Should a Mechanic’s Lien be Invalidated if It Is Missing the Project Address? 

Should a Mechanic’s Lien be Invalidated if It Is Missing the Project Address?

According to an unpublished California Court of Appeals case, the answer is no, the lien isn’t invalid.

The Case: Ellis Contracting, Inc. vs. The Superior Court of San Diego County

Ellis Contracting, Inc. (Ellis) furnished to a tenant improvement owned by Del Mar Highlands Town Center Associates II, LLC (Highlands), which was leased by 20 Lounge Del Mar, LLC (Lounge).

October 2, 2014, Ellis filed a mechanic’s lien for $93,235.70 and subsequently proceeded with the foreclosure action. Unfortunately, the mechanic’s lien did not identify the project with an address or legal description of the property, and the trial court invalidated Ellis’ lien.

What Information was in the lien? Did service on required parties maintain the lien’s validity?

Per the court opinion, the lien included the claimant’s information, the owner & the tenant’s information.

“The completed mechanic’s lien form includes the following information: 20 Lounge employed Ellis, whose name and address is provided, to undertake “tenant improvement build out of existing space.” (Capitalization omitted.) Highlands, whose name and address is provided, owned the place where the repairs were carried out. Ellis is owed $93,235.70 for the work completed. The street address or legal description of the place where Ellis performed the work was omitted on the mechanic’s lien form.”

Although the project information was missing, the lien itself was served on several parties:

“The record contains a proof of service affidavit indicating the mechanic’s lien form was served on Highlands. The record also includes an e-mail, with a copy of the completed mechanic’s lien form attached, which Ramona Vidales, a project administration manager at Donahue Schriber Realty Group, sent to Valerie Griggs and to Highlands’s property manager, Russ Monroe. Griggs stated in a deposition that she had received the e-mailed copy of the mechanic’s lien form, and she believed Highlands was Donahue Schriber Realty Group’s parent company.”

Upon appeal, the appeals court determined that omission of the address did not automatically invalidate the lien, based on section 8422 of California statute.

“There is no question that under section 8422, actual mistakes made in the description of the property provided do not invalidate a lien. For example, listing the address as “2546 Folsom Street, Los Angeles, California” instead of the correct address, “2436 Folsom Street, Los Angeles, California” does not invalidate a lien so long as a reasonable person could rely on the information on the lien to find the correct property.”

One could argue the information that was included in the lien (the lien identified both Lounge & Highlands), plus the confirmation of service of the mechanic’s lien on Highlands, met this “reasonability requirement” the court referenced.

Ultimately, the court of appeals reversed the trial court’s decision and the case (as of April 2016) was remanded back to the trial court to “conduct further proceedings.”

The Takeaway

Although Ellis would have headed to court when it initiated its foreclosure action, it could have saved itself this extra blip by ensuring the mechanic’s lien contained all information as provided in CA Civ. Code 8416.

8416. (a) A claim of mechanics lien shall be a written statement,
signed and verified by the claimant, containing all of the following:
(1) A statement of the claimant’s demand after deducting all just credits and offsets.
(2) The name of the owner or reputed owner, if known.
(3) A general statement of the kind of work furnished by the claimant.
(4) The name of the person by whom the claimant was employed or to whom the claimant furnished work.
(5) A description of the site sufficient for identification.
(6) The claimant’s address.
(7) A proof of service affidavit completed and signed by the person serving a copy of the claim of mechanics lien pursuant to subdivision (c).

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