Posted on March 10, 2015
One of the most important, and effective, tools that contractors, subcontractors, and materialmen have at their disposal to protect their right to payment for work performed or materials provided is the mechanic’s lien. Ohio’s mechanics’ lien law, codified at sections 1311.01 et seq. of the Ohio Revised Code, was developed over a century ago with the principle object of providing “security for class of persons whose claim gradually accumulates from day to day and who cannot protect themselves in any other way.” Lee Turzillo Contracting Co. v. Cincinnati Metro. Housing Auth. (1967), 10 Ohio St.2d 5.
Mechanic’s liens are often misunderstood, and the statutory provisions which govern them frequently ignored or not followed. Because mechanic’s liens run contrary to the historical importance which has been placed on a person’s property rights, the statutes which govern them are strictly construed by Ohio courts. This means that, generally, the filer of a mechanic’s lien must follow the statute precisely in order to perfect the lien interest in the property at issue.
Sometimes, however, a court’s reading of the statutory provisions regarding mechanic’s liens can work to the benefit of the contractor, subcontractor, or materialman. Such was the case in a recent 5th District Court of Appeals decision in Stottlemyer Hydromulching, Inc. v. Dearlove, 2015-Ohio-750. In Stottlemyer, Triglyph Holdings, LLC (“Triglyph”) began developing a residential project called Snug Harbor Development (“Snug Harbor”) in July of 2006. In the spring of 2007, Triglyph hired Stottlemyer Hydromulching, Inc. (“Stottlemyer”) to work on Snug Harbor.
On April 6, 2007, Triglyph filed a plat for the Snug Harbor project, subdividing it into sixty-six separate lots. Stottlemyer performed its work, but Triglyph failed to make timely payments, so Stottlemyer filed a mechanics’ lien on October 24, 2007. The Stottlemyer lien contained a property description covering the entire Snug Harbor project. William and Marion Dearlove acquired title to a lot in Snug Harbor in a deed from Triglyph dated November 1, 2007, and recorded on November 16, 2007. The title company that handled the closing failed to notice Stottlemyer’s lien.
In 2013, Stottlemyer filed a complaint to foreclose on its mechanic’s lien against the Dearloves. The Dearloves did not dispute that Triglyph did not pay Stottlemyer’s mechanics’ lien at the time of the sale, but sought to limit the amount to which Stottlemyer could enforce the lien by arguing that the lien had to be divided equally amongst the sixty-six lots of Snug Harbor. According to the Dearloves, they only owed Stottlemyer a pro-rata share of the lien, in the amount of $4,283.45. The trial court granted summary judgment in favor of Stottlemyer, but only for the limited amount of $4,283.45.
On appeal, the 5th District looked at a number of Ohio’s statutory provisions regarding the filing of mechanics’ liens, concluding that because Triglyph did not record a notice of commencement, pursuant to R.C. 1311.13(A)(1), all liens on Snug Harbor, including Stottlemyer’s, were effective from the date the first visible work or labor was performed. Because work on Snug Harbor began on July 15, 2006, that was the effective date of Stottlemyer’s lien. This was important as the Court concluded that, because the lien was effective prior to April 6, 2007 – when Triglyph subdivided Snug Harbor – Stottlemyer’s lien applied to all 113.63 acres of the project. The Court concluded that the trial court had erred in determining that Stottlemyer could only enforce $4,283.45 of its $82,000.00 mechanics’ lien.
As demonstrated by the Stottlemyer case, the provisions of Ohio’s mechanic’s lien law can be incredibly complicated and difficult to follow. Ensuring compliance with Ohio’s mechanic’s lien statutes is an undertaking that can, and should, be discussed with experienced legal counsel. For questions regarding Ohio’s mechanic’s lien law, or any other aspect of Ohio construction law, please contact Todd Harpst or Nick Horrigan, at Harpst Ross, Ltd. – Business Lawyers for the Construction Industry®, at (330) 983-9971 or firstname.lastname@example.org or email@example.com.
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