Do You Know If Your Lien Was Filed Correctly?

New York’s Lien Law is quite specific on the requirements of a notice of lien.So what happens when a lien does not strictly comply with those requirements?This very issue was recently analyzed by the Appellate Division, Second Department in the case of Park Side Constr. Contrs., Inc. v. Bryan’s Quality Plus, LLC (156 AD3d 804).

In Park Side, the plaintiff was Park Side Constr. Contrs., Inc., a general contractor who hired Bryan’s Quality Plus as its piling subcontractor to perform drilling services at 2 different sites.During construction, Bryan’s Quality Plus had difficulty with the soil at the Brooklyn site, and it had to use alternative means and methods to complete its work.When it was complete, Bryan’s Quality Plus submitted a claim for the additional costs associated with the unexpected changes.At the Manhattan site, Bryan’s Quality Plus ordered materials but could not start work due to a stop work order.Park Side did make payments for materials, and Bryan’s Quality Plus kept materials in storage with the expectation that it would use them when the job started.However, when the work commenced, Park Side hired a different subcontractor to perform the work.

As a result, Bryan’s Quality Plus filed 2 liens: one for the additional costs associated with the alternative means and methods used at the Brooklyn project, and the other for the alleged unpaid balance for materials at the Manhattan site. In response, Park Side sued Bryan’s Quality Plus for: 1) an order of seizure of materials it purchased for the Manhattan site; 2) a declaration that liens were willfully exaggerated and void under Lien Law §39; and 3) damages for the amounts demanded by the liens in excess of costs and materials actually provided.Bryan’s Quality Plus counterclaimed to foreclose mechanic’s liens, and for breach of contract.

Prior to trial, Park Side file a motion to summarily discharge the liens because they included Park Side’s post-office box address rather than its principal place of business.Bryan’s Quality Plus filed a cross-motion for leave to amend the liens nunc pro tunc, essentially asking the Court to amend these apparently harmless defects.  The trial court ruled that despite the defect, the use of a post office box address rather than the address of a foreign corporation’s principal place of business within the state is a non-jurisdictional defect – one that the Court, within the discretion afforded by Lien Law §12-a, was willing to correct.The Appellate Division, Second Department ruled that the trial court properly exercised its discretion.

The lesson to be learned is this: while the subcontractor in this situation was allowed to retroactively amend its liens after making the proper application to the Court, it incurred unnecessary legal expenses to preserve its liens.  This could have been avoided had they consulted with an attorney prior to filing the lien.  It is important to receive good legal counsel at the outset of a dispute, particularly from attorneys who are well-versed in the Lien Law and its requirements.  However, if you do find yourself in the unfortunate situation of filing a facially-defective lien, you are not without hope – contact a knowledgeable attorney who can make the appropriate petition to the Court preserve your rights. 

If you would like more information regarding this topic please contact Frank Gramarossa at fgramarossa@wbgllp.com or call (914) 607-6465