Gray•Duffy Successfully Defeats Contractor’s Claim on Mechanic’s Lien and Recovers $175,000 for Firm’s Client

May 2013

Overview

Michael Eisenbaum of Gray•Duffy’s Encino office successfully defended a general contractor’s $26,000 claim on mechanic’s lien, and recovered $175,000 from that contractor to pay for repairs and completion of the work.

Discussion

Jim Smith v. El Capitan Environmental

Gray•Duffy’s clients are the owners of a large ranch house located on several acres of rural land. The clients hired local general contractor Jim Smith to repair and renovate the ranch house for the project amount of $600,000. As the construction work progressed, it became evident that the contractor was not following the plans, charged extra for work that was included within the original contract price and failed to adequately staff the project. Eventually, the contractor was removed from the job, and the firm’s clients hired a different contractor to finish the project and repair the defective work.

Despite being already over-paid for the work he performed, the contractor filed a mechanic’s lien against the property. He then filed suit on the mechanic’s lien to collect the amount he claimed was owed. In response, Mr. Eisenbaum filed a cross-complaint for various defects in the construction, damage caused by the contractor’s failure to protect the construction from the elements and for charging the owners for work not performed. As discovery progressed, it was established that the client’s claims were far stronger than those of the contractor.

The case went to mediation and a settlement was reached in which the contractor agreed to dismiss his claims entirely, release the mechanic’s lien and pay the owners $175,000 for all the necessary repairs and completion of the work.

Please Note: This article is necessarily general in nature and is not a substitute for legal advice with respect to any particular case. Readers should consult with an attorney before taking any action affecting their interests.