At Creedon & Gill, we recently secured a significant victory on behalf of our client, a prominent general contractor, defeating a building owner’s attempt to dismiss a mechanic’s lien foreclosure action in New York County Supreme Court. The case arose out of a large-scale residential renovation project involving properties in Manhattan, where our client served as the general contractor. As reflected in the record, the project became substantially more complex than originally anticipated due to defective architectural plans, repeated revisions to the scope of work, and continuous changes that required completed work to be torn out and redone, conditions which the owner’s own representative described as having “exploded.”
As the project progressed, our client performed extensive additional work pursuant to the contract’s pricing structure and change order provisions, submitted requisitions and supporting documentation, and continued performance in reliance on the expectation of payment. However, as detailed in our opposition papers, the owner fell behind on payment of undisputed amounts, delayed approval of change orders, and ultimately refused to fund the project unless our client agreed to relinquish substantial claims. When our client declined to waive those rights, it was left without the financial ability to continue performance. Our client then exercised its statutory rights by filing mechanic’s liens and commencing foreclosure actions to recover the amounts due.
In response, the owner moved for summary judgment seeking dismissal of the lien foreclosure action, arguing that our client’s lien was “willfully exaggerated” under New York Lien Law § 39, a claim that, if proven, would invalidate the lien. The owner contended that certain charges were improper, that portions of the work had already been paid, and that our client documentation was insufficient. We opposed that motion by demonstrating that our clientclaims were grounded in the contract, supported by detailed records, and reflected work actually performed, and further that any alleged discrepancies raised, at most, issues of fact rather than evidence of intentional exaggeration.
The Court agreed and denied the motion in its entirety. 👉 The Court held that the owner failed to meet its burden of establishing willful exaggeration, emphasizing that such a finding requires proof of intentional inflation, not merely a dispute over amounts owed or the valuation of work. The Court further reaffirmed that the issue of whether a lien is willfully exaggerated is generally a question for trial, not one to be resolved on summary judgment, and that an inaccuracy in the amount of a lien does not invalidate it absent proof of willfulness. The Court concluded that the owner failed to demonstrate a prima facie entitlement to dismissal of our client’s foreclosure claim, allowing the action to proceed.
This decision underscores several critical principles in New York construction law: mechanic’s liens remain a powerful and protected remedy for contractors, claims of willful exaggeration are subject to a high evidentiary standard requiring proof of intentional misconduct rather than mere disagreement, disputes over change orders, scope, or payment typically present factual issues unsuitable for summary disposition, and owners cannot defeat lien claims simply by recharacterizing legitimate disputes as exaggeration. Ultimately, this outcome reinforces that contractors who perform their work, document their claims, and proceed in accordance with their contractual rights will be afforded the protections of the Lien Law, and that attempts to avoid payment through unsupported legal theories will not succeed.