Mechanic’s Lien Amount Shall Not Include Attorneys’ Fees
February 4th, 2015
The Utah Supreme Court has held that a mechanic’s lien does not include attorneys’ fees incurred by a contractor even when the lien statute allows recovery of reasonable legal fees. The court distinguished between the right to recover attorneys’ fees, and the amounts that could be considered in asserting the lien claim. The lien would be limited to the “value of service rendered, labor performed, or materials or equipment furnished” – the language in the Utah statute. The subcontractor, 2 Ton Plumbing, filed its initial lien claim for $7,470. Based on the right to recover attorneys’ fees, 2 Ton amended its lien claim twice, with the second amended notice for $38,714. Along the way the defendant successor owners stipulated to the original unpaid amount of $7,470 (owed by the original contractor), but argued that the lien was not supposed to cover legal fees. They also argued that attorneys’ fees of $44,857 awarded by the trial court were excessive in relation to the original amount sought. Amen to that. The Utah Supreme Court ruled that the right to recover attorneys’ fees was distinct from the items that could be included in the lien claim. The lien amount would be limited to services, labor, materials and equipment. So if a bond or other security was recorded (the Utah law provides a sliding scale for alternate security, from 150% to 200% of the lien amount), any excess could be applied to legal fees ultimately awarded, but would not become the basis for the contractor to file an amended claim that included increasing attorneys’ fees. The case was remanded to the lower court to recalculate the final judgment and allowable legal fees, given the high court decision. The case is 2 Ton Plumbing, L.L.C. v. Thorgaard, 2015 UT 29, 2015 Utah LEXIS 56 (Jan. 30, 2015).