Utah Law Developments
| Jurisdiction | Utah,United States |
| Citation | Vol. 25 No. 5 Pg. 34 |
| Pages | 34 |
| Publication year | 2012 |
Vol. 25, No. 5. 34. Utah Law Developments
Volume 25 No. 5
Sep/Oct 2012
Many litigators have had the experience of receiving a demand letter informing them that a client's lien is wrongful and that it must be removed. Many of those same attorneys have responded to complaints and petitions to nullify the supposedly wrongful lien. In Utah, many practitioners and jurists alike misapply Utah's wrongful lien statute found in the Utah Code see Utah Code Ann. § 38-9-1 et seq. The confusion occurs when the unenforceability of a lien becomes synonymous with "wrongful."
"Unenforceable" and "Wrongful" are Synonymous.
Prior to 2009, courts often held that unenforceable liens were wrongful. For example, in Russell v. Thomas, 2000 UT App 82, 999 P.2d 1244, a recorded notice of interest was held to be a wrongful lien because the agreement upon which the defendant relied when he filed the notice of interest did not give him an interest in the real property at issue. See id ¶¶14-15. Similarly, in another case, a notice of interest recorded by a lien claimant was held to be wrongful because the notice of interest included land in excess of what the lien claimant could arguably claim it had a right to under the real estate contract. See Commercial Inv. Corp. v. Siggard, 936 P.2d 1105 (Utah Ct. App. 1997).
Courts have also held that purported mechanic's liens can be wrongful. In Packer v. Cline, 2004 UT App 311, 2004 WL 2021277, Cline filed a mechanic's lien that failed to substantially comply with the mechanic's lien statute because he did not include several elements required by statute. See id *2-*3. Because of these deficiencies, the trial court held that the lien was not actually a mechanic's lien, was not expressly authorized by statute, and was wrongful. Id. *3. The Court of Appeals agreed on appeal. Id. *3-*4.
In each of these cases, the Utah Court of Appeals held that various liens were wrongful because they were somehow defective. These defects clearly make the liens unenforceable, but do they also make them wrongful? Prior to 2009, the answer was not clear. The case law shows that if there was a procedural defect, or if it turned out that the party filing the lien or notice of interest somehow overstepped its bounds, courts could not only declare the lien unenforceable, but they...
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