A Lesson in Last Furnishing Dates and Lien Rights

A Lesson in Last Furnishing Dates: Massey Asphalt Paving, Inc. v. Lee Land Development, Inc.

Determining the last furnishing date has proven to be tricky for claimants under the mechanic’s lien and bond claim statutes for a LONG time – perhaps dating as far back as the creator of the mechanic’s lien, Thomas Jefferson. (OK, I don’t actually know that the disputes go back that far – my point is, furnishing dates have been a bit of a sore spot for a long time.)

We’ve discussed furnishing dates before, and today we will take a look at a recent case from Alabama, where the claimant’s mechanic’s lien was invalidated because its deadline was calculated from the last date of corrective work.

The Chain of Events

On March 4, 2016, Alabama Court of Civil Appeals published an opinion in the case of Massey Asphalt Paving, Inc. v. Lee Land Development, Inc.

Lee Land Development, Inc. (“Lee”) hired Massey Asphalt Paving, Inc. (“Massey”) to provide labor and materials related to paving work for the Lee Gardens and Lee Commercial Park projects. Lee failed to remit payment to Massey for the materials and labor provided, so Massey filed a mechanic’s lien.

A Broken Link

Massey sought foreclosure on their mechanic’s lien, and during the foreclosure action, the court ruled that Massey’s mechanic’s lien was invalid because it was not filed timely.

In Alabama, the mechanic’s lien deadline is based on the claimant’s last furnishing date. When contracting directly with the owner, file the lien within 6 months from last furnishing materials or services.

Section 35-11-215, Ala. Code The lien declared in this division shall be deemed lost unless the statement referred to in Section 35-11-213 shall be filed by every original contractor within six months and by every journeyman and day laborer within 30 days, and by every other person entitled to such lien within four months, after the last item of work or labor has been performed or the last item of any material, fixture, engine, boiler, or machinery has been furnished for any building or improvement on land or for repairing, altering, or beautifying the same under or by virtue of any contract with the owner or proprietor thereof, or his agent, architect, trustee, contractor, or subcontractor.

According to the court decision, Massey completed paving work in April 2008, did some “corrective work” between October & November 2008 and then filed their lien in November 2008. Based on their last furnishing date of April 2008, their lien deadline would have been sometime in October 2008.

Massey argued that their last furnishing was actually the “corrective work” and that would make their November 2008 filing timely. The court disagreed, and cited other cases that indicated warranty, repair & corrective works were insufficient as a last furnishing date.

“Holdings from other jurisdictions generally are in line with our conclusion…[R]emedial work such as warranty work, corrective work, [or] repair work does not extend the time for filing a claim of lien.”; Tym v. Ludwig, 196 Wis.2d 375, 387, 538 N.W.2d 600, 604 (Ct.App.1995) (“To be valid, a construction lien must be filed within six months of the last day labor or materials are furnished by the lien claimant. Warranty or repair work on an original installation does not extend the time for filing a construction lien. Thus, the time for filing the lien claim is measured from the date of the original installation, not from the date of the later repair work.” (citations omitted)); Woodman v. Walter, 204 Mich.App. 68, 70, 514 N.W.2d 190, 191 (1994) (stating that it was “join[ing] the majority of other jurisdictions” in concluding that the “period [for filing a claim of lien] commences on the date of completion of the original installation work and is not extended by the later performance of warranty work”); and Central Coast Elec., Inc. v. Mendell, 66 Or.App. 42, 45, 672 P.2d 1224, 1226 (1983) ( “It would pervert the legislature’s purpose in fashioning the time limitation [for filing a claim of lien] to allow the time to be extended merely because warranty work was performed.”).”

Take Away

Determining a last furnishing date can be difficult; however, a good rule of thumb is to use the last date of a substantial furnishing – don’t rely on punch list work, warranty work, remediation & small shipments* (*in comparison to total contract) for calculating deadlines

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