Reason #9 of the recent article “17 Ways A Mechanics Lien Works To Get You Paid” states that a mechanics lien is effective because it is “hard to challenge.” Last week, this was highlighted by the New York County Supreme Court in B & B Constr., Inc. v Prestige Plumbing & Heating, Inc.
In this case, B&B Construction Inc. sought to discharge Prestige Plumbing & Heating Inc.’s mechanics lien claiming that Prestige Plumbing never furnished the materials or services to the units it claims it did. It’s the classic “you didn’t do that” argument. The subcontractor claimed it did certain work and the prime contractor claimed the work wasn’t done.
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Should the lien be discharged? New York County’s Judge Stallman says no:
It is well settled that a court has no inherent power to vacate or discharge a notice of lien except as authorized by Lien Law § 19 (6)…[I]n the absence of a defect upon the face of the notice of the lien, ‘any dispute regarding the validity of the lien must await trial thereof by foreclosure.’ … Although Lien Law § 39 provides that a willfully exaggerated lien is void, the issue of willful or fraudulent exaggeration is one that also ordinarily must be determined at the trial of the foreclosure action.
The 17 Ways a Mechanics Lien Gets You Paid article explains that if a mechanics lien is filed technically correct, “it can be a challenge to get a judge to toss the claim.” That’s because judges require all disputes play out in a formal trial, and not a lien challenge action.
The Prestige Plumbing case is an example of this principle, and the benefits that accrue to the subcontractor. While the general contractor and the subcontractor may have a legitimate dispute about the work, that dispute may never get heard because of the unlikelihood that the case ever makes it to trial. The result is that the lien gets the subcontractor paid.