Failure to Include Lien in Contractor Case Results Case Dismissed

It can be an exciting time for a family when they are building or renovating a house. It can also be a stressful experience, especially if the homeowner and general contractor don’t see eye to eye.

My office represents contractors and sub-contractors all the time related to work being performed and not being paid.

Recently, in Mobile County, in McGee v. Dillard the Court addressed a contractor’s appeal over a lien and certain discovery issues. McGee, a general contractor, entered into two separate agreements with the Dillards for the preservation and repair of their house.

While they had no complaints regarding the first agreement, the second agreement is the subject of litigation. According to the second agreement, McGee agreed to paint portions of the outside of the house and make certain repairs inside the house. The Dillards terminated McGee’s services in September 2015, claim to have paid McGee in full, but McGee still filed a lien against the house.

The Dillards sought a judgment determining that they did not owe McGee any further money, declaring the lien void, and releasing the lien. McGee then filed his own action in small-claims court; the two actions became one singular case. In September 2016, the court entered an order directing McGee to sit for depositions, but he continually refused. In December 2016, the Dillards filed a motion for summary judgment, claiming that McGee had never sought to enforce his lien in circuit court, it was invalid and released. The trial court agreed.

McGee appealed for two different reasons. McGee first argued that the circuit court was wrong to release the lien. For a general contractor to have a valid lien, he must (1) provide statutory notice to the owner; (2) file a verified statement of the lien in the probate office of the county where the improvement is located; and (3) file suit to enforce the lien. The Court held that when McGee filed suit, his complaint did not seek enforcement of the lien. Because of this, the lien was invalid and properly released.

McGee also appealed based on the circuit court requiring him to sit for depositions. However, appealing was not the proper was to seek review. The proper method for addressing discovery orders is through a writ of mandamus, where McGee would have had to show that the circuit court abused its discretion. McGee’s appeal as to both of his arguments was dismissed.

There are two main takeaways here. The first is that if you are a contractor trying to perfect a materialman’s lien, it is essential that you address enforcement of that lien in the complaint you file in court. Otherwise, the lien is invalid. The second takeaway is that discovery tools (like depositions) cannot be appealed normally but must be addressed through writs of mandamus.

If you are concerned about what to include in your lawsuit, you should have an experienced, knowledgeable attorney on your side to make sure that you make the best arguments.

Contact Business Dispute attorney INGRAM LAW LLC at (205) 236-3997 for an attorney with the experience and knowledge that can make all the difference.

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