On March 19, 2013, the Missouri Court of Appeals, Western District heard oral arguments on a fascinating landscaping lien case with potential precedential value, Manning Construction v. MCI Partners. The PAID blog expects the court to rule on two important issues. First, does work completed after a substantial amount of the project has already been completed extend the time in which a subcontractor can file a lien? Second, is landscaping even covered under Missouri’s mechanics lien statute?
The Landscaping Lien Case
In September of 2006, Watkins Development Services hired Manning Construction Company to perform landscaping work on the Equity Plaza project, a property owned by MCI Partners. Amongst many other tasks, Manning’s work included clearing the property, mass grading, storm water detention, and erosion control. Manning signed a “certificate of substantial completion” on August 6, 2007 after completing its work in two distinct phases. By October of 2007 all of Manning’s remaining “punch list items” had been completed and its last pay period was March 27, 2008. The only work Manning completed after this date was some mowing and weed eating in December of 2008 and mowing, weed eating, and alleged fence repair in June of 2009. In its complaint, Manning conceded that the only reason it performed this mowing and other light landscaping was to extend its time to file a valid mechanics lien.
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When the project financing fell apart, Manning filed a mechanics lien in November 2009 and listed the date Manning last furnished labor, materials, and services as June 1, 2009. In its lien Manning claimed it was still owed nearly $200,000 in unpaid invoices.
Mechanics Lien Law and its Application in Missouri
Under Missouri law, a mechanics lien must be filed within six months of the last day of lienable work. However, when exactly does the “six month” clock start ticking?
Under Missouri law, a mechanics lien must be filed within six months of the last day of lienable work.
In an earlier case, the appeals court in United Petroleum service v. Piatcheck held that “if labor is performed after the project is accepted as substantially complete under the contract, the work will not be lienable.” This holding was echoed in many subsequent cases. Simply put, once the work is substantially completed, the six month clock starts ticking for the subcontractor to file a lien or lose the right to do so forever.
In Manning, the court’s decision given this law was easy: Since Manning clearly signed a certificate of substantial completion on August 6, 2007, any light landscaping work it performed after then would not re-start the six month clock. Two clear holdings emerged from this fact. First, Manning’s claim that it last performed work on June 1, 2009 when it mowed the lawn, mended a fence, and cut some weeds was not valid. Second, since Manning did not file a lien until November of 2009, it had missed its six month window by more than a year and a half and thus its landscaping lien was invalid. As the court noted, “the failure to file a lien within six months of substantial completion bars a mechanic’s lien from being imposed on the completed structure. As the court noted, The failure to file a lien within six months of substantial completion bars a mechanic’s lien from being imposed on the completed structure.”
Important Issues Moving Forward
There are two issues that should be discussed given the holding in Manning.
First, will work that is performed after a substantial amount of the project has been completed extend the window in which a subcontractor has time to file a lien, which in Missouri is six months?
Although when a project is “substantially performed” will always be a hotly litigated issue, once courts or the parties themselves are able to set the date of substantial performance, the time limit to file a mechanics lien starts ticking. In this case and other cases, when the parties themselves have signed a document or documents agreeing that a project has been substantially performed, the court will probably rely on that agreed-upon date unless clear evidence indicates otherwise.
Second, can a landscaper subcontractor file a mechanics lien for mowing a lawn? A good starting point for answering this question, other than this blog post are the Missouri lien statutes, which state that “any person who shall … perform … labor upon land” is eligible to file a mechanics lien. The statute even goes on to list “landscaping goods and services” as valid grounds to file a lien.
so long as a Missouri subcontractor’s primary task is basic landscaping services, mowing a lawn may indeed be covered by Missouri lien law.
Thus, so long as a Missouri subcontractor’s primary task is basic landscaping services, such as mowing a lawn, and those tasks aren’t completed simply to extend the period of time that party has to file a mechanics lien, mowing a lawn may indeed be covered under Missouri lien law. While other states might not be so specific as to list landscaping as a basis for a mechanics lien, Missouri might be the exception.