Thursday, April 19, 2012

Appellate Division Confirms Finding of Willful Exaggeration

In Inter Metal Fabricators, Inc. v. HRH Construction, the Appellate Division affirmed a finding that the lienor had willfully exaggerated its mechanic's lien.  While findings of willful exaggeration are "rare", it appears from this decision that the lienor did all but lay the exaggeration defense out on a platter for the defendants.  The Court noted that the evidence of willfulness included the lienor's own documents which showed that the lienor intentionally and knowingly marked up its costs and expenses.  But even more damaging may have been the testimony of the lienor's Chief Operating Officer who, during a deposition, admitted the overcharges and stated that he was "entitled to mark it up to whatever number I want" and "You know what, people do a lot of things."

While the decision does not give any details as to what the exaggeration finding led to, discharge and voiding of the mechanic's lien under Lien Law Section 39.  Unfortunately the Court doesn't tell us whether the Court below also awarded damages under Lien Law Section 39-A.

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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