Under Liberal Construction of Lien Law Defendant Did Not Waive Its Mechanic’s Lien by Failing to Assert Lien-Based Counterclaims and Cross Claims In Its Initial Answer

The Third Department, in a full-fledged opinion by Justice Lahtinen, determined that the defendant had not waived its mechanic’s lien by failing to assert lien-based counterclaims and cross claims it in its initial answer and therefore could amend its answer accordingly:

“The duration of a lien is prescribed by statute and the right to enforce it, like the right to file and create it, is derived therefrom” … . That statutory framework “is remedial in nature and intended to protect those who have directly expended labor and materials to improve real property at the direction of the owner or a general contractor” … . The law governing mechanic’s liens is thus liberally construed to ensure that its purpose is accomplished, and substantial compliance with its provisions is generally sufficient (see Lien Law §§ 23, 40…).

Lien Law § 44 (5) provides in pertinent part that “[e]very defendant who is a lienor shall, by answer in the action, set forth his [or her] lien, or he [or she] will be deemed to have waived the same, unless the lien is admitted in the complaint, and not contested by another defendant.” * * *

…[H]ere, at the time [defendant] made its motion to amend its answer, plaintiff’s complaint, read in conjunction with [defendant’s] answer as well as the other pleadings, constituted a sufficient substantial admission of [defendant’s] lien such that, had the matter gone to trial on those pleadings, [defendant’s] rights would have been preserved under the statutory language … . Since [defendant’s] lien rights had not been already waived as a matter of law when it made its motion to amend its answer, its proposed counterclaim and cross claims were not wholly devoid of merit. Edwards & Zuck PC v Cappelli Enters Inc, 2014 NY Slip Op 08690, 3rd Dept 12-11-14