Court Opinion

ID: 9515271
Source: CourtListenerOpinion
Date Created: 2023-08-06 22:55:12.643468+00
Date Added: 2024-06-11T09:06:27.206185
License: Public Domain

SABERS, Justice
(dissenting).
[¶ 21.] I respectfully dissent because the majority opinion rewards Wald for greatly inflating the amount of its mechanic’s lien.
[¶ 22.] Mechanic’s liens are devices that allow “persons who provide labor and materials ... to ensure that they get paid.” Action Mechanical v. Deadwood Historic, 2002 SD 121, ¶17, 652 N.W.2d 742, 749. However, mechanic’s liens are easily abused. In an effort to curtail abuse, the Legislature requires that lien claimants file itemized statements upon which the lien is claimed. SDCL 44-9-16. “Substantial compliance with the statute ... is required to protect others with an interest in the property from fraud and imposition.” Ringgenberg v. Wilmsmeyer, 253 N.W.2d 197, 200 (S.D.1977).
[¶ 23.] We refuse to enforce a mechanic’s lien where the claimant has willfully and intentionally exaggerated the claim. Id. at 201. A claim is not intentionally or willfully false if the mistakes were honestly made. Id. However, “if the lien grossly misrepresents the amount, the burden is on the person asserting the lien to prove the mistake was made in good faith.” Id.
[¶ 24.] Wald’s mechanic’s lien claim was for $46,186.30. The Stanleys offered to settle for $5,000. The circuit court found that Wald was only entitled to $5,351. Thus, Wald insisted on litigating its claim and was awarded only $351 more than offered by the Stanleys. The amount the circuit court determined Wald was entitled to, was only one-eighth of the amount claimed. Despite that, the circuit court awarded Wald the full amount of attorney’s fees claimed ($5,726.07) because Stanleys exercised their statutory option that the lien be enforced or forfeited as provided in SDCL 44-9-26.
[¶ 25.] Under the circuit court’s logic, a claimant who recovers even a small fraction of its original claim is entitled to attorney’s fees even though not warranted or necessary. Creditors are free to be careless, negligent, or excessive in filing their claims so long as they recover some portion of the claim at trial.
[¶ 26.] Wald filed a mechanic’s lien that encumbered the Stanley homestead by over eight times the amount determined. The Stanleys appropriately demanded that Wald enforce or forfeit the inflated lien as provided by statute. As a result, the circuit court abused its discretion when it awarded attorney’s fees neither warranted nor necessary. In fact, the action to enforce the excessive mechanic’s lien was not warranted or necessary and the case should have been settled without a lawsuit.