In the construction industry, it is not odd for owners of multiple parcels of land to hire one contractor to work on all parcels through separate contracts. Despite the multiple contracts, Ohio courts, if certain requirements are met, allow for a single mechanics lien to be filed and attach to all the parcels of land, whether work was done or material was furnished to those parcels or not. This option for mechanics liens recently helped a subcontractor get fully paid.
The Case Background
In July 2006, Triglyph Holdings, LLC (Triglyph), a residential development company, began work on Snug Harbor Developments (Snug Harbor). The following spring, Triglyph hired Stottlemyer Hydromulching, Inc. (Stottlemyer) to work on Snug Harbor as a subcontractor. In April 2007, Triglyph also filed for a plat to subdivide the land into sixty-six separate plots.
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Stottlemyer’s subcontract stated that work should be substantially completed by August 4, 2007. The final work recorded by Stottlemyer was on September 1, 2007. Triglyph failed to make timely payments to Stottlemyer, forcing the subcontractor to file an affidavit of mechanics lien on October 24, 2007. The lien contained a description of the entire Snug Harbor project. Lot 43 was purchased by William and Marion Dearlove on November 1, 2007 and recorded on November 16, 2007 without being notified of the lien on their land.
On August 27, 2013, Stottlemyer filed a complaint for foreclosure of the mechanics lien against Dearlove’s land. Stottlemyer was still owed $82,000, but the trial court only awarded $4,283.45. Stottlemyer appealed the amount of the award.
The Court’s Decision
The issue before the Ohio Appellate Court, in Stottlemyer Hydromulching, Inc. v. Dearlove, 2015-Ohio-750, was whether the amount Stottlemyer could recover for the mechanics lien claim should be pro rata or the full amount still owed to them. Dearlove of course argued that only a portion of work and materials was supplied to their plot, so only a portion of the lien should paid by their lot. Stottlemyer argued that the effective date of the mechanics lien was before the date the project was subdivided, so, pursuant to Sections 1311.03 and 1311.08, they were entitled to the full balance being enforced against the one subsequently sub-divided parcel.
R.C. 1311.08 states
Where an improvement consists of two or more buildings united together, situated on the same lot or upon contiguous or adjacent lots, or of separate buildings upon contiguous or adjacent lots, or where work or labor has been performed or material has been furnished for improvements which are located on separate tracts or parcels of land but operated as an entire plant or concern, and erected under one general contract, the lien for the labor or work performed or material furnished attaches to all such improvements, together with the land upon, around, or in front of which such labor or work is performed or material is furnished … and it is not necessary to file a separate lien for each improvement.
Section 1311.03 allows for a mechanics lien to be filed against properties that touch certain areas where work is done.
Ohio’s Appellate Court sided with Stottlemyer. When examining the statutory provisions provided by Stottlemyer, along with Section 5311.13(D), the court determined the full balance of the mechanics lien should be enforced. The reasoning for this was because all three statutory provisions dealt with the same subject matter of multiple plots of land and mechanics liens, but Section 5311.13(D) was the only provision that said the amount enforced should be pro-rata. Sections 1311.03 and 1311.05 contain no language limiting mechanics lien claims to a pro-rata basis. Therefore, the court awarded the full balance of $82,000 to the subcontractor Stottlemyer.
Mechanics Lien at Its Best
Was this court decision good or bad? Well, if you are a subcontractor, this decision is great. It truly shows the power of a mechanics lien and the many ways you can receive full payment for your hard work. In certain circumstances, a lien on a single lot could protect work performed for an entire project spread over multiple lots. It’s important to note, however, that this is not always the case, and certain specific factual circumstances were required in order for the decision in this case to go the way it did. Filing a mechanics lien on time and properly can protect you in so many different ways from non-payment and make sure you receive the money you are owed. The laws of your specific state can help you even further and make your mechanics lien more powerful than you think.