Many states allow the prevailing party in a lien foreclosure action to recover attorney’s fees from the other party. This is set out by statute in the states in which this award is available. It is no different in New Mexico, which also provides for the recovery of reasonable attorney’s fees, costs, and expenses in a dispute arising out of or related to a lien action.
Attorney fees in NM lien foreclosure actions
Although New Mexico mechanics lien laws do address attorney fees in foreclosure actions, NM treats this right a bit differently. Let’s take a look at the statutory language under N.M. Stat. Ann. § 48-2-14; which provides that:
A prevailing party in a dispute arising out of or relating to a lien action is entitled to recover from the other party the reasonable attorney fees, costs and expenses incurred by the prevailing party.
It seems that the clear language of this statute would result in the award of attorney’s fees to whichever party (either the lien claimant, or the property owner) is successful in the underlying lawsuit. But that’s not the case, it seems that only the successful lien claimant is entitled to attorney fees – and not a property owner defending against the lien
NM homeowners not entitled to attorney fees in lien foreclosures
In Tabet Lumber Co. v. Romero, a case of first impression, the Supreme Court of New Mexico held that N.M. Stat. Ann. § 48-2-14 does not allow the recovery of attorney’s fees by homeowners. That case, however, was decided under the previous version of the statute at issue, (which was admittedly a bit more strict in terms of naming the party entitled to attorney’s fees). The court determined that the Mechanic’s and Materialmen’s Lien Act “is meant to protect lien holders and not homeowners”, and that “there is nothing in the language of Section 48-2-14 that allows a homeowner who has to defend against a wrongful lien to recover attorney fees.”
While the language of the statute may have changed since the court’s decision, the reasoning that the homeowner is protected by the Stop Notice Act, which does not have a provision for the recovery of attorney’s fees, still holds true. Since the statute has changed since the decision in Tabet Lumber, it is impossible to feel completely secure in that outcome – but, absent any new cases being decided, it is still the rule in New Mexico.
So, that being said, what does this mean for the lien claimant? It may make the decision to foreclose on a lien an easier decision to make, especially if the lien claimant has any worries about the validity of the lien claim. Without the potential to be required to foot the bill for the property owner if the foreclosure suit is not successful, the lien claimant can go ahead and file suit in an attempt to get paid.