NY Appellate Court Says Incorrect Name on Lien May be Forgiven

In Matter of CAFS Mgmt. Corp. v. Q Realty & Development the Court was faced with an appeal that denied a petition pursuant to Lien Law Section19(6).  Apparently a mechanic's lien was filed that named Q Realty & Development, Inc. when, in fact, it should have listed the correct name of Q Realty & Development Group Corp.  Noting that the Lien Law affords "liberal construction to protect the beneficial interests of lienors" (see Lien Law Section 23) the Appellate Division that denial of the petition to discharge the lien was proper and that "misidentification of the lienor on the notice of lien was a nonjurisdictional defect capable of amendment pursuant to Lien Law Section 12-a(2)".

In addition, the Court affirmed the lower court's determination that the petitioner failed to establish that the property was a single family dwelling (subject to a 4 month limitations period) as opposed to a multi-family dwelling (subject to an 8 moth limitations period).

There was nothing particularly new or novel in this decision but it reaffirmed the Second Department's long standing position that a "misidentification" of a name in a mechanic's lien is curable.

Vincent T. Pallaci is the managing member of Kusnick Pallaci PLLC and his practice focuses on construction law.   For more information visit Kushnick Pallaci PLLC's website at www.nyconstructionlaw.com.  For more information about Kushnick Pallaci PLLC's lien services visit their mechanic's lien services page here.   

Lien Law Section 19(6) is limited to "facial" defects

The summary discharge of a mechanic's lien can only be accomplished through one of the very limited, and specific, reasons set forth in Lien Law Section 19(6).  In Matter of Prospect Hgts. Rising Corp. the Kings County Supreme Court was again faced with a petition to discharge a mechanic's lien under Lien Law Section 19(6).  However, the Court determined that the "defect" claimed by the petitioner was not a "facial" defect as required by Lien Law Section 19(6).  Instead, the petitioner challenged that the mechanic's lien was filed late under New York law because although the body of the lien claimed that the last item of work was performed on February 11, 2011, a stop work order was issued on October 23, 2010.  The petitioner therefore argued that since all work was ordered stopped on October 23, 2010, no work could have possibly taken place thereafter and the February 11, 2011 date on the face of the mechanic's lien was incorrect.  The petitioner's argument went on to say that the lien was therefore defective under Lien Law section 10 because it was filed late.

In its analysis, the Court pointed out that its power was limited to the specific instances set forth in Lien Law Section 19(6).  In its analysis, the Court ultimately determined that the petitioner's argument necessarily required it to look past the face of the lien and would require an ultimate determination that the face of the mechanic's lien is incorrect.  Such a determination, the Court found, was beyond the power of Lien Law Section 19(6).  Therefore, the petition to discharge the mechanic's lien was denied and the Court noted that the petitioner's argument could only be raised in an action to foreclose the lien.

This decision is in line with the long standing case law and the statute it self.   I routinely field calls from owners, contractors and developers that want to challenge mechanic's liens for what they perceive to be "defects" in the lien.  However, these defects almost always go to the argument that something on the lien is "false."  The two most common arguments in this sense are that the lien amount is incorrect or that the last day of work is incorrect.  In either event, the proper way to challenge the lien is (usually) not through a Lien Law Section 19(6) petition but, rather, through a Lien Law Section 59 proceeding.  Lien Law Section 59 forces the lienor to foreclose within 30 days or face discharge of the lien.  This gives the petitioner two lines of attack.  Either the lien is not timely foreclosed upon and is discharged or it is foreclosed upon and the petitioner can then raise the "non facial" defects.

Vincent T. Pallaci is a partner at the law firm of Kushnick | Pallaci, PLLC.  His practice includes mechanic's lien foreclosure and defense and lien law special proceedings.  With offices in Long Island and Buffalo, New York, Kushnick | Pallaci, PLLC provides services to the construction industry across the State of New York.