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Recent New Jersey Appellate Division Decision Examines The Amended Sections Of The Construction Lien Law

construction-machine-3412240__340-300x202The Appellate Division of New Jersey’s Superior Court recently reviewed the signature requirements for filing a construction lien claim prior to and after the 2011 amendments to New Jersey’s Construction Lien Law.  Our construction attorneys represent contractors in construction law matters including but not limited to filing and/or defending against construction lien claims under New Jersey’s Construction Lien Law, N.J.S.A. 2A:44a-1, et seq.

 

The Court’s review was in Diamond Beach, LLC v. March Associates, Inc., decided in December 2018.  The Court was required to review the signatory requirements “pre” and “post” Construction Lien Law amendments, and determine whether the amendments should retroactively apply to previously filed construction liens.  Prior to the 2011 Construction Lien Law amendments, N.J.S.A. 2A:44A-6 required that a lien claim be signed, acknowledged, and verified by “a partner or duly authorized officer” of the partnership or organization.  The 2011 Construction Lien Law amendments dropped the requirement that the lien claim be signed by a “duly authorized officer” and instead required that the lien claim comply with the N.J.S.A. 2A:44A-8 claim form which requires that a “officer/member” sign the form.

 

While the amendment may have lowered the filing requirements, the Court found that the 2011 changes to the signatory requirements do not retroactively apply to the lien at issue, which was filed prior to the 2011 amendments, because the amendments did not expressly state that they were retroactive.  Further, the Court found that the amendments were not “curative” because there was no evidence that they were made to “cure” a previous misinterpretation of the law.  Diamond Beach, LLC v. March Associates, Inc., 457 N.J. Super. 265, 277–78 (App. Div. 2018).

 

Based on the signatory requirements prior to the 2011 Construction Lien Law amendments, the Court upheld the trial court’s determination to discharge the lien in question because the claimant’s accounting & information systems manager was not a “duly authorized officer” because the claimant failed to establish the claimant’s Board of Directors authorized him to sign the lien claim on behalf of the company.  The Court further upheld the trial court’s award for attorney’s fees and costs to affected party by the lien claim based on the claimant’s failure to comply with the requirements of the Construction Lien Law. Diamond Beach, LLC v. March Associates, Inc., 457 N.J. Super. 265, 277–78 (App. Div. 2018).

 

In making its decision, the Court relied on the earlier 2018 New Jersey Appellate Division decision in NRG REMA LLC v. Creative Environmental Solutions Corp., which held that a lien claim was unenforceable where there was no written evidence that the claimant’s “financial director” was duly authorized to sign the lien claim on behalf of the claimant.

 

While Diamond Beach, LLC v. March Associates, Inc. may only specifically address the signatory requirements for filing a construction lien claim, the lessons learned from this case apply to all requirements outlined under the Construction Lien Law.  Simply put, the lesson is make sure to follow them exactly or face the consequences.  If you do not, you run the risk of having your construction lien claim discharged and paying the other side’s attorney’s fees and costs.

 

Our construction law attorneys are trained in navigating the Construction Lien Law for both contractors in commercial and residential projects, as well as business and homeowners when construction liens are filed against their properties. To set up an appointment to speak with one of our construction law attorneys, please call (973) 890-0004 or e-mail us.  We can help.