Court Declines to Cancel Lien where Defect wasn't Apparent on Face of Document

In this column, we often remind our readers that a mechanic’s lien is a powerful tool for an unpaid contractor to obtain payment. For that reason, the target of the lien, either the property owner or the affected upstream contractor(s), often wants (or needs) to see the lien removed just as quickly as it was asserted. Section 19 of the Lien Law provides such persons and entities with the ability to have liens quickly discharged, but only if they are defective on their face. In the recent case of Pizzarotti, LLC v Gravity Construction Corp., a court reminded us that a defect on the face of the lien is one that is evident by looking only to the face of the lien, and without reference to any documents other than the lien itself.

Background

Pizzarotti was the construction manager for the construction of a residential building in Manhattan. Pizzarotti retained Gravity Construction as its masonry subcontractor. In June of 2019, Gravity submitted its final application for payment to Pizzarotti. Not having received its claimed payment, in November of 2020, Gravity filed several mechanic’s liens, seeking a total of $830,652.83. In these mechanic’s liens, Gravity alleged that its last date of work was April 27, 2020, which was within the statutory eight-month window in which to file the liens.

Within days of the filing of the mechanic’s liens, Pizzarotti commenced a proceeding, pursuant to Section 19 of the Lien Law, to have Gravity’s liens discharged as defective. In support of its petition, Pizzarotti not only noted that Gravity’s final application for payment was dated in June of 2019 (and, thus, the liens filed in November of 2020 would be untimely), but that pursuant to Governor Cuomo’s Executive Order 202, it was impossible for Gravity—or anyone else—to have been on site on April 27, 2020. Pizzarotti argued that Gravity’s listing of this date in its mechanic’s liens was simply a manufactured attempt to avoid the liens being dismissed as untimely.

Decision

The court denied Pizzarotti’s petition, finding that there was nothing invalid on the face of the liens because November 17, 2020, the date on which the liens were filed, was within eight months of April 27, 2020, the date listed in the liens as the last date of work. Following well settled appellate case law, the court held that to the extent that Pizzarotti disputed the facts set forth in the liens—rather than what was printed on their face—it would have to do so at trial, and the summary remedy was unavailable.

Comment

A mechanic’s lien is a powerful tool for a contractor to obtain payment, since it not only puts the world on notice that there is a claim against the property, but it often requires general and other upstream contractors whose subcontractors file such liens to go to the expense of having those liens discharged on pain of being in breach of their own contracts. Accordingly, it is natural that a contractor with a documentary defense to the claim would want the liens removed immediately. Usually, the most expeditious way to do this is to bond off the lien (and pay the associated premium). While the Pizzarotti court reminded us that the summary proceeding under Section 19 is limited to situations where the lien is defective on its face, there are other provisions in the Lien Law—such as the demand to foreclose, which, if not responded to, itself constitutes grounds for the expeditious discharge of a lien—which allow such issues to be determined more rapidly than in a typical lawsuit. In that regard, owners and general and other upstream contractors would be advised to consult with experienced construction counsel when a mechanic’s lien is filed against a property to determine whether it can be removed more quickly than the seeming geologic speed at which your average lawsuit progresses.

If you would like more information regarding this topic please contact Thomas H. Welby at twelby@wbgllp.com or call (914) 428-2100