Appeals Court Ruling Impacts Recording of Lien Claims

By Paul R. Cressman Jr.

On March 24 2010 Division II of the Washington Court of Appeals ruled in the case of Williams v. Athletic Field Inc. that a Claim of Lien recorded by a lien service LienData USA Inc. (“LienData”) was invalid for failure to utilize a corporate acknowledgment. In this case LienData was clearly identified as the agent for the claimant and an individual employee of LienData signed the verification testifying to the truth and correctness of the Claim of Lien but no corporate acknowledgment was utilized. Note that both a verification and an acknowledgment are to be signed before a Notary Public.

The Court held that because LienData was the claimant’s agent and was a corporation LienData was required to sign an acknowledgement of the Claim of Lien using the corporate form of acknowledgment. Because a corporate acknowledgment was required the sample form specified in Washington’s lien statute was not sufficient because it only satisfies the requirements for signature by an individual not someone signing in a representative capacity. As a result the Court held that the lien was invalid.

If a lien service has recorded liens on your behalf you should have your lawyer review such liens. Because of additional potential ramifications of this case it is probably wise for contractors to consult a lawyer prior to the recording of future liens.

Paul R. Cressman Jr. is Founding Member of Ahlers & Cressman PLLC and a member of AGC’s Legal Affairs Committee.