Elevator Mechanics Lien Rights

One would think that identifying oneself on a document is a no brainer. Similar to going to a party and saying, “hello, my name is ___,” when filing a mechanics lien the party filing the lien (i.e. the lien claimant) must announce who they are.  Within the document, the claimant will write something like, “We, ABC Company, make a claim against the property.”  It turns out that this is not as clear or as easy as it may seem.

Time after time companies are identifying themselves incorrectly in mechanics lien claims. Sometimes the mistake is small and sometimes it’s surprisingly large. Courts are asked to declare the lien invalid, or to forgive the error and allow an amendment.

Here are a few related articles:

The New York Supreme Court for New York County issued a very surprising opinion earlier this year invalidating a lien with a tiny, tiny error int he claimant’s name. Last month, another section of the court issued a more liberal decision in this area.  This leaves New York lien claimants with very little guidance on how their case may ultimately get resolved.

New York County’s Approach to Claimant Name Errors: Comparing July 2014 Decision with September 2014 Decision

Last year, we wrote about a decision from the New York County Supreme Court in “New York Mechanics Lien Invalidated Because Claimant’s Name Slightly Incorrect.” The error in that case was incredibly small. In fact, the error was so minuscule that it’s unclear whether there is any error at all.  Here is the difference between the company’s registered name and the name it used on the invalidated lien:

Used in Lien: A&L Construction Corp.

Formal Name: A. & L. Construction Corp.

Yes, really.  That was the only issue in A. & L. Construction Corp. v. East Harlem Developers, LLC, and yes, the court actually invalided the mechanics lien because of this “error.” The court ruled that the claimant “provide[ed] no affidavit or other evidence to support [the] contention” that the error was only a scrivener’s error.

The lien claimant in 555 Partners, L.P. v. Unitech Ver-tech Elevator, a New York County case from September 2014, was a bit more lucky.  Though the problem was the same and the court was the same, the decision was exactly opposite.  The judge in this case held that the mis-identification within the lien claim was a minor problem that could be corrected by amendment.  There did not seem to be any burden of proof placed on the lien claimant to prove that the error was a “scrivener’s error.”  Instead, the court stated simply, and correctly, that:

If a corporation files a notice of lien in which it does not use its true legal name but gives ‘adequate notice of the lienor’s identity to all concerned,’ the notice can be amended to reflect the correct name of the corporation.

This type of analysis is completely different than the bizarre burden placed on A. & L. Construction Corp. to provide some type of proof that the non-use of two periods in their name was a scrivener’s error.  Plus, the error in the new case is a lot more pronounced than the A&L Construction Corp. case. Here is the difference between the name used in the lien and the formal name:

Used in Lien: Unitec Ver-Tech Elevator, a corporation

Formal Name: Alliance Elevator Company, a Delaware corporation duly registered to conduct business in New York under the name Ver-Tech Elevator

Overall, this September 2014 case is a good thing for potential lien claimants in New York County. The A&L case was pretty ridiculous and threatened to cause problems for lien claimants who rarely file claims with pinpoint precision. Unfortunately, however, the Unitech Ver-tech Elevator case didn’t expressly discuss or overrule the A&L decision, and the reality is that these two decisions are still alive, side-by-side, and the fountainhead for future possible ambiguity and argument.

The best way to avoid this boogyman is to get the claimant name exactly right.

Elevator Repair Work is Lienable And Easily Described

The Unitec Ver-Tech Elevator decision is mostly about the identification of a lien claimant within a mechanics lien claim. Nevertheless, it lightly touched on two other things of note:  (i) Whether elevator repair work is lienable in New York; and (ii) What detail is required when describing the labor and/or materials provided to a project. In both of these issues the decision was favorable to lien claimants.

First, maintenance work is always the source of a bit of ambiguity. Consider, for example, this FAQ article we did a few years ago titled “Do maintenance companies have mechanics lien rights?” Installing a new elevator system within a building is clearly an improvement, as are projects to modernize elevator installations.  But, what about repairs to elevators?

The Unitech Ver-Tech Elevator case involved a claimant who provided “elevator maintenance and repairs, together with related materials,” and this was considered to be work and materials that fell within the scope of the New York mechanics lien statutes.

Second, the property owner challenged whether the work was described with enough specificity.  The lien claim provided very simply that the work was “elevator maintenance and repairs, together with related materials,” and the property owner argued that this wasn’t enough to identify the work with enough detail to preserve the lien.  Not only was this small description found satisfactory, it was so clearly satisfactory that the court nearly skipped right over the argument, dismissing the objection as not valid without much discussion.

Summary
New York Allows Mechanics Lien Amendment When Name Wrong
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New York Allows Mechanics Lien Amendment When Name Wrong
Description
Though a lien claimant identified themselves incorrectly in a mechanics lien claim, the New York court allowed an amendment and declared the lien valid.
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zlien
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