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Articles Posted in Tolling of Statute of Limitations

It is often stated that the Lien Law is to be “liberally construed” so as to protect the rights of the contractors and workers who are the beneficiaries of the statutory scheme. However, certain rules are strictly enforced by the courts, and a failure to follow the strictures of aspects of the Lien Law will result in a loss of rights. The rule regarding the renewal of mechanic’s liens is an area where a party must be especially vigilant, notwithstanding the suspension of certain deadlines during the COVID-19 shutdown, as the recent case Emerald Services Corporation v. Empire Core Group LLC, (NY County Index No.: 652744/2020) makes clear.

In the Emerald Services the plaintiff filed four mechanic’s liens on December 24, 2019 and commenced a foreclosure action on June 25, 2020. However, it did not file a notice of pendency or renew its liens within one year of the filing of the liens. Accordingly, pursuant to Lien Law Section 17 and the relevant case law, the liens expired one year after their filing. The court did not have discretionary authority to rule otherwise.

Plaintiff made the argument that it moved to extend its liens, nunc pro tunc, pursuant to Executive Order 202.8, which tolled virtually all statutes of limitations as a result of COVID-19. As the court pointed out, however this executive order was superseded by Executive Order 202.67 which provided that the tolling was only effective through November 3, 2020. Because the Plaintiff moved after the tolling period had expired on November 3, it could not enjoy the benefit of that statute. In effect, the Emerald Services Court was treating Executive Order 202.8 as a suspension of the statute of limitations rather than a toll, which might have operated to waive the statute of limitations for several more months after the period ended. The issue of whether Executive Order is technically speaking a toll or a suspension has not been addressed by appellate courts, and that decision, whatever it is, will impact numerous claims under the Lien Law, and claims well beyond the scope of the Lien Law.

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