Reviewed September 7, 2026.
In Northe Group, Inc. v. Spread NYC, LLC, 88 AD3d 557 (1st Dept 2011), the First Department affirmed a judgment declaring a mechanic’s lien void for willful exaggeration.
The written agreement and the claimant’s invoices conclusively showed it was acting as construction manager under that agreement and could not impose the disputed contractor-service markups. Its assertion of a separate contemporaneous oral arrangement as general contractor did not overcome the documentary proof.
Read the actual compensation agreement
The case does not establish that all construction managers are prohibited from earning markups, or that every general contractor has an unlimited right to set them. Compensation depends on the agreement and applicable law. Identify the authorized fee, reimbursable costs, markup limits and approved changes before calculating a lien.
The decision also expressly recognizes summary disposition of a § 39 claim when willful exaggeration is conclusively established. It is inaccurate to say the issue must always be tried.
Keep pricing documents consistent with invoices and lien calculations. A knowingly unsupported markup can threaten the entire lien; a genuine contractual dispute or honest mistake requires a different evidentiary analysis.
Kushnick Pallaci PLLC assists clients throughout New York with mechanic’s lien litigation and defense. Contact 631-752-7100 or vtp@kushnicklaw.com.
Attorney Advertising. General information, not legal advice.
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