Windfarms proliferate in response to the growing need for renewable energy. At the same time, their birth and death can create collateral issues. For example, disposing of damaged turbine blades is a challenge. The blades are more than 100 feet long and could need to be cut to even fit on a semi-trailer for disposal.
The birth of a wind farm can create other issues not only for the landowners but also for the multitude of contractors and subcontractors needed to build them. A modern windfarm may include dozens of individual towers and turbines spread over several miles, and connected by underground cables. The developer probably does not actually own the land where each tower is located. The developer may have no more than a lease or an easement on an area big enough to construct the base and tower itself which likely stands in the middle of a field belonging to a third party. Developers are also leveraging the large sums of credit each construction tier is extending to build the bases and towers. If anything goes wrong from manufacturing mistakes to weather delays, there will be a ripple effect in the flow of payments to the contractors and subcontractors prompting calls to lawyers about mechanic lien protections. The lawyers’ response may not be what the caller expected.
If a payment problem develops for a party on one or more towers, it may be expensive to attempt to specifically identify the tower location for any effort to file a mechanic lien, let alone find dozens of such parcels. Each individual tower sits on its base, but that is likely to be a relatively small area in a larger parcel well-spaced from the next tower connected only by its miles of cable. The developer’s rights in the location of that tower base and cables are defined in its agreements with landowners and may include language to the effect that the base and tower could eventually be removed. While actual removal would be problematic at best, such provisions further undercut the ability to make a traditional mechanic lien claim. At least one court in Illinois was faced with similar facts and decided that the base and tower are removable trade fixtures and not lienable at all.
Minnesota, at least, may have an answer in Minnesota Statutes Section 514.04. The statute provides:
514.04 LINES OF RAILWAY, TELEGRAPH, OR SIMILAR PROJECTS.
If such contribution be thus made for the construction, alteration, or repair of any line of railway, or any structure or appurtenance of such railway, or of any telegraph, telephone, or electric light line, or of any line of pipe, conduit, or subway, or any appliance or fixture pertaining to either, the person performing such labor, or furnishing such skill, material, or machinery, shall have a like lien upon the lines so improved, and upon all the rights, franchises, and privileges of the owner appertaining thereto.
This particular statute has been part of Minnesota’s mechanics lien laws for well over 100 years. As with the whole of Minnesota’s lien statutes, it is an expression of public policy to protect the rights of those providing labor and materials and to address what were then newly developing types of improvements. This section was conceived to provide a means to secure payment to contractors and suppliers for projects like railroads, telephone and electric lighting which did not fit the “standard” mechanics lien model of private improvements to particular real estate. These works are the parts of systems or networks that cross many parcels including county lines. This section creates a different kind of lien right for projects that may include a mixture of real and personal property rights. This variation of lien right applies to labor and materials claims which may cover an extended distance and cross county or state boundaries. Such works may or may not relate to specific real estate but they represent a bundle of “rights, franchises, and privileges” which have substantial value. The statute creates a recordable claim comparable to a Uniform Commercial Code (UCC) security interest a bank would take in contract rights or other intangible property rights. To perfect the lien, the lien statement is recorded in the office of the Secretary of State in much the same way as a UCC financing statement. This lien would be enforced with a suit in state court in much the same way as the more traditional mechanic lien claim would be enforced.
Absent a new statute to specifically address windfarms this concept of a lien on the bundle of “rights, franchises, and privileges” would seem to be well suited not only to windfarms but to similar connected networks like fiberoptic internet cables. It is also an important means to support and protect the tiers of credit that the whole construction industry relies upon to function smoothly.
