Magazine article Business Credit

Lien Rights in the Balance in RI Supreme Court Case

Magazine article Business Credit

Lien Rights in the Balance in RI Supreme Court Case

Article excerpt

In April 2003, a trial judge in Rhode Island ruled that mechanics' liens are unconstitutional under the Rhode Island and U.S. Constitutions on "due process" grounds. If the Rhode Island Supreme Court finds the state's mechanic's lien law to be unconstitutional under the due process clause of either the U.S. or the Rhode Island Constitution, contractors' lien rights across the country could face new challenges. For example, if the high court were to decide that due process requires a pre-lien hearing, the usefulness of mechanic's liens throughout the country would be diminished, and liens currently on record would be invalidated.

The Rhode Island Supreme Court has granted the American Subcontractors Association, Inc. (ASA) and its chapter in the state, the Rhode Island Subcontractors Association (RISA), permission to intervene as amici curiae, or "friends of the court."

"Lien rights are an essential part of the system of justice that protects specialty trade contractors, who work on a promise of future payment," said ASA President Rick Wanner, executive vice president of Wanner Metal Worx in Delaware, Ohio. "Any court decision that threatens to weaken lien rights must be taken very seriously. ASA believes that the wrong decision in this case in Rhode Island could set an undesirable precedent."

The case in dispute is a lien enforcement lawsuit, Gem Plumbing v. Rossi. A trial court dismissed Gem Plumbing's lien enforcement action, reasoning that the law failed to provide enough "process" to protect the property owner against the contractor's lien claim. The trial judge reasoned that the law failed to provide enough "process" to protect the property owner against the contractor's lien claim because "[t]here is no provision in the statute for a hearing to determine the validity of the lien or the claim underlying the lien until some point after the filing of the petition to enforce the mechanics' lien. …

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