Appellate Court Affirms Dismissal Of Mechanic’s Lien Foreclosure Action

This column has often extolled the virtues of a mechanic’s lien as a powerful tool to help contractors get paid. A mechanic’s lien, however, is not something that can be deposited into a bank account. In order for a contractor to obtain the benefits of a lien, all of the formalities required by the Lien Law must be followed. As a contractor learned in the recent case of Hewitt Builder and Renovations v Tectonic Builders, one of the formalities that must be followed is the filing of a Notice of Pendency in connection with the filing of the lien foreclosure lawsuit, and the failure to follow all required formalities is fatal. 

Background

In April of 2021, Hewitt Builders and Renovation entered into a contract with Tectonic Builders for Hewitt to perform drywall and carpentry work for Tectonic at a property owned by Farmingville Associates. Hewitt finished its work in October of that year, but was still owed over $100,000. In order to secure its right to payment of that sum, on November 29, 2021, Hewitt filed a mechanic’s lien. When payment was still not forthcoming, in March of 2022, Hewitt filed a lien foreclosure lawsuit against both Tectonic and the owner, Farmingville. Hewitt, however, did not file a Notice of Pendency at the time it filed its lawsuit.  (A Notice of Pendency is, essentially, a “red flag” that a plaintiff files in the County Clerk’s office at the time the lawsuit is started [or shortly thereafter] that will stand out to anyone searching the title to the property notifying them that there is a lawsuit filed of which a prospective buyer or lender may need to be aware. A Notice of Pendency extends a mechanic’s lien for three years, and not just the one year that is otherwise available to a lienor by a traditional extension; a Notice of Pendency, however, is only available in the context of a lien foreclosure lawsuit.) In December of 2022, the owner obtained a mechanic’s lien discharge bond.

     In September of 2023, the owner moved to dismiss the complaint insofar as asserted against it, arguing that as the mechanic’s lien had not been extended by the filing of a Notice of Pendency (or otherwise extended by any other filing), the mechanic’s lien expired by operation of law one year after its filing and could no longer be foreclosed upon. In opposition, Hewitt argued that as a bond had issued to serve as substitute security for the property, the filing of a Notice of Pendency was no longer necessary. 

Decision

The motion court granted the owner’s motion, noting that as the mechanic’s lien had already expired by the time the bond was procured, even if the bond had been filed with the County Clerk (which it had not), it was not sufficient to salvage a cause of action against the owner (or the surety). Accordingly, the motion court dismissed the claim. 

   Hewitt appealed. However, it did not fare any better as the appellate court affirmed. In doing so, that court held that the bond, procured after the expiration of the lien, could not serve to extend the lien. The appellate court also declined to salvage any unjust enrichment claim against the owner, finding that Hewitt’s relationship was with Tectonic, and not the owner. 

Comment

In the private and public sectors, mechanic’s liens are a powerful tool to help an unpaid contractor get paid, but only if all of the required formalities are followed. These formalities are necessary because the mechanic’s lien is a statutory compromise that gives a contractor the right to sue someone with which it has no contractual relationship—and, in most circumstances, provides security for the underlying debt. Here, the contractor failed to follow all of the required formalities to keep its lien in place (the filing of the Notice of Pendency). Accordingly, once the lien expired, so did the contractor’s right to maintain the lien foreclosure lawsuit. 

    Mechanic’s liens must be prepared, filed, served (with proof thereof), and perfected correctly.  Therefore, should you have any questions as to how to best protect your rights to recover on a mechanic’s lien, you should consult with experienced construction counsel.

About the authors: Thomas H. Welby, an attorney and licensed professional engineer, is General Counsel to the CIC and the BCA, and is the Founder of, and Senior Counsel to the law firm of Welby, Brady & Greenblatt, LLP, with offices located throughout the Tri-State Region. Gregory J. Spaun, General Counsel to the Queens and Bronx Building Association, and an attorney and a partner with the firm, co-authors this series.

If you would like more information regarding this topic please contact Thomas H. Welby at twelby@wbgllp.com or call (914) 428-2100