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Missouri Court of Appeals Affirms Judgment Holding Knowing Misstatements; Invalidates Mechanic’s Lien

A recent decision from the Missouri Court of Appeals Western District examined a couple interesting items in the world of Missouri mechanic’s liens. Of interest to Midwest Construction Law Blog readers are two items: (1) what does a contractor need to prove in a breach of contract claim; and (2) how can a misstatement in a mechanic’s lien invalidate the entire lien? In R.K. Matthew Investment, Inc. v. Beulhah Mae Housing, LLC, the Court of Appeals offered us some guidance on these two important topics.

What does a Contractor need to prove in a breach of contract claim?

If you want to recover any money on a breach of contract claim, you will need to prove: (1) there was a contract; (2) there were rights and obligations under the contract; (3) a breach occurred; and (4) that there were damages from such breach. Now this is straightforward stuff on any breach of contract claim.

What makes the R.K. Matthew Investment, Inc. case interesting is the Court stated that in construction contract cases, party alleging a breach much prove that payment was not made for work performed in a good and workmanlike manner. This means you will need to put on evidence that you were not paid for your work but also that your work was completed in a “workmanlike” manner. In plain English, the work needed to be done right!

In R.K. Matthew Investment, Inc., the evidence showed that much of the work failed inspections and needed to be redone. In addition, some of the work was not completed and yet was included in the mechanic’s lien. Given these facts, the Court found that R.K. Matthew Investments had not met its burden of proof and was denied its claim for breach of contract.

What not to include in your mechanic’s lien statement:

Missouri requires that every mechanic’s lien contain a “just and true” account of what the contractor, subcontractor, or supplier is claiming in its lien. The requirements of a “just and true” account are more stringent for subcontractors and suppliers than for general contractors in that a general contractor can just state the amount due in a single lump sum, whereas the subcontractor or supplier must provide an itemization of labor and materials provided.

What a contractor, subcontractor or supplier cannot include are charges for items which have already been paid or charges for work that was never performed. These types of charges demonstrate an “intentional and knowing misstatement” in a mechanic’s lien and will likely invalidate the lien on the basis of the lien not containing a “just and true account.”

Key things to remember about you mechanic’s lien:

This case teaches us a couple things. First off, you should make sure you introduce evidence at trial that you were not paid for your work and that the work was completed in a “workmanlike” manner. The evidence could consist of your own testimony, photographs of the jobsite, or even reports from the building inspector. The second teaching point is to make sure that your lien statement does not contain egregious errors such as charges for things you have already been paid for or charges for items you did not complete. These types of items could prove fatal to your mechanic’s lien.