2009 California Code of Civil Procedure - Section 1203.50-1203.66 :: Chapter 2.5. Oil And Gas Liens

CODE OF CIVIL PROCEDURE
SECTION 1203.50-1203.66

1203.50.  This chapter shall be known and may be cited as the Oil
and Gas Lien Act.

1203.51.  Unless the context otherwise requires, the definitions set
forth in this section shall govern the construction of this chapter.
   (a) "Person" means an individual, corporation, firm, partnership,
limited liability company, or association.
   (b) "Owner" means a person holding any interest in the legal or
equitable title or both to any leasehold for oil or gas purposes, or
his or her agent and shall include purchasers under executory
contract, receivers, and trustees.
   (c) "Contract" means a contract, written or oral, express or
implied, or partly express and partly implied, or executory or
executed, or partly executory and partly executed.
   (d) "Material" means any material, machinery, appliances,
buildings, structures, casing, tanks, pipelines, tools, bits, or
other equipment or supplies but does not include rigs or hoists or
their integral component parts except wire lines.
   (e) "Labor" means work performed in return for wages.
   (f) "Services" means work performed exclusive of labor, including
the hauling of material, whether or not involving the furnishing of
material.
   (g) "Furnish" means sell or rent.
   (h) "Drilling" means drilling, digging, shooting, torpedoing,
perforating, fracturing, testing, logging, acidizing, cementing,
completing or repairing.
   (i) "Operating" means all operations conducted on the lease in
connection with or necessary to the production of oil or gas, either
in the development thereof or in working thereon by the subtractive
process.
   (j) "Construction" means construction, maintenance, operation, or
repair, either in the development thereof or in working thereon by
the subtractive process.
   (k) "Original contractor" means any person for whose benefit a
lien is prescribed under Section 1203.52.

1203.52.  Any person who shall, under contract with the owner of any
leasehold for oil or gas purposes perform any labor or furnish any
material or services used or employed, or furnished to be used or
employed in the drilling or operating of any oil or gas well upon
such leasehold, or in the constructing, putting together, or
repairing of any material so used or employed, or furnished to be so
used or employed, shall be entitled to a lien under this chapter,
whether or not a producing well is obtained and whether or not such
material is incorporated in or becomes a part of the completed oil or
gas well, for the amount due him for any such labor performed, or
materials or services furnished, within six months prior to the date
of recording the statement of lien as provided in Section 1203.58,
including, without limitation, shipping and mileage charges connected
therewith, and interest from the date the same was due.

1203.53.  Liens created under Section 1203.52 shall extend to:
   (a) The leasehold for oil or gas purposes to which the materials
or services were furnished, or for which the labor was performed, and
the appurtenances thereunto belonging, exclusive of any and all
royalty interest, overriding interests and production payments
created by an instrument recorded prior to the date such materials or
services were first furnished or such labor was first performed for
which lien is claimed; and
   (b) All materials and fixtures owned by the owner or owners of
such leasehold and used or employed, or furnished to be used or
employed in the drilling or operating of any oil or gas well located
thereon; and
   (c) All oil or gas wells located on such leasehold, and the oil or
gas produced therefrom, and the proceeds thereof, except the
interest therein owned by the owners of royalty interests, overriding
royalty interests and production payments created by an instrument
recorded prior to the date such materials or services were first
furnished or such labor was first performed for which the lien is
claimed.

1203.54.  Any person who shall, under contract, perform any labor or
furnish any material or services as a subcontractor under an
original contractor or for or to an original contractor or a
subcontractor under an original contractor, shall be entitled to a
lien upon all the property upon which the lien of an original
contactor may attach to the same extent as an original contractor,
and the lien provided for in this section shall further extend and
attach to all materials and fixtures owned by such original
contractor or subcontractor to or for whom the labor is performed or
material or services furnished and used or employed, or furnished to
be used or employed in the drilling or operating of such oil or gas
wells.

1203.55.  When a lien provided for in this chapter shall have
attached to a leasehold estate, forfeiture of such estate shall not
impair any lien as to material, appurtenances and fixtures located
thereon and to which such lien has attached prior to forfeiture. If a
lien provided for in this chapter attaches to an equitable interest
or to a legal interest contingent upon the happening of a condition
subsequent, failure of such interest to ripen into legal title or
such condition subsequent to be fulfilled, shall not impair any such
lien as to material, appurtenances and fixtures located thereon and
to which said lien had attached prior to such failure.

1203.56.  The lien provided for in this chapter arises on the date
of the furnishing of the first item of material or services or the
date of performance of the first labor for which a lien is claimed
under the provisions of this chapter. Upon compliance with the
provisions of Section 1203.58, such lien shall be preferred to all
other titles, charges, liens or encumbrances which may attach to or
upon any of the property upon which a lien is given by this chapter
subsequent to the date the lien herein provided for arises.

1203.57.  All liens arising by virtue of this chapter upon the same
property shall be of equal standing except that liens of persons for
the performance of labor shall be preferred to all other liens
arising by virtue of this chapter.

1203.58.  Every person claiming a lien under this chapter, shall
record in the office of the county recorder for the county in which
such leasehold, or some part thereof, is situated, a verified
statement setting forth the amount claimed and the items thereof, the
dates on which labor was performed or material or services
furnished, the name of the owner of the leasehold, if known, the name
of the claimant and his mailing address, a description of the
leasehold, and if the claimant be a claimant under Section 1203.54,
the name of the person for whom the labor was immediately performed
or the material or services were immediately furnished. The statement
of lien must be recorded within six months after the date on which
the claimant's labor was performed or his materials or services were
furnished to be effective as to such labor, materials, or services.

1203.59.  Anything in this chapter to the contrary notwithstanding,
any lien claimed by virtue of this chapter, insofar as it may extend
to oil or gas or the proceeds of the sale of oil or gas, shall not be
effective against any purchaser of such oil or gas until written
notice of such claim has been delivered to such purchaser. Such
notice shall state the name of the claimant, his address, the amount
for which the lien is claimed, and a description of the leasehold
upon which the lien is claimed. Such notice shall be delivered
personally to the purchaser or by registered letter or certified
mail. Upon receipt of such notice the purchaser shall withhold
payments for such oil or gas runs to the extent of the lien amount
claimed until delivery of notice in writing that the claim has been
paid. The funds so withheld by the purchaser shall be used in payment
of the lien judgment upon foreclosure. The lien claimant shall
within 10 days give notice in writing that the claim has been paid.

1203.60.  (a) Whenever any lien or liens shall be claimed or
recorded under the provisions of this chapter then the lessor or
owner of the property on which the lien or liens are claimed or the
contractor or subcontractor through whom such lien or liens are
claimed, or either of them, may record a bond with the county
recorder of the county in which the property is located as herein
provided. Such bond shall describe the property on which lien or
liens are claimed, shall refer to the lien or liens claimed in manner
sufficient to identify them and shall be in an amount equal to 150
percent of the amount of the claimed lien or liens referred to and
shall be payable to the party or parties claiming same. Such bond
shall be executed by the party recording same as principal and by a
corporate surety authorized to execute such bonds as surety and shall
be conditioned substantially that the principal and surety will pay
to the obligees named or their assigns the amounts of the liens so
claimed by them with all costs in the event same shall be proven to
be liens on such property.
   (b) Such bond, when recorded, shall take the place of the property
against which any claim for lien referred to in such bond is
asserted. At any time within the period of time provided in Section
1203.61, any person claiming such lien may sue upon such bond but no
action shall be brought upon such bond after the expiration of such
period. One action upon such bond shall not exhaust the remedies
thereon but each obligee or assignee of an obligee named therein may
maintain a separate suit thereon in any court having jurisdiction.

1203.61.  (a) Any lien provided for by this chapter shall be
enforced in the same manner as provided in Title l5 (commencing with
Section 3082), Part 4, Division 3, of the Civil Code. Such action
shall be filed within 180 days from the time of the recording of the
lien provided for herein. If a credit be given and notice of the fact
and terms of such credit be filed in the office of the county
recorder subsequent to the filing of such lien and prior to the
expiration of said 180-day period, then such lien continues in force
until 180 days after the expiration of such credit, but no lien
continues in force by reason of any agreement to give credit for a
longer time than one year from the time the work is completed. If the
proceedings to enforce the lien be not prosecuted to trial within
two years after the commencement thereof, the court may in its
discretion dismiss the same for want of prosecution, and in all cases
the dismissal of such action (unless it be expressly stated that the
same is without prejudice) or a judgment rendered therein that no
lien exists shall be equivalent to the cancellation and removal from
the record of such lien.
   (b) As against any purchaser or encumbrancer for value and in good
faith whose rights are acquired subsequent to the expiration of the
180-day period following the filing of such lien, no giving of credit
or extension of the lien or time to enforce the same shall be
effective unless evidenced by a notice or agreement filed for record
in the office of the county recorder prior to the acquisition of the
rights of such purchaser or encumbrancer.

1203.62.  Nothing in this chapter shall be construed to impair or
affect the right of any person to whom any debt may be due for work
performed or materials or services furnished to maintain a personal
action against the person liable for such debt.

1203.63.  The taking of any note or any additional security by any
person given a lien by this chapter shall not constitute a waiver of
the lien given by this chapter unless made a waiver by express
agreement of the parties in writing. The claiming of a lien under
this chapter shall not constitute a waiver of any other right or
security held by the claimant unless made a waiver by express
agreement of the parties in writing.

1203.64.  All claims for liens and likewise all actions to recover
therefor under this chapter shall be assignable upon compliance with
the provisions of Section 1203.58 so as to vest in the assignee all
rights and remedies herein given subject to all defenses thereto that
might be raised if such assignments had not been made.

1203.65.  All liens granted by this chapter shall be perfected and
enforced in accordance with the provisions hereof whether such liens
arise before or after the effective date of this chapter; provided,
however, that any unperfected lien granted under any statute in
effect prior to the effective date of this chapter and which could be
subsequently perfected in accordance with such prior statute were it
not for the existence of this chapter may be perfected and enforced
in accordance with the provisions of this chapter if the statement of
lien required to be recorded under Section 1203.58 is recorded
within the time therein required or within two months after the
effective date of this chapter, whichever period is longer; and
provided further, that the validity of any lien perfected prior to
the effective date of this chapter in accordance with the
requirements of any statute in effect prior to such effective date
shall be determined on the basis of such prior statute but the
enforcement thereof shall insofar as possible be governed by the
provisions of this chapter.

1203.66.  This chapter shall be given liberal construction in favor
of all persons entitled to any lien under it.



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