## Facts

- Pennzoil Company and Pennzoil Producing Company (Pennzoil) owned an offshore drilling platform and contracted with Seaways International, Inc. (Seaways) as general contractor to construct a three-story steel living-quarters unit for the platform.
- The living-quarters unit was constructed on blocks at a construction site in St. Mary Parish, Louisiana.
- After construction, Pennzoil transported the unit and attached it to an offshore drilling platform located in the Gulf of Mexico off the coast of Texas.
- Seaways subcontracted with P.H.A.C. Services, Inc. (P.H.A.C.) to install plumbing, heating, and air conditioning in the unit and with Acoustical Spray Insulators, Inc. (Acoustical) to provide labor and acoustical materials.
- It was undisputed that P.H.A.C. and Acoustical performed their subcontract work but were not paid.
- The prime contract between Pennzoil and Seaways was not recorded, and Seaways was not required to furnish a bond.
- The subcontractors timely filed lien affidavits and sued Pennzoil and Seaways seeking to enforce statutory privileges, relying on (1) the Private Works Act, La. R.S. 9:4801 et seq.; (2) the oil, gas, and water well privilege statutes, La. R.S. 9:4861 et seq.; and (3) alternatively, the movables privilege statute, La. R.S. 9:4502.
- The trial court ruled the subcontractors’ only available privilege arose under La. R.S. 9:4861 et seq., rejecting a Private Works Act claim on the ground that the unit was not a building and not immovable property.
- The court of appeal disagreed and held the Private Works Act governed. All parties sought review in the Louisiana Supreme Court.

## Issues

1. Whether the living-quarters unit constructed on blocks in Louisiana qualified as a “building” or other work subject to subcontractor privileges under the Private Works Act.
2. Whether the oil, gas, and water well privilege statutes applied to this work and, if so, whether they displaced or excluded the Private Works Act remedy.
3. Whether a privilege on movables under La. R.S. 9:4502 was available if the unit was not treated as an immovable for purposes of the asserted construction privileges.

## Decision

- The Louisiana Supreme Court held the subcontractors were entitled to statutory lien privileges for their unpaid work on the living-quarters unit and rejected the trial court’s view that the Private Works Act remedy was unavailable.
- The court agreed that the Private Works Act could apply to this type of substantial, building-like living-quarters structure constructed in Louisiana, even though it was later transported and attached to an offshore platform.
- The court further held the oil-and-gas privilege statutes were not the exclusive source of lien rights on these facts; they did not bar use of the Private Works Act where its requirements were met.
- Because the subcontractors had construction-related privileges, the court did not rest relief on the general movables privilege statute pleaded in the alternative.
- The court adjusted the lower courts’ rulings on which statutes could apply and remanded for further proceedings consistent with its opinion.

## Legal Principles

- The Private Works Act grants privileges to subcontractors and suppliers who furnish labor or materials for the construction of a building or other work treated as immovable property for lien purposes.
- Whether a construction privilege arises turns on the character of the work and the status of the project at the time the labor and materials are furnished; later movement of the structure does not automatically defeat privileges that arose during construction.
- The oil, gas, and water well privilege statutes create additional protections for certain work connected with oil and gas operations, but they do not, by themselves, eliminate Private Works Act protection when construction work falls within that act.
- When a claimant fits within a targeted construction lien statute, courts generally do not expand recovery by relying on a broader, alternative movable-privilege provision for the same work.

## Conclusion

P.H.A.C. Services and Acoustical, as unpaid subcontractors on a living-quarters unit built in Louisiana for use on an offshore drilling platform, could pursue lien privileges under Louisiana’s Private Works Act, and the oil-and-gas privilege statutes did not serve as the sole or exclusive lien remedy on these facts; the case was sent back for further proceedings to apply the court’s statutory analysis.


P.H.A.C. Services, Inc. v. Seaways International, Inc., 403 So. 2d 1199 (1981)