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Home>Levelset Community>Legal Help>Owners Lawyer is disputing this Lien. I need help with a response.

Owners Lawyer is disputing this Lien. I need help with a response.

ArkansasMechanics Lien

Mr. Tootill: I reviewed your attachment to your email below just now. Ferguson’s lien is invalid because it does not strictly comply with Ark. Code Ann. Section 18-44-101 et. seq. As I’m sure you know, it is very difficult to comply with all of Arkansas’ lien requirements and the slightest misstep invalidates the entire lien. Ferguson’s purported lien has a number of fatal flaws as follows: 1. The October 8 lien notice identifies “Ferguson Enterprises, Inc.” and “Ferguson Enterprises, LLC” as the entity/entities that supplied the materials in question but the “Lienor” on the actual purported lien is “Ferguson Waterworks”. Thus the lien claimant did not give the notice required by ACA 18-44-115. 2. The lien must be filed by the lien claimant. See ACA 18-44-117(a). Ferguson’s was filed by some sort of “disclosed and limited agent”. At a minimum that invalidates the lien and it also likely subjects “Levelset” to liability for the unauthorized practice of law. 3. The second pages of the purported lien references “the above-identified HIRING PARTY” but that party is not identified “above” or anywhere else within the lien. 4. ACA 18-44-117(a)(2)(A) requires the lien account to be “verified by affidavit” (by the lien claimant). Ferguson’s purported lien doesn’t contain an affidavit. Instead it contains a short “Signature of Claimant, and Verification” section, which was not completed by a Ferguson representative and instead by someone else, who did not swear that the facts were true. The wording clearly indicates that his purported verification, which is also referred to as a “certification”, is made “upon my information and belief that the foregoing is true and correct,” and “I believe them to be true”, but nowhere does it say that he has knowledge of the facts and circumstances that gave rise to the lien and that they are true and correct. Instead he only claims to “thereby have knowledge of the facts” because he read “the foregoing Notice of Claim of Lien” which he himself created. That’s circular reasoning. In short, Ferguson cannot seriously contend that its purported lien was “verified by affidavit”. 5. In addition, and as an entirely separate fatal matter, the “Signature of Claimant and Verification” section does not contain any language swearing that the legal description is correct, as required by ACA 18-44-117(a)(2)(A). 6. Although it may or may not invalidate the lien claim, I note that the fifth page of the purported lien document contains a check from Jim Butler Construction Co., Inc., made payable to “Bryan Hodge exc & Ferguson”. 7. Perhaps the most glaring deficiency is that ACA 18-44-117(a)(1)(B) requires that the “just and true account” (the lien) contain “an affidavit of notice attached to the lien account”. Ferguson’s purported lien does not contain anything that could be interpreted as an affidavit of notice. No affidavit at all. 8. ACA 18-44-117(a)(3) requires that the (missing) affidavit of notice contain there things: (i) “a sworn statement evidencing compliance with the notice provisions of 18-44-114 – 18-44-116”; (ii) “a copy of each applicable notice given …”; and (iii) “a copy of the proof of service required under 18-44-114”. Pages 6 – 11, which are the only pages that could possibly apply here, don’t comply with any of those three requirements. Although pages 8 and 9 do say “I declare under penalty of perjury that the foregoing is true and correct,” there is no verification, jurat, or other notary section anywhere. Sworn statements have to be made before a notary to be effective. See Rasmussen vs. C. J. Horner Co., Inc., 255 Ark. 1030, 505 S.W.2d 225 (1974) “The lien account is neither verified by the clerk nor does the evidence show that any oath was given. Without question, under our cases, one or the other was essential … To make a valid oath or affirmation there must be some overt act which shows that there was an intention to take an oath or affirmation on the one hand and an intention to administer it on the other; for even though such intention actually did exist, if it was not manifested by an unambiguous act, perjury could not be based thereon. If the attention of the person making the affidavit is called to the fact that it must be sworn to, and, in recognition of this, he is asked to do some corporal act, and he does it, the instrument constitutes a statement under oath, irrespective of any other formalities.” Also, Exhibit 3 is unsigned, not notarized, and is only one notice. It indicates that it was sent by certified mail (and gives the certified mail numbers), yet “the proof of service required under 18-44-114” is nowhere to be found. 9. Finally, the actual “NOTICE TO PROPERTY OWNER” language is what is commonly referred to as the “commercial language”, which only applies under ACA 18-44-115 to “nonresidential real estate” and “residential real estate containing five (5) or more units”. I think everyone would agree that the property in question is residential real estate but it does not contain “five or more units”. 10. Many, many Arkansas cases recite something along the lines of the following, which is from Books-A-Million, Inc. v. Arkansas Painting Specialties Co., 340 Ark. 467, 10 S.W.3d 857 (2000): The crucial issue before us is the construction to be given Arkansas lien statutes. In particular, whether the notice provisions of Ark.Code Ann. § 18–44–115 are to be strictly construed, thus requiring strict compliance, or whether they can be satisfied by substantial compliance. We hold that strict compliance is necessary. Any statute in derogation of the common law will be strictly construed. Although the General Assembly has the power to alter the common law, a legislative act will not be construed as overruling a principle of common law unless it is made plain by the act that such a change in the established law is intended. Hartford Ins. Co. v. Mullinax, 336 Ark. 335, 984 S.W.2d 812 (1999). It has long been held that mechanic's liens are in derogation of the common law. The materialmen's lien and the construction money mortgage lien are in derogation of common law. Both are creatures of the legislature. The legislature is presumed to know the decisions of the supreme court, and it will not be presumed in construing a statute that the legislature intended to require the court to pass again upon a subject where its intent is not expressed in unmistakable language. Rhodes v. Cannon, 112 Ark. 6, 164 S.W. 752 (1914); Spickes Bros. Paint. Cont. v. Worthen Bank & Trust Co., 299 Ark. 79, 771 S.W.2d 258 (1989). In Valley Metal **860 Works, Inc. v. A.O. Smith–Inland, 264 Ark. 341, 572 S.W.2d 138 (1978), we stated, “Our lien statutes are in derogation of the common law and we construe them strictly since they provide an extraordinary remedy that is not available to every merchant or worker.” See also, Christy v. Nabholz Supply Co., 261 Ark. 127, 546 S.W.2d 425 (1977); Dews v. Halliburton Industries, Inc., 288 Ark. 532, 708 S.W.2d 67(1986); National Lumber Co. v. Advance Development Corp., 293 Ark. 1, 732 S.W.2d 840 (1987); Gray v. Nations, 1 Ark. 557 (1839). … The notice provisions contained in these statutes must be complied with strictly. 11. If this lien is litigated, the loser pays the winner’s attorneys’ fees and costs under ACA 18-44-128. Ferguson’s purported lien is a cloud on my client’s title and is causing damage. Ferguson has through the end of this month to execute and property record a lien release. Attached is one that will work. I’ve been instructed to file suit in the first week of January to declare Ferguson’s lien to be improper and invalid if the release is not filed by then.

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