{"id":896417,"date":"2019-09-10T11:50:27","date_gmt":"2019-09-10T17:50:27","guid":{"rendered":"https:\/\/www.myconstructionexpert.com\/blog\/?p=896417"},"modified":"2019-09-10T11:50:29","modified_gmt":"2019-09-10T17:50:29","slug":"subcontractor-prematurely-recorded-mechanics-lien","status":"publish","type":"post","link":"https:\/\/www.myconstructionexpert.com\/blog\/subcontractor-prematurely-recorded-mechanics-lien\/","title":{"rendered":"California Subcontractor Gets a Kick in the Rear (or Perhaps the Front) for Prematurely Recorded Mechanics Lien"},"content":{"rendered":"\n<p>Garret Murai | <a href=\"https:\/\/calconstructionlawblog.com\/2019\/09\/03\/california-subcontractor-gets-a-kick-in-the-rear-or-perhaps-the-front-for-prematurely-recording-mechanics-lien\/\">California Construction Law Blog<\/a> | September 3, 2019<\/p>\n\n\n\n<p>California provides three statutorily recognized construction payment remedies: (1) mechanics liens; (2) stop payment notices; and (3) payment bond claims. Each is intended to provide payment protections for those who furnish labor, materials and services on a construction project. However, each is also different in important ways.<\/p>\n\n\n\n<p>One of those differences has to do with timing. Specifically,&nbsp;<em>when<\/em>&nbsp;the statutory payment remedy may be used by a claimant. Stop payment notices can be served&nbsp;<em>at any time<\/em>during a project even before a claimant has completed its work. &nbsp;However, mechanics liens may only be recorded and payment bond claims may only be made&nbsp;<em>after<\/em>&nbsp;a claimant has completed or ceased performing its work.<\/p>\n\n\n\n<p>In&nbsp;<em><a href=\"https:\/\/scholar.google.com\/scholar_case?case=15538773133923488856&amp;q=Precision+Framing+v.+Luzuriaga&amp;hl=en&amp;as_sdt=4,5\" target=\"_blank\" rel=\"noreferrer noopener\">Precision Framing Systems, Inc. v. Luzuriaga<\/a><\/em>, Case No. E069158 (August 29, 2019), the 4th District Court of Appeal examined whether a subcontractor had prematurely recorded a mechanics lien and, thereby, was prevented from filing a lawsuit to foreclose on its mechanics lien.<\/p>\n\n\n\n<h3 class=\"wp-block-heading\"><em>Precision Framing Systems, Inc. v. Luzuriaga<\/em><\/h3>\n\n\n\n<p>Precision Framing Systems, Inc. was a framing subcontractor on a veterinary hospital project in Wildomar, California. Precision\u2019s scope of work was to supply and install trusses on the project. Precision hired Inland Empire Truss, Inc. for the fabrication of the trusses.<\/p>\n\n\n\n<p>In late July 2013, Precision started working on the framing. Later that month, Inland delivered the trusses to the site. And by the beginning of August Precision began installing the trusses.<\/p>\n\n\n\n<p>Shortly after the trusses were installed, the city issued a correction notice stating that \u201c[t]russ bearing points are not per plan.\u201d Precision notified Inland and Inland carried out some repairs.<\/p>\n\n\n\n<p>In early December 2013, the city issued a second correction notice. A walk through of the project was conducted between Precision and the general contractor, and the general contractor found that Precision\u2019s work was complete and fully in compliance with the plans and specifications. The city later approved the framing work.<\/p>\n\n\n\n<p>However, Precision never received full payment for tis work. The project owner, Deborah Luzuriaga told the president of Precision that \u201cshe was not interested in paying Precision and told [him] to sue her.\u201d He did.<\/p>\n\n\n\n<p>On January 2, 2014, Precision recorded a mechanics lien in the amount of $53,268.16. &nbsp;That same month, the Luzuriagas changed the locks on the building, locking all contractors out. Precision later met with project architect and building inspector and, at this meeting, learned for the first time of additional correction notices.<\/p>\n\n\n\n<p>Ms. Luzuriaga took the position that Precision\u2019s mechanics lien was premature because it had not yet completed its scope of work and, in particular, had not corrected its work as required by the outstanding correction notices. A site inspection was conducted and, in mid-February 2014, Inland performed additional repairs. The repairs took two to three hours.<\/p>\n\n\n\n<p>Precision later filed suit to foreclose on its mechanics lien. During pendency of the case, the Luzuriagas moved for summary judgment on the ground that Precision\u2019s mechanics lien was prematurely recorded because it was recorded before it had ceased its work in February 2014. The trial court agreed and Precision appealed.<\/p>\n\n\n\n<h3 class=\"wp-block-heading\">The Court of Appeal Decision<\/h3>\n\n\n\n<p>The Court of Appeals began by citing the mechanics lien statute, specifically, Civil Code section 8414 which provides:<\/p>\n\n\n\n<blockquote class=\"wp-block-quote is-layout-flow wp-block-quote-is-layout-flow\"><p>A [mechanics lien] claimant other than a direct contractor may not enforce a lien unless the claimant records a claim of lien within the following times:<\/p><p>(a) &nbsp; &nbsp; &nbsp; After the claimant ceases to provide work.<\/p><p>(b) &nbsp; &nbsp; &nbsp; Before the earlier of the following times:<\/p><p>(1) &nbsp; &nbsp; &nbsp;Ninety days after completion of the work of improvement.<\/p><p>(2) &nbsp; &nbsp; &nbsp;Thirty days after the owner records a notice of completion or cessation.<\/p><\/blockquote>\n\n\n\n<p>The Court of Appeals, noting that Precision\u2019s subcontract required that Precision supply and install \u201ctrusses . . . necessary to complete the . . . project,\u201d held that the repairs performed in February 2014 were part of Precision\u2019s \u201cwork\u201d and that because Precision had recorded its mechanics lien in January 2014 it had done so prematurely.<\/p>\n\n\n\n<p>The Court of Appeals also explained that the fact that the general contractor deemed Precision\u2019s work to be complete is irrelevant, since the scope of Precision\u2019s work was established by its contract not by \u201cthe factually unsupported legal opinion of two witnesses.\u201d<\/p>\n\n\n\n<p>Finally, explained the Court of Appeal, while \u201cit may seem unfair to hold that [Precision] recorded its claim prematurely\u201d when \u201cit did not know that it had any work left to do\u201d that the Court had \u201cnot found any case law suggesting that a claimant\u2019s subjective knowledge or belief as to whether it has ceased to provide work is relevant\u201d and further that \u201cnothing in the Mechanic\u2019s Lien law prohibited [Precision] from recording its claim again after the repairs were prepared.\u201d<\/p>\n\n\n\n<h3 class=\"wp-block-heading\">Conclusion<\/h3>\n\n\n\n<p>Timing issues related to mechanics liens typically arise as to whether a mechanics lien was timely recorded rather than whether a mechanics lien was prematurely recorded.&nbsp;<em>Precision Framing<\/em>&nbsp;is a cautionary tale for contractors, subcontractors, suppliers and equipment lessors that they can get caught not only by mechanics lien deadlines but also by the premature recording of a mechanics lien.<\/p>\n\n\n\n<p>The case does give me some concerns though, as the earliest time a mechanics lien can be recorded and the deadline by which a mechanics lien can be recorded are both based on the date of completion or cessation of labor. &nbsp;They are, in short, part of a larger whole, and can\u2019t be viewed in isolation. Most lien claimants, in order to not get caught having recorded a mechanics lien past the statutory deadline, view completion as not including repair or punchlist work.<\/p>\n","protected":false},"excerpt":{"rendered":"<p>Garret Murai | California Construction Law Blog | September 3, 2019 California provides three statutorily recognized construction payment remedies: (1) mechanics liens; (2) stop payment notices; and (3) payment bond claims. Each is intended to provide payment protections for those who furnish labor, materials and services on a construction project. However, each is also different&hellip; <a class=\"more-link\" href=\"https:\/\/www.myconstructionexpert.com\/blog\/subcontractor-prematurely-recorded-mechanics-lien\/\">Continue reading <span class=\"screen-reader-text\">California Subcontractor Gets a Kick in the Rear (or Perhaps the Front) for Prematurely Recorded Mechanics Lien<\/span><\/a><\/p>\n","protected":false},"author":1,"featured_media":0,"comment_status":"open","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"jetpack_post_was_ever_published":false,"_jetpack_newsletter_access":"","_jetpack_dont_email_post_to_subs":false,"_jetpack_newsletter_tier_id":0,"_jetpack_memberships_contains_paywalled_content":false,"_jetpack_memberships_contains_paid_content":false,"footnotes":"","jetpack_publicize_message":"","jetpack_publicize_feature_enabled":true,"jetpack_social_post_already_shared":true,"jetpack_social_options":{"image_generator_settings":{"template":"highway","enabled":false},"version":2}},"categories":[10772],"tags":[9895,88,10933,184],"class_list":["post-896417","post","type-post","status-publish","format-standard","hentry","category-mechanics-lien-law","tag-advise-consult","tag-california","tag-construction-payment-remedies","tag-mechanics-lien-law","entry"],"jetpack_publicize_connections":[],"yoast_head":"<!-- This site is optimized with the Yoast SEO plugin v25.0 - https:\/\/yoast.com\/wordpress\/plugins\/seo\/ -->\n<title>California Subcontractor Gets a Kick in the Rear (or Perhaps the Front) for Prematurely Recorded Mechanics Lien - Advise &amp; 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