Proving Payment in Full: The SMI Building Systems Decision

Reviewed September 7, 2026.

An owner seeking summary judgment on the ground that no lien fund exists needs supporting evidence, not just a conclusion that the contractor has been paid.

In SMI Building Systems, LLC v. West 4th Street Development Group, LLC, 83 A.D.3d 687 (2011), the owner moved before discovery to dismiss a subcontractor’s foreclosure claim. Its affidavits said that no money was owed when the lien was filed or afterward, but supplied no checks or similar financial proof. The Second Department affirmed denial because the owner failed to meet its initial evidentiary burden. The decision did not finally establish the lienor’s entitlement to payment.

Build a usable payment record

Maintain the prime contract, approved changes, payment applications, bank records, cancelled checks, releases, completion records and a reconciliation of the balance. A waiver should be read together with its scope, conditions and the payment evidence; its effect should not simply be assumed.

Lien Law § 4 requires attention to amounts earned and unpaid when the lien is filed and relevant amounts subsequently earned. Defective-work and completion-cost claims also need supporting facts. A properly documented defense may support summary judgment; unresolved material facts may require further proceedings.

Kushnick Pallaci PLLC assists clients throughout New York with mechanic’s lien enforcement and defense. Contact 631-752-7100 or vtp@kushnicklaw.com.

Attorney Advertising. General information, not legal advice.