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#86:  Mechanic's Lien Deadlines and Additional Work

2/29/2020

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The requirement in RSA 447:9 that a mechanic’s lien must be secured within 120 days of the lienor’s last furnishing of labor or materials has occasionally spawned disputes over what counts as that last day.  A would-be lienor who returned to the job site to do something which he hopes has reset the clock may find that he has waited too long.
 
The general nature of activities that will not extend the 120-day life of the lien has been the subject of few New Hampshire Supreme Court cases.  Tolles-Bickford Lumber Co. v. Tilton School, 98 N.H. 55, 58 (1953), held that “where a contract to furnish materials is to be regarded as completed, a subsequent gratuitous furnishing of material in the nature of a substitution or replacement to remedy a defect in the material originally delivered will not operate to extend the time within which to claim a mechanic’s lien.”  Bader Co. v. Concord Electric Co., 109 N.H. 487, 489 (1969), affirmed a ruling “that the work done in March by Bader on Concord Electric’s premises ‘was inconsequential and not done pursuant to the contract but done at the request of the owner to correct defects.’ Work of that nature could be found not to be such as to extend the duration of plaintiff’s lien.”
 
Such characterizations – “gratuitous,” “inconsequential,” “a substitution or replacement,” “to correct defects” – are helpful, but not always easy to identify.  “Warranty” work won’t count, but “punch list” work might.  Identifying when the lienor’s contract can fairly be said to have been “completed” may be useful.  But see Fraser Engineering Company, Inc. v. IPS-Integrated Project Services, LLC,
2018 WL 1525725 at *5 (D.N.H. March 27, 2018) (“this court is disinclined to hold as a matter of law that work done pursuant to a contract necessarily extends a mechanics lien”).
 
Some would-be lienors hurt their cause by sending a final invoice for the full balance due for all contract work more than 120 days prior to securing their lien.  See Tolles-Bickford, supra at 57 (“When the plaintiff submitted its final bill on January 31, 1951, there was included in the total debits and credits and enclosed therewith an invoice entitled ‘Materials delivered to complete contract.’”).  Sending a final invoice strongly suggests that full performance was achieved as of its date, justifying the inference that any return to the site thereafter was for performing touch-up work.  See Fabcon Precast, LLC v. Zirkelbach Constr. Inc., No. 218-2015-cv-1011 (Rockingham Super. Ct. Nov. 25, 2015) (Delker, J.) (“Because it represented that the work was 100% complete, the Court finds that the work performed on May 20, 2015—both the repair of the panels and the caulking—was remedial. The 120 days began to run on January 15, 2015. Accordingly, the failure to perfect the lien within that time is ‘fatal’ and the lien must be lifted.”).
 
If all of the work that the lienor is suing for was performed outside the 120-day window, courts might even deem the subsequent work extra-contractual.  Peabody v. Wentzell, 123 N.H. 416, 419 (1983) (“We need not determine whether the work performed by the plaintiff after September, 1979, was inconsequential, gratuitous or done merely to remedy defects, because there was sufficient evidence to support the master’s finding that the work at issue was not included in the parties’ contract.  Consequently, it was immaterial whether the work was inconsequential, gratuitous, or done merely to remedy defects.”)  This suggests that a lienor may not reset the 120-day clock by performing work for which it is not seeking compensation.
 
The reference in Tolles-Bickford to sending a final bill has engendered some additional confusion.  In re McLaughlin, 2011 WL 1706791 (Bkrtcy. D.N.H. May 4, 2011), stated “The time starts to run not from the date the mechanic’s lien accrues but from when the final bill is sent or the last work is completed under the contract.”  If the phrase “whichever is later” had been added, the ruling would clearly be in tension with the statutory language; but if “whichever is earlier” were implied, the ruling would dovetail with the analysis discussed above.

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    Frank Spinella

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