Articles Tagged with Mechanic’s Liens

Last September, the New York Court of Appeals granted a motion for leave to appeal the Fourth Department’s decision in Ferrera v. Peaches Café LLC, 138 A.D.3d 1391, 30 N.Y.S.3d 765 (4th Dep’t 2016). In Peaches, the Fourth Department enforced a mechanic’s lien filed by a contractor who was hired by a tenant and had no direct relationship with the landlord/owner. However, if this same mechanic’s lien had been filed against real property governed by any other New York Appellate Department, the mechanic’s lien would have very likely been discharged.

Lien Law Section 3 states that a contractor “who performs labor or furnishes materials for the improvement of real property with the consent or at the request of the owner thereof … shall have a lien for the principal and interest, of the value, or the agreed price, of such labor ….”

The First, Second and Third Departments have determined that in order for a mechanic’s lien to come within Lien Law Section 3, the owner must be an affirmative factor in procuring the improvement, or else, having possession and control of the premises, assent to the improvement in the expectation that he will reap the benefit of it. See Paul Mock, Inc. v. 118 East 25th Street Realty Co., 87 A.D.2d 756, 448 N.Y.S.2d 693 (1st Dep’t 1982); Interior Bldg. Services, Inc. v. Broadway 1384 LLC, 73 A.D.3d 529, 900 N.Y.S.2d 311 (1st Dep’t 2010); Matell Contracting Co., Inc. v. Fleetwood Park Development, LLC, 111 A.D.3d 681, 974 N.Y.S.2d 573 (2d Dep’t 2013); Drapaniotis v. 36-08 33rd Street Corp., 48 A.D. 3d 736, 853 N.Y.S.2d 356 (2d Dep’t 2008; Sager v. Renwick Park & Traffic Assn., 172 A.D. 359, 159 N.Y.S. 4 (3d Dep’t 1916).

Summary dismissal of a mechanic’s lien is a tricky business.  It is fundamental that a mechanic’s lien may be summarily discharged only for defects appearing on its face.  Di-Com Corp. v. Active Fire Sprinkler Corp., 36 A.D.2d 20, 21, 318 N.Y.S.2d 249, 250 (1st Dept. 1971).  In fact, Section 19(6) of the Lien Law specifically states, in pertinent part, as follows: 

Where it appears from the face of the notice of lien that the claimant has not valid lien … the owner or any other party in interest, may apply to the supreme court of this state, or to any justice thereof, or to the county judge of the county in which the notice of lien is filed, for an order summarily discharging of record the alleged lien.

(Emphasis added.)

Thus, there can be no summary discharge if there are disputed issues of fact: “It has been consistently held that objections to a notice of lien which do not involve matters appearing on the face of the lien, raise issues of fact for disposition upon trial rather than upon a motion to vacate the lien.”  In re Miller, 133 N.Y.S.2d 421, 422 (Sup. Ct. Suffolk Co. 1954).  This is so “[d]espite the existence of a multiplicity of reasons which render [the lien] invalid ….”  Country Village Heights Condominium (Group I) v. Mario Bonito, Inc., 79 Misc.2d 1088, 1091, 363 N.Y.S.2d 501, 505 (Sup. Ct. Rockland Co. 1975).  As long as the notice is valid on its face, it cannot be discharged based on factual grounds.

Continue reading

Contractors accustomed to filing mechanic’s liens to secure their claims for payment may be surprised when they find themselves working on a project where they have no lien rights, despite the broad scope and intent of the Lien Law. In a recent decision, Justice Charles Ramos of the Commercial Division, New York County, was presented with a plaintiff trying desperately to avoid a gap in Lien Law protection. In Metro Woodworking Inc. v Hunter Roberts Construction Group, LLC, NYLJ 1202718867273 (Sup. Ct. N.Y. Co., Feb. 9, 2015), the court determined that the contractor’s private mechanic’s lien was improper, but suggested that if the lien had been filed as a public lien it would have been valid. The facts and Lien Law suggest, however, that even if the contractor had filed a public lien, it would not have been valid.

The New York Lien Law provides contractors with an easy method to secure their claims. Simply by filing a form with the county clerk and serving it on the owner, a contractor working on a privately owned project is able to establish a private mechanic’s lien, pursuant to Lien Law § 10, which attaches to the property. If a project is owned by the state or a public corporation, whose land is not susceptible to liens, the contractor can file a public lien under Lien Law § 12 with the public entity controlling the project, which will attach to the public funds for the project.

Continue reading