1. Lost profits, not part of unpaid contract balance, may be recoverable as consequential damages in contract claim, but cannot be included in lien. TSP Services Inc. v. National-Standard, LLC, 2019 BL 340267 (Mich. Ct. App. Sept. 10, 2019)

National-Standard, LLC contracted TSP Services, Inc. for asbestos abatement, demolition, restoration, and disposal of scrap steel

Matter of Red Hook 160 LLC v. Borough Constr. Grp. LLC, No. 524909/18, 2019 BL 122210 (N.Y. Sup. Ct. Mar. 19, 2019)

This cases arises out of a project owner’s request for further itemization of amounts claimed in a construction manager’s mechanic’s lien.  Red Hook 160 LLC (“Red Hook”), the owner of the property sought to be liened, demanded a revised itemized statement of the mechanics’ lien filed by Borough Construction Group, LLC (“BCG”), the construction manager hired in connection with the construction and renovation of a six story building located at 160 Imlay Street in Kings County, New York.

Continue Reading Supreme Court of New York Rejects Property Owner’s Request for Further Itemization of Mechanic’s Lien, Holding Production of Invoices Detailing the Quantity, Price and Date of Delivery of Materials Is Not Required

Ferrara v. Peaches Café LLC, 2018 NY Lexis 3244 (November 20, 2018)

COR Ridge Road Company, LLC (“COR”), as landlord, entered into a 10 year lease with Peaches Café, LLC (“Peaches”).  The lease imposed certain construction requirements on Peaches for it to operate its restaurant, including adherence to specific electrical specifications. The lease also provided that COR approve of any improvements to the premises, that Peaches submit to COR all design plans for the electrical work, and that any improvements made become part of the realty.  Angelo Ferrara (“Ferrara”) performed some of the electrical work.

After Peaches closed its business, Ferrara filed a mechanics lien against the property for more than $50,000 Peaches owed him, noticing both Peaches and COR. Ferrara subsequently sought to foreclose on the lien.  Both Ferrara and COR moved for summary judgment in the foreclosure action, and the trial court granted COR’s motion and dismissed the complaint against it. The Appellate Division granted Ferrara’s motion for summary judgment, upholding the validity of the lien on COR’s property. COR appealed to the Court of Appeals, which affirmed.
Continue Reading New York Court of Appeals Holds That Direct Consent by Landlord Is Not Necessary for Contractor to Enforce a Lien Against the Property for Work Performed for a Tenant

Iliescu v. Steppan, No. 68346, 2017 Nev. LEXIS 38, (Nevada Supreme Court, May 25, 2017)

Appellants Iliescu entered into a Land Purchase Agreement to sell four unimproved parcels in downtown Reno, Nevada to Consolidated Pacific Development (“CPD”) for development of a high-rise, mixed-use project to be known as Wingfield Towers, which agreement was subsequently assigned to BSC Investments, LLC (“BSC”).  BSC subsequently hired Mark Steppan (“Steppan”), to provide design services for the Wingfield Towers.  Financing was never obtained for the project and the escrow never closed on the sale of appellants’ property.  In addition, since BSC did not pay Steppan for his services, Steppan recorded a mechanic’s lien against appellants’ property.  However, Steppan did not provide appellants with a pre-lien notice.

In this case, the Nevada Supreme Court was asked to determine whether the actual notice exception for pre-lien notices should be extended to offsite work and services performed by an architect for a prospective buyer of the property.  NRS 108.245(1) requires a mechanic’s lien claimant, other than one who performs only labor, to deliver a written notice to the owner of the property of the right to lien after they first perform work on or provide material to a project.  However, substantial compliance with this requirements is met if the property owner: (1) has actual notice of the construction on the property and (2) knows the lien claimant’s identity.


Continue Reading Actual Notice Exception to Pre-Lien Notice Requirement of Nevada Lien Statute Does Not Apply to Architect’s Offsite Work When No Onsite Work Has Been Performed Even Though Owner Knew That Architect Was Performing Work for the Project

In re: Linear Electric Co., Inc., No. 16-1477, 2017 U.S. App. Lexis 5527 (3d Cir., March 30, 2017)

This case concerns whether suppliers, Cooper Electrical Supply Co. and Samson Electrical Supply Co. (“Suppliers”), could file construction liens under New Jersey law, despite the fact that Linear Electric Inc. (“Contractor”), filed a petition for bankruptcy, which automatically stays any act to create or perfect any lien against the contractor’s property. Two weeks after Contractor filed for bankruptcy, the Suppliers filed construction liens against projects in New Jersey where the materials were incorporated.  Following a motion by the Contractor, the Bankruptcy Court held that the liens were in violation of the automatic stay provision of the Bankruptcy Code. The District Court affirmed the Bankruptcy Court’s holding that, under New Jersey law, the liens were claims against the Contractor’s accounts receivables, which receivables are part of the bankruptcy estate and protected by the automatic stay.  On appeal, the Third Circuit affirmed the ruling of the District Court.


Continue Reading Construction Liens Filed by Suppliers in New Jersey After Contractor’s Filing of Bankruptcy Petition Are Barred by the Automatic Stay Provision of the Bankruptcy Code

Summit Contracting Grp., Inc. v. Ashland Heights, LP,  2016 U.S. Dist. LEXIS 60662 (M.D. Tenn. May 6, 2016)

Ashland Heights, LP (“Owner”) contracted with Summit Contracting Group, Inc. (“Contractor”) to construct an assisted living facility in Tennessee.  After completing the project, Contractor alleged that Owner had failed to pay Contractor in full for the work it performed; to make timely payments; to provide Contractor a time extension for inclement weather; and to deposit retainage into an interest-bearing escrow account as required by Tennessee’s Retainage Law.

Contractor filed a breach of contract and Retainage Law action in federal district court, seeking damages and litigation costs in excess of $1.5 million (the “Contract Action”).  Contractor concurrently filed a mechanic’s lien action in state court seeking enforcement of the lien in the amount of $1,074,688.74 (the “Lien Action”).


Continue Reading Tennessee Federal District Court Holds That Contractor May Pursue Both Breach of Contract Action in Federal Court and Lien Enforcement Action In State Court – Abstention Not Required

Oakdale Equip. Corp. v. Meadows Landing Assocs., LP, 2015 Pa. Super. Unpub. LEXIS 2067 (Pa. Super. Ct. July 8, 2015)

Meadows Landing Associates, LP (“MLA”) contracted with Richard Lawson Excavating, Inc. (“Lawson”) for work on MLA’s 200-acre subdivision, including earthwork, grading, excavating and pond construction.  Lawson then contracted with Oakdale Equipment Corporation (“Oakdale”) to rent heavy equipment for the work.  More than one year later, MLA terminated Lawson for failure to achieve substantial completion on time.  Oakdale and Lawson both filed mechanics’ lien claims against MLA.


Continue Reading Superior Court of Pennsylvania Strictly Construes Procedural Requirements Under Pennsylvania’s Mechanics’ Lien Law

Branch Banking & Trust Co. v. Construction Supervision Services Inc. (In re Construction Supervision Services Inc.), 753 F.3d 124 (4th Cir. 2014)

Our sister publication, Bankruptcy-Real Estate-Insights.com, recently discussed the unique issues relating to the perfection of mechanics liens after the filing of a bankruptcy petition as resolved by the United States Court

Pending House Bill 473 seeks to amend the current lien law by creating a centralized construction notices registry in Pennsylvania known as the State Construction Notices Directory (“Directory”), which would provide owners and general contractors with access to a database listing all potential lien claimants on a registered project.

An owner would have the option of registering a project by filing a notice of commencement on the Directory and posting a copy at the site of the project prior to the start of physical construction.


Continue Reading Proposed Changes to Pennsylvania Mechanics’ Lien Law Would Provide for Internet-Based Directory to Serve as a Standardized Statewide System for Filing Construction Notices