residential construction mechanic’s liens - … · a general mechanic’s lien overview is...

RESIDENTIAL CONSTRUCTION MECHANIC’S LIENS -PERFECTION AND REMOVAL

J. PAULO FLORESSCHEEF & STONE, L.L.P.

5956 SHERRY LANE, SUITE 1400DALLAS, TEXAS 75225

(214) 706-4200FAX: (214) 706-4242

[email protected]

State Bar of TexasRESIDENTIAL REAL ESTATE

CONSTRUCTION LAW COURSEFebruary 18, 2005 - DallasFebruary 25, 2005 - Austin

CHAPTER 8

J. PAULO FLORESScheef & Stone, L.L.P.

5956 Sherry Lane, Suite 1400Dallas, Texas 75225

(214) [email protected]

Legal Education

The University of Texas School of LawJ.D. 1989Vinson & Elkins ScholarDelta Theta Phi Legal Fraternity (Vice President, Treasurer)

Undergraduate Education

The University of Texas at Austin The University of Hawaii at ManoaB.A. With Highest Honors - 1986 Attended Fall 1982 - Spring 1984Phi Beta Kappa, Phi Kappa Phi Selected Studies Honors ProgramMajor: Psychology; Minor: Government

EmploymentScheef & Stone, L.L.P. – Of Counsel, September 2004 to PresentJ. Paulo Flores, P.C. - Director, November 1, 2003 to September 2004Gessner & Flores, P. C. - Director, February 1, 1998 to October 31, 2003Associate Municipal Judge, City of Dallas, Texas - June 1, 1996 to November 2001Law Office of J. Paulo Flores, P.C. (Dallas, Texas) - Director, July 1994 to January 31, 1998Miller, Hiersche, Martens & Hayward (Dallas, Texas) - Associate Attorney, September 1989 to July 1994

Experience

Experienced in federal and state trial practice, as well as arbitrations, in Dallas, Tarrant, and the surrounding counties,as well as Harris, Travis, and Bexar counties. Primary concentration in construction law, employment law, tortdefense, bankruptcy, and commercial and business litigation. Transactional experience primarily in commerciallending secured by real or personal property, real estate, and leasing. Licensed attorney-mediator. AAA arbitrator. Author and lecturer on real estate and construction law issues. Associate Municipal Judge for the City of Dallas,Texas for over five years. One of nine Commissioners on the Texas Residential Construction Commission.

Legal Affiliations - State Bar of Texas (Admitted November 1989) (Member: Construction Law Section)- U.S. District Courts for the Northern and Eastern Districts of Texas- American Bar Association (Member: Forum on Construction Industry)- Dallas Bar Association (Member: Business Litigation Section and Construction Law Section - Executive

Council Member 1994-1995; Newsletter Editor 1996; Treasurer 1997; Secretary 1998; Vice-Chair (ProgramChair) 1999; Chair 2000)

- Hispanic Bar Association- College of the State Bar of Texas

Residential Construction Mechanic’s Liens Chapter 8

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TABLE OF CONTENTS

I. INTRODUCTION . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1

II. SOME GENERAL MECHANIC’S LIEN CONCEPTS . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1A. The Form of the Mechanic’s Lien . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1B. The Trapping Notice . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2C. The Lien Filing Notice . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2D. Other Important Notices . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2E. Mechanic’s Lien Foreclosure . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 3

III. RESIDENTIAL CONSTRUCTION . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 3

IV. HOMESTEAD . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 4

V. THE MECHANIC’S OF LIEN REMOVAL UNDER SECTION 53.160 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 5A. Generally . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 5B. Declaratory Judgment . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 6C. The Motion . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 6D. Obtaining the Hearing . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 6E. The Response . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 6F. The Hearing . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 7G. The Order . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 7H. Filing the Order and Clerk’s Certificate . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 7

VI. INTERESTING MECHANIC’S LIEN REMOVAL ISSUES . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 7A. The Only Reported Cases . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 7B. Summary Motion versus Summary Judgment . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 8C. Evidence at Hearing . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 8D. Original Contractor’s Standing . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 8E. Attorneys’ Fees . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 9F. What if a Party seeking lien removal prevails at the §53.160 hearing/order stage, but the lien claimant then

prevails at trial? . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 9G. Arbitration Agreements . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 9H. Constitutional Lien . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 9

APPENDICES:

Appendix A . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 11Appendix B . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 13Appendix C . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 15Appendix D . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 19Appendix E . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 21Appendix F . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 23Appendix G . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 31Appendix H . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 35Appendix I . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 37


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RESIDENTIAL CONSTRUCTIONMECHANIC’S LIENS: PERFECTINGM E C H A N I C ’ S L I E N S A N DREMOVING IMPROPER LIENS

I. INTRODUCTIONIn the 75th legislative session, the Texas Legislature

passed extensive, new requirements for the perfection ofmechanic’s liens on residential construction projects. Inthat same session, the Legislature also passed section53.160 of the Texas Property Code entitled “SummaryMotion to Remove Lien.” The stated purpose of thisstatute was to provide a quick, inexpensive remedy forremoval of a technically deficient mechanic’s lien. Thestatute became effective September 1, 1997.

In order to practice in this area, it is important youhave a good understanding of basic mechanic’s lienconcepts, and a thorough understanding of how theseconcepts are modified in the area of residentialconstruction. The same basic understandings areimportant when you seek to remove a mechanic’s lienthat has been placed on a residential construction project.

A general mechanic’s lien overview is presentedbelow, followed by a detailed discussion of mechanic’sliens in residential construction, as well as a subset ofresidential construction - - homestead construction; andI conclude with addressing removal of mechanic’s liens.

II. SOME GENERAL MECHANIC’S LIENCONCEPTS

A. The Form of the Mechanic’s LienUnder section 53.054, a mechanic’s lien, in order to

be valid, must comply with the following:

1. The affidavit must be signed by the personclaiming the lien or by another person on theclaimant’s behalf and must containsubstantially:

a. a sworn statement of the amount of theclaim;

b. the name and last known address of theowner or reputed owner;

c. a general statement of the kind of workdone and materials furnished by theclaimant and, for a claimant other than anoriginal contractor, a statement of eachmonth in which the work was done andmaterials furnished for which payment isrequested;

d. the name and last known address of theperson by whom the claimant wasemployed or to whom the claimantfurnished the materials or labor;

e. the name and last known address of theoriginal contractor;

f. a description, legally sufficient foridentification, of the property sought to becharged with the lien;

g. the claimant’s name, mailing address, and,if different, physical address; and

h. for a claimant other than an originalcontractor, a statement identifying thedate each notice of the claim was sent tothe owner and the method by which thenotice was sent.

Tex. Prop. Code §53.054.

In the same legislative session that saw the creationof 53.160, the Legislature added new requirements to theform of the mechanic’s lien affidavit. Despite the factthat these additional requirements are necessary for anylien that relates to an original contract entered into afterSeptember 1, 1997, almost seven years ago, it is still notuncommon to encounter mechanic’s liens that do notcontain one or more of the additional requirements. Itbears emphasizing, therefore, the following are the four“new” requirements that must be in the lien affidavit:

1. The claimant must disclose the last knownaddress of the owner or reputed owner,original contractor, and person with whom theclaimant contracted.

2. The claimant must state its physical and, ifdifferent, its mailing address. (So, if theClaimant has a physical address and a P.O.box, for example, both must be disclosed.)

3. In connection with the general statement of thekind of work or materials furnished to theproject by the claimant, any claimant other thanan original contractor must state the month ormonths in which the work was performed orthe materials were delivered.

4. For a claimant other than an originalcontractor, the claimant must identify the dateon which each notice of claim was sent to theowner and original contractor and must statethe method the notice was sent. (Be aware,the statute requires the method to be certifiedor registered mail).


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B. The Trapping NoticeThe notice of claim required under Chapter 53 of

the Texas Property Code is referred to as a “TrappingNotice,” as its purpose is to trap funds for the claimant’sbenefit. (This notice is also commonly known as an“intent to lien” notice in the construction industry.) Aproper and timely trapping notice for claimants other thanoriginal contractors is a prerequisite to being able to filea mechanic’s lien. The following chart sets forth thenotice requirements and timing:

Ownerù

(1) Original Contractor (G. C.)ù

(2) Sub or supplier (first tier)ù

(3) Sub of sub or supplier to sub (second tier)or lower

(1) Since the original contractor contracts directlywith the owner, no trapping notice is necessarysince obviously the owner is aware that he orshe has not paid the original contractor.

(2) The subcontractor or supplier contracting withthe original contractor must give notice to theowner by the 15th day of the third mouthfollowing each month in which all or part of thelabor was performed or materials weredelivered (the “Three Month Notice”).

(3) The sub of a sub and the supplier to a sub (aswell as any lower tier claimant) must givenotice to the original contractor by the 15th dayof the second month following each month inwhich all or part of labor was performed ormaterials were delivered (the “Two MonthNotice”). One must then give the same noticeto the owner, with a copy to the generalcontractor, by the 15th day of the third month(the “Three Month Notice”).

The trapping notice must:

(1) Be sent certified mail, return receipt requested;and

(2) Contain the following magic language:

“The owner may be personally liableand the owner’s property may besubject to a lien unless the owner

withholds payments from thecontractor for payment of the claim,or the claim is otherwise paid orsettled.”


C. The Lien Filing NoticeA lien claimant must give the owner and, if

applicable, the original contractor, notice of the lien filing.Tex. Prop. Code §53.055. For mechanic’s liens filedafter September 1, 1999, the notice of lien filing must begiven within five days of the lien filing.

D. Other Important Notices

Retainage Notice -

Despite being statutorily required, in my experienceretainage is normally not withheld in residentialconstruction projects. Nevertheless, if you are anattorney representing owners, you should advise yourclient of the requirement, and the risks of not retaining(see, Tex. Prop. Code subchapter E - sections 53.101, etseq.).

The procedure to make a claim for retainage issimilar to the mechanic’s lien procedures discussedabove, but there are some differences. Preliminarily,subcontractors and suppliers have to give notice of theirretainage agreements. A form notice of retainageagreement is attached as Appendix “A.” If theagreement is with the original contractor, this notice mustbe given to the owner by the 15th day of the secondmonth following the delivery of materials or theperformance of labor by the subcontractor or supplierthat first occurs after it has agreed to the contractualretainage. If the agreement is with a subcontractor, thisnotice must also be given to the original contractor withinthe same time period. Make sure that in addition to thisnotice of retainage agreement, that if your client is notpaid, it provides the trapping notices as discussed above.

In my experience, few subcontractors give notice oftheir retainage agreements. More and more owners’ andoriginal contractors’ lawyers are noticing this, andlatching onto this to defeat mechanic’s liens that includeretainage claims. The argument is that the trappingnotice of ones claim must be given during a certain timeperiod. Obviously subs are not giving this notice monthto month as to their retainage (under their thinking, thisamount is not past due). Therefore, when a paymentdispute arises, most likely the time for making a claim formany of the months in which retainage has been


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withheld, has passed. The retainage notice avoids thisproblem. It should be a part of a subcontractor/supplier’spractice, where appropriate. Conversely, the failure toprovide this notice is fodder for the attorney representingowners.

Also, whether attempting to perfect or defeat amechanic’s lien as to retainage, keep in mind that thetime period in which to file a lien with respect toretainage is different. The lien must be filed not laterthan the 30th day after the work is completed. This isbecause under Tex. Prop. Code §53.101, the owner isonly required to retain for this thirty day period.

Specially Fabricated Materials -

Typically in order for a subcontractor or supplier toestablish its rights to collection under a mechanic’s lien ina lawsuit to foreclose such a lien, the subcontractor orsupplier has to show that the materials were actuallydelivered to the site. This is not the case, however, if thesubcontractor or supplier has specially fabricatedmaterials, and has given the proper notice describedbelow. However, the subcontractor or supplier has tocomply with the additional notice requirements to protectits lien rights with respect to specially fabricatedmaterials, in case it is not paid, and the materials are notdelivered to the job.

A specially fabricated material is defined under theTexas Property Code as, “material fabricated for use asa component of the construction or repair so as to bereasonably unsuitable for use elsewhere.” Tex. Prop.Code §53.001(12). A few examples may be a speciallyblended paint product, a custom made wood trim/molding,or a custom made wallpaper.

If a subcontractor or supplier specially fabricates amaterial for a project, it should give notice of such to theow ner no later than the 15th day of the second monthafter the month in which it received and accepted theorder for the material. If it does not have a contractdirectly with the original contractor, it must also give thesame notice to the original contractor within the sametime period. A sample notice is attached as Appendix“B.” As you can see, the notice must contain astatement that the order has been received and accepted,and the price of the order. The notice must be sentcertified mail, return receipt requested, to the last knownbusiness or residence address of the owner and, ifapplicable, of the original contractor.

The subcontractor or supplier must still send thetrapping notice or notices described above if it is nottimely paid. The sole purpose of the specially fabricated

materials notice is to protect the subcontractor or supplierif the materials are never delivered to the job.

E. Mechanic’s Lien ForeclosureEnforcement of mechanic’s liens is governed by

Subchapter G of Chapter 53 of the Texas Property Code.Section 53.154 states that, “A mechanic’s lien may beforeclosed only on a judgment of a court of competentjurisdiction foreclosing the lien and ordering the sale ofthe property subject to the lien.” However, as discussedin detail toward the end of this paper, if there is anarbitration agreement between the parties, an arbitratorcan award foreclosure of a mechanic’s lien.

The limitations period to foreclose a commercialmechanic’s lien is the latter of two years after the lastday a lien claimant may file a lien under Section 53.052or within one year after completion, termination, orabandonment of the work under the original contrac t onwhich the lien claim is filed. However, in the area ofresidential construction, as discussed in more detailbelow, this time period has been shortened to one year.Tex. Prop. Code §53.158(b).

III. RESIDENTIAL CONSTRUCTIONIn the 1997 Texas Legislative session, far reaching

and substantial changes were made in the area ofresidential construction, both new construction andremodeling (these can be found at subchapter K ofchapter 53 of the Texas Property Code, section 53.251,et seq) . The first subsections to look at are the newsubsections 53.001(8), (9), and (10), which now define“residence,” “residential construction contract,” and“residential construction project.” These allow you tosee if any of the following sections even apply to you.These new definitions are as follows:

(8) “Residence” means a single-family house,duplex, triplex, or quadruplex or a unit in amultiunit structure used for residential purposesthat is:

(A) owned by one or more adult persons; and(B) used or intended to be used as a dwelling

by one of the owners.

(9) “Residential construction contract” means acontract between an owner and a contractor inwhich the contractor agrees to construct orrepair the owner’s residence, includingimprovements appurtenant to the residence.

(10) “Residential construction project” means aproject for the construction or repair of a new


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or existing residence, including improvementsappurtenant to the residence, as provided by aresidential construction contract.

These definitions are important, because they determinewhether you have to concern yourself with the changesin notice and lien filing requirements that apply toresidential construction, as well as the extensivedisclosures now required in residential constructioncontracts. If you are involved in a project building a newhome, second home, or vacation home, or remodeling ahome, second home, or vacation home, for an individualor individuals, you will be involved in residentialconstruction as defined in the statute, and the itemsbelow will apply to you. If, however, the individual orindividuals are building or remodeling the home(s) forinvestment purposes, you will not be involved inresidential construction, and the items listed below willnot apply to you.

By far the most important new requirements in theproperty code amendments relating to residentialconstruction relate to shortened lien filing deadlines(when combined with amended section 53.052, which isdiscussed in the next paragraph), a shortened trappingnotice deadline, and the new disclosure requirements. Anumber of Property Code sections have been amendedsimply to refer to these new subsections.

The trapping notice period discussed above has beenshortened for those involved in residential construction tothe 15th day of the second month after the performanceof labor and/or delivery of materials. Tex. Prop. Code§53.252. One simplification is that since thesubcontractor or supplier is required to copy the originalcontractor with the notice anyway, it does not matterwhat tier claimant they are. In other words, if one isinvolved in residential construction, and their contract isnot directly with the owner, they need to send a trappingnotice regarding their claim by the 15th day of the secondmonth to the owner, with a copy to the originalcontractor.

If the claimant is still not paid, they will need to filetheir lien by the 15th day of the third month. Asdiscussed above, section 53.052 of the Texas PropertyCode provides that a mechanic’s lien affidavit must befiled by the 15th day of the fourth month after theindebtedness accrues, something with which allconstruction attorneys are quite familiar. This section, asamended in 1997, now provides that mechanic’s liens onresidential construction must be filed one month earlier,or on the 15th day of the third month after theindebtedness accrues. Tex. Prop. Code §53.052(b).

Section 53.158 of the Texas Property Code, whichgoverns the time period within which a claimant mustbring suit to foreclose a mechanic’s lien, has beenchanged to provide that a suit to foreclose a mechanic’slien on a residential construction project must be brought,“within one year after the last day a claimant may file alien affidavit under Section 53.052 or within one yearafter completion, termination, or abandonment of thework under the original contract under which the lien isclaimed, whichever is later.”

IV. HOMESTEADAdditional steps are necessary to lien a project that

is the owner’s homestead. This would include repairs,renovations, and additions to an existing homestead, butmay also include new home construction for the personthat intends to have the home be his or her homesteadwhen it is completed. The lien claimant must also, ofcourse, comply with the additional requirements now inplace for “Residential Construction,” as discussed above.

The additional requirements necessary to lien ahomestead are as follows: (1) The original contractor andthe owner must execute a written contract setting forththe terms of their agreement; (2) The contract must besigned before the material is furnished or the labor isperformed; (3) If the owner is married, the contract mustbe signed by both spouses; (4) The contract must be filedwith the county clerk of the county in which thehomestead is located; and (5) the lien affidavit mustcontain the following notice conspicuously printed,stamped, or typed in a size equal to at least 10-pointboldface or computer equivalent, at the top of the page:“NOTICE: THIS IS NOT A LIEN. THIS IS ONLYAN AFFIDAVIT CLAIMING A LIEN.” Tex. Prop.Code §53.254. A sample lien affidavit is attached asAppendix “C.”

Furthermore, for the lien on a homestead to be valid,the trapping notice must include or have attached thefollowing statement: “If a subcontractor or supplier whofurnishes materials or performs labor for construction ofimprovements on your property is not paid, your propertymay be subject to a lien for the unpaid amount if: (1)after receiving notice of the unpaid claim from theclaimant, you fail to withhold payment to your contractorthat is sufficient to cover the unpaid claim until thedispute is resolved; or (2) during construction and for 30days after completion of construction, you fail to retain 10percent of the contract price or 10 percent of the valueof the work performed by your contractor. If you havecomplied with the law regarding the 10 percent retainageand you have withheld payment to the contractorsufficient to cover any written notice of claim and have


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paid that amount, if any, to the claimant, any lien claimfiled on your property by a subcontractor or supplier,other than a person who contracted directly with you, willnot be a valid lien on your property. In addition, exceptfor the required 10 percent retainage, you are not liableto a subcontractor or supplier for any amount paid to yourcontractor before you received written notice of theclaim.” Tex. Prop. Code §§53.252 and 254. A sampletrapping notice is attached as Appendix “D.”

As an aside, note that any contract for work on ahomestead must contain a notice required by Section41.007 of the Texas Property Code. This notice is asfollows:

“IMPORTANT NOTICE: You and yourcontractor are responsible for meeting theterms and conditions of this contract. If yousign this contract and you fail to meet the termsand conditions of this contract, you may loseyour legal ownership rights in your home.KNOW YOUR RIGHTS AND DUTIESUNDER THE LAW.”

The notice must be exactly as set forth above, includingcapitalization where indicated, and must be placed nextto the owner’s signature line. Failing to place this noticeon the contract is a violation of the Texas DeceptiveTrade Practices Act.

As you can see, the first key to being able to lien ahomestead is for the original contractor to have filed aproperly signed copy of the prime contract with thecounty in which the land lies. The contract shouldcontain the statutory warning set forth above, be signedprior to any work commencing or materials beingfurnished, and should be filed prior to commencement.It has been my experience that it is rare for an originalcontractor to fulfill all of the foregoing requirements. Ifthe original contractor fails to fulfill all of therequirements, no one can lien the project. If the originalcontractor fulfills all of the requirements, then its filing ofa properly executed contract also benefits thesubcontractors and suppliers, by allowing them to lien theproject if they properly comply with their requirements.

Subcontractors or suppliers that do residential workand want to have lien protection should find out from theoriginal contractor whether it has filed its prime contract,and should ask to see a file-stamped copy. The otheroption is to contract with the homeowner directly (inessence, putting the subcontractor in an originalcontractor’s position). If they do this, and they want tomaintain their lien rights, they will need to follow thesame steps an original contractor would need to do.

They should have a written contract signed by thehomeowner (and if they are a married couple, by bothspouses), with the statutory notice, and they should filetheir contract with the county prior to commencing anywork, or delivering any materials. Even if they do nottake these steps, if they have contracted directly with theowner, they at least have collection rights against theowner for breach of contract if they do not get paid, andat least arguably have a constitutional lien.

In defending a residential mechanic’s lien case, youwill also want to see if the original contractor assigned itslien rights to a lender. Under some residentialconstruction financing documents, original contractorsassign their lien rights on homestead property to thelender in consideration for the lender providing financingfor the construction. Fraser v. Baybrook Building Co. ,Inc., 2003 Tex. App. Lexis 4956 (Tex. App. - Houston[1st Dist.] 2003, writ denied), shows the potential dangersto the contractor. In Fraser, the Frasers sued Baybrookunder various causes of action relating to the constructionof their home. Baybrook counterclaimed for the allegedfailure by the Frasers to pay all sums they owed and forforeclosure of its mechanic’s lien. Baybrook prevailed atthe trial court level, and the court ordered foreclosure ofits lien. On appeal, the Houston Court of Appeals did noteven reach the validity of Baybrook’s mechanic’s lien, asit found that the mechanic’s lien had been assigned to thelender. Therefore, “Baybrook could not seek judicialforeclosure on a lien that it did not possess and thereforecould not enforce.” Id.

V. THE MECHANIC’S OF LIEN REMOVALUNDER SECTION 53.160

A. GenerallyIn order to be able to defeat a residential

mechanic’s lien, it is important to initially have a basicgrasp of the requirements of a properly drafted, filed, andserved mechanic’s lien - both the general requirements,as well as the additional residential, and if applicable,homestead, requirements as discussed above. Wheneveryou receive a mechanic’s lien that the Client wantsremoved, you should first compare it to the requirementsof sections 53.054 and 53.254 of the Texas PropertyCode; then check whether a trapping notice was requiredunder section 53.252 of the Texas Property Code, and ifso, whether it complied with the requirements; and thencheck for timing of the trapping notices, lien filing, andlien filing notice. You should have a firm understandingof these requirements in order to determine whethergrounds exist to have the lien removed.

Section 53.160 of the Texas Property Code setsforth a procedure for summary removal of a defective


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mechanic’s lien. I use a declaratory judgment actionunder Chapter 37 of the Texas Civil Practice andRemedies Code as my vehicle, whether in my petition orin my counterclaim, to bring the issue of lien invaliditybefore the Court. Generally speaking, the summary lienremoval procedure is as follows: (1) you file yoursummary motion to remove lien; (2) you obtain a hearingwith at least 21 days notice to the lien claimant (24 daysif notifying by some form other than personal delivery,such as by mail or telefax); (3) the lien claimant may, butdoes not have to, file a response; (4) the hearing is held;(5) if you prevail, an order is entered declaring the lieninvalid and ordering its removal, but the order alsocontains a bond amount the lien claimant can post to stayremoval of the lien; (6) if the lien claimant does not postthe bond within 30 days, the lien is removed, and theorder should be filed with the county clerk’s office, alongwith a clerk’s certificate stating no bond has been filed,thereby putting persons on notice of the invalidity of thelien and its removal. Each of these steps is explored inmore detail below.

B. Declaratory JudgmentIn order to proceed with a lien removal action, you

need some type of vehicle to assert your claim againstthe lien claimant. I use a declaratory judgment actionunder Chapter 37 of the Texas Civil Practice andRemedies Code, requesting that the Court declare thelien invalid. Attached as Appendix “E” is a copy of anOriginal Petition for your review.

C. The MotionBasically the summary motion to remove lien is

available for any technical defect in the mechanic’s lienprocess, including the trapping notice requirements, thelien form itself, notice of the lien filing, and the timing ofthe notices. Attached as Appendices “F” and “G”respectively are copies of a couple of summary motionsI have filed in the past. The format I use is similar to amotion for summary judgment. I do this because myexperience is that although some judges may beunfamiliar with the summary lien removal process, all areobviously aware of, and comfortable with, the summaryjudgment process. The motion must be verified, and maycontain affidavits attached. My motions, as you can see,contain evidentiary affidavits, as allowed by the statute.As you will see in more detail below, however, in myopinion, the hearing is an evidentiary hearing in which anytype of admissible evidence can be presented. You havethe burden of proof on all grounds in your motion, excepton the issues of notice (which will be discussed furtherunder “The Response,” below).

More and more, one can find at least basic forms in formbooks. For example, one can find forms for the motionin the Texas Real Estate Guide at 5-81 Texas RealEstate Guide §81.111, and in Dorsaneo at 18-271Dorsaneo, Texas Litigation Guide §271.111.

D. Obtaining the HearingIn my experience, court and county clerks are

becoming familiar with the summary lien removal process(after all it has been in place seven years). Nevertheless,in an abundance of caution, proceed as if your clerk isnot aware of the process. When requesting a hearing,make sure they set it at least 21 days away (24 if you areserving notice of the hearing by some method other thanhand delivery). If I am not setting the hearing myself, Igenerally include a brief cover letter advising the clerkthis process is much like a summary judgment hearing;they are obviously familiar with the timing on those. Onemajor difference in my opinion, however, from asummary judgment hearing, is that in the summary lienremoval hearing you can offer evidence (I will discussthis in more detail below). If you plan on offering livetestimony, make sure you let the clerk know so that youget adequate time and so you have a reporter. (I had onehearing re-scheduled after I appeared because the judgedid not realize that I intended to offer evidence other thanthe affidavits that were attached to my motion. I wouldsuggest, furthermore, that no matter what, a recordshould be made of the hearing.) Of course if you onlyplan on relying on Affidavit evidence, then the hearingshould not take any longer than a summary judgmenthearing would normally take.

E. The ResponseJust as in the summary judgment arena, the lien

claimant may file and serve a Response to the SummaryMotion to Remove Lien. (The statute explicitly states,however, that the lien claimant is not required to file aresponse.) The statute is silent as to when a responseneeds to be filed; if you are representing the Respondent,I would suggest the safest course would be to do so atleast seven days prior to the hearing - again parallelingthe summary judgment procedures. If part of the lienremoval arguments rely on the position that the lienclaimant did not give a proper trapping notice (whichranges from no notice at all, to untimely notice, to defectsin a timely given notice) or notice of the mechanic’s lienfiling, be aware that the lien claimant actually bears theburden of proof. Specifically, the statute states that, “theburden is on the claimant to prove that the notice of claimand affidavit were furnished to the owner and originalcontractor as required by [Chapter 53].” Tex. Prop.


7

Code §53.160(d)(1). Presumably the lien claimant couldchoose to not file a response, and still present itsevidence at the hearing. However, in my opinion the bestpractice when defending the lien, just as in summaryjudgment practice, is to file a response with supportingaffidavits.

F. The HearingExpect to spend a few minutes educating your judge

as to this process. Again, due to the relative youth of thestatute, some attorneys and judges are still not familiarwith the summary lien removal practice and procedure.Just as in summary judgment practice, keep yourargument simple. In general, it should be fairly obviousif there is a defect in the lien. Either something was doneor it was not. Either the elements are present, or theyare not. Of course, there can always be morecomplicated fact patterns. Some interesting, morecomplex issues are discussed below.

G. The OrderThe form of the Order is not really set forth,

although some elements are mentioned at Tex. Prop.Code §§53.160(e) and 53.161(a). An example order isattached as Appendix “H.” As you can see, the Ordercontains a bond amount, which should be the judge’sestimate of, “the costs and attorney’s fees the movant islikely to incur in the proceeding to determine the validityor enforceability of the lien.” Tex. Prop. Code§53.161(a). The sum may not exceed the amount of thelien claim, and if the court fails to set an amount in theorder, it is presumed the amount is the amount of the lienclaim. Tex. Prop. Code §§53.161(a) and (b). The lienclaimant, if it posts this bond within 30 days, may stay theremoval of the lien. Tex. Prop. Code §53.161.

H. Filing the Order and Clerk’s CertificateIf the lien claimant does not post the bond, you file

the Order with the clerk of the county in which the lienwas filed, along with a certificate by the County Clerkthat: (A) no bond or deposit in lieu of the bond was filedwithin 30 days after the date the order was entered bythe court; and (B) no order staying the order to removethe lien was entered by the court. Tex. Prop. Code§53.161(f). An example of a Clerk’s Certificate that Iwas able to file is attached as Appendix “I” for yourreview. I developed this form from scratch, but it didwork.

VI. INTERESTING MECHANIC’S LIENREMOVAL ISSUES

A. The Only Reported CasesTo date, there are only two reported cases that even

mention section 53.160. Both merely reference 53.160in passing. Neither really address any issues directlyarising from 53.160. Both cases are in the area ofcommercial, as opposed to residential, construction.

Dalton Contractors, Inc. v. Bryan AutumnWoods, Ltd.., 60 S.W.3d 351 (Tex. App. - Houston [1st

Dist.] 2001, no writ) - Dalton involved a very typicalconstruction dispute fact pattern. An owner and acontractor entered into a construction contract, thatincluded an arbitration clause. A dispute arose, probablyone in which the owner argued poor performance and didnot pay all contractual sums to the contractor. Thecontractor filed a mechanic’s lien. The owner filed suit,which included an action to remove the lien under section53.160. The contractor filed an application to compelarbitration and a plea in abatement. The trial courtdenied these, and granted the owner’s summary motionto remove lien. The contractor filed no bond, but did filean interlocutory appeal on whether the issue should havebeen arbitrated. The Houston Court of Appeals foundthat the two prong test for arbitration - (1) whethe r avalid, enforceable arbitration agreement exists, and, if so,(2) whether the claims asserted fall within the scope ofthe agreement - was fulfilled, and reversed the trial court,and remanded with instructions to compel arbitration.

A couple of years ago, I opined that there may beroom for disagreement by other courts of appeal on thisissue of arbitrability. For example, one could counter-argue that the Legislature specifically set forth a judicialremedy, whose specified purpose is the quickadjudication of this issue, and there are no guaranteesthat an arbitrator would provide this speedy relief.(Although arbitration is often touted as being faster thanlitigation, most construction lawyers know this is notalways the case. Furthermore, arbitrations are not reallyset up well to provide interim relief, such as what iscontemplated in section 53.160.) Even if the issue wereto be arbitrated quickly, a number of procedural issuesarise. For example, will the clerk file the arbitrator’sorder (as opposed to a judicial order). I could see wherea clerk’s office would insist the arbitrator’s award beconverted into a court judgment or order before it is filed,in which case one has definitely lost the goals of aninexpensive and quick remedy.

This issue appears, however, to have been laid torest by the Texas Supreme Court in CVN Group, Inc. v.Delgado, 95 S.W.3d 234, 243 (Tex. 2002), in which theTexas Supreme Court affirmed Dalton, and held that

http://www.TexasBarCLE.com/CLE/PMCasemaker.asp?table=TX_caselaw&volume=60&edition=S.W.3d&page=351&id=32485_01

http://www.TexasBarCLE.com/CLE/PMCasemaker.asp?table=TX_caselaw&volume=95&edition=S.W.3d&page=234&id=32485_01


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issues related to foreclosure of a mechanic’s lien shouldbe arbitrated if covered by an arbitration agreementbetween the parties. (Incidentally, in my opinion, thesame interesting issues arise as to how to mechanicallyenforce an arbitrator’s foreclosure award. It seems tome it would need to be converted into a judgment.)

Wesco Distribution, Inc. v. Westport Group, Inc.,2004 Tex. App. Lexis 3208 (Tex. App. - Austin, April 8,2004, n.w.h.) - The very recent case of Wesco involveda second tier materials supplier, Wesco, who sued toforeclose its mechanic’s lien. The general contractor,Westport, had also filed suit against Wesco to remove themechanic’s lien. The suits were consolidated. Westport,in the consolidated suit, filed a summary motion toremove lien under section 53.160 of the Property Code.The trial court denied the summary motion, but later onin the case, granted summary judgment on the exactsame issue. In my opinion, the only thing this case tellsus is that it can still be difficult to get a lien summarilyremoved in some courts, because the issue appears to bea rather obvious one to me. Specifically, the second tiersupplier sent a timely trapping notice to the generalcontractor, but with insufficient postage. The notice wasreturned due to the insufficient postage, and by the timethe notice was re-sent, the time period had passed. Atimely trapping notice to the general contractor is aprerequisite to a second tier subcontractor or suppliermechanic’s lien. Wesco argued that merely depositing itsnotice in the U.S. Mail was sufficient, as that is all thestatute requires. As stated above, the trial court deniedthe summary lien removal. Further in the case, however,it did grant summary judgment on the same issue, and theAustin Court of Appeals, rightfully in my opinion,affirmed. The other interesting issue was that Wescoargued it should not be liable for all of Westport’sattorneys’ fees, as the trial court should have held againstit at the summary lien removal stage, and not allowed thecase to proceed to the point where summary judgmentwas necessary. Interesting argument, but obviously itlost.

That is the sum total of cases addressing 53.160.As such, the following issues are offered as my opinion,but there is no precedent supporting them.

B. Summary Motion versus Summary JudgmentOne of the problems with the summary lien removal

process, from the perspective of the person seekingremoval, is that the lien claimant can stay removal byfiling a bond. Furthermore, even if the removal is notstayed, you still have to proceed to obtain a finaljudgment, presumably by summary judgment or trial.Query - Are you better off simply moving for summary

judgment, and trying to obtain a judgment holding the lieninvalid, rather than the order under section 53.160? If theaction is strictly between the owner and the lien claimant,or if you can sever the summary judgment holding thelien invalid, then it seems summary judgment may be thebetter way to go, as it would seem to bring finality morequickly. I would say, however, that in the lien removalactions in which we proceeded all the way to hearing andI obtained an order removing the lien, bond has neverbeen posted, and the lien claimants no longer pursuedtheir lien foreclosure action against the owner. From apractical standpoint, it is difficult for me to see how a lienclaimant could lose at the summary lien removal hearingand go on to prevail at trial of the matter. Also, howdoes the Wesco case discussed above play into thisanalysis?

C. Evidence at HearingThe statute does not explicitly state whether

evidence other than affidavits is admissible at thehearing. Three statements in the statute, however, leadme to believe any admissible evidence may be offered atthe hearing. First, section 53.160(a) states, at the end,“The motion may be accompanied by supportingaffidavits [emphasis added].” Presumably, therefore, itdoes not have to be accompanied by affidavits. Second,is the fact that the lien claimant is not required to file aresponse, yet bears the burden of proof on the noticeissues. Presumably the lien claimant would have tointroduce evidence at the hearing to sustain this burden.Third, section 53.160(f) states that, “Any admissibleevidence offered at the hearing may be admitted in thetrial of the case.” This to me contemplates that the sametypes of evidence may be offered at the hearing as attrial.

D. Original Contractor’s StandingIn every case in which I have represented an

original contractor trying to remove the lien under theprovisions of section 53.160 I have encountered astanding argument. The lien claimants have argued thatbecause the original contractor was not the owner of theproperty, it had no standing to seek removal of the lienencumbering the real property. Tex. Prop. Code§53.153(a) states that: “If an affidavit claiming amechanic’s lien is filed by a person other than the originalcontractor, the original contractor shall defend at his ownexpense a suit brought on the claim.” Presumably thisgrants standing to the original contractor to use section53.160 to void the mechanic’s lien. Furthermore, thecontract between the parties may contain a contractualobligation for the original contractor to do so.


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E. Attorneys’ FeesIn my opinion, attorneys’ fees are available to the

prevailing party in a section 53.160 action under section53.156 of the Texas Property Code. This section statesas follows:

In any proceeding to foreclose a mechanic’slien or to enforce a claim against a bond issuedunder Subchapter H, I, or J or in anyproceeding to declare that any lien or claimis invalid or unenforceable in whole or inpart, the court may award costs andreasonable attorney’s fees as are equitable andjust. [Emphasis added.]

Furthermore, as stated above, I use the DeclaratoryJudgments Act as my vehicle for lien removal, which, ofcourse, provides for recovery of attorneys’ fees as areequitable and just. See, Tex. Civ. Prac. & Rem. Code§37.009. You can also use Wesco as authoritysupporting an award of attorneys’ fees. The questionthen becomes when can the fees incurred in the section53.160 proceeding be recovered? In the beginning of mylien removal practice I would always go ahead and seekan award of fees in the Order removing the lien. I nolonger do so at this stage. Even if awarded, I wonder asto the finality of the Order with respect to the fees.Would they be collectable at this point? From a judge’sperspective, probably the best course would be to waituntil a final judgment to award attorneys’ fees. In orderto maintain credibility with your Judge, I think it is betterto leave the award of attorneys’ fees to another day.Hopefully if you are using this process, you are doing soearly in the case, while attorneys’ fees are relatively low.(By the way, if you are using a summary judgmentmotion instead, by all means also try to recover your feesat that point.)

F. What if a Party seeking lien removal prevails atthe §53.160 hearing/order stage, but the lienclaimant then prevails at trial?As stated above, it is hard for me to conceive of a

situation in which a party seeking lien removal prevailedin its section 53.160 action, but then lost at trial. Thisvery situation is, however, addressed by section 53.162of the Texas Property Code. Basically, the finaljudgment serves to revive the lien. However, and moreinterestingly, the so-revived lien is void as to a creditor orsubsequent purchaser for valuable consideration whoobtained an interest in the property in the period betweenthe filing of the order and the final judgment. (When indoubt, sell the property?)

G. Arbitration AgreementsIn my opinion, the majority of construction contracts,

both commercial and residential, contain arbitrationclauses. Dalton indicates lien foreclosure is arbitrable.I raised some interesting issues related to same in thediscussion of that case. Other interesting issues will alsolikely arise. For example, you have an arbitration clausein the prime contract and in the subcontract, but the lienforeclosure dispute is strictly between the subcontractorand the owner, who are not in privity of contract.Arbitrable? Add the insolvent general contractor tomake it arbitrable? What if it is in bankruptcy?

H. Constitutional LienThe Texas Constitution provides an automatic lien to

“Mechanics, artisans and materialmen, of every class,shall have a lien upon the buildings and articles made orrepaired by them for the value of the labor done thereon,or materials furnished therefore; and the Legislature shallprovide by law for the speedy and efficient enforcementof said liens.” Texas Constitution, Article XVI, Section37. The constitutional lien is automatic, and no stepshave to be taken in order to perfect this lien. However,it has long been settled that in order for this lien to apply,the contractor or vendor must have contracted directlywith the owner. How does the Constitutional Lien playinto all of this? Does it even have any applicability tosection 53.160 at all? In the Fraser case discussedabove, did the contractor’s attorney address theConstitutional lien? Was this part of the assignment?This subject raises so many issues for me, that it wouldmerit an entire article just on constitutional lien issues.


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APPENDIX A

[Date]

VIA CMRRR NO. and FIRST CLASS MAIL

[Owner's name and address]

[If applicable:]VIA CMRRR NO. and FIRST CLASS MAIL

[General Contractor's name and address]

Re: Notice of Retainage Agreement between [company's name] and [name of contractor with whom youcontracted] for materials and/or labor supplied to [describe location of property and or nature of project] (the"Project")

Dear Sirs:

The following notice is provided to comply with the requirements of Section 53.057 of the Texas Property Code, andis being sent to you as owner [, and to you as general contractor,] of a [project][building] located at [project address].This notice is statutorily required, and should not be construed as a reflection on anyone's credit. If you are not the ownerof the above-referenced project, please notify the undersigned as soon as possible.

On or about [date], [name of your company] entered into a subcontract agreement [or agreement to supplymaterials] with [name of general contractor or subcontractor with whom you contracted] to provide labor and/or materialsto a [project][building] located at [address]. This agreement is a retainage agreement as defined in Section 53.057 ofthe Texas Property Code. The retainage is to be withheld as follows: [describe the retainage percentage in the contract(for example 10%)]. The total sum anticipated to be retained under this agreement will be $__________, to be paid[describe provision for payment (for example thirty days after completion of your work)].

The agreement described above requires us to perform [describe work to be performed and/or materials to befurnished].

Sincerely,


13

APPENDIX B

[Date]



[If applicable:]VIA CMRRR NO. and FIRST CLASS MAIL


Re: Notice of Specially Fabricated Materials by [company's name] at the request of [name of contractor withwhom you contracted] to be supplied to [describe location of property] with respect to the [describe project]Project (the "Project")

Dear Sirs:

The following notice is provided to comply with the requirements of Section 53.058 of the Texas Property Code, andis being sent to you as owner [, and to you as general contractor,] of the Project. This notice is statutorily required, andshould not be construed as a reflection on anyone's credit. If you are not the owner of the above-referenced project,please notify the undersigned as soon as possible.

On [date], [name of your company] received and accepted an order from [name of general contractor orsubcontractor with whom you contracted] for specially fabricated materials generally described as [describe] forincorporation in the Project.

The price agreed upon for the above-described specially fabricated materials is $___________.

Sincerely,


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APPENDIX C

NOTICE: THIS IS NOT A LIEN. THIS IS ONLY AND AFFIDAVIT CLAIMING A LIEN

MECHANIC'S LIEN AFFIDAVIT AND CLAIM

STATE OF TEXAS §§ KNOW ALL MEN BY THESE PRESENTS:

COUNTY OF ______ §

I, [name], the undersigned affiant, [position in company] for [name of company], Claimant, which has furnished[labor][materials][labor and/or materials] to improve the real property herein described, make this Affidavit for thepurpose of perfecting a lien on that property and improvements, and on oath make the following statements:

1. My name is [your name], and I am the [position in company] of [name of company], which company's businessaddress is at [company's business address], and mailing address is at [company’s mailing address]. I am over 18 yearsof age, have personal knowledge of the facts set forth below, and am competent and duly authorized to make and domake this Affidavit on behalf of [name of company].

2. The amount of this claim is $___________, and this amount is just and reasonable and has not been paid. Thisclaim constitutes the reasonable value of the labor and/or material furnished after all extra charges, credits, payments,and offsets have been allowed.

3. The name of the owner or reputed owner of the real estate hereinafter described is:

a. [Name and address][If Necessary:]

b. [Name and address]c. [Name and address]

4. The property sought to be charged with the lien is described as [street address of property], and is moreparticularly described in the attached Exhibit “A.” [Attach legal description as Exhibit “A.”]

5. Claimant provided labor and/or materials for the improvement of said real estate, consisting generally of[description of labor and/or materials furnished]. The months in which Claimant provided labor and/or materials withrespect to this lien claim are from _____, 200_ through _______, 200_.

6. [If applicable:] The subcontractor at whose direction the labor and/or materials were supplied was [name andaddress of subcontractor].

7. The name of the original contractor was [name and address of general contractor].[If applicable: __. Claimant was the original contractor on this project. Claimant therefore claims, in addition to

a statutory lien under Chapter 53 of the Texas Property Code, a constitutional lien under Article 16, Section 37, of theTexas Constitution. Also, if you were an original contractor, you have no notice requirements and can skip the nextsection 8.]

8. The date, addressee, and method of delivery of each notice sent is as follows:

[Date] [Original Contractor] Certified mail, return receipt


16

[Date] [Owner; (Tenant); Original Contractor] Certified mail, return receipt

9. A copy of this Affidavit has been sent certified mail, return receipt requested and regular mail to the ownerand/or reputed owner described above, addressed to the owner's last known address, and to the general contractordescribed above, addressed to the general contractor's last known address.

[NAME OF COMPANY]

[Sign here] By: [Your name]Its: [Your position]

SWORN TO AND SUBSCRIBED BEFORE ME on this _____ day of _____________, 200__, to certify whichwitness my hand and seal of office.

____________________________________Notary Public in and forthe State of Texas_____________________________________Notary's Printed NameMy Commission Expires:_______________


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CERTIFICATE OF SERVICE

This is to certify that a true and correct copy of the foregoing Lien Affidavit and Claim has been sent certified mail,return receipt requested and regular mail to the following parties on this _____ day of ____________, 200__:

a. [Name and address of Owner]

b. [Name and address of General Contractor]

_____________________________________[Your name]

AFTER RECORDING RETURN TO:Attn: [Your name][Company's name and address]


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APPENDIX D

[Date]





Re: Notice of claim by [company's name] for materials and/or labor supplied to [describe location of property andnature of project] (the "Project") under a contract with [name of contractor with whom you contracted]

Dear Sirs:

This company routinely notifies parties if an account is not current to preserve our rights under the Texas PropertyCode. This notice is statutorily required, and should not be construed as a reflection on anyone's credit.

You as general contractor, and you as owner or reputed owner, are hereby notified that Claimant has furnished laborand/or materials to the Project. Enclosed please find a copy of the invoices for the work performed and/or materialsdelivered, for which there is a balance due and owing of $______________.

The material and labor are generally described as [describe], and are specifically described in the enclosed invoices.This labor and/or material furnished were used to improve the Project.

The unpaid balance is $__________. [If applicable: This amount includes retainage of $___________ due underthe contract.] This amount is due Claimant and has not been paid. If the claim remains unpaid, you will be personallyliable and the property subjected to a lien unless you withhold payment from the contractor for payment of the claim, orthe claim is otherwise paid or settled.

If a subcontractor or supplier who furnishes materials or performs labor for construction of improvements on yourproperty is not paid, your property may be subject to a lien for the unpaid amount if:

(1) after receiving notice of the unpaid claim from the claimant, you fail to withhold payment to your contractorthat is sufficient to cover the unpaid claim until the dispute is resolved; or

(2) during construction and for 30 days after completion of construction, you fail to retain 10 percent of thecontract price or 10 percent of the value of the work performed by your contractor.

If you have complied with the law regarding the 10 percent retainage and you have withheld payment to thecontractor sufficient to cover any written notice of claim and have paid that amount, if any, to the claimants any lien claimfiled on your property by a subcontractor or supplier, other than a person who contracted directly with you, will not bea valid lien on your property. In addition, except for the required 10 percent retainage, you are not liable to asubcontractor or supplier for any amount paid to your contractor before you received written notice of the claim.

Sincerely,

Enclosure


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APPENDIX E

CAUSE NO. _____________

_______ § IN THE DISTRICT COURT§

PLAINTIFF, §§

VS. § _____ JUDICIAL DISTRICT§

________ §§

DEFENDANT. § COLLIN COUNTY, TEXAS

PLAINTIFF’S ORIGINAL PETITION

COMES NOW, ____________, Inc. (“Plaintiff”) and files this, its Original Petition against __________, Inc.(“Defendant”), a Texas Corporation, and in support thereof would respectfully show the Court as follows:

Parties, Process, and Venue

1. Plaintiff is a Texas corporation with its principal place of business in Dallas, Dallas County, Texas.

2. Defendant is a Texas corporation that can be served with process by serving its registered agent, _______,at ____________, Plano, Texas 750__; or its president, _________, at ______________, Plano, Texas 750__.

3. Venue is mandatory in Collin County under Tex. Civ. Prac. & Rem. Code §15.011, as this is an action affectingreal property, and to remove an encumbrance from the title to real property, located in Collin County.

Background Facts

4. On September 19, 1996, Plaintiff entered into a contract with _____ Construction Co. (“G.C.”) for exteriorand interior painting to be performed for _________, at their location in Allen, Collin County, Texas. A portion of thiswork was subcontracted by Plaintiff to Defendant. Defendant was, therefore, a second tier subcontractor (i.e., a subof a sub). A dispute arose as to Defendant’s performance on the project, and Defendant was terminated on February19, 1997.

5. On April 3, 1997, Defendant filed a mechanic’s lien in the amount of $30,259.00 related to this project. Notrapping notices were ever sent by Defendant to either the owner of the project, _______, nor to the original contractor,as required by Tex. Property Code 53.056. The sending of these notices is an absolute prerequisite for the filing of a validmechanic’s lien.


22

Cause of Action - Declaratory Judgment

6. Plaintiff incorporates the foregoing paragraphs herein by reference.

7. The mechanic’s lien filed by Defendant was improper and is void. Because this lien was filed by Defendant,the original contractor has withheld payment of the sum of $34,770.88, that it otherwise would pay to Plaintiff. The filingby Defendant of the invalid mechanic’s lien has, therefore, directly harmed Plaintiff. Plaintiff hereby requests that theCourt declare the mechanic’s lien filed by Defendant void under the provisions of Chapter 37 of the Texas Civil Practiceand Remedies Code and Chapter 53 of the Texas Property Code.

Attorneys’ Fees

8. Plaintiff incorporates the foregoing paragraphs herein by reference.

9. Defendant’s actions and inactions have caused Plaintiff to have to hire the undersigned attorney to protect itsrights in this matter. Plaintiff is entitled to a judgment for its attorneys’ fees incurred in this matter from Defendant underthe provisions of Tex. Civ. Prac. & Rem. Code §37.009 and Tex. Prop. Code §53.156.

Conditions Precedent

10. All conditions precedent to Plaintiff’s recovery have been performed or have occurred.

WHEREFORE, PREMISES CONSIDERED, Plaintiff, ____________, respectfully prays that Defendant be citedto appear, and that upon final hearing hereof, Plaintiff be granted judgment for the following:

1. A declaratory judgment voiding the mechanic’s lien filed by Defendant;

2. Its reasonable attorneys’ fees in the amount of at least $5,000.00 through trial of this matter; $2,500.00 in theevent of an appeal to the Texas Courts of Appeal; and $2,000.00 in the event of an appeal to the TexasSupreme Court; as well as its costs of court; and

3. Such other and further relief, both at law and in equity, to which it may show itself to be justly entitled.

Respectfully submitted,


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APPENDIX F

CAUSE NO. _____________

________, INC. § IN THE DISTRICT COURT§

PLAINTIFF, §§


________, INC. §§


PLAINTIFF’S SUMMARY MOTION TO REMOVEINVALID LIEN AND BRIEF IN SUPPORT THEREOF

COMES NOW, ______________, Plaintiff in the above-entitled and numbered cause, and files this, its SummaryMotion to Remove Invalid Lien, pursuant to Tex. Property Code §53.160, and in support thereof would respectfully showthe Court as follows:

MOTION

1. Plaintiff is seeking a declaration that the mechanic’s lien filed by Defendant under Chapter 53 of the TexasProperty Code is defective, and therefore, void. Plaintiff will show the Court that Defendant did not properly and timelycomply with the requirements of Chapter 53 of the Texas Property Code, and that Plaintiff is entitled, therefore, to ajudgment declaring Defendant’s mechanic’s lien void.

2. In support of this Motion, Plaintiff would refer the Court to the following:

a. The Affidavit of _____________ (the “_________ Affidavit”), which is attached as Exhibit “A,” andis incorporated herein by reference.

b. The Affidavit of J. Paulo Flores (the “Flores Affidavit”), which is attached as Exhibit “B,” and isincorporated herein by reference.

c. Plaintiff’s Brief contained herein.

d. Plaintiff’s Original Petition.

BRIEF

Factual Background:

3. On September 19, 1996, Plaintiff entered into a contract with _______ Construction Co. (“G.C.”) for exteriorand interior painting to be performed for _________ (“Owner”), at their location in Allen, Collin County, Texas. Aportion of this work was subcontracted by Plaintiff to Defendant. Defendant was, therefore, a second tier subcontractor(i.e., a sub of a sub). A dispute arose as to Defendant’s performance on the project, and Defendant was terminated onFebruary 19, 1997. See, _________ Affidavit at para. 3.


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4. On April 3, 1997, Defendant filed a mechanic’s lien affidavit in the amount of $30,259.00 related to this project(the “Lien Affidavit”). A true and correct copy of the Lien Affidavit is attached as Exhibit “B-1” to the Flores Affidavit,and is incorporated herein by reference. The only notice sent by Defendant with respect to its claim was a notice of thelien filing; no trapping notices were ever sent by Defendant to either the owner of the project, ___, nor to the originalcontractor, _______, as required by Tex. Property Code 53.056. See, Flores Affidavit at para. 5, Exhibit “B-2,” andExhibit “B-3.”; and _________ Affidavit at para. 4.

Legal Argument:

5. In order for a second tier subcontractor to be able to perfect a right to file a mechanic’s lien under Chapter 53of the Texas Property Code, it must first comply with the notice requirements of the Code. Texas Property Code §53.056imposes an obligation on a derivative claimant, i.e., one not contracting directly with the owner, to give the owner of aproject notice of claimant’s unpaid invoices. There is a further requirement for one not contracting directly with theoriginal contractor to give the original contractor notice of its claim. Specifically, this section states as follows:

(a) A claimant other than an original contractor must give the notice prescribed by this section for the lien to bevalid.

(b) If the lien claim arises from a debt incurred by a subcontractor, the claimant must give to the original contractorwritten notice of the unpaid balance. The claimant must give the notice not later than the 15th day of thesecond month following each month in which all or part of the claimant’s labor was performed or materialdelivered. The claimant must give the same notice to the owner or reputed owner and the original contractornot later than the 15th day of the third month following each month in which all or part of the claimant’s laborwas performed or material or specially fabricated material was delivered.

(c) If the lien claim arises from a debt incurred by the original contractor, the claimant must give notice to theowner or reputed owner, with a copy to the original contractor, in accordance with Subsection (b).

(d) To authorize the owner to withhold funds under Subchapter D [section 53.081, et seq.], the notice to the ownermust state that if the claim remains unpaid, the owner may be personally liable and the owner’s property maybe subjected to a lien unless:

(1) the owner withholds payments form the contractor for payment of the claim; or

(2) the claim is otherwise paid or settled.

(e) The notice must be sent by registered or certified mail and must be addressed to the owner or reputed owneror the original contractor, as applicable, at his last known business or residence address.

(f) A copy of the statement or billing in the usual and customary form is sufficient as notice under this section.

The requirements of this subsection are clear and not subject to interpretation. Subsection (a), when read in conjunctionwith subsection (b), clearly requires that the requisite notices must be given to the owner and to the original contractorin order for a lien to be valid. See, Tex. Prop. Code §53.056(a). As a second tier subcontractor, Defendant had to givenotice of its claim to the original contractors by April 15, 1997 (the fifteenth day of the second month after it performedlabor and or delivered materials) and to the owners by May 15, 1997 (the fifteenth day of the third month after itperformed labor and or delivered materials). The notices had to contain what is known by construction lawyers as the“magic language” required by Tex. Property Code §53.056(d), as set forth above. Since Defendant failed to give noticesof its claim in compliance with section 53.056, its lien is invalid as a matter of law.

6. Tex. Property Code §53.160 provides a summary procedure to remove an invalid lien. One of the groundsspecifically enumerated therein for the removal of an invalid lien is when, “notice of claim was not furnished to the owner


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or original contractor as required by Section 53.056....” Tex. Property Code §53.160(b)(1). Standing is specifically givenin this section to one who brings suit to declare a lien invalid.

Attorneys’ fees:

7. This Court has the authority to award Plaintiff a judgment against Defendant for the reasonable attorneys’ feesincurred by it in having to bring this Motion pursuant to the provisions of Tex. Civ. Prac. & Rem. Code §37.009 and Tex.Prop. Code §53.156. As can be seen from the Flores Affidavit, a reasonable attorneys’ fee for a case of this type andat this stage of the proceedings is $600.00. As can be further seen in the Flores Affidavit, Plaintiff has incurred courtcosts in this case of $174.00 and service fees of $50.00. See, Flores Affidavit at para. 3 and 4.

WHEREFORE, PREMISES CONSIDERED, Plaintiff, _________, Inc., respectfully prays that this SummaryMotion to Remove Invalid Lien be granted; that Plaintiff be granted a judgment declaring Defendant’s mechanic’s lienvoid; and that it be granted such other and further relief, both at law and in equity, to which it may show itself to be justlyentitled.


VERIFICATION

STATE OF TEXAS §§

COUNTY OF DALLAS §

BEFORE ME, the undersigned Notary Public, on this day personally appeared _______________, who being byme duly sworn on his oath deposed and said that he is president for ______________, Inc., Plaintiff in the above-entitledand numbered cause; that he has read the above and foregoing Summary Motion to Remove Invalid Lien; and that everystatement contained therein is within his personal knowledge and is true and correct.

_________________________________________________________

SUBSCRIBED AND SWORN TO BEFORE ME on this ____ day of ______, 2004 by _______________ tocertify which witness my hand and seal of office.

_________________________________________Notary Public in and forthe State of Texas


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FIAT

Hearing on the foregoing Summary Motion to Remove Invalid Lien has been set for ______ o'clock __.m. on the

_____ day of _______________, 2004, in the courtroom for the ________ Judicial District Court, Collin County,

Texas.

___________________________________JUDGE PRESIDING

CERTIFICATE OF SERVICE

This is to certify that a true and correct copy of the above and foregoing Summary Motion to Remove Invalid Lienhas been served upon Defendant along with the Citation and Original Petition in this case.

________________________________________J. Paulo Flores


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CAUSE NO. _____________

______________, INC. § IN THE DISTRICT COURT§

PLAINTIFF, §§


_________, INC. §§


AFFIDAVIT OF J. PAULO FLORES IN SUPPORT OFSUMMARY MOTION TO REMOVE INVALID LIEN


COUNTY OF DALLAS §

BEFORE ME the undersigned notary on this date appeared J. Paulo Flores, who on his oath testified as follows:

1. “My name is J. Paulo Flores, I am over the age of 21 years, I have never been convicted of a crime, I amcompetent to testify, and have personal knowledge of the facts contained herein, which are true and correct.

2. I have been employed by _________, Inc. to remove the invalid mechanic’s lien that is at issue in this case.

3. I have been licensed to practice law in the State of Texas since November of 1989. I have also been admittedto practice before the federal courts of the Northern and Eastern Districts of Texas. For approximately the first fiveyears of my practice I practiced law with the firm of Miller, Hiersche, Martens & Hayward. In July of 1994, I left thatfirm to start a solo practice. Since then I have practiced for the Law Offices of J. Paulo Flores, P.C., until February 1,1998, when I formed Gessner & Flores, P.C., where I currently practice. I practice primarily in Dallas and thesurrounding counties. Probably the largest part of my practice has involved construction law matters, including contractnegotiation and formation, mechanic’s lien and bond claim practice, resolving disputes on projects, and when necessary,litigation. I represent primarily subcontractors and vendors, however, I have also represented general contractors andowners. I am the author of the 1995 publication “The Advisor on Mechanic’s Lien and Bond Claims for Project inTexas.” I am also a frequent lecturer on mechanic’s lien and bond claim issues. I was on the executive council of theConstruction Law Section of the Dallas Bar Association for two years; in 1996 I was newsletter editor of the Section;in 1997 I was treasurer of the Section; and I am currently Secretary of the Section. I am also a member of the AmericanBar Association Forum on the Construction Industry, and of the Texas State Bar Construction Law Section. I wasinducted into the College of the State Bar of Texas this year. I am, therefore, certainly familiar with reasonable chargesfor cases of this type, and at this stage in the proceedings.

4. In my opinion, a reasonable fee for a case of this type, and at this stage of the proceedings, is $600. Plaintiffhas incurred court costs in this case of $174.00 and service fees of $50.00. A reasonable fee to handle the appeal of thiscase is $2,500 in the event of an appeal to the Court of Appeal, and $2,000 in the event of an appeal to the TexasSupreme Court.

5. Attached as Exhibit “B-1” to this Affidavit, and incorporated herein by reference, is a true and correct copyof the mechanic’s lien affidavit filed by ____________, Inc. on the ___ project. Attached as Exhibit “B-2” to thisAffidavit, and incorporated herein by reference, is a true and correct copy of Defendant’s Answers to Interrogatories,including the Answers to Interrogatory No.’s 5 and 6, in case no. __________, a case involving the same parties as the


28

instant litigation. Attached as Exhibit “B-3” to this Affidavit, and incorporated herein by reference, is a true and correctcopy of the cover page, pages 9 - 10 and 37 - 39, and the certification page, as well as Exhibit 1, of the Deposition of_________. Mr. _____ was produced as the representative for ____________, Inc. in case no. __________, a caseinvolving the same parties as the instant litigation.

Further Affiant sayeth not.”

__________________________________J. PAULO FLORES

SUBSCRIBED TO AND SWORN BEFORE ME this ____ day of _____, 200_.

____________________________________Notary Public in andfor the State of Texas____________________________________

Seal Printed Name


29

CAUSE NO. _____________

______________, INC. § IN THE DISTRICT COURT§

PLAINTIFF, §§


_________, INC. §§


AFFIDAVIT OF _________ IN SUPPORT OFSUMMARY MOTION TO REMOVE INVALID LIEN


COUNTY OF DALLAS §

BEFORE ME the undersigned notary on this date appeared _______, who on her oath testified as follows:

1. “My name is __________, I am over the age of 21 years, I have never been convicted of a crime, I amcompetent to testify, and have personal knowledge of the facts contained herein, which are true and correct.

2. I am the president of _________, Inc., Plaintiff in the above-entitled and numbered case.

3. On September 19, 1996, _________, Inc., as a first tier subcontractor, entered into a contract with___________ (“G.C.”), the original contractor, for exterior and interior painting to be performed for ________, theowner, at their location in Allen, Collin County, Texas. A portion of this work was subcontracted by ________, Inc. to___________, Inc. ___________, Inc. was, therefore, a second tier subcontractor, i.e., a subcontractor to asubcontractor, on the ___ project. A dispute arose as to _________, Inc.’s performance on the project, and_________, Inc. was terminated on February 19, 1997.

4. On April 3, 1997, ___________, Inc. filed a mechanic’s lien affidavit in the amount of $30,259.00 related tothe ___ project (the “Lien Affidavit”). A copy of the lien affidavit was sent to __________, Inc. A true and correctcopy of the Lien Affidavit is attached as Exhibit “B-1” to the Affidavit of J. Paulo Flores, and is incorporated herein byreference. The only notice sent by _________, Inc. with respect to its claim was a notice of the lien filing; no trappingnotices were ever sent by ____________, Inc. to either the owner of the project, ___, nor to the original contractor,_______.


_________________________________________________

SUBSCRIBED TO AND SWORN BEFORE ME this _____ day of March, 1998.


30

____________________________________Notary Public in andfor the State of Texas____________________________________

Seal Printed Name


31

APPENDIX G

CAUSE NO. _____________

______ CONSTRUCTION COMPANY § IN THE DISTRICT COURT§

PLAINTIFF, §§

VS. §§ _____ JUDICIAL DISTRICT

_________ NATIONAL INDEMNITY §COMPANY and _________ §CONSTRUCTION §

§DEFENDANTS. § DALLAS COUNTY, TEXAS

THIRD PARTY DEFENDANT _____________,L.L.P.’S SUMMARY MOTION TO REMOVE

INVALID LIEN AND BRIEF IN SUPPORT THEREOF

COMES NOW, ________, L.L.P., Third Party Defendant in the above-entitled and numbered cause, and files this,its Summary Motion to Remove Invalid Lien, pursuant to Tex. Property Code §53.160, and in support thereof wouldrespectfully show the Court as follows:

MOTION

_____, L.L.P. has been sued by ______ Construction under Chapter 53 of the Texas Property Code to foreclose analleged mechanic’s lien. _____, L.L.P. will show the Court that _____, Construction did not properly and timely complywith the requirements of Chapter 53 of the Texas Property Code, and that _____, L.L.P. is entitled, therefore, to an orderdeclaring _____, Construction’s mechanic’s lien void.

1. In support of this Motion, _____, L.L.P. would refer the Court to the following:

A. The Affidavit of _______ (the “_______ Affidavit”), which is attached as Exhibit “A,” and isincorporated herein by reference.

B. The Affidavit of J. Paulo Flores (the “Flores Affidavit”), which is attached as Exhibit “B,” and isincorporated herein by reference.

C. Certified copy of Texas Secretary of State Certificate of Non-Existence, which is attached as Exhibit “C,”and is incorporated herein by reference.

D. _____, L.L.P.’ Brief contained herein.

E. _____, Construction’s Original Counterclaim and Petition to Foreclose Mechanic’s lien, including itsexhibit, filed by _____, Construction with this Court (the “Counterclaim”).


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BRIEF

Factual Background:

2. In November, 1997, _____, L.L.P. hired _______, as original contractor, to build a _____ hotel in Dallas,Dallas County, Texas. ______ entered into a subcontract with _____, Construction, wherein _____, Construction wouldprovide labor and materials to perform the concrete work on the project. See, _______ Affidavit at para. 3; see also,the Counterclaim at para. III. ______ was the original contractor on the Project. See, _______ Affidavit at para. 3._____, Construction was a first tier subcontractor to ______. Id. _____, Construction failed to properly perform underhis subcontract with ______. Specifically, _____, Construction failed to provide the concrete necessary for the project,and failed to complete the project. Id.

3. On or about September 16, 1998, _____, Construction filed a mechanic’s lien in the amount of $91,911.99related to this project (the “Lien Affidavit”). A true and correct copy of the Lien Affidavit is attached as Exhibit “A”to the Counterclaim, and is incorporated herein by reference.

Legal Argument:

4. The contents that must be included in a lien affidavit are set forth in Tex. Prop. Code §53.054. The contentsinclude: “the Claimant’s name. . . .” Tex. Prop. Code §53.054(a)(7). Furthermore, “The affidavit must be signed by theperson claiming the lien or by another person on the claimant’s behalf.” Tex. Prop. Code §53.054(a). The allegedClaimant in the mechanic’s lien at issue in this suit is “_____ Construction, Inc.” No such business entity exited in thestate of Texas on the date of the mechanic’s lien, nor on the date it was filed. See, Exhibit “A” to the Counterclaim; andExhibit “C” to this Motion. Section 53.160 of the Texas Property Code sets forth the grounds for removal of an invalidor unenforceable lien. One of the grounds is that, “an affidavit claiming a lien failed to comply with Section 53.054.”Tex. Prop. Code §53.160(b)(2). As _____, Construction’s mechanic’s lien fails to comply with section 53.054, and inany event simply could not comply with the requirements of such section as the alleged claimant did not exist, the lienmust be ordered void as a matter of law.

5. As stated above, the contents that must be included in a lien affidavit are set forth in Tex. Prop. Code §53.054.The required contents include: “a statement of each month in which the work was done and materials furnished for whichpayment is requested.” Tex. Prop. Code §53.054(3). _____, Construction’s mechanic’s lien affidavit does not containsuch a statement. See, Exhibit “A” to the Counterclaim. The mechanic’s lien affidavit must have: “the name and lastknown address of the original contractor.” Tex. Prop. Code §53.054(5). _____, Construction’s mechanic’s lien affidavitdoes not contain such a statement (_____, Construction can maybe argue that the original contractor is at least listed,although it is not identified as the original contractor, but certainly the last known business address is missing). See,Exhibit “A” to the Counterclaim. The lien affidavit must also include: “a statement identifying the date each notice ofthe claim was sent to the owner and the method by which the notice was sent.” Tex. Prop. Code §53.054(8). _____,Construction’s mechanic’s lien affidavit does not contain such a statement. See, Exhibit “A” to the Counterclaim.Section 53.160 of the Texas Property Code sets forth the grounds for removal of an invalid or unenforceable lien. Oneof the grounds is that, “an affidavit claiming a lien failed to comply with Section 53.054.” Tex. Prop. Code §53.160(b)(2).As _____, Construction’s mechanic’s lien fails to comply with section 53.054, the lien must be ordered void as a matterof law.

6. Alternatively, a first tier subcontractor must comply with the trapping notice requirements of the Property Codein order to perfect the right to file a mechanic’s lien. Texas Property Code §53.056 imposes an obligation on a derivativeclaimant, i.e., one not contracting directly with the owner, to give the owner of a project notice of claimant’s claim bythe 15th day of the third month following each month in which all or part of the claimant’s labor was performed or materialdelivered. The burden is on claimant to show compliance with this section. Texas Property Code §53.160(d)(1). _____,Construction must provide the court with evidence that he timely and properly sent such a notice. Otherwise, the lienmust be ordered void as a matter of law.


33

7. Alternatively, a first tier subcontractor must comply with the lien filing notice requirements of the Code in orderfor the mechanic’s lien to be properly perfected. On the date the mechanic’s lien at issue was filed, Texas PropertyCode §53.055 imposed an obligation on a derivative claimant, i.e., one not contracting directly with the owner, to givethe owner of a project and the original contractor notice of claimant’s mechanic’s lien filing within one business day ofthe filing. The burden is on claimant to show compliance with this section. Texas Property Code §53.160(d)(1). _____,Construction must provide the court with evidence of the date it filed its lien, and the stamped postal receipts indicatingmailing to the owner and original contractor within one business day. If _____, Construction cannot sustain this burden,the lien must be ordered void as a matter of law.

8. In the further alternative, Rogers has filed a bond with respect to _____, Construction’s claim and mechanic’slien in accord with Texas Property Code §53.171. A true and correct copy of such bond as filed is attached as Exhibit“A-1” to the Huggins Affidavit, and is incorporated herein by reference. As such the lien has been bonded around anddischarged, and should, therefore, be found to be void as a matter of law.

Attorneys’ fees:

9. This Court has the authority to award _____, L.L.P. a judgment against _____, Construction for the reasonableattorneys’ fees incurred by it in having to bring this Motion pursuant to the provisions of Tex. Prop. Code §53.156. Ascan be seen from the Flores Affidavit, a reasonable attorneys’ fee for a case of this type through hearing on this Motionis $2,125.00. See, Flores Affidavit at para. 3 and 4.

WHEREFORE, PREMISES CONSIDERED, Third Party Defendant, _____, L.L.P., respectfully prays that thisSummary Motion to Remove Invalid Lien be granted; that _____, L.L.P. be granted an order declaring _____,Construction’s mechanic’s lien void; that it be granted its attorneys’ fees in the amount of $2,125.00; and that it begranted such other and further relief, both at law and in equity, to which it may show itself to be justly entitled.


[Insert Certificate of Conference (if applicable in your County by local rule), Verification, Fiat, Certificate of Service,and supporting Affidavits.]


35

APPENDIX H

CAUSE NO.99-87206-3

_______________, INC. § IN THE COUNTY COURT§

PLAINTIFF, §§

VS. § AT LAW NO. 3§

________, INC., et al §§

DEFENDANTS. § TARRANT COUNTY, TEXAS

ORDER TO REMOVE INVALID LIEN

CAME ON for hearing on the 3r d day of March, 2000, the Summary Motion to Remove Invalid Lien filed by

Defendant pursuant to Tex. Property Code §53.160. The Court, after reviewing the pleadings, hearing the evidence, and

hearing the arguments of counsel, finds that good cause exists for the granting of the relief requested by the Defendant.

It is therefore,

ORDERED, that Plaintiff’s Summary Motion to Remove Invalid Lien is hereby GRANTED, and the Mechanic’s

Lien filed by ____, Inc. at Vol. _____, page ____ of the Real Property Records of Tarrant County, Texas, on

September 2, 1999, is hereby removed.

IT IS FURTHER ORDERED, that Plaintiff may post security in the amount of $___________________, which

the Court finds to be a reasonable estimate of the costs and attorneys’ fees the movant is likely to incur in this proceeding,

in order to stay removal of the lien. Such security shall be filed no later than the 30th day after the date of this Order.

SIGNED THIS ____ day of March, 2000.

____________________________________JUDGE PRESIDING


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APPENDIX I

CLERK’S CERTIFICATE PURSUANT TOTEXAS PROPERTY CODE §53.161(f)


COUNTY OF TARRANT §

I, ________________________, deputy clerk for Tarrant County, Texas, hereby certify as follows:

1. No bond or deposit in lieu of the bond was filed with the Office of the County Clerk of Tarrant County, Texas

within thirty days after March 27, 2000, as allowed by the Order signed that date by Judge Vincent G. Sprinkle in case

number __________, styled ___________, Inc. v. ___________, Inc., et al., filed in County Court at Law No. 3,

Tarrant County, Texas.

2. No order staying the Order to Remove Lien has been entered by the Court.


__________________________________[Signature]

[Seal] __________________________________[Printed Name]

TARRANT COUNTY DEPUTY CLERK

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