BAY MITCHELL, Judge.
¶ 1 This appeal presents a lien priority contest. Plaintiff GasRock Capital, L.L.C. (GasRock) appeals from an Order granting summary judgment in favor of lien claimant Defendant Pan American Drilling Services, L.L.C. (Pan American) in this foreclosure action.
¶ 2 EnDevCo is the unit operator
¶ 3 GasRock's mortgage lien was recorded on April 24, 2006, in Cleveland County. The area subject to GasRock's mortgage was in part, the same leasehold premises upon which Pan American and KAL subsequently furnished their respective drilling services on Well #109 located on the property.
¶ 4 EnDevCo hired third-party contractors Pan American and KAL to drill the No. 109 well in the West Short Junction Unit located in the Southwest Quarter of Section 15-10N-R4W, Cleveland County, Oklahoma. Pan American commenced its work at that location on or about September 25, 2007. EnDevCo ultimately defaulted on its payment obligation to its lender GasRock as well as to its drilling contractors.
¶ 5 After EnDevCo failed to pay Pan American for its services, Pan American filed its oil and gas lien statement in Cleveland County on July 8, 2008. The lien statement lists the amount of $1,558,377.51, plus interest and attorney's fees due as of July 2008. The lien statement additionally provides that Pan American furnished materials and labor "for and used in connection with the drilling of an oil and gas well located in the 12,000 acre drilling and spacing West Short Junction Unit comprised, in part, of the SW/4 of Section 15-10N-4W, Cleveland County, Oklahoma, said well being commonly referred to as the West Short Junction Unit #109."
¶ 6 GasRock and Pan American sought summary adjudication of the priority of their respective lien. GasRock contends that because it recorded its mortgage prior to Pan American's commencement of drilling, it has "first in time" priority over mechanics' and materialmen's oil and gas well liens, in particular those filed pursuant to 42 O.S. 2011 §144.
¶ 7 Ultimately, the trial court determined Pan American's "labor and materialmen's lien" had priority over the mortgage of GasRock as a matter of law. GasRock appeals from the trial court's denial of its Motion for Summary Judgment and the granting of Pan American's Counter-Motion for Summary Judgment.
¶ 8 Appellate courts review an award of summary judgment de novo, giving no deference to the trial court. Lowery v. Echostar Satellite Corp., 2007 OK 38, ¶11, 160 P.3d 959, 963. Summary judgment is only appropriate when there is no substantial controversy as to any material fact, and the moving party is entitled to judgment as a matter of law. Id. The reviewing court must view all inferences and conclusions that can be drawn from the facts in the light most favorable to the party opposing the motion. Rose v. Sapulpa Rural Water Co., 1981 OK 85, ¶2, 631 P.2d 752, 754. We will reverse summary judgment if reasonable people could reach different conclusions from the undisputed material facts. Lowery, 2007 OK 38, ¶11, 160 P.3d at 963-64.
¶ 9 We find that material facts are undisputed and the applicable law (construed with the pertinent Plan of Unitization) provides Pan American with a statutory "first and prior lien," which has priority over GasRock's mortgage lien as a matter of law. An oil and gas unit operator's statutory lien has priority over a mortgagee's lien regardless of the first-in-time recording of the mortgage. TCINA, Inc. v. NOCO Investment Co., Inc., 2004 OK CIV APP 62, 95 P.3d 193, cert. denied; Ladder Energy Co. v. Intrust Bank, N.A., 1996 OK CIV APP 126, 931 P.2d 83, cert. denied (rejecting bank's §144 first in time argument and holding bank's mortgage secured by mortgagor's working interest in oil and gas leases was subject to obligations and liabilities of mortgagor's interest including the cost of development and exploration incurred by operator of leases after the bank's mortgage was recorded).
¶ 10 GasRock attempts to distinguish this case from TCINA, Inc. on the basis that here Pan American is not a unit operator, but rather a third-party contractor hired by the unit operator, EnDevCo. GasRock would have us construe the Unit's §287.8 lien protection as limited to the unit operator. Because, GasRock contends, the unit lien statute (§ 287.8) is unavailable to Pan American, GasRock's mortgage lien has priority under application of the general "first-in-time" rule applicable to liens authorized under §144.
¶ 11 While the §287.8 lien is silent on the issue of third-party contractor's lien rights, we note the unitization statutory powers conferred are expressly "subject to the limitations imposed by the provisions of [the] act and
Id. (emphasis added).
¶ 12 The Oklahoma Corporation Commission, in approving the Plan of Unitization in 1961, ordered that the entire unit area including any separately owned tracts therein, shall participate in the Unit, subject to the terms and provisions of the Unitization Plan. There is no question that the Corporation Commission had this power. See 52 O.S. §287.2 (vesting the Corporation Commission with the "jurisdiction, power and authority," and the "duty to make and enforce such orders and do such things as may be necessary or proper to carry out and effectuate the purposes of this [Unitization] Act"). Title 52 O.S. §287.9 appears to remove any doubt as to the availability of the §287.8 lien to Pan American. It provides:
§287.9 (emphasis added).
¶ 13 The Plan of Unitization, notice of which was filed of record decades prior to the recording of GasRock's mortgage, expressly provides for the broad extension of lien rights beyond the Unit operator to other "Persons entitled to the benefit" of the lien. Pan American, which was under contract with EnDevCo, the Unit Operator, to provide drilling services for the benefit of the Unit, clearly falls within the category of persons
¶ 14 The Court of Civil Appeals noted this statutory lien is "significantly different" from other statutory liens such as the mechanics' and materialmen's lien under §144 "in that the legislature expressly and unconditionally declared the §287.8 lien to be a first and prior lien." TCINA, Inc., 2004 OK CIV APP 62, ¶3, 95 P.3d 193, 194. "A first and prior lien is absolutely essential to preserve the fiscal integrity of the unit in that (1) the unit must operate ` without profit to the unit,' §287.8, and (2) the unit cannot acquire, hold, or possess real or personal property for its own account, but does so only as agent for the several lessees." TCINA, Inc., ¶4 (citing 52 O.S. §287.9).
¶ 15 In dispensing with the mortgagee's first-in-time argument, TCINA, Inc. provides, given the nature of the lien in question "it is inconsequential when" drilling services were performed on behalf of the unit (thereby incurring unit expenses) versus the timing of the mortgage recording. Id. at ¶7. The Court additionally determined "a land-record filing reflecting approval of the unit and the participation of particular leases or interests [constitutes] sufficient perfection" of the statutory first and prior lien. Id. at ¶6. Thus, the Court determined in TCINA, Inc. that the operator's failure to file a lien statement there immaterial to perfection of the statutory lien and/or its priority.
¶ 16 We note that a notice of the Corporation Commission's approval of the unit at issue herein has been on record in the Cleveland County Clerk's office since January 1962. "Such a filing imparts notice to third parties that any lien or interest a third party may acquire in a participating lease or interest would be subordinate to the unit's statutory lien." Id. at ¶6.
¶ 17 Because we find the trial court's lien priority determination correct in accordance with 52 O.S. §287.8, we need not decide the alternate theories advanced by the parties pursuant to other statutory authority.
¶ 18 After Pan American was successful on its Counter-Motion for Summary Judgment, it sought recovery of attorney fees, which the trial court granted pursuant to 42 O.S. §176
¶ 19 On appeal, GasRock seeks the reversal of the prevailing party attorney fee on the contingency of the reversal on the merits of the lien contest. Because we affirm the trial court's lien priority determination, Pan American's prevailing party status remains unchanged. We therefore affirm the trial court's March 13, 2012 Journal Entry of Judgment granting Pan American's Motion for Attorney Fees and Costs.
¶ 20 KAL was a party to a 2007 contract with EnDevCo wherein KAL agreed to provide services and materials in connection with the drilling of the #109 well and EnDevCo agreed to pay for those services. Just as with Pan American, KAL commenced its drilling services subsequent to the recording of GasRock's mortgage. KAL's services were completed in January 2008. EnDevCo failed to pay over $2 million for KAL's drilling services and materials. KAL thereafter filed a lien statement on February 5, 2008, wherein it asserted a lien against the oil and gas leasehold interests underlying the unit.
¶ 21 Prior to the commencement of the present litigation, KAL filed suit in 2008 against EnDevCo (among additional defendants) in the U.S. District Court for the Western District of Oklahoma for amounts it claimed were due under the parties' drilling contract. KAL also sought foreclosure of its oil and gas lien against the interests of EnDevCo (and other working interest owners in West Short Junction Unit Well #109), claiming priority over GasRock's mortgage lien.
¶ 22 Ultimately, the U.S. District Court for the Western District of Oklahoma entered its February 24, 2009 Order granting GasRock's Motion for Summary Judgment, which essentially determined that GasRock's mortgage lien had priority over KAL's 42 O.S. §144 materialmen's liens. The order further provides that because the mortgage lien was recorded before KAL commenced its services the mortgage lien is "prior in time and hence superior to KAL's lien, absent some legal basis for a conclusion to the contrary."
¶ 23 GasRock cited the federal court's February 2009 Order as the primary basis for its Motion for Summary Judgment filed herein, which the trial court granted with the entry of its March 30, 2011 Partial Journal Entry of Judgment in favor of GasRock against KAL "in its entirety based upon the prior order in Case No. CIV-08-395, United States District Court for the Western District of Oklahoma." KAL counter-appeals from this determination.
¶ 24 KAL's counter-appeal of the summary adjudication of the priority contest between it and GasRock is a collateral attack on the federal district court's order. "When a federal-court judgment is attacked collaterally in a state court, it is entitled to the same faith and credit as that given to it under the applicable federal law. The facial validity of a federal judgment—a question that hinges on the presence of the three essential elements of jurisdiction—also is measured by federal law." Veiser v. Armstrong, 1984 OK 61, n.5, 688 P.2d 796 (citing Allen v. McCurry, 449 U.S. 90, 96). While KAL merely denies the preclusive effect of the federal district court's order entered against it prior to the instant litigation, it raises no jurisdictional challenge thereto. The only way a party can avoid the effect of claim preclusion as to bar the claims raised against the same parties in a prior lawsuit, would be by asserting the prior judgment was void for want of some jurisdictional element that has not been fully and fairly litigated. Veiser v. Armstrong, 1984 OK 61, 688 P.2d 796, 803.
¶ 25 The doctrine of collateral estoppel, or also commonly referred to as "issue preclusion," bars relitigation of an issue determined in a previous proceeding where there is an identity of parties in the former and latter action, or the parties in the former and latter actions are in privity. Id.; Laws v. Fisher, 1973 OK 69, 513 P.2d 876. "For invocation of issue preclusion there need not be a prior adjudication on the merits (as is often the case with res judicata)
¶ 26 KAL and GasRock are parties to the prior federal court matter and this case, with the identical priority contest at issue in both forums. Although KAL characterizes the federal order as interlocutory, the federal court order appears in all respects final on the determination of lien priority which was, and is,
¶ 27 The federal district court rendered its decision in accordance with the general "first in time rule" pursuant to 42 O.S. §144 as opposed to an application of 52 O.S. §287.8, which grants a first and prior statutory lien on participating interests in the unit for the operating expenses of the unit. "The principle of issue preclusion operates to bar from relitigation both correct and erroneous resolutions of jurisdictional and nonjurisdictional challenges." McCrady, ¶7, 176 P.3d at 1199.
¶ 28 We therefore AFFIRM the trial court's March 30, 2011 Partial Journal Entry of Judgment in favor of GasRock against KAL, which was entered in recognition of the preclusive effect of the prior February 2009 order in Case No. CIV-08-395, United States District Court for the Western District of Oklahoma.
¶ 29 The trial court's October 28, 2011 Journal Entry of Judgment and the December 13, 2011 Order denying GasRock's Motion to Vacate or Modify Judgment and Motion for New Trial are AFFIRMED. Additionally, the trial court's March 13, 2012 Order granting Pan American's Motion for Attorney Fees and Costs is AFFIRMED.
HETHERINGTON, P.J., and GOREE, J., concur.