Indiana Courts Uphold Validity of Mechanics Lien Notices

Attorneys: Johnson, Nicholas

Winter 2014
Recently, the Indiana court of appeals had the opportunity to address the technical requirements of notice under the applicable Indiana statutes governing liens on construction projects. In Von Tobel Corporation v. Chi-Tec Construction & Remodeling, Inc., 2013 WL 5011985 (Ind. Ct. App., Sept. 13, 2013), the supplier on a construction project filed a pre-lien notice and a subsequent lien on the residential property due to non-payment from the general contractor. The owner of the property argued that the pre-lien notice and subsequent lien were insufficient because the name of the corporation on the pre-lien notice, Von Tobel Home Center, Inc., was not the same corporation that filed a lien on the property, Von Tobel Corporation. After reviewing the applicable statute, the appellate court determined that the underlying purposes of the Indiana Mechanics Lien Act was remedial and that, although a technical violation of the Act occurred it was minimum, there was sufficient notice to inform the owner of the property that a claim for materials furnished on the construction site of the residence was being asserted by Von Tobel Corporation, and there was no prejudice to the owner.
In The City of Ft. Wayne v. Consolidated Electrical Distributors, Inc., 998 N.E.2d 733 (Ind. App. 2013), the court looked at the notice required for a lien on public projects. In compliance with the notice requirements of the statute, the subcontractor on the public project at issue provided its notice of a non-payment within 60 days after last performing services on the project to the mayor, rather than the parks department board which let the contract. The Act requires that notice be filed with the “board” not later than 60 days after the last performance of services. “Board” is defined as “the board or officer of a political subdivision or an agency having the power to award contracts for public work.” The city argued that the subcontractor could not serve the mayor since the mayor did not award the contract. Relying on the last-antecedent rule in interpreting the statute, the court concluded that the mayor was an officer of the municipality and was properly served. The court concluded that the rules of statutory construction supported the subcontractor’s position that the mayor did not have to have the power to award the contract to be the proper person served under the Act.
Although both of the above-mentioned cases resulted in lien rights being affirmed, these cases should not be relied upon as examples of acceptable non-compliance with the exact requirements of the Indiana mechanics lien statutes. Although the court in each case reached its conclusions using well-settled statutory interpretation principles, it is presumed that great expense was incurred in the trial and appellate courts by each subcontractor to reach the results. Therefore, it is always advisable that clients understand and follow the particularities and nuances of each statute to ensure that the exact requirements are followed closely to avoid costly litigation.
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