Time and time again here at the Construction Payment Blog we have stressed the importance of adhering to mechanic’s lien deadlines. If you miss the deadline by which your lien must be filed, you are out of luck in terms of filing a valid mechanic’s lien. Complicating this matter is that sometimes determining the day on which the time period starts to run is harder than one would expect, or in dispute.
Many times, these type of posts are potentially bad news. And, of course, missing out on lien rights because of a one day delay in filing, or not paying close enough attention to the date of last delivery or date of substantial completion of the project is terrible, and something worthy of attention. However, sometimes, the lien laws determining the lien period may work in the lien claimant’s favor.
Such is potentially the case in Missouri. Generally speaking, in Missouri a lien must be filed within 6 months from the date of last furnishing labor and materials to the project. This may potentially benefit the lien claimant if the work is begin performed under a “running account” or a “continuing contract.” Missouri courts have defined this situation as follows:
A running account is a mutual account between buyer and seller, to which charges and credits are made as materials are sold or paid for. Unless there is evidence to show a separate and distinct contract as to the last items, the account will be considered a running account and relates back to the original contract…Once a running account is established, the mere lapse of time between the items ‘is not sufficient to commence the running of the mechanic’s lien periods of limitation. Nor is it significant that the last item or labor may be a small item. Trout’s Investments, Inc. v. Davis, 482 S.W.2d 510, 514 (Mo.App. 1972).
In that case, the court determined that when a contractor replaced a roof, the subsequent dispatching of a workman 4 months later to apply sealant, which should have been done originally but was not, was part of a continuing contract such that the lien period did not begin to run until after the application of the sealant.
So, while it is always extremely important to carefully review the dates by which your notices and liens must be filed (and enforced), it is not always doom and gloom. Occasionally, the deadlines in the lien laws seem to work in the favor of the lien claimant.