Question. Lienor, filed a mechanics lien against Owner for work performed on property. The lien was based on work Lienor performed under contracts with Owner, which were provided in the verified statement. Owner demanded Lienor produce a verified statement under Lien Law Section 38, including the names and addresses of the subcontractors and the work performed. Lienor argues the information requested goes beyond the scope of Section 38. Owner argues it should be provided with more detailed information to ensure it is not "double liened." Does the Owner's request for detailed information go beyond the scope of Section 38's requirements?
Answer. Yes. Where the lien is based on a contract, nothing would be accomplished by requiring the lienor to furnish an itemization of materials and labor performed under that contract. Only those items in dispute must be provided in a detailed statement.
Under Section 38 of the Lien Law, "on demand in writing" a lienor must deliver to the owner a verified statement that sets forth "the items of labor and/or material and the value thereof which make up the amount for which he claims a lien, and which shall also set forth the terms of the contract under which such items were furnished." If the lienor fails to produce this statement within five days of the demand, the lienee may petition the court for an order "directing such compliance." The intent of these provisions is to ensure that the lienee is apprised of the detail of the lienor's claim, and of the basis for the statement of value as set forth in the lien.
Section 38, however, does not give a lienee an absolute right to a detailed statement from a lienor as to all the items for which he claims a lien. Itemization of all materials and labor is required only in a case where the lien is based on quantum meruit i.e. the reasonable value of the work. Where the lien is based on a contract for an agreed price, nothing would be accomplished by requiring the lienor to furnish an itemization of materials furnished and labor performed in performance of the contract. Only those items in dispute such as claims for extra work and material must be provided in the detailed statement.
Here, it appears that the lien is based on work that Lienor and its subcontractors performed pursuant to contracts with Owner's general contractor. The Verified Statement contains copies of these contracts setting forth the work performed and the agreed upon price. Lienor has also provided signed change orders to the contracts. Furthermore, Owner has not indicated that there are specific items in dispute or that Lienor is asking for quantum meruit compensation. Instead, its only argument is that it should be provided more detailed information to ensure it has not been double liened.
If, as it appears here, the claim is based on agreed upon contracts that have been performed, Lienor need only supply enough information to allow Owner to check whether it has been double liened by subcontractors of Lienor. It has no obligation to provide more information than is already in the contracts. Requiring itemization of all material, work performed, and labor rates as Owner requests would accomplish nothing. Lienor's Verified Statement includes the names of its subcontractors on which the lien is based, providing the information necessary to allow Owner to determine if it has been double liened.