Schottenstein Zox & Dunn

The mechanic’s lien statutes are strictly construed by the courts as to whether a lien has been perfected. For most, but not all private projects, if the Notice of Commencement and the Notice of Furnishing have been filed, a lien is perfected if the affidavit for a mechanic’s lien is filed within 75 days of the date on which the last of the labor or work was performed or material was furnished by the person claiming the lien.

Can unauthorized work extend the time period for filing a mechanic’s lien? In the case discussed below, the subcontract agreement stated that the subcontract work was to be done at such time, in such manner and in such quantities as directed by the general contractor. In other words, the subcontractor was to perform its work only when the general contractor authorized it.

In this case, the subcontractor performed work using a supplier’s equipment during a period when work was not authorized by the general contractor. The issue became whether this “unauthorized” work extended the time period for the supplier to file a mechanic’s lien when the subcontractor fails to pay the supplier the lease payments for the equipment.

Kroger contracted with general contractor (GC) to build a Kroger store. The GC retained a subcontractor to perform the excavation work on the project. Kroger also entered into an agreement with an adjacent landowner that allowed Kroger to deposit and remove dirt on the adjacent lot during construction. The subcontractor leased equipment from the supplier who issued a Notice of Furnishing to Kroger and the GC.

For six months, the subcontractor moved several thousand cubic yards of dirt from the Kroger property to the adjacent property. When winter weather arrived in December, the GC suspended work with the intent to resume work the next spring. The equipment lease between subcontractor and supplier expired at the end of December. The subcontractor failed to pay the supplier and defaulted on the lease.

For six weeks at the beginning of the next year, the subcontractor performed work with the supplier’s equipment at the project site. In March, the supplier removed its equipment and in April filed an Affidavit for Mechanic’s Lien against the project. The affidavit stated that March 1 was the last date its equipment was used at the project. The supplier filed an action for foreclosure of the lien in June.

Kroger and the GC argued that the mechanic’s lien was not perfected because the supplier failed to file its affidavit within 75 days of authorized work being completed on the project using the supplier’s equipment.

The supplier responded that the subcontractor performed work on the site, using the supplier’s equipment, within 75 days prior to the filing of the lien affidavit.

The Court of Appeals held that work performed by the subcontractor after Dec. 28 was not authorized by the general contractor and therefore was not in furtherance of the contract. The record indicated that the GC had not authorized the subcontractor to even be present at the work site after Dec. 28 because the project had been suspended until the next spring. Therefore this “unauthorized” work did not toll the running of the 75 days for the supplier’s filing of the affidavit for the mechanic’s lien. Even the work performed by the supplier to get its equipment off the work site did not extend the time period for the supplier to file the mechanic’s lien.

Because the work was not authorized in January and February, the court held that the 75 day time period for the supplier to file a mechanic’s lien started to run no later than Dec. 28.

Argo Construction Company, Inc. v. Kroger Limited Partnership (June 15, 2009), Clinton App. No. CA2008-09-036, 2009-Ohio-2811.