Picerne Construction Corp. v. Castellino Villas
Facts: An owner of undeveloped land hires a contractor to build a residential apartment complex containing multiple buildings. The owner retains a portion of the money earned by the contractor which will be paid on completion of the project. The city issues certificates of occupancy as each building is completed. After the last certificate of occupancy is issued, the owner acknowledges partial completion of the project. Work continues for several weeks before the owner acknowledges final completion of the project. The owner does not release the retention proceeds and, within 90 days of the owner acknowledging final completion but more than 90 days after the last certificate of occupancy was issued, the contractor records a mechanic’s lien on the property.
Claim: The owner seeks to nullify the mechanic’s lien, claiming it is invalid since the 90-day window for the contractor to record a mechanic’s lien commenced when the city issued the final certificate of occupancy indicating substantial completion of the project.
Counterclaim: The contractor seeks the ability to foreclose on their mechanic’s lien and recover the money owed by the owner, claiming the mechanic’s lien is valid since it was recorded within the 90-day window of the actual completion date which occurred when the owner acknowledged the final completion of the project.
Holding: A California court of appeals holds the mechanic’s lien is valid and the contractor may foreclose on its lien since the lien was recorded less than 90 days from the actual completion of the project based on the date the owner signed the document acknowledging final completion. [Picerne Construction Corp. v. Castellino Villas (2016) 244 CA4th 1201]
