## Facts

- Donald and Linda Williams obtained a $135,000 construction loan from First United Bank and Trust Company secured by a construction mortgage recorded September 28, 2007, for a home build in Sapulpa, Oklahoma.
- Mill Creek Lumber & Supply Company furnished construction materials for the home between November 13, 2007, and February 15, 2008.
- In February 2008, the Williamses refinanced with a new mortgage recorded February 28, 2008, and the Bank released the original construction mortgage; the borrowers represented the property was unencumbered except for recorded encumbrances.
- On March 17, 2008, the Williamses executed a supplemental mortgage to the Bank with warranties of good title free of unlisted liens; it did not mention any materialmen’s lien.
- Mill Creek recorded a materialmen’s lien on May 15, 2008, asserting $17,350 remained unpaid.
- Mill Creek sued on July 10, 2008, seeking an in personam judgment against Linda Williams and an in rem foreclosure of its lien; the Bank was notified as an interested party.
- The Bank argued Mill Creek’s materials became fixtures, making Mill Creek’s interest a UCC Article 9 fixture security interest subordinate to the Bank’s earlier-recorded mortgage interests.

## Issues

1. Whether Mill Creek’s claim is governed by Oklahoma’s materialmen’s lien statutes or by UCC Article 9 rules for security interests in fixtures.
2. Whether a timely perfected materialmen’s lien that relates back to the commencement of furnishing materials has priority over the Bank’s construction and replacement mortgages.

## Decision

- The Oklahoma Court of Civil Appeals affirmed summary judgment for Mill Creek.
- The court held Mill Creek held a statutory materialmen’s lien, not merely a UCC Article 9 fixture security interest.
- Because Mill Creek timely perfected its lien and timely filed its enforcement action, the lien related back to the commencement of furnishing materials.
- The court concluded the statutory lien priority and relation-back scheme gave Mill Creek’s lien priority over the Bank’s mortgages, notwithstanding the borrowers’ title warranties in the mortgage documents.

## Legal Principles

- A materialmen’s lien arising under Oklahoma lien statutes is a statutory lien governed by the statute’s perfection, relation-back, and priority rules, not by UCC Article 9 fixture priority rules.
- When a material supplier timely perfects a materialmen’s lien and timely brings an enforcement action, the lien may relate back to the commencement of furnishing labor or materials for the improvement.
- Borrower warranties of marketable title and “no unrecorded encumbrances” in mortgage documents do not displace statutory lien priority established by the materialmen’s lien scheme.

## Conclusion

The court affirmed that Oklahoma’s materialmen’s lien statutes control priority: Mill Creek’s timely perfected lien related back to the start of furnishing materials and took priority over the Bank’s mortgages, and the Bank could not reframe the lien as a subordinate UCC fixture interest.


Mill Creek Lumber & Supply Co. v. First United Bank & Tr. Co., 278 P.3d 12 (Okla. Civ. App. 2012)