Mechanics Lien Exaggeration: Grounds to Dismiss a Lawsuit in New York?

Mechanics Lien Exaggeration: Grounds to Dismiss a Lawsuit in New York? By Elliot Singer on March 24, 2013 Summary Judgment: An Introduction Most people think that if a lawsuit proceeds to trial, there’s only one opportunity to win or lose: When a jury issues a verdict. In civil trials, however, this scheme isn’t always true. Let’s say that you’re a property owner and that a subcontractor who performed work on your home filed a mechanics lien on the property and then sued to foreclose on it. As the property owner, however, you’re frustrated. Not only did you actually pay the subcontractor for the work he performed (and can document it), even if you didn’t pay him, the amount he claims that he is owed is much more than the two of you ever agreed upon. This is called lien exaggeration (a topic previously discussed on the PAID blog). Perhaps he’s saying that he’s owed $40,000 on a $10,000 kitchen installation. In civil trials, the plaintiff (the party that files the lawsuit) is permitted to make its case first. In doing so, the plaintiff may make an opening statement, call favorable witnesses, and introduce supporting exhibits. But what happens if the plaintiff’s case is so weak that there’s no way a jury could ever find in the plaintiff’s favor? Courts don’t like to waste time, so if the defendant believes that “no reasonable juror” could conclude that the plaintiff should win, even if the defendant doesn’t make its case. The defendant will do something called “moving for summary judgment.” In essence, the defendant is saying to the judge that since the plaintiff hasn’t presented enough evidence to win, the court should dismiss the lawsuit before the defendant presents any of its own evidence. This is actually a fairly common request. Summary Judgment for Lien Exaggeration Going back to our example above, are you, the defendant and property owner entitled to summary judgment in New York if you can show that the plaintiff and subcontractor who claims that he is owed $40,000 exaggerated the amount he is claiming in the lien? A recent case decided on March 14, 2013, On the Level Enterprises v. 49 East Houston, L.L.C., addressed this exact issue. Although it is short, the court’s opinion is actually rich in clarification of the law. Specifically, the court held that while it is possible for courts to issue summary judgment against plaintiffs who file exaggerated liens, in this case, summary judgment would be inappropriate.

Protecting Supplier Lien Rights in New Jersey - Follow the Money

Protecting Supplier Lien Rights in New Jersey - Follow the Money Posted by Daniella Gordon on January 02, 2013 By: Tony Byler and Daniella Gordon Suppliers frequently provide supplies on lines of credit to contractor customers who are involved in multiple construction projects. In an ideal world, both the customer and the supplier would maintain accounting records keeping each construction project and the payments attributable to those construction projects separate and accurate. Out of practical convenience, however, contractors and the suppliers sometimes lump projects and payments into a single account, making it difficult, if not impossible, for the supplier to determine which payments apply to each ongoing project, i.e., a task that is necessary for a supplier seeking to assert a mechanics’ lien claim against a particular project when its customer fails to timely pay. Several weeks ago the Appellate Division of the New Jersey Superior Court, in L&W Supply Corporation v. Joe Desilva, described the affirmative duty suppliers have to determine the source of its customers’ payments for materials, by requiring suppliers to ask. According to the Court, a supplier who fails to do so “sacrifices its rights under the Construction Lien Law.” A brief review of the evolving mechanics’ lien laws relating to suppliers helps explain the Court’s potentially severe ruling. New Jersey’s Construction Lien Law The New Jersey Construction Lien Law (“Lien Law”) allows contractors and suppliers who are owed payment for work or materials on privately procured projects to file a lien against the property where the improvements (labor and supplies) were constructed. The lien encumbers the property, which prevents the owner from selling or transferring the property without first dealing with the contractor’s or supplier’s payment claim. The purpose of the Lien Law is twofold: first, to secure payment of money due to contractors and suppliers; and second, to protect owners from paying more than once for the same work or materials. In order to protect owners from being forced to pay twice for the same work or materials, the Lien Law provides that the value of a lien cannot exceed the value of the “lien fund,” which, in the simplest terms, is the amount of money that remains unpaid on the job. CONTINUE READING ARTICLE

Non-profit credit counseling agency Take Charge America

Do’s and Don’ts for Managing Your Credit Score Non-profit credit counseling agency Take Charge America offers tips to boost your financial outlook, deal with credit card debt and build credit history PHOENIX--(BUSINESS WIRE)-- Few financial figures are as important as a credit score. The three-digit figure has a major impact on daily life – dictating what consumers can buy, how much credit they can obtain and even where they choose to reside. A credit score is an estimate of credit risk, which is based on a consumer’s credit report. Lenders use this number to determine how likely applicants will be to repay a loan or line of credit in a timely manner. The higher the score, the better interest rate they’ll receive. “Credit scores matter whether your credit history is pristine, new or needs some work,” said Mike Sullivan, chief education officer for Take Charge America, a national non-profit credit counseling and debt management agency. “Improving your score requires a regular effort. You need to continually be mindful of your purchases and your payments.” Sullivan offers five do’s and don’ts for managing a credit score and maintaining a positive credit history: •Don’t Miss Credit Card Payment Due Dates – Credit card companies set deadlines in stone. Missing just one payment – even by a day or two – can negatively impact your credit score. On the flip side, a history of on-time payments can help improve your credit score. •Do Pay More than the Minimum Amount Due – Submitting minimum payments can be a very slow way to pick away at your credit card debt. Bigger payments can make a big impact on your total debt level, plus they can help raise that score. •Don’t Apply for New Credit – If you are trying to improve your credit, applying for new credit could not only lower your score, but you’re more likely to get higher interest rates on the loan or line of credit. •Do Decrease the Total Amount of Debt Owed – Paying down your total debt, including credit cards and other personal loans, is among the fastest ways to improve your credit score. •Don’t Close Old Credit Card Accounts – Closing a credit card can lower your credit score – especially if it’s been open for more than three years – because it reduces your credit-to-debt ratio, a major factor credit bureaus use to determine your score. If you want to remove the temptation to spend, consider cutting or storing the card while keeping the account open. To keep tabs on credit history and ensure the data is correct, Sullivan recommends consumers check their credit reports at least once a year. A free credit report can be obtained annually from each of three credit bureaus at www.annualcreditreport.com. A credit score can also be obtained for a small fee. It’s common for the score to vary slightly with each bureau. For more financial tips, visit Take Charge America. About Take Charge America, Inc. Take Charge America, Inc., a non-profit financial education, credit counseling, housing counseling and debt management agency, is dedicated to helping consumers nationwide improve their financial futures. Founded in 1987, the organization has helped more than 1.6 million consumers nationwide manage their personal finances and debts. To learn more, visit www.takechargeamerica.org or call (888) 822-9193. THIS IS NOT AN ENDORSEMENT BY OUR BLOG JUST A LINK TO A RESOURCE GOOD LUCK!

Legal Mess Continues for Banks

Legal Mess Continues for Banks By Zacks Equity Research | According to Bloomberg, the U.S. Court of Appeals in Manhattan turned down the dismissal of a lawsuit by a lower court ruling on Friday. The lawsuit was filed by the New Jersey Carpenters Health Fund against The Royal Bank of Scotland Group plc (RBS), Deutsche Bank AG (DB), Wells Fargo & Company (WFC) and NovaStar Mortgage Inc. The lodged complaint claims that these banks misrepresented documents as an underwriter in the sale of over $1.3 billion in mortgage-backed securities in 2007. The fund alleged that the banks deceptively sold the mortgage-linked securities that gradually failed and also misrepresented the value of instrument by providing materially misleading statements. Moreover, the New Jersey pension fund alleges that the banks failed to expose NovaStar’s ignorance in complying with its own underwriting standards and the company’s use of overstated appraisals. The banks have been blamed for overlooking these issues while buying loans from NovaStar and selling them as securities to investors. Eventually, the market showed a downtrend, resulting in huge losses for common investors. Previously, the pension fund sued a larger group of securities in six offerings worth $7.7 billion. However, in 2011, U.S. District Judge, Deborah Batts dismissed the complaint, claiming that the fund invested in just one offering and therefore a lawsuit cannot be filed for the other five offerings. Moreover, the judge highlighted the absence of supporting documents related to the case. After the dismissal of the case, the pension fund again filed the lawsuit in 2011 over 2007 securities. Currently, the appeals court approved the allegations and regarded them as adequate for proceeding with the case. Moreover, the lower court has been intimated to analyze whether other offerings can be sued by the fund. However, spokesmen from the banks refrained from commenting on the issue. The continuously increasing number of lawsuits is apprehended to dent the reputation of the banks and financials. However, investors who lost their hard-earned money in such investments should get some reprieve. Among other banks, JPMorgan Chase & Co. (JPM) and Citigroup have also been legally accused of distorting documents related to mortgage-backed securities and other losses in 2011.