Thursday, December 25, 2014

Motion to Amend Pleadings Keeps Lien Alive

Happy holidays lien lovers!  We can be thankful to the Third Department this year for continually giving us interesting and thorough discussions of the Lien Law.  Our latest gift comes courtesy of Edwards & Zuck, P.C. v. Cappelli Enterprises, Inc.  There the lienor commenced an action to foreclose upon its mechanic's lien.  As required by Lien Law Section 44, the lienor named other lien holders as necessary party defendants.  One defendant lienor, Cives Corporation, originally filed an answer that did not include a counter/cross claim to enforce its own mechanic's lien.  Pursuant to Lien Law Section 44(5), the failure to assert a counter/cross claim is a waiver of the lien.   Cives was in trouble...

However, prior to the expiration of its own lien, Cives filed a motion to amend its answer and assert a counter/cross claim to enforce its mechanic's lien.  The Supreme Court permitted the amendment and permitted the lien to survive.  On appeal, the Third Department affirmed noting that the "law governing mechanic's liens...liberally construed to ensure that its purpose is accomplished..."  The key here appears to have been that at the time the motion was filed the lien was still valid (it has not expired) and the other parties were on notice of the lien by virtue of it having been referenced in the complaint and its alleged validity and priority asserted in the original answer.  

The lesson here?  Play it safe: if you are going to appear as a defendant in the lien foreclosure action and you want to preserve and enforce your lien, assert a cross and counterclaim to foreclose.

Vincent T. Pallaci is the managing partner of the New York law firm of Kushnick | Pallaci PLLC where his practice concentrates mainly on the area of construction law including prosecuting and defending mechanic's lien claims.  With offices in the New York City metropolitan area and in Buffalo, New York, KP serves the construction industry across the State of New York.

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