If mechanics lien laws weren’t complex enough, the Kansas Court of Appeals last week issued an opinion that may have some in the construction industry really scratching their head wondering just what is and is not a sufficient description of materials or labor within a mechanics lien.
KSA 60-1102(a)(4) requires that a Kansas mechanics lien contain “a reasonably itemized statement” in support of the amount of the claim.
In Nicholson v. Hartnett, there was a good deal of information included in and with the mechanics lien filing identifying what type of work was performed that gave rise to the lien claim. Hartnett, the lien claimant, attached two documents to the filing.
One document was an invoice for a portion of the work that identified the work as “wire new addition,” “redo service wire going into house,” “run wires for surround sound,” “put computer cable to basement,” “hook up oven,” and “replace light in kitchen.” The other document was a one-page statement summarizing the other invoices sent on the project, which included items like “Equipment, insurance and services” and “materials with sales tax.”
The Kansas Court of Appeals held that Hartnett’s claim was insufficient, stating as follows:
[O]ur court has held that a “reasonably itemized statement” is one “that is fair and sufficient . . . to enable the landowner to ascertain whether the work was completed and whether the charge therefor is fair.” … Setting out claims for more than $100,000 with no more information than “Equipment, Insurance & Services” and “Materials w/Sales Taxes” does not constitute a reasonable itemization.
This decision seems really unfair to me.
First, the court says that the “claims for more than $100,000…” with the information suggested is not sufficient, but it’s clear here that the lien claim wasn’t for $100k, but only $16,654.11.
Second, the court says that there is “no more information than ‘equipment insurance & services’ and ‘materials w/ sales tax,” but that is not accurate by the court’s own explanation, as the court talked about an invoice attached with the lien identifying some very specific work tasks such as “replacing light in kitchen’ and “wire new addition.”
Plus, the court does very little to offer mechanics lien claimants in Kansas any guidance for fulfilling this requirement in the future, saying simply that “the level of detail needed will vary depending upon the facts of each case,” but that the description just wasn’t sufficient here.
Liberal v. Strict Construction Makes A Difference
One thing construction lawyers and potential mechanics lien claimants can take from this case is that whether a state “strictly” or “liberally” construes mechanics lien claims can make a big difference.
In Kansas, the courts largely ruled the way they did because they strictly construe lien claims. This is what the court said about how mechanics lien claims are treated in Kansas:
Our consideration of the issue begins with the overall rule that a contractor must strictly comply with the statutory requirements for a mechanic’s lien to be valid. Additionally, the lien’s validity must be determined entirely from the verified lien statement and its attachments.
This is in contrast to some states, like Washington, where mechanic lien claims must be afforded liberal treatment as per statutory directives (even though the courts fought this until recently). Would this Kansas case have been decided differently in Washington? Likely.