Summary Judgment: An Introduction

Most people think that if a lawsuit proceeds to trial, there’s only one opportunity to win or lose: When a jury issues a verdict.  In civil trials, however, this scheme isn’t always true.

Let’s say that you’re a property owner and that a subcontractor who performed work on your home filed a mechanics lien on the property and then sued to foreclose on it.  As the property owner, however, you’re frustrated.  Not only did you actually pay the subcontractor for the work he performed (and can document it), even if you didn’t pay him, the amount he claims that he is owed is much more than the two of you ever agreed upon.  This is called lien exaggeration (a topic previously discussed on the PAID blog).  Perhaps he’s saying that he’s owed $40,000 on a $10,000 kitchen installation.

In civil trials, the plaintiff (the party that files the lawsuit) is permitted to make its case first.  In doing so, the plaintiff may make an opening statement, call favorable witnesses, and introduce supporting exhibits.  But what happens if the plaintiff’s case is so weak that there’s no way a jury could ever find in the plaintiff’s favor?

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Courts don’t like to waste time, so if the defendant believes that “no reasonable juror” could conclude that the plaintiff should win, even if the defendant doesn’t make its case.  The defendant will do something called “moving for summary judgment.”  In essence, the defendant is saying to the judge that since the plaintiff hasn’t presented enough evidence to win, the court should dismiss the lawsuit before the defendant presents any of its own evidence.  This is actually a fairly common request.

Summary Judgment for Lien Exaggeration

Going back to our example above, are you, the defendant and property owner entitled to summary judgment in New York if you can show that the plaintiff and subcontractor who claims that he is owed $40,000 exaggerated the amount he is claiming in the lien?

A recent case decided on March 14, 2013, On the Level Enterprises v. 49 East Houston, L.L.C.addressed this exact issue.  Although it is short, the court’s opinion is actually rich in clarification of the law.

Specifically, the court held that while it is possible for courts to issue summary judgment against plaintiffs who file exaggerated liens, in this case, summary judgment would be inappropriate. The court held that while it is possible for courts to issue summary judgment against plaintiffs who file exaggerated liens, in this case, summary judgment would be inappropriate.

When Will A Court Issue Summary Judgment for Lien Exaggeration?

Courts will only issue summary judgment in favor of a defendant who claims that the plaintiff exaggerated its lien if the defendant can provide credible evidence or affidavits that the lien is in fact exaggerated.  In On The Level, the court held that the defendant simply had not met that burden since there was no evidence “on the record” demonstrating both the plaintiff did or did not exaggerate his lien.

Just because the New York court in this case didn’t issue summary judgment for the defendant doesn’t mean that the courts never will.  For example, in Northe Group v. Spread NYC, the appeals court affirmed the lower court’s decision to declare the plaintiff’s lien claim void since the plaintiff “willfully exaggerated” the amount he claimed he was owed.  The exact same decision was issued in Strongback Corporation v. N.E.D. Cambridge Avenue Development.  In that case, since the defendant was able to show that the plaintiff willfully exaggerated its lien, the defendant was entitled to win without even presenting its case.

Take-Aways From Lien Exaggeration Cases

Returning once again to our example, how can you show that your subcontractor is exaggerating its lien and that the court should rule in your favor without even requiring you to put on a case?

In On the Level, the defendant lost because it merely claimed that the plaintiff exaggerated its lien instead of showing why it did.  The defendants in Northe Group and Strongback did the exact opposite; they presented contracts, affidavits, and other documentation showing the difference between what the subcontractor was actually paid and what he claimed he was owed.

Simply put, courts will issue summary judgment if the defendant shows enough evidence that the plaintiff exaggerated its claims.  Simply put, courts will issue summary judgment if the defendant shows enough evidence that the plaintiff exaggerated its claims[/quote]  If not, the court will order that the case proceed to trial and that a judge or jury issue a verdict after the defendant has presented its case.

It’s also worth noting that several states have laws in place that impose penalties for the inappropriate exaggeration of a lien claim. So, a plaintiff who exaggerates the amount he’s owed not only may not get paid what he is actually owed, he may end up being forced to pay a penalty, as well.