When it comes to Kansas mechanic’s liens, how important is the name of the contractor on the lien if you’re a subcontractor or material supplier? Two cases in the past several years out of the Kansas Court of Appeals are very clear…the form is every bit as important as the substance. You’ve got to dot your i’s and cross your t’s, literally. The cases concerned K.S.A. 60-1103(1) which states “the lien statement must state the name of the contractor…” The Court left no room for doubt that the name must be more than close. It must be exact. In both cases the subcontractor or supplier almost had the name of the contractor correct on the liens, but not quite. The two cases are Nat’l Restoration Co. v. Merit Gen. Contractors, Inc., 41 Kan. App. 2d 1010 (2009), and Tradesmen Int’l, Inc. v. Wal-Mart Real Estate Bus. Trust, 35 Kan. App. 2d 146 (2006).
The National Restoration case involved the construction of an Overland Park Dillon’s grocery store by Merit General Contractors, Inc., the HVAC subcontractor, and the ductwork supplier. After the HVAC subcontractor had been paid, it defaulted on its contract leaving behind unpaid vendors including the ductwork supplier. The supplier filed a mechanic’s lien naming Merit Construction Co., Inc. as the contractor, not Merit General Contractors, Inc. The Court affirmed the lower court’s summary judgment ruling that Merit Construction Co., Inc. is not the same legal entity as Merit General Contractors, Inc. even though both companies shared a common address and officers, and the lien was fatally defective.
This was the second time the Kansas Court of Appeals ruled on nearly an identical set of facts. In the earlier Tradesman International case, a concrete subcontractor had also defaulted on its subcontract with Merit General Contractors, Inc. on a Wal-Mart Project leaving behind unpaid vendors in the process. A lower tier supplier to the subcontractor also incorrectly named Merit Construction Co., Inc. in its mechanic’s lien statement. The results were the same as the Court ruled the wrong contractor was named and therefore the lien was fatally defective and unenforceable.
There are at least four lessons to be learned from these two cases and others like them, and each is applicable under Kansas, as well as Missouri, mechanic’s lien laws: 1) liens are creatures of statutes and must be perfect to be enforceable; 2) there are many pitfalls in preparing an enforceable lien; 3) if you make a mistake, you lose; and, 4) you should seek the services of an experienced construction lawyer to help you file and foreclose on your mechanic’s lien claims.