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Perils of Unsupported Mechanics Liens

By April 20, 2018 No Comments

A recent jury verdict in Mecklenburg County Superior Court demonstrates the perils of filing a false or otherwise unsupportable mechanics lien in North Carolina. See N.C.G.S. § 44A-1 et seq.  According to Dolan Media and Lexis, Kyle and Brittany Allison retained Harland Homes, Inc. to build a new home for the couple near Davidson, NC.  As the build neared its end, Harland invoiced the Allisons for work completed on the build, but the amount demanded substantially surpassed the agreed upon contract price.

Apparently, when the couple refused to pay the invoice, Harland filed a lien on the property and threatened to sue to collect the balance. In response, the Allisons initiated their own lawsuit against Harland where they alleged breach of contract, negligence, constructive fraud and false claim of a lien. The matter proceeded to trial, and on January 8, 2018 the jury found in favor of the Allisons.

Of special note, trial court Judge Carla Archie determined that Harland’s filing of a false lien amounted to an unfair and deceptive trade practice under Unfair and Deceptive Trade Practices Act, (“UDTPA”) N.C.G.S. § 75-1.1 et seq. As such, the Court trebled damages relating to the false lien and awarded attorney fees in the amount of $51,258.00, which would not have been recoverable but for the UDTPA provision.  All told, the jury awarded the couple $120,992.00 which should act as cautionary tale to contractors and construction lawyers when deciding to file a mechanics lien. Should those liens be found unsupportable, the risk is now much greater sue to the possibility of an award that includes trebled damages and attorney’s fees.

 

Tags: mechanic’s lien, contractor’s lien, Unfair and Deceptive Trade Practices Act, treble damages, UDTPA