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(A revised version of this article appears in The
Construction Lawyer, Volume 21, No. 4, October 2001,
published by the American Bar Association's Forum on the
Construction Industry.)
By John W. Ralls
Howrey LLP
A
contractor agreed to build a home. The contractor claimed
it was not fully paid for its work and sued the homeowners
to foreclose a mechanic's lien. The homeowners claimed that
the contractor had not perfected its lien because the pre-lien
notice was defective.
Minnesota's
mechanic's lien law provides that any contractor must provide
written notice to the owner that any person or company performing
construction work may file a lien if it is not paid. Minn.
Stat. § 514.011. The statute provides, "The notice,
whether included in a written contract or separately given,
must be in at least ten point bold type, if printed, or
in capital letters, if typewritten…." The statute
goes on, "A person who fails to provide the notice
shall not have the lien and remedy provided by this chapter."
The
construction contract contained a pre-lien notice with the
appropriate wording in 11-point printed type but not in
boldface. The homeowners moved for summary judgment based
on the lack of boldface type.
The
trial court denied the owner's motion for summary judgment.
The trial court found that the contractor substantially
complied with the pre-lien notice requirement because the
notice was printed in 11-point type (1 point larger than
required) and was printed near the owner's signature. The
trial court also noted that the owner did not claim prejudice
from the absence of bold print.
The
Minnesota Court of Appeals reversed. Niewind v. Carlson,
628 N.W.2d 649 (Minn. App. 2001) The court held that there
must be strict compliance with the requirements of the statute.
"If the legislature had merely intended to require
that notice be set out in a manner likely to bring it to
the attention of the buyer, it would have said so."
"We
understand the District Court's reluctance to invalidate
the lien on a technicality, but the unambiguous language
of the statue and case law require strict compliance with
the statute."
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For more information about the issues covered in this report, please contact John Ralls in our San Francisco office at 415-848-3362 or at rallsj@howrey.com or contact your Howrey attorney. For more information about Howrey's Construction Practice Group, click here.
©2001 Howrey LLP
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