New York Lien Law Cases: Five Appellate Decisions From the First Half of 2026

JDS Construction Group LLC was the general contractor for the construction of the luxury skyscraper at 111 West 57th Street in Manhattan. Copper Services, LLC, a subcontractor, asserted counterclaims seeking foreclosure of mechanic’s liens, recovery for alleged diversion of Article 3-A trust funds, and an accounting of trust assets.

The mechanic’s liens could not be revived

Copper filed its liens in September 2020 and extended them through September 7, 2022. An October 2021 order invalidated the liens after Copper defaulted in the litigation. The default was later vacated on appeal, but Copper did not obtain another extension or otherwise preserve the liens before September 7, 2022.

The First Department affirmed dismissal of the lien-foreclosure counterclaim. Vacating the default did not revive mechanic’s liens that had already expired under Lien Law § 17.

The Article 3-A claims were reinstated

The trust claims produced a different result. The respondents had not made a prima facie showing establishing when the limitations period began to run. Their initial evidence was an attorney affidavit without personal knowledge and without supporting documentary evidence. An additional affirmation submitted on reply should have been disregarded.

The court also concluded that Copper should have been permitted to amend its pleading to add breach-of-fiduciary-duty and aiding-and-abetting claims against individual defendants and to provide more detailed allegations supporting the trust-diversion theory.

The plaintiffs allegedly agreed in January 2020 to renovate Austin Kitt’s residence in Babylon, New York. After the plaintiffs commenced a breach-of-contract action, Kitt asserted counterclaims for breach of contract and unjust enrichment. He alleged that he had paid more than $365,000 but that the work was not completed.

In July 2024, approximately four and a half years after the renovation agreement, Kitt sought leave to add an Article 3-A counterclaim alleging that the plaintiffs failed to properly deposit and maintain construction funds in an escrow account and misappropriated those funds.

Relation back did not save the proposed claim

The Second Department concluded that the original breach-of-contract and unjust-enrichment counterclaims did not allege failure to maintain construction funds in escrow or misappropriation of those funds. The proposed Article 3-A claim therefore depended on materially different factual allegations.

Because the original pleading did not give notice of the transactions and occurrences that would have to be proved, the proposed amendment was time-barred and the denial of leave to amend was affirmed.

Kingdom Associates filed a mechanic’s lien against property owned by Broadway PT 1710 LLC. The owner commenced a special proceeding under Lien Law §§ 19(6) and 38 seeking summary discharge. The Supreme Court granted the petition, but the First Department unanimously reversed and dismissed the proceeding.

Summary discharge is limited to defects appearing on the face of the lien

The First Department held that summary discharge under Lien Law § 19(6) is available only when the invalidity appears on the face of the notice of lien, including where the character of the labor or materials furnished cannot support a valid lien.

The owner did not identify a facial defect. Lack of consent and the other challenges concerned the lien’s underlying validity, required factual determinations, and belonged in the lien-foreclosure action. The court also emphasized that courts do not have inherent authority to summarily vacate mechanic’s liens outside the grounds authorized by the Lien Law.

Section 38 did not provide an alternative basis for discharge

The First Department concluded that Lien Law § 38 did not support discharge because no court had entered an order directing Kingdom to provide the itemized statement.

Hewitt performed subcontract work at property in Farmingville, New York. It filed a mechanic’s lien on November 29, 2021 and commenced a foreclosure action in March 2022. It did not, however, file a notice of pendency or obtain an extension within one year after the lien was filed.

Commencing the action was not enough

Under Lien Law § 17, a mechanic’s lien expires one year after filing unless the lien is extended or a foreclosure action is commenced and a notice of pendency is filed within the applicable period. Hewitt’s lien therefore expired by operation of law on November 29, 2022.

The owner obtained a surety bond on December 21, 2022, purportedly to discharge the lien. By that date the lien had already expired. The later bond did not revive the lien or permit the foreclosure claim to continue against the bond.

The court also affirmed dismissal of Hewitt’s contract and quantum-meruit claims against the property owners. The pleading alleged a contract with the general contractor, not the owners, and did not allege a direct contractual or reliance-inducing relationship sufficient to support recovery from the owners.

Layout performed survey work as a sub-subcontractor on two Brooklyn projects. The contractual chain extended from the owners to the general contractors, through additional subcontractors, and ultimately to Layout. After it was not paid, Layout filed mechanic’s liens and sought foreclosure and recovery against bonds issued to discharge the liens.

A lower-tier lienor’s rights are derivative

The Second Department explained that a mechanic’s lien cannot exceed the amount owed by the owner to the general contractor when the lien is filed. For a sub-subcontractor, the analysis also follows the contractual levels above the lienor.

The defendants sought summary judgment on the ground that no lien fund existed. Their project-manager affidavit did not adequately account for balances that accrued before the liens were filed but were not paid until afterward. Because the evidence did not conclusively establish the absence of funds within the chain at the relevant time, triable questions remained.