Mechanics lien aficionados will enjoy reading a recent unpublished decision from the Minnesota Courts of Appeal, which contains a detailed discussion about what work extends the lien filing deadline and what work qualifies for a mechanics lien at all.
The case – Bright Star Systems Corporation v. MN Theaters 2006, LLC – is so robust in its discussions that we’re going to separate the holding into two posts. This post will focus on the mechanics lien filing timeline in Minnesota, and the court’s holding that repair work may extend the lien period for claimants.
Why Details Matter With The Minnesota Mechanics Lien Deadline
Every state has a deadline before which claimants must file their mechanics lien claim. To know when that deadline will expire, however, it’s critical to know when it starts counting. This is a complicated question with a complicated answer, varying from state to state. As we’ve said in the past, with lien deadlines the devil is in the details.
In most states a mechanics lien filing is required within a certain number of days after “materials or labor are last furnished to the project.” Simply counting off the days is not difficult. The difficulty lies in deciding on what constitutes the last date that labor and materials are furnished.
To know when that deadline will expire, however, it’s critical to know when it starts counting. This is a complicated question with a complicated answer. Must the furnishing be significant? What if the furnishing was to repair something broken? What if it was warranty work on the project? What if a party stops furnishing for a year and comes back to fix a tiny aspect of the work? These are all valid questions that courts around the country must face. Some courts and states are very specific about what constitutes a “furnishing” and what doesn’t, and unfortunately, the matter is quite gray in other states.
In Minnesota, a lien must be filed within 120 days from last providing materials or labor. A recent case in Minnesota asked the appeals court to rule on the timeliness of a mechanics lien filing that relied on “repair work” to meet the 120 day deadline. What did they decide?
Court Says Repair Work MAY Extends the Mechanics Lien Deadline
In deciding whether “repair work” should be considered as furnishing labor or material, the Minnesota Court of Appeals starts its discussion explaining that they are required to “disregard ‘items of labor or material which are nominal or insignificant in amount and furnished for the sole purpose of extending the time for filing the lien.” Further, like many states, the courts must strictly construe whether there are lien rights, and then after determining that the lien attaches, must liberally construe the claim.
According to these starting statements, the court must consider the work furnished by the claimant under the following parameters:
- It must be strictly construed and strictly conform with the mechanics lien laws;
- It must not be nominal or insignificant; and
- It must not be for the sole purpose of extending the time for filing the lien.
While there are several ambiguous components to this decision which prohibit it from being used to support a statement that “repair work always extends the lien deadline,” it is certainly true that in Minnesota it can not be said that “repair work will not extend the deadline.” It certainly may. The appeals court did not see reason in the record to overturn the trial court’s decision that the “repair work” was enough to extend the filing deadline. Interesting about this case is that the details of the work do actually appear to be fairly minor: (i) The work required several hours of work by two different employees; (ii) The work in question was to “repair a crack in the floor” and “repair a concrete step that had separated from the building.”
Also interesting about the decision is that the court distinguished some previously decided cases in Minnesota on this subject that – at first glance – seem pretty relevant.
One case distinguished, Dayton v. Minneapolis Radiator & Iron Co, has been law in the state since 1895(!) and held that “when the last work performed was ‘two hours labor..in chipping off the edge of the fire doors on the front of a boiler…[and] the edge of a flue door,'” the lien deadline was not extended.
This Dayton case was pretty close to the case at hand, but the court wisked it away saying that the courts must consider “several factors, including the amount of the work done, whether the work that the claimant performed constituted separate contracts, and whether the work was performed for the sole purpose of extending the time to file a mechanics lien.”
What This Ruling Means And Whether Repair Works Will Always Extend The Mechanics Lien Deadline
The law is stubborn and never perfectly clear, and in line with this, there is a lot of gray area surrounding this court decision.
First, the decision is “unpublished.” Unpublished court decisions are a mystery to those outside the legal profession. Basically, courts may issue flag any decision as “unpublished,” which means that the decision does not establish law, cannot be cited by any other claimant, and means nothing at all except to decide the particular case at hand. Not only does this seem to frustrate the entire purpose of a court decision, it’s commonly ignored by lawyers and judges who regularly cite these unpublished decisions.
Second, the court starts it discussion on this question by noting that “determination of when the claimant’s last day of work occurred is a question of fact.” This, of course, is true, but it just underscores that a court with a different case could easily carve out distinguishing features and rule a different way.
Third, and finally, the court doesn’t say that repair work is always included, but states that the courts must look to a number of factors. This leaves the “rule” of this case ambiguous.
In the end, the Minnesota appeals court ruled that the repair work performed in this case was enough to extend the mechanics lien deadline. While there are several ambiguous components to this decision which prohibit it from being used to support a statement that “repair work always extends the lien deadline,” it is certainly true that in Minnesota it can not be said that “repair work will not extend the deadline.” It certainly may.