Insight into the 90 Day Claim Rule

In the recent Picerne Construction Corp v. Castellino Villas matter, the Court interprets former Civ Code 3115 (regarding deadlines to record a claim of mechanic’s lien) and section 3131 (regarding the definition of a work of improvement).

Picerne agreed to build an apartment building complex comprised of 11 buildings for Castellino. Certificates of occupancy were issued on July 25, 2006, however Picerne continued to work after this date – there was roof work and installation of stairway grip tape that was still required under the contract. Though Castellino signed a document entitled “Owner’s Acceptance of the Site” on September 8, 2006, the roof and stairway work continued to sometime shortly after September 8, 2006. Castellino began renting the apartment units in October 2006. This was the same time that Picerne asked Castellino to release the project retention proceeds.

Picerne recorded a claim of mechanic’s lien on November 28, 2006 and filed a complaint against Castellino and others to foreclose its mechanic’s lien on December 29, 2006. The trial court ruled that the project was completed no earlier than September 8, 2006, that Picerne timely recorded its claim of mechanic’s lien, that Picerne was entitled to foreclose on its lien and that the lien was senior to the deed of trust in favor of Bank of the West. The trial court ordered Picerne’s lien foreclosed; Castellino appeals.

In the appeal, Castellino makes multiple arguments including: 1) Picerne did not have a valid mechanic’s lien because it did not record a claim within 90 days after substantial completion of the project pursuant to former Civ Code 3115 – that the date started to run as of July 25, 2006 when the certificate of occupancy was issued, and 2) each of the 11 buildings of the complex were separate residential units per the meaning of section 3131, thus different lien claim deadlines applied. The Court disagreed with both of these arguments. The Court reasoned that the Legislature deleted “trivial imperfections” in the predecessor to this Code and defined completion of the work of improvement as actual completion of the work. Ample evidence points to the fact that work continued between July 25, 2006 through September 2006, and that this work was not corrective work, repair work, nor warranty work, but that the work (which was roof work and grip tape application work) was required by the terms of the contract. Thus, the lien was timely recorded. The Court also discussed that under the meaning of section 3131, Castellino failed to show that there was separate title for each of the 11 buildings, and instead, that Castellino filed one notice of completion for the entire project, thus different lien claim deadlines are not applicable.

In short, actual completion is not to be confused with substantial completion and where the contract calls for specific work, that work must be completed before the time starts to run on the 90 day deadline to record a claim of mechanic’s lien. Also, where a work of improvement is comprised of multiple units/buildings, where there is no separate title for the individual units/buildings and where there is one notice of completion for the entire project, there are no separate deadlines, or deadlines calculated on a “per unit/building” basis.