This memorandum is uncorrected and subject to revision before

publication in the New York Reports.

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No. 223 

In the Matter of Delilah Rigano, 

&c.,

 Respondent,

 v.

Vibar Construction, Inc.,

 Appellant.

(And Another Proceeding.)

Jeffrey Rizzo, for appellant.

John Brian Macreery, for respondent.

LIPPMAN, Chief Judge:

The issue on this appeal is whether a notice of

mechanic's lien can be amended nunc pro tunc to reflect the name

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of the true owner of the property or whether the misnomer

invalidates the lien. Here, the true owner is the sole

shareholder of the listed owner, the conveyance of the property

in question from the listed owner to the true owner was not at

arm's length, and the public and certainly the true owner here

were on notice that a lien had been placed on the property. The

subject notice of lien also provided means for third parties to

contact the true owner. And, significantly, the true owner and

listed owner consented to the underlying work that allegedly went

uncompensated. Under the particular circumstances presented, the

misnomer is a misdescription that does not constitute a

jurisdictional defect and is curable by amendment.

George Vignogna (the sole shareholder of Vibar

Construction Corp.) and Nick Rigano (the sole shareholder of Fawn

Builders, Inc.) were business partners for over 35 years before

deteriorating business conditions in 2007 led to disputes

concerning the construction contract at issue here. Their

relationship had consisted of Rigano, through Fawn Builders, Inc.

(Fawn Builders), purchasing property and Vignogna, through Vibar

Construction Corp. (Vibar), developing the property. The parties

would split the profits and rarely reduced their agreements to

writing, trusting in their long-term business relationship to

help them avoid any conflict. During their last project, Vibar

constructed a common driveway to access the Pound Ridge, New York

property in question and maintains that Rigano and Fawn Builders

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failed to compensate it for the construction of the road. The

record shows that Rigano consented to construction of the

driveway as demonstrated by the construction and easement

agreement the parties signed in 2006 (signed by Rigano

individually and for Fawn Builders as president).

Vibar filed a notice of mechanic's lien on the property

to recover the cost of constructing the road. The notice

provided that Fawn Builders owned the property, when it was

actually owned by Rigano, Fawn Builders’ sole shareholder and

president.

Rigano sought to have the lien discharged on the ground

that he, not Fawn Builders, owned the property, asserting a

jurisdictional defect that invalidated the lien. Rigano had

indeed acquired title to the property when, on February 14, 2007,

he, as president of Fawn Builders, transferred the property from

Fawn Builders to himself, as an individual. The deed stated that

Rigano and Fawn Builders were located at the same address, and

Rigano signed the deed as "president" of Fawn Builders.

Vignogna petitioned to amend the notice of lien,

arguing that naming Fawn Builders as the owner of the lot was a

"misdescription" that did not warrant invalidating the lien. He

noted that at all times during the parties’ partnership, Rigano

owned property in his corporation's name. He also contended that

the transaction in which the land was transferred from Fawn

Builders to Rigano was not one for consideration, noting that

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Rigano was the sole beneficial owner of Fawn Builders and signed

the deed as president of Fawn Builders, and that there was no

indication of any transfer tax having been paid.

After initially holding in favor of Vignogna, and

concluding that the notice "substantially complied" with the Lien

Law requirements, on reargument and renewal, Supreme Court

granted Rigano's petition and discharged the mechanic's lien.

The Appellate Division affirmed, holding that "[w]hile

a failure to state the true owner or contractor or a

misdescription of the true owner will not affect the validity of

a notice of lien, a misidentification of the true owner is a

jurisdictional defect which cannot be cured by an amendment nunc

pro tunc" (Matter of Rigano v Vibar Const., Inc., 109 AD3d 829,

831 [2d Dept 2013] [quotation marks and citations omitted]). The

Court held that the notice was jurisdictionally defective because

it "completely misidentified the true owner of the subject

premises," citing its own precedent in Matter of Tri Quality

Mech. Corp. v Chappastream Corp. (138 AD2d 610 [2d Dept 1988])

and Tri-State Sol-Aire Corp. v Lakeville Pace Mech. (221 AD2d 519

[2d Dept 1995]) (id.). This Court granted leave to appeal.

Article 2 of the Lien Law provides that it "is to be

construed liberally to secure the beneficial interests and

purposes thereof" (Lien Law § 23), which include "provid[ing]

security for laborers and materialmen and . . . provid[ing]

notice and a degree of certainty to subsequent purchasers"

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(Matter of Niagara Venture v Sicoli & Massaro, 77 NY2d 175, 181

[1990]). It states that "substantial compliance . . . shall be

sufficient for the validity of a lien and to give jurisdiction to

the courts to enforce the same" (Lien Law § 23) and "[a] failure

to state the name of the true owner . . . or a misdescription of

the true owner, shall not affect the validity of the lien" (Lien

Law § 9 [7]). The Lien Law also authorizes amendment provided it

does not "prejudice . . . an existing lienor, mortgagee or

purchaser in good faith" (Lien Law § 12-a [2]). Thus, read

together, it explicitly provides that it should be construed

liberally, states that a misdescription of the true owner shall

not invalidate a lien, and allows amendment where a third party

would not be prejudiced. 

The Court is mindful of the power a lien gives to the

holder over another's property, and, because of the potential for

abuse, it must be understood that the Lien Law does not sanction

amendment without confirmation that the true owner and listed

owner are closely related and there was consent to the

construction work. In Gates & Co. v National Fair & Exposition

Assn., we emphasized that

"[i]t was not the legislative

intent to give a lien upon the

property through the filing of any

notice describing it; it was

intended that such a lien should be

acquired as against the title or

interest of the person party to or

assenting to the agreement under

which the work was done" (225 NY

142, 156 [1919] [emphasis added]). 

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We conclude that the Lien Law authorizes the type of amendment

sought under the specific circumstances here where the defect is

plainly a misdescription and not a misidentification. 

Even with a defect in the naming of the property owner,

Lien Law § 9 "preserve[s] the validity of the lien so far as the

person named as owner and against whom a lien is asked in fact,

may have some title or interest" (Gates, 225 NY at 156). The

Gates court permitted amendment where the true owner purchased

most of the property under the lien (id. at 155), and there was

"common consent" by the parties as to the construction work (id.

at 153). Although the true owner of the property in Gates had

changed its name from "Empire City Trotting Club" to "Empire City

Racing Association" before purchasing the property, and the lien

listed the previous corporate name, amendment was allowed because

the two corporations were the same entity (see id. at 155). The

Court recognized that the misnomer "would give to the public

substantially the same notice of the lien [on the property] as if

the exact name . . . had been used, or at least . . . would put a

person examining the lien docket upon inquiry as to the intent

and scope of the lien" (id.). The Court simultaneously denied

amendment to another lien where the listed owner was one of many

stockholders of the corporate owner (see id. at 156). Whereas

the first was a misdescription, the second was a

misidentification, which amounted to a jurisdictional defect

invalidating the lien. 

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The First and Third Departments correctly allow

amendment where the listed owner is closely related to the true

owner, there was consent to the construction work, and a third

party would not be prejudiced. In PM Contr. Co. v 32 AA Assocs.,

the First Department permitted amendment where the listed owner

was named 32 AA, but the property had been transferred to 32

Sixth, an entity completely controlled by 32 AA, as its sole

board member (see 4 AD3d 198, 199 [1st Dept 2004]). The two

companies shared the same address and agent for service of

process and no consideration was paid to transfer the property

from 32AA to 32 Sixth (see id. at 199-200). Agreeing with

Supreme Court that the lien misdescribed the true owner, as

opposed to misidentifying it (such as when naming a party with no

relationship to the true owner and with no interest in the

property), the First Department also reasoned that the

"transaction was not one at arm's length," no innocent thirdparty purchaser was prejudiced by the defect, and "deem[ed] 32 AA

and 32 Sixth to be one and the same entity for present purposes"

(id.). 

The Third Department followed the liberal

interpretation required by Lien Law when it allowed amendment in

Matter of Carboline Co. v Gold, where the listed owner was a

corporation owned by three individuals who, together, owned the

property (see 94 AD2d 921 [3d Dept 1983]). The listed owner also

signed the contract for the construction materials, showing clear

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consent to the work (see id.). The court characterized this

"misdescription of the true owners" as "the kind of failure which

subdivision 7 of section 9 of the Lien Law is intended to

protect" by allowing amendment (id.). 

In contrast, the present, stricter construction

contravenes the intent of the statute. Here, the true owner,

Rigano, and the listed owner, Fawn Builders, are closely related,

as the deed to the property made clear. Rigano and Fawn Builders

had the same interest and control over the property in question

-- Rigano owned 100% of Fawn Builders. Significantly, the

transfer of the property was not accomplished in an arm's length

transaction -- no transfer tax was paid and Rigano merely

conveyed the property to himself from his corporation. Further,

Rigano had notice of the lien because he shares an address with

Fawn Builders. Naming Fawn Builders gives, at the very least,

inquiry notice to the public that there is a lien on the

property, and a correct address to contact the true owner. And

Rigano, who appears to have consented to a substantial majority

of the work done on the property, signing as an individual and

for Fawn Builders as its one and only shareholder, understood

that a lien could be placed on the property upon a failure to pay

for the work. This notice of lien would not have caught Rigano

off guard. Finally, no third-party purchaser was or would be

prejudiced by this amendment.

Accordingly, the order of the Appellate Division should

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be reversed, with costs, and the matters remitted to the

Appellate Division for consideration of the other issues raised

but not determined on the appeal to that court.

* * * * * * * * * * * * * * * * *

Order reversed, with costs, and matters remitted to the Appellate

Division, Second Department, for consideration of issues raised

but not determined on the appeal to that court. Opinion by Chief

Judge Lippman. Judges Read, Smith, Pigott, Rivera and AbdusSalaam concur.

Decided December 16, 2014

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