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Our customer is stating that our mechanic’s lien is void and invalid as a matter of law. Are they right?

IndianaMechanics Lien

Our customer is stating that our mechanic’s lien is void and invalid as a matter of law. They are stating that the fact that the individual executing the mechanic’s lien (zlien agent) had no personal knowledge of the lien claim (and was not acting as attorney for us, as required by Indiana statute) and the fact that we are not registered to do business in the State of Indiana and thus have no authority to ever file a lien foreclosure lawsuit to pursue any rights on the lien. Now they are demanding immediate release of the mechanic’s lien in full. Is my lien still valid?

1 reply

Feb 12, 2019

I'm sorry to hear about that. First and foremost, it's important to understand that a property owner's first reaction to a lien filing is often to challenge the lien filing. They may do so on a number of bases - and often, it's done in a way where they're throwing everything to the wall to see what sticks. But, simply because a property owner contends that a lien claim is void and invalid does not mean that a filed lien is actually flawed. zlien discusses that idea further, here: My Lien Was Challenged — What Do I Do? Further, whether a mechanics lien is ultimately considered invalid or void would be up to a court (if the matter makes it that far). Most mechanics lien disputes are resolved prior to legal action, but even for those lien challenges that are more-seriously made, it's hard to predict how a court might land on the issue. Still, looking at the Indiana lien statute might provide some information that can help shed some light on the issues stated above. Nothing in the Indiana lien statute appears to require a mechanics lien be filed by an attorney. Under § 32-28-3-3(a), a claimant is entitled to file a lien themselves: "a person who wishes to acquire a lien upon property, whether the claim is due or not, must file in duplicate a sworn statement and notice of the person’s intention to hold a lien upon the property for the amount of the claim..." That section of the Indiana lien statute continues and provides permission to attorneys to file lien claims: "The statement and notice of intention to hold a lien may be verified and filed on behalf of a client by an attorney registered with the clerk of the supreme court as an attorney in good standing under the requirements of the supreme court." (Emphasis added). However, it's just that - permission. This does not prevent a lien claimant from filing a lien on their own behalf (be that through the use of an agent of the business, or otherwise). Thus, a lien claim can be filed by an attorney - but the statute does not require it. There is no restriction apparent for a lien claimant to file their own lien, and there does not appear to be a limitation on a claimant's ability to do so, by extension, through their agent. In fact, any time a business other than a sole proprietor files a mechanics lien, some agent of that business will ultimately be the one to file on the business' behalf. While a non-attorney cannot initiate legal action on the behalf of a business (such as a lien enforcement action), and a non-attorney cannot represent a business in court, a mechanics lien filing, placed with the recorders office for recording in the public record, does not constitute such an action. As for the knowledge of the claim - a construction business is surely knowledgeable about their own claim for payment, and regardless of whether an agent (such as zlien) has been utilized, the claim is still being filed by and on behalf of the claimant construction business who performed the work. Further, the circumstances giving rise to the lien claim are apparent on the face of the lien claim, plus when a claimant utilizes the zlien software platform, that claimant inputs the information serving as the basis of their claim and verifies that the information is truthful. As for the ability to file a lien enforcement suit - I'm not familiar with reasoning supporting that a business owned and operated outside of the state of Indiana would be barred from access to Indiana courts in order to enforce their mechanics lien claim made in Indiana for work that was performed inside the state. As mentioned above, in order to file a lien enforcement action at some point down the line, a lien claimant would need to be represented by an attorney authorized to appear before the court. But it's extremely common for a lien claimant to file a lien without the use of an attorney, then later secure an attorney should a lien enforcement action become necessary. While I hope some of this information has been helpful, in order to adequately assess a challenge to a lien claim, it might be best to consult a construction attorney to review the documentation, evaluate the claims being made, and to advise on how to proceed.

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