Termination of Public Works Contract Does Not Necessarily Start Lien Clock

In County Wide Flooring, Corp. v. Town of Huntington the Court was faced with a motion to discharge a public improvement lien and dismiss the foreclosure action.  The contractor apparently filed two mechanic’s liens.  It failed to foreclose on the first one in a time fashion and the lien was thus dismissed.   It did foreclose on the second lien but the general contractor was seeking to dismiss that lien because it was, allegedly, untimely.

Pursuant to Lien Law Section 12, a public improvement lien may be filed:

“[A]t any time before the construction … is completed and accepted by the state or by the public corporation, and within thirty days after such completion and acceptance….”

The lien here was filed December 2, 2015.  The lienor/contractor argued that the project had not yet been completed and accepted, and, as such, the lien was timely.  The contractor responded that the last work it performed on the project was October 20, 2011 and that the Town terminated the contract by letter dated May 2, 2012.  Apparently, the record before the Court did not contain any information regarding the basis of termination nor whether the project was ever completed and accepted by the Town.

The Court seems to indicate that if nothing happened after May 2, 2012 then the lien is likely untimely.  However, the Court does not know if anything happened after that date and specifically points out that it does not know whether the Town hired another contractor to complete the project which would have extended the time to file the lien until the replacement contractors completed the project and it was accepted by the Town.  Accordingly, the lien was allowed to stand and the case was ordered to proceed.

You can read more about our mechanic’s lien enforcement/foreclosure practice here.

Comments are closed.