Grounds for a lien discharge in NY
Under New York's Lien Law §19(6) application may be made to the appropriate court for an order "summarily discharging" a mechanic’s lien where:1) it appears from the face of the notice of lien that the claimant has no valid lien by reason of the character of the labor or materials claimed therein (e.g., type of work not related to the improvement of property); 2) where the notice of lien is invalid for any other reason under §9 (incorrect owner or property description) or 3) failure to comply with service requirements of §10 (failure to properly and/or timely file and serve the notice of lien.)
Several recent Second Department Appellate Decisions remind us that applications to summarily discharge a lien will be denied if they are brought upon any other grounds. As "a court has no inherent power to vacate or discharge a Mechanic's Lien except as authorized under Lien Law §19(6). 1" Luckyland, LLC v. Core Continental Construction, LLC, 921 N.Y.S.2d 537 (2011).
In the Luckyland case, the property owner/petitioner moved pursuant to Lien Law §19(6) to discharge two Mechanic's Liens placed on its property by the respondent, Core Continental. Luckyland based its application on proof that Core Continental had failed to complete its work, and that the work it did complete failed inspection. However, as there was no defect upon the "face of the Notice of Lien" Luckyland’s challenge to the liens’ validity had to await trial "by foreclosure." As the lienor/contractor was the only party able to bring a foreclosure action, the Owner’s 19(6) application failed as a matter of law.
Similarly, in Bryan's Quality Plus, LLC v. Dorime, the Second Department found that a trial court lacked the authority to discharge a mechanics’ lien "unless they were authorized by Lien Law §19(6)." The fact that the liens at issue included improper items, i.e., charges for standby time, was of no moment to the Court. The validity of the lien’s "amount" was an issue of fact to be determined in, and only in, a foreclosure action. 915 N.Y.S.2d 135 (2d Dept. 2011).
What can be the subject of a §19(6) discharge proceeding? Where a lien sets forth a "last day of work" which falls outside the time period allowed under the Lien Law to file a lien (e.g., eight months for private, non-single family improvements) it could be discharged via a 19(6) motion. See, e.g., AC Green Electrical Contractors, Inc. v. SMG Construction, Inc., 279 A.D.2d 287 (1st Dept. 2001). However, as long as the contractor states in the Notice of Lien a last day of work within the applicable time period, an owner may not bring a motion to discharge the lien based upon evidence that the "last day of work" was false. See Jay Frees Plumbing & Heating Corp. v. 245 Glenmore Ave. Corp., (2d Dept. 1977).
What should an Owner to do with a lien that, although valid on its face, is exaggerated or outright false in its claims? It can wait for the lien to lapse and secure a discharge or, if time is of the essence, it can serve a demand to foreclose upon the lienor. A lienor’s failure to bring a foreclosure action within 20 days of such a demand, if properly served, is sufficient grounds for a summary discharge motion.
1 Lien Law §19(6) applies only to private improvement liens.