Court dismisses mechanic's lien claim because filing information not complete

Generally speaking, statutory requirements governing the establishment of a mechanic's lien are strictly interpreted and enforced by state courts. The case of Gravett v. Covenant Life Church, No. 01430 (Md. Ct. Spec. App. filed September 10, 2003) demonstrates that Maryland courts observe this general rule of strict application.

The case

In Gravett, a structural steel erection sub-subcontractor brought suit to establish a mechanic's lien against a project owner's property. Six months into its contract, the sub-subcontractor had sent a statutorily required notice of intention to claim a lien to the owner, alleging that it had not been paid by the subcontractor for whom it had performed work on the project. Two months later, the sub-subcontractor sent a second notice of intention to claim a lien to the project owner, identical to the first except that the outstanding balance claimed by the sub-subcontractor was reduced.

After the sub-subcontractor brought suit, the owner moved to dismiss the lien action on the grounds that the sub-subcontractor's notices were defective because they didn't state the time period during which the sub-subcontractor performed the work on which its claim was based, as required by Maryland's mechanic's lien statute. The trial court granted the owner's motion and dismissed the sub-subcontractor's lien claim, and the sub-subcontractor appealed.

The court's decision

On appeal, the sub-subcontractor argued that its omission from the notices of the time period worked was harmless and that the notices substantially complied with the law. The appellate court, however, held that under Maryland law, the failure of lien notice to specify when the work was done is a fatal defect because such notices are designed to allow the owner to determine whether the claimant has a timely, and therefore a meritorious, lien claim. While recognizing that the Maryland Code endorses a form of lien notice which need only be substantially followed, the appellate court held that a lien notice that does not include the time period when the work was performed is not in substantial compliance with the code's form.

The sub-subcontractor also argued that the omission from its notices of the time during which it performed the work at issue was unimportant because the property owner had actual knowledge that the sub-subcontractor had performed its work within the statutorily mandated time prior to issuance of the notices. The appellate court, however, concluded that the mere timing of the lien notices, neither of which stated the time the sub-subcontractor performed the work, did not ensure the owner's actual knowledge of the time of performance of the work. Accordingly, the appellate court affirmed the trial court's dismissal of the sub-subcontractor's lien claim.

Impact on contractors

Most mechanic's lien laws require precise detail in the notices and other documents that must be filed to establish and enforce a mechanic's lien. Contractors need to ensure that all necessary information is included in their documents or, like the sub-subcontractor in Gravett, they may find their otherwise compelling claim ruled invalid.

Gerald I. Katz is an attorney specializing in construction law throughout the United States with Katz & Stone LLP, Suite 600, 8230 Leesburg Pike, VA 22182.

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