June 4, 2014
Using the doctrine of “equitable subrogation” to establish lender priority over mechanic’s liens would “completely defeat” the legislative intent behind mechanic’s liens statutes and “improperly shift the known and assumed risks” from construction project owners and lenders to contractors and subcontractors, the American Subcontractors Association (ASA) and ASA of Arizona told the Supreme Court of Arizona.
In the associations’ amicus brief in The Weitz Company, LLC, Plaintiff-Appellee, v. Nicholas Heth, et al., Defendants-Appellants, ASA and ASA of Arizona urged the state Supreme Court to affirm a court of appeals decision, saying, “The mechanic’s lien statutes are one part of the intricate statutory framework adopted by the legislature to protect subcontractors and ensure that laborers and materialmen are paid for their work All 50 states have some form of mechanic’s lien statutes. The language and details of the statutes vary widely, as does the jurisprudence. However, the basic premise of all is that those whose labor or materials go into improving real estate should be permitted, in fairness, to satisfy their unpaid bills out of that real estate.”
“Those involved in construction depend on their mechanic’s lien rights as security for payment for the work they perform,” said Matthew B. Meaker, attorney, Sacks Tierney P.A., Scottsdale, Ariz. Sacks Tierney prepared the ASA brief in this case. “Affirming the Court of Appeals decision regarding equitable subrogation results in a bright line rule that all stakeholders can rely upon.”