## Facts

- Coastal Refining & Marketing, Inc. contracted with Certified Waste Services, Ltd. and Chief Supply Corporation to remove and dispose of hazardous waste from Coastal’s refinery property.
- The prime contractors subcontracted part of the work to Haz-Mat Response, Inc. to perform hazardous-waste-removal services; Haz-Mat did not perform the project’s final disposal component.
- Coastal hired other contractors to complete disposal work.
- Coastal did not pay the prime contractors, and the prime contractors did not pay Haz-Mat for work Haz-Mat had performed.
- Haz-Mat filed a mechanic’s lien against Coastal’s property under K.S.A. 60-1101 and sued to foreclose the lien.
- Haz-Mat also sought recovery from Coastal under quantum meruit/unjust enrichment for the value of benefits Coastal allegedly received.
- The district court granted summary judgment for Coastal on both the mechanic’s-lien and unjust-enrichment claims.
- The Kansas Court of Appeals affirmed the denial of the lien but reversed on unjust enrichment, holding lack of privity did not automatically bar the claim.

## Issues

1. Whether hazardous-waste removal, as performed here, is an “improvement of real property” supporting a mechanic’s lien under K.S.A. 60-1101.
2. Whether a subcontractor lacking contractual privity with the owner may recover from the owner for unjust enrichment, and if so, under what limits.

## Decision

- The Kansas Supreme Court held that hazardous-waste removal in this case was not an “improvement of real property” under K.S.A. 60-1101; Haz-Mat could not assert a mechanic’s lien against Coastal’s property.
- The court held that lack of privity does not categorically bar a subcontractor’s unjust-enrichment claim against an owner.
- The court nonetheless ruled that unjust-enrichment recovery against an owner requires “special circumstances,” and Haz-Mat did not show fraud, inducement, misleading conduct, or comparable inequity by Coastal.
- The court ultimately affirmed judgment for Coastal on both the lien and unjust-enrichment theories.

## Legal Principles

- Mechanic’s liens under K.S.A. 60-1101 are statutory; whether a lien attaches is strictly construed, though the statute is construed liberally once attachment is established.
- “Improvement of real property” depends on the circumstances and may include nonstructural or nonvisible work, but the work must enhance the property’s value or utility in the statutory sense.
- Lienable labor, equipment, materials, or supplies must be “used or consumed” for the improvement and, in general, must become part of the realty rather than merely removing items from it.
- Unjust enrichment may allow recovery where an owner retains a benefit at another’s expense, but it is not a substitute for lien or contract remedies.
- A subcontractor without privity may proceed against an owner in unjust enrichment only under special circumstances (e.g., fraud, misleading conduct, inducement, or other inequitable conduct by the owner); an owner’s nonpayment to the prime contractor alone is insufficient.

## Conclusion

The Kansas Supreme Court rejected a mechanic’s lien for hazardous-waste removal because the work, as performed, did not qualify as an “improvement of real property” under K.S.A. 60-1101, and it limited subcontractor unjust-enrichment claims against owners to cases involving special circumstances of inequitable owner conduct, which were not shown.


Haz-Mat Response, Inc. v. Certified Waste Servs., Ltd., 259 Kan. 166, 910 P.2d 839 (Kan. 1996)