Many state courts are notorious for enforcing state mechanics lien and contractual law extremely strictly; failure to comply with every single detail set forth in the law means that a lien will be declared invalid or a suit to foreclose on a lien will be dismissed. But must every part of a lawsuit to foreclose on a lien, such as the certificate of notice contained in the mechanics lien, be strictly complied with as well? A Kentucky appeals court addressed this question in a recent case.
Mechanics Lien and Service Law in Kentucky
Kentucky is one of those states in which strict compliance with mechanics lien law is required. For example, within 120 days of a party’s last furnishing labor or material, a property owner must receive notice of intent to lien. A Kentucky court would have no problem invalidating a lien entirely if such notice was sent 121 days after labor or material was last furnished. Similarly, a lien claimant must also file the mechanics lien itself within six months of last furnishing materials or labor. Again, a Kentucky court would invalidate a mechanics lien if the lien was filed six months and one day after work or materials were last furnished.
Kentucky is one of those states in which strict compliance with mechanics lien law is required.
But does Kentucky’s law regarding service of process for a mechanics lien require such strict compliance as well? (Service of process is physically sending or delivering a copy of all documents related to a lawsuit, including the complaint itself, to the opposing party. Additionally, every document filed must have a “certificate of service” at the end of it describing to whom the document was sent and that party’s address.) The laws regarding service of process are contained in Kentucky’s Civil Rules.
In this case, the only unambiguous reference to the state’s Civil Rules in Kentucky’s mechanics lien law is that a “corporate claimant should provide the name and address of an agent for service of process,” and if such agent is not listed, service may be issued to the party that signed the lien statement.
The Law Applied
A recent case heard before the Court of Appeals of Kentucky, Forcht Bank v. John Denny d/b/a Denny Sod Company, applied both Kentucky’s mechanics lien and service of process law.
The plaintiff, Denny Sod Company, was hired as a subcontractor by another subcontractor, Landesign Outdoor Solutions, to provide landscaping services at at Forcht Bank branch in Richmond, Kentucky. When Landesign refused to pay Denny’s $5,950 invoice, Denny sent notice of intent to lien to Forcht Bank, the property owner. Even after sending such notice, the bill was still not paid.
Two months later (and within the statutory timeframe) Denny filed a mechanics lien on in the Madison County Clerk’s Office. The lien was sent to Forcht, which acknowledged receiving the lien. Another two months after this filing, Denny sued to foreclose on the lien. Without a trial, the court ruled in favor of Denny and, after finding that the lien itself was valid, ordered Forcht to pay Denny’s invoice.
On appeal, Forcht Bank argued that the trial court improperly granted Denny’s motion for summary judgment because Denny’s certificate of service in the mechanics lien it filed with the county did not contain any names or addresses, including Forcht’s. Thus, Forcht argued, the court should have declared that the lien was invalid, a holding that would have prevented Denny from later suing on (and winning) the unpaid invoices.
Kentucky’s service of process law has no express requirement for strict compliance with the Civil Rules.
As discussed above, Kentucky’s service of process law has “no express requirement for strict compliance with the Civil Rules.” Additionally, the court wisely pointed out the Civil Rules themselves only apply to “actions of a civil nature,” and that merely filing a mechanics lien is not a civil action. Although later suing to foreclose on that lien would trigger the Civil Rules and compliance with them, filing the lien that led to such a lawsuit did not.
The court concluded that since Denny had properly filed notice of intent to lien, filed the mechanics lien, and sued to foreclose on the lien within the statutory time period, an error in its lien’s certificate of service would not invalidate the entire action. Thus, it affirmed the trial court’s holding that Denny was entitled to summary judgment in its favor.
Further, and perhaps the another basis on which the court may have ruled in Denny’s favor, is that Forcht acknowledged receipt. Generally, since service requirements are to provide notice, “actual notice”, as evidenced by acknowledgement of receipt, is sufficient to comply with service requirements however they are set forth. In this case, not only was the strict compliance with service affidavits necessary, but the document was actually delivered.