Judge: Maurice A. Leiter, Case: 23STCV12208, Date: 2024-12-11 Tentative Ruling

Case Number: 23STCV12208    Hearing Date: December 11, 2024    Dept: 54

Hearing Date: December 11, 2024

Department 54, Judge Maurice A. Leiter

Motion to Release or Reduce Mechanic’s Lien

Moving Party: Defendant Inspire Hollywood Propco, LLC

Responding Party: Plaintiff Essey Construction Company, Inc.

T/R:      DEFENDANT’S MOTION TO RELEASE OR REDUCE MECHANIC’S LIEN IS DENIED.

DEFENDANT TO NOTICE.

If the parties wish to submit on the tentative, please email the courtroom at SMCdept54@lacourt.org with notice to opposing counsel (or self-represented party) before 8:30 am on the day of the hearing.

The Court considers the moving papers, opposition, and reply.

“Under California's mechanic’s lien law, a mechanic’s lien attaches to any interest in a work of improvement and the real property on which it is situated.  The lien is a direct lien, similar to a mortgage, and is imposed as security for payment of sums due the mechanic.” (Wachovia Bank v. Lifetime Industries, Inc. (2006) 145 Cal.App.4th 1039, 1050; see also Cal. Const., art. XIV, § 3.) The California mechanic’s lien statutes are intended “to prevent unjust enrichment of a property owner at the expense of a laborer or material supplier.” (Burton v. Sosinsky (1988) 203 Cal.App.3d 562, 568.) The relevant statute, California Civil Code section 8430, governs amounts permissibly included in mechanic’s liens, and provides as follows:

“(a) The lien is a direct lien for the lesser of the following amounts:

(1) The reasonable value of the work provided by the claimant.

(2) The price agreed to by the claimant and the person that contracted for the work. . . .

(c) This section does not preclude the claimant from including in a claim of lien work performed based on a written modification of the contract, or as a result of rescission, abandonment, or breach of the contract. If there is a rescission, abandonment, or breach of the contract, the amount of the lien may not exceed the reasonable value of the work provided by the claimant.”

“When a claimant has recorded a mechanic’s lien and then secured a stay of an action to foreclose the lien, an owner must have a speedy court remedy for showing that the lien is invalid.” (Lambert v. Superior Court (1991) 228 Cal.App.3d 383, 389.)  Accordingly, a Lambert motion examines the “probable validity of the lien” under Civil Code section 8430. (Id. at p. 388.) The question is “not the ultimate merit of the contractor’s claim but whether the contractor should be entitled to retain the security of the mechanic’s lien . . . pending a resolution of the matter.” (Cal Sierra Construction, Inc. v. Comerica Bank (2012) 206 Cal.App.4th 841, 850.) The court is empowered to reduce or remove the lien to the extent that it does not comply with Civil Code section 8430.

In a Lambert motion, the burden is on the claimant-plaintiff to establish the probable validity of the lien. (See Cal Sierra Construction, supra, 206 Cal.App.4th at p. 845; Lambert, supra, 228 Cal.App.3d at p. 387.)

Defendant Inspire moves to release or reduce the mechanic’s lien filed by Plaintiff against the real property at issue in this construction action. The current balance recorded on the lien is $5,007,609.10. Defendant asserts that the lien is invalid because Plaintiff engaged in fraud by secretly using another company as the general contractor, Plaintiff refused to credit Defendant for direct payments made to subcontractors, and Plaintiff did not offset the amount of the lien with liquidated damages.

In opposition, Plaintiff presents evidence showing Defendant was aware of all companies used by Plaintiff and that Plaintiff credited Defendant for all payments made to subcontractors. Plaintiff disputes any obligation to pay liquidated damages under the relevant contract provisions. This is sufficient to show the probable validity of the lien.

Defendant’s motion is DENIED.