Friday, April 8, 2011

"Innocent" exaggeration will not void mechanic's lien

In Ferran Enterprises, Inc. v. Cauldwell-Wingate Co. a general contractor moved to discharge a subcontractor's liens on the grounds that the mechanic's liens were allegedly willfully exaggerated.  The Judge found that there were issues of fact "concerning whether [lienor] made deliberate misrepresentations or whether there is simply a difference of opinion or honest mistake as to the amount, if any, owed."  The court noted that Lien Law Section 39, was "intended to protect against 'ficticious, groundless and fraudulent liens by unscrupulous lienors', not such an honest difference of opinion or mere inaccuracy." 

Lienors should always be careful to make sure their mechanic's lien is as accurate as it possibly can be especially in regards to the amount due so as to avoid the potential for exaggeration damages.  However, as the above case shows, a legitimate dispute over the amount due will not void the lien.  There must be some affirmative proof that the lienor intended to file a mechanic's lien for more than it knew it was due.

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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