Home>Levelset Community>Legal Help>I need expert advice how to get paid on my Mechanic's Lien ( I am the claimant) released by Surety Bond where I am named the Obligee but never got paid.

I need expert advice how to get paid on my Mechanic's Lien ( I am the claimant) released by Surety Bond where I am named the Obligee but never got paid.

Hello, I provided various improvement works on a property located in Westlake Village, Ca. I did not get paid and had to file a Mechanic's Lien which I did succesfully. I was considering filing a Mechanics Lien foreclosure lawsuit when the owner volunterily announced he was selling the property. I notified both the seller ( owner who owed me the money) and the buyer about my mechanic's Lien. I was offered in writing to be paid out of Escrow to which I agreed. I stood ready and willing to be paid and in exchange to release the Mechanic's Lien however the promised payment was never made. It was a mystery how they closed Escrow. It has now become known to me that a strange Surety Bond has named me as an Obligee, but once again I am not offered to be paid per said bond. It appears my payment now delinquent 2 years has been switched to a Bond worth nothing. I am deceived and hope the entities involved Escrow, Title company, the Bond Company can correct themselves and pay me ASAP. I am a victim of the Wolsey Fire and have a family emergency and need help receiving the payment I am owed.

1 reply

Jun 27, 2019

That's a good question, and I'm sorry to hear about the payment problems as well as the damage from the Woolsey fire. While I'm not able to advise you on how you should proceed with your claim, I can provide some information that should help in determining how best to move forward. First, let's look at what exactly happens when a lien is "bonded off", then at what the next steps for recovery are once a lien has been bonded off.

Basics on mechanics lien bonds
When a mechanics lien is filed, that lien attaches to the underlying project property, and it clouds the owner's title. However, an owner (or some other interested party) can clear that lien from the property title by "bonding off" the filed lien with a surety bond. When a surety bond is filed in order to release a lien claim (and names the lien claimant as the bond's "obligee"), the claim no longer attaches directly to the property - instead, the filed claim is transferred to the surety bond. That doesn't mean recovery from the claim is no longer possible, though. It just means the method of recovery changes a little. For more background on liens discharged by filing a surety bond, this is a great resource: Primer on Mechanics Lien Bonds and Bonding a Mechanics Lien

Recovery from a bonded off lien
Once a mechanics lien is filed, there's a second deadline to keep in mind - the deadline to file a lien enforcement/foreclosure suit. For a mechanics lien, the deadline to enforce is generally 90 days from the date when the lien was filed. If a lien is bonded off, this timeframe changes a little bit.

Once a lien claim is bonded off, the deadline to file suit is actually extended. A lien claimant will have 6 months to file suit after they receive notice that the lien was bonded off. But, in order to recover payment based on the filed claim, a lawsuit must be filed before that 6-month window closes. Otherwise, otherwise, the claimant may need to look for some other way to recover payment.

Now, just because a lien or bond enforcement deadline has been missed, that doesn't mean payment can't be obtained. Options like filing suit for breach of contract, under California's prompt payment laws, or under some other legal theory might still be on the table, and merely threatening to take legal action might be enough to compel payment. Further, depending on the amount of the claim (up to $10,000), California small claims court might be an option - and recovery might be made without the need for attorneys, extensive legal fees, or long delay.

But, for the best insight into potential recovery options, it might be helpful to consult a local construction attorney. They'll be able to review the situation as well as any relevant documentation, then advise on how best to proceed. Good luck! I hope you're paid what you've earned.

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