We don’t talk enough about Guam.  Who does, right?  Last week the Guam Supreme Court issued an opinion affecting the territory’s mechanics lien laws (Yes, you can file a mechanics lien in Guam, and yes, Levelset can help you).

While the Guam territory is incredibly small and likely doesn’t affect a business’ day-to-day routine, the mechanics lien laws there are quite similar to those on the mainland and the Supreme Court opinion is helpful to those seeking to understand general mechanics lien law principles.  In fact, the Guam court’s opinions refer to the California mechanics lien jurisprudence because the territory actually adopted their laws from that state.

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Proving That A Mechanics Lien Claim Was Willfully Exaggerated Is A Question Of Fact

If you have a lawyer in the family, are a lawyer or have hung around with lawyers, you’ve probably heard the phrase “question of fact.”  That’s because everything in the legal world is separated into two categories: questions of fact and questions of law.  When something is a question of law a judge can make a decision on it fairly quickly. When something is a question of fact, however, it’s a he-said she-said mud slinging cluster that can only be resolved by a jury or trier of fact in a full-blown trial.

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When disputing a mechanics lien claim, it’s important for folks to really understand what a question of fact is. That’s because you’re probably going to lose your challenge if such a question is involved.

If your dispute with the lien claimant is a factual dispute you’ll likely need a full trial after months of discovery and litigation to get the lien removed.  Getting a lien removed with a quick motion usually requires you be correct as a matter of law.

The key question, however, is how to determine if someone did or did not file an instrument with willful intent?  Is the discrepancy in filing “willfully [made],” or a mere “mistake or error in the statement of demand?” In the case of Guam Resorts Inc. v. G.C. Corporation, the Guam Supreme Court was confronted with a mechanics lien that the plaintiffs claimed had been exaggerated.  Specifically, as reported by the Pacific News Center, the plaintiffs contended “that GC forfeited its mechanic’s lien claim by willfully including amounts for work and materials not performed upon or not furnished for the construction project, in violation of Guam’s mechanic’s lien law.”

Guam’s mechanics lien laws, like the laws in most states, invalidates or changes a mechanics lien claim if the lien amount is exaggerated. If a lien claim is exaggerated or illegally filed with willful intent, almost every state would punish the claimant.  The key question, however, is how to determine if someone did or did not file an instrument with willful intent?  Is the discrepancy in filing “willfully [made],” or a mere “mistake or error in the statement of demand?”

The Guam Supreme Court explains:

The question of whether a person acted ‘willfully’ is a question of fact for the trier of fact and involves the weighing of evidence…Summary Judgment is appropraite when there is no genuine issue of material fact and the prevailing party is entitled to judgment as a matter of law…We conclude that there was a genuine issue of material fact as to whether GC willfully included in its mechanic’s lien work not performed upon or materials not furnished for the Project, thus precluding summary judgment.