Wednesday, December 22, 2010

Lienor survives summary judgment on multiple fronts

In IVM General Construction v. Neptune Estates, LLC, a lienor sought to foreclose upon its mechanic's lien and the defendant owner moved to dismiss the complaint and discharge the lien on a number of theories.  The owner's theories included: 1) the lien was invalid under Lien Law Section 4(1) because no amount was owned by the general contractor by the owner at the time that the lienor filed its lien; 2) the written contract between the general contractor and the subcontractor-lienor precluded recovery by the lienor against the owner under a implied or quasi-contract theory; 3) the lien was invalid pursuant to Lien Law Section 10(1) because it was not filed timely; and 4) the lien was invalid pursuant to Lien Law Section 9(4) because it failed to separately identify the amounts due under two alleged separate subcontracts.  The court found issues of fact on all of these arguments and denied the motion for summary judgment discharging the lien and dismissing the case. 

This is an interesting case for potential lienors to read for a variety of reasons.  Particularly interesting in this case was the discussion of the lienor's purported execution of final lien waivers and the fact that the lienor included the general contractor and an alleged successor general contractor as the persons who allegedly employed the lienor.  While the court held lien valid as it substantially complied with the lien law, the court nonetheless found that to the extent the lien was meant to attach to monies owed from the owner to the second general contractor a separate lien was needed and the existing lien therefore did not operate against that lien fund. 

We don't get many detailed decisions on the lien law so take the time to read Judge Demarest's decision here

Vincent T. Pallaci is a partner at the New York law firm of Kushnick Pallaci, PLLC where his practice focuses primarily on the area of construction law.  He can be reached at (631) 752-7100 or

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