Contractor working on home remodel could be personally liable for fraudulent mechanics lien

Securing your mechanics lien rights in Florida is no simple task. It involves specific notices, forms, and deadlines that must be met. Even the seemingly simple aspects of the lien process can prove challenging. Take signing your claim of lien, for instance. It seems pretty straightforward, but making a mistake here can expose the claimant to personal liability. In a recent case, the Florida Court of Appeals considers whether the contractor is personally liable for damages in the event of a fraudulent mechanics lien.

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Florida mechanics liens

Mechanics liens are typically filed on behalf of the construction company providing the services, usually an LLC or corporation. When filling out a mechanics lien claim, you need to be sure that this is crystal clear. In fact, the whole purpose of conducting your business through a business entity is to shield yourself from personal liability.

Failing to clearly indicate that the claim is signed by you, on behalf of your company, can have some disastrous results.

One such mistake may very well cost one individual over $75,000, not including any attorney fees or court costs. This arose from a recent Florida Court of Appeals case highlighting the potential personal liability that can be created when improperly signing your lien claim.

Contractor improperly files claims on behalf of their company

The case in question is Witters Contracting Company v. West.

Project Snapshot:

  • Owner(s): Paul & Maria West (collectively Wests)
  • Contractor: Witters Contracting Company (WCC)
  • President of Contractor Company: David Witters (Witters)

The Wests had hired WCC to perform renovations to their home under a cost-plus contract for around $245K. As the project progressed, the relationship between the Wests and WCC soured. After a few legal threats, a claim of lien was ultimately filed on June 16, 2020 for $75K.

Initial lien claim filing

The June lien was a printed online form, and the blank sections were handwritten. The relevant portions of the claim read as follows, the italicized text are the handwritten portions.

Image of claimant's handwritten name on lien

I, David John Witters pres Witters Contracting Company 8725 Placida Rd Suite 7 Placida FL 22946, being duly sworn state the following…” 

Signature block of lien claim

Under the signature line are printed the words “Name of Person Claiming Lien.” Above the signature line appears the handwritten signature of “David Witters pres.”

Notary Certification for Claim of Lien

In the portion entitled “Notary Certification for Claim of Lien,” the name of the claimant is handwritten as “David Witters.

The Certificate of mailing states the following, “I, David John Witters pres Witters Contracting Co, certify on this date, June 20, 2016, I have mailed a copy of this Claim of Lien…” Under the signature line appears the words “Name of Person Claiming Lien.” Above the signature line appears, “David John Witters pres Witters Contracting Co.”

Amended lien claim filed

Shortly thereafter, an amended claim of lien (prepared by an attorney) was filed, which stated that the unpaid balance was over $87K (July Lien). This amended lien claim included the following signature block:

Signature block on amended lien

Witters Contracting Co.

By: _______________________

David Witters, President

Lienor

Court finds contractor personally liable for fraudulent lien claim

The Wests filed a lawsuit against both WCC and Witters individually alleging fraudulent lien claims. The Wests also filed a motion for summary judgment, which was granted. The court determined that the claim was fraudulent because it was calculated with “such gross negligence as to the amount claims therein to constitute willful exaggeration.”

Judgments were entered against both the construction company and Witters individually; an award of $75,000 in punitive damages against Witters personally, and $87,239 in punitive damages against WCC.

Attorney fees were also awarded against both Witters and WCC jointly and severally for over $96K. The decision was appealed.

Claim against the individual remanded to trial

On appeal, the Second District Court of Appeal reversed the judgment regarding the June Lien. The court declared that there was an issue of fact remaining whether the June lien was signed by Witters in his individual capacity, or on behalf of WCC.

The appeals court ultimately reversed the summary judgment against Witters individually. The handwritten portions on the June Lien that identify David Witters as “pres” of WCC suggests that Witters may have signed the document on behalf of the company. The case was remanded to trial.

The appeals court may have reversed the $75K judgment against Witters personally, but the story doesn’t end here. The trial court can still end up finding that the June Lien was filed in his individual capacity.

Pay attention to the details when filling out a lien claim

Mechanics liens offer an extraordinary amount of protection against non-payment. And because so, the requirements are strictly enforced. Even a seemingly small mistake, such as improperly identifying yourself, can have enormous financial implications.

Using the proper signature block and identifying information is an often overlooked aspect of a mechanics lien claim. But, as you can see from this case, even a minor overlook such as this can have dire financial consequences.

Furthermore, this case highlights the ultimate problem with online form farms many contractors attempt to use as templates for their lien filings. Not only are these forms typically generic and fail to take state specific requirements into account, there is also no guarantee that these are properly filled out. That’s why Levelset’s free forms are created and reviewed by construction attorneys and payment experts. Thousands of contractors and suppliers from across the country have successfully used these forms to get paid what they’ve earned.

Going through the lien process on your own isn’t impossible, but it is full of potentially expensive pitfalls.