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Case Summary: Private Lien Cannot be Amended to become Public Lien

Case Summary: Private Lien Cannot be Amended to become Public Lien

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Metrowoodworking Inc. v Hunter Roberts Constr. Group, LLC

The Appellate Court affirmed the finding of the lower court, denying the plaintiff’s motion for leave to amend the notice of lien.

This action arose out of a construction and improvements contract, wherein the property was owned by the Battery Park City Authority (BPCA), which is a public benefit corporation.  There were two leases signed relating to this property, the first between subsidiaries of BPCA and the second between BPCA and GS Site 25, the subtenant.  The general contractor on the site entered into a subcontract with the Plaintiff, Metro Woodworking, to perform millwork.  The subcontract was terminated about one year later, wherein Metro Woodworking filed a notice of lien against the premises, naming GS Site 25 as the owner, and the security was taken on the real property.  This lien was vacated by the Court, as the named owner in the Notice was erroneous (the premises belonged to BPCA) and because BPCA is a public entity, filing a private lien against it pertaining to its real property is not permitted.  The Court held that Metro Woodworking should have filed a public lien against the public improvements of the property and thus, the private lien filed was not valid.

Metro Woodworking requested leave from the Court to amend or modify the existing Notice, pursuant to Lien Law §12-a, which requires 3 different criteria to allow the Court to modify the lien.  However, the Court stated that even if the lien substantially complied with those 3 requirements, a modification would not be sufficient for the Notice of lien to be valid.  The Court explained that to allow such a modification would result in the transformation of a private lien into a public lien, which are 2 different kinds of liens, filed in 2 different places, and published differently.

The Court further explained that the services performed by Metro resulted in improvements upon the property belonging to BPCA, a public entity, and as such, are public improvements according to the Lien Law §2(7) definition.  To satisfy the public policy of enabling public entities to be sovereign over their properties, these types of improvements are to be filed with public agencies, and the security is to be held against the improvements of the property, not the property itself.

The Court held that Notice filed by Metro cannot be deemed valid merely because it substantially complied with the Lien Law as applied to a lien against a privately owned real property.  Metro Woodworking erred in complying with the Lien Law relating to private improvements, whereas it should have complied with the Lien Law relating to public improvements.  Therefore, the Notice was found to be invalid and as such, the first element needed to give power to the Court to authorize the amendment was not met.

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