What should I do? Release lien and record a new one or make lien amendments?

1 month ago

I am reaching out on behalf of my client, a General Contractor.

My client stopped getting payment and stopped working on a project in November of 2018. Within the 90 day statutory requirement I filed a claim of lien on February 12, 2019.

Sometime in May of 2019 my client received a partial payment for the work and work commenced again on the project with my client furnishing supplies and labor on the project.

On August 13, 2019 my client stopped working on the project again because work was completed and again no payment was made.

On October 12, 2019 the lien statute of limitations for the 8 months of my first lien is going to expire. We are still within the 90 days of the last day of work because that date is November 11, 2019.

My question is, should I:
1. Let the lien expire and file a second lien that includes the old amount and the new end of work date
2. Release the old lien, acknowledging that no payment was made and file a new lien that includes the old amount and new end of work date
3. Amend the old lien and change the new amount owed and new end of work date?

Chief Legal Officer Levelset

If the Model Disclosure Statement was provided (if required), and all rules and requirements were met with respect to the filing, content, and service of the lien, it appears that the following fact pattern applies:

1. Lien filed timely on February 12, 2019;
2. Work interrupted;
3. Partial payment made, and work on the project continues under the same contract agreement;
4. Work completed on August 11, 2019.

As you state, mechanics liens in Washington must be filed within 90 days from last furnishing labor or material to the project, and expire if an action to enforce the lien is not initiated within 8 months from the date the lien was filed. This is a hard deadline, and may not be extended.

Amending liens can sometimes be a tricky proposition.

In Washington, a lien claimant is allowed to modify and amend the lien claim at any time within the 90-day filing period Geo Exch. Sys., LLC v. Cam, 65 P.3d 11, 15-16 (Wash. App. 2003). In order to do so, the claimant can file a new lien with the amended information, serve it like the original lien, and release and cancel the original lien filing.

Even after the 90-day period a court may allow a lien to be amended if it is not being amended to avoid a failure to substantially comply with the statutory filing or content requirements. Lumberman’s of Wash., Inc. v. Barnhardt, 949 P.2d 382, 384-86 (Wash. App. 1997). This ruling has been scrutinized, however, and any material error on the lien claim likely may not be amended after the 90-day original filing period.

There is also another option available to modify a lien claim set forth by Washington statute. If the claimant files a timely action to enforce the lien claim, the claim may be amended in the same manner as amending a pleading, according to RCW 60.04.091(2) and Wash. Super. Ct. Civ. R. 15(a).

Courts will generally allow such amendments, the court is required to consider whether or not the amendment would adversely impact any third-parties to the suit.

It appears then, that:
1) an action to enforce the original lien may be initiated and the lien claim amended as a pleading; or
2) a new “amended” lien that includes all amounts due may be filed, to the extent the work was pursuant to one contract and was one”improvement,” and the original lien may be released.

However, as the timeline is long and there was a substantial break in work, it is likely that any path forward (other than, potentially, filing both a) an action to enforce the first lien, and b) an additional new lien for solely the “new” unpaid amount and then joining those enforcement actions) will be challenged by the property owner related to timeliness.

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