Mechanic’s Lien Defense – Move It or Lose It!

This is syndicated content that was originally published on AVVO.com by Attorney Michael J. Wambolt of Sader Law Firm.

Spring and summer kick off home improvement season here in Missouri and around the country. History shows a correlation between home improvement projects and an increase in mechanic’s lien lawsuits. When confronted with mechanic’s lien claims, many secured creditors rightly focus on whether they hold a purchase money deed of trust and whether the claimant complied with all statutory notice requirements. A less obvious defense centers on whether a mechanic’s lien claimant has diligently prosecuted its claim against all known or reasonably knows parties.

Statutory requirements to timely prosecute a Mechanic’s Lien Claim.

In Missouri, mechanic’s liens are creatures of statute and are governed by Chapter 429, RSMo. If a claimant fails to comply with applicable statutory requirements, the mechanic’s lien fails as a matter of law. Two such requirements are that a claimant file a mechanic’s lien statement with the appropriate county clerk within six months from the date that the last labor, materials, or home improvement services were provided,    § 429.080, and that the claimant file a lawsuit to enforce its lien within six months of the date that the mechanic’s lien statement was filed, § 429.170. Section 429.170 further requires that all lawsuits filed to enforce a mechanic’s lien shall be “prosecuted without unnecessary delay to final judgment…” Id. That last requirement is critical, as the mere filing of a lawsuit is not enough to toll the six month deadline mandated by § 429.170. Instead, the lawsuit must be filed and diligently prosecuted within six months of the date the mechanic’s lien statement was filed pursuant to § 429.080.

A common issue that leads to dismissal for lack of diligent prosecution involves service of process on named parties. In one case, a mechanic’s lien action was dismissed against all parties for lack of prosecution where plaintiff failed to serve a named party within six months of filing suit. See West Central Concrete, LLC v. Jim Reeves, et al., 310 S.W.3d 778 (Mo. App. W.D. 2010). The West Central court distinguished between “mere delay” and “unnecessary delay,” noting only the latter would lead to dismissal for lack of prosecution. Id. at 783. West Central determined plaintiff’s failure to serve a named party until nine months after the lawsuit was filed represented “unnecessary delay” and presented cause for dismissal, particularly where plaintiff waited nearly four months to effect service after its first attempt was unsuccessful. Id. In reaching its decision, the West Central court focused on the importance of § 429.170’s six month limitation period, noting: “[the purpose of the relatively short period of limitations to commence enforcement of mechanic’s liens is to achieve prompt determination of lien claims, which encumber private property.” Id. at 782. West Central demonstrates that courts will dismiss an entire mechanic’s lien action, even against parties that were timely served with process, if plaintiff fails to diligently pursue service on all named parties to the action. Id.

Failure to join necessary parties is also cause for dismissal.

Failure to join a necessary party can also lead to dismissal for failure to prosecute within the six month deadline. Section 429.190 mandates that all parties to a contract for home improvement services shall be made parties to a mechanic’s lien action. Id. When read in context with § 429.170, a mechanic’s lien claimant must join and diligently prosecute a mechanic’s lien claim against all parties to a contract for home repair services within six months. Id. “[T]he joining of necessary parties is mandatory and the six-month limitation period is not tolled, rather, it continues to run if when an action is commenced, proper service is not secured within the six-month limitation.” Central Wholesale Distrib., A Div. of Topeka Lumber, Inc., v. Day, 672 S.W.2d 88, 95 (Mo. App. W.D. 1984). In one case, a mechanic’s lien action was dismissed where plaintiff failed to join and serve a contracting party within six months of filing suit, even though the contracting party was no longer in business. See Lee Deering Electric Company v. Pernikoff Construction Company, 247 S.W.3d 577 (Mo. App. E.D. 2008). The Pernikoff court held that absent proper joinder of and service on all necessary parties, it lacked jurisdiction over plaintiff’s mechanic’s lien claim. Id.

The above cases demonstrate that merely filing suit is not enough to satisfy the six-month deadline to prosecute a mechanic’s lien claim.