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Stingray Pressure Pumping, LLC v. EQT Production Co.

United States District Court, W.D. Pennsylvania

December 21, 2016



          Cathy Bissoon, United States District Judge

         I. MEMORANDUM

         Defendant's Motion to Dismiss (ECF No. 16) will be granted, and Plaintiff will be given one final opportunity to amend its pleadings.


         On September 2, 2014, Defendant and Plaintiff entered into a Master Services Agreement (“Agreement”), whereby Plaintiff agreed to “furnish labor and materials to complete well sites.” Am. Compl. (ECF No. 13) ¶ 3. All of the work performed by Plaintiff related to three wells located on the Gallagher Pad in Washington County, Pennsylvania: Well #H13, Well #H14 and Well #H15. Id. ¶ 7. Plaintiff alleges that Defendant improperly withheld $1, 651, 250.00 in payments following the completion of the project. Id. ¶¶ 20, 32, 41.

         On December 23, 2015, Plaintiff filed a “Notice of Materialman's and Mechanic's Liens” (“Notice”) in the Court of Common Pleas of Washington County, Pennsylvania, with respect to each of the three wells on which it performed work. Id. at Ex. A, D, G. The three Notices bear the signature of Mark E. Layton, Plaintiff's CFO. Id. Each Notice alleges that Plaintiff “performed labor and furnished material, machinery and supplies . . . in connection with drilling and/or operation” of the wells. Id. Attached to the Notices are invoices and field tickets containing charges for items such as water, sand, “stimulation charge, ” “remote data transmission, ” “pump down e-line service, ” “goat head charge” and “safety shower.” Id.


         Defendant contends that this action should be dismissed for lack of subject matter jurisdiction pursuant to Federal Rule of Civil Procedure 12(b)(1) because the Notices filed by Plaintiff in Washington County were defective on their face. Defendant's argument can be characterized as a factual attack on the Court's subject matter jurisdiction, as it is challenging the Court's “very power to hear the case.” Mortensen v. First Federal Sav. & Loan Ass'n, 549 F.2d 884, 891 (3d Cir. 1977). Accordingly, the Court is “free to weigh the evidence and satisfy itself as to the existence of its power to hear the case.” Id. Plaintiff bears the burden of showing that jurisdiction does in fact exist. Id.

         Defendant also argues that Plaintiff has failed to state a claim pursuant to Rule 12(b)(6). “To survive a motion to dismiss, a complaint must contain sufficient factual matter, accepted as true, to ‘state a claim to relief that is plausible on its face.'” Ashcroft v. Iqbal, 556 U.S. 662, 678 (2009) (quoting Bell Atlantic Corp. v. Twombly, 550 U.S. 544, 570 (2007)). When faced with a motion to dismiss, a court “must accept all of the complaint's well-pleaded facts as true, but may disregard any legal conclusions.” Fowler v. UPMC Shadyside, 578 F.3d 203, 210-11 (3d Cir. 2009).

         Defendant asserts two interrelated arguments in support of dismissal: (1) Plaintiff has failed to allege that the work that it performed on the well project is the type of activity that can invoke a mechanic's lien; and (2) Plaintiff has failed to allege that the project on which it performed that work - in this case, an oil drilling operation - satisfies the requirements of Pennsylvania's mechanics' lien statute as a matter of law.[1]

         The Pennsylvania Mechanics' Lien Law, enacted in 1963, provides that:

Every improvement and the estate or title of the owner in the property shall be subject to a lien . . . for the payment of debts due by the owner to the contractor or by the contractor to any of his subcontractors for labor or materials furnished in the erection or construction, or the alteration or repair of the improvement . . .

49 Pa. Cons. Stat. § 1301 (emphasis added). “Erection and construction” is defined as “the erection and construction of a new improvement or of a substantial addition to an existing improvement or any adaptation of an existing improvement rendering the same fit for a new or distinct use and effecting a material change in the interior or exterior thereof.” Id. at § 1201. “Alteration and repair” is defined as “any alteration or repair of an existing improvement” that does not satisfy the definition of “erection and construction.” Id.

         Pennsylvania courts consistently have limited the availability of a mechanic's lien to “work which was connected with and an integral part of the erection, construction, alteration or repair of a building or other permanent structure.” Yellow Run Coal Co. v Yellow Run Energy Co., 420 A.2d 690, 691 (Pa. Super. 1980). Thus, a mechanic's lien cannot attach to land “for work unconnected with the construction of a building or other ...

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