. 900 (1915). Repairs done at a thief's request do not give rise to a lien. United States Fidelity & Guaranty Co. v. Marshall, 4 Kan. App. 2d 9, 601 P.2d 1169 (1980). Indeed, work done at a thief's request does not give rise to any claim. In re Two (2) Bose Speakers, 17 Kan. App. 2d 179, 835 P.2d 1385 (1992). Storage fees incurred when a police
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officer impounds a vehicle do not give rise to a mechanic's lien because they were not incurred with the owner's consent. Hartford Ins. Co. v. Overland Body Tow, Inc., 11 Kan. App. 2d 373, 724 P.2d 687 (1986).
Filing a lien statement: The verified lien statement must set forth the following: (1) the name of the owner; (2) a description of the property on which the lien is claimed; (3) a statement of the items of the account; (4) the date the work was last performed or material last provided; and (5) the county of residence of the owner, if known. K.S.A. 58-201.
A lien statement must be filed with the register of deeds (1) in the county where the work was performed; and (2) in the county of the residence of the owner of the property, if known. K.S.A. 58-201. To simplify the process, the statute should be amended to provide for the filing of the lien statement with the secretary of state rather than the register of deeds.
Assignment and Amendment: Mechanic's liens are assignable. National Bond & Investment v. Midwest Finance Co., 156 Kan 532, 134 P.2d 639 (1943). Generally, however, amendment of lien statements is not allowed unless the amendment is minor and not adverse to any other person. Butel Motors, Inc. v. Warsop, 176 Kan 491, 271 P.2d 237 (1954).
Perfection: Where the lien claimant has possession of the property, nothing further is necessary to perfect the lien. Overland Co. v. Evans, 104 Kan. 632, 180 P. 235 (1919). If the lien claimant does not have possession, it must file to perfect the lien within ninety days after the work was done on the property. K.S.A. 58-201. Possession is so essential to the lien that if the owner of the property takes the property from the claimant without permission, that taking may be theft. State v. Etape, 237 Kan 380, 699 P.2d 532 (1985). A release of possession to the debtor will defeat the lien unless a lien statement is filed with the register of deeds within ninety days of the release of possession. In Weatherhead v. Boettcher, 3 Kan. App. 2d 261, 594 P.2d 257 (1979), the claimant released the property after filing suit for replevin, but without filing a lien statement. The court ruled that this constituted a waiver of the lien. A lien claimant cannot be sued for conversion of property delivered to it for repair. Farrell v. GMAC, 249 Kan. 231, 815 P.2d 538, 16 U.C.C. Rep.Serv.2d 96 (1991).
Enforcement: A mechanic's lien is foreclosed in the same manner as a security interest under the U.C.C. See K.S.A. 58-202. However, any mechanic's lien foreclosure must be commenced within one year after filing with the register of deeds. Id. There is no time limit for foreclosure of a lien if perfected by possession. Id.
Priorities: A properly perfected mechanic's lien has priority over an existing security interest in the same property. 9-310; K.S.A. 58-201; Hockaday Auto Supply Co. v. Huff, 121 Kan. 113, 245 P. 1013 (1926).
Lapse: Unless the lien creditor has possession, an action to enforce the mechanic's lien must be commenced within one year of filing the lien statement. K.S.A. 58-202.
Agricultural Liens
In general: As might be expected in a state as dependent on agriculture as Kansas, the legislature has created a number of special liens which relate to farming, farm products, and farm machinery. Liens on farm equipment for repairs, replacement of parts, or other services and on farm products such as crops or livestock are very similar to mechanic's liens on vehicles. There are unfortunate differences, however, which should be eliminated. The following discussion will focus on special liens on farm products, including but not limited to crops and livestock. The legislature has also created the "Agricultural Input Lien," which is more akin to a limited purchase money security interest (PMSI) than a "mechanic's lien," and should be considered as such.
The Agricultural Input Lien: K.S.A. 58-241 et seq.
In general: A farmer with financial problems may find it impossible to obtain financing unless a supplier will provide the seed, fuel, and chemicals necessary to produce the crop. Accordingly, the legislature adopted the provisions of the Agricultural Input Lien statute at K.S.A. 58-241 et...
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