## Facts

- Crystal Oil Co. held oil and gas leases and entered a farmout agreement requiring Lyle Dews, at his expense, to drill a test well by a stated deadline (later extended) to test a target formation; upon successful production, Crystal would assign lease interests to Dews while reserving an overriding royalty.
- Dews separately agreed to assign his farmout rights to Bruce Massey for $50,000; Dews reserved a 5% overriding royalty, and Massey agreed to cause the well to be drilled.
- Massey hired eleven oil-field service and supply companies to provide labor, materials, and services for drilling and completing the well.
- The well was completed as a producing well; Crystal assigned the lease interests to Dews as contemplated by the farmout.
- Massey did not pay the $50,000 to Dews’s satisfaction, and Dews did not assign his interest to Massey; the service companies were not paid in full.
- The unpaid companies sued Massey and added Dews, seeking money damages and lien and punitive remedies; the trial court imposed joint and several liability on Dews and Massey, and awarded liens and punitive damages.
- Dews knew the well was being drilled for his farmout obligation, knew the companies were providing the work through Massey, and retained the lease assignment and increased lease value produced by their work without ensuring payment.

## Issues

1. Whether a lease-interest recipient who lacked privity with subcontractors, but knowingly accepted and retained benefits from their work, is liable in unjust enrichment (quasi-contract).
2. Whether statutory or equitable liens could be imposed on the leasehold interest despite noncompliance with statutory lien requirements.
3. Whether unregistered foreign corporations are barred from recovering restitution for unjust enrichment under statutes limiting suits “on contracts.”
4. Whether punitive damages were available based on Dews’s conduct.

## Decision

- Affirmed the money judgment holding Dews (along with Massey) jointly and severally liable to the unpaid companies under unjust enrichment/quasi-contract.
- Reversed and dissolved statutory and equitable liens due to failure to satisfy statutory notice/perfection requirements and lack of grounds for an equitable lien.
- Held that unregistered foreign corporate claimants could recover in restitution because unjust enrichment is not an action to enforce a contract.
- Reversed the punitive damages award against Dews for insufficient proof of the culpability required for punitive damages.

## Legal Principles

- Unjust enrichment permits recovery where a defendant knowingly obtains and retains benefits conferred by another under circumstances making retention without payment unjust, even absent contractual privity.
- Quasi-contract is imposed by law to prevent unjust enrichment; it does not depend on the parties’ assent.
- Statutory lien remedies require strict compliance with statutory notice and perfection provisions; failure to comply defeats the lien even if a money judgment is proper.
- Equitable liens are extraordinary remedies and are not imposed merely because restitution is warranted.
- Statutory restrictions on unqualified foreign corporations suing “on contracts” do not bar restitutionary recovery for unjust enrichment.
- Punitive damages require proof beyond inequitable conduct; restitution liability alone does not establish the malice or willfulness needed for punitive awards.

## Conclusion

The court required Dews to pay in restitution for the drilling benefits he knowingly retained through his lease assignment, but rejected lien and punitive remedies and allowed unregistered foreign corporations to recover because the claim sounded in unjust enrichment rather than contract enforcement.


Dews v. Halliburton Indus., Inc., 708 S.W.2d 67 (Ark. 1986)