In 2014 the Mississippi Legislature introduced the Mississippi construction industry to new legislation on construction liens. Miss. Code Ann. §§ 85-7-401, et seq. Currently, there has been limited jurisprudence interpreting these statutes. On August 18, 2020, the Mississippi Court of Appeals provided some limited guidance in ABG Contractors, Inc. v. I-55 Development. [Link before for Decision] In that case, the Contractor had filed a lien against the property to secure payment for work it had performed on construction of a convenience store. The Owner took action to have the lien expunged, alleging it was defective and fraudulent.
A hearing was subsequently held but only the Owner’s attorney attended the hearing. The circuit court judge heard the arguments of counsel and cancelled the lien but ordered the parties to return to put on proof of the validity of the lien. The Contractor appealed. The Mississippi Court of Appeals reversed the circuit court relying upon the clear and unambiguous language of the statute that required a finding as to the validity of the lien prior to canceling it. The Court therefore remanded the matter for an evidentiary hearing to permit the circuit court to issue findings of fact and conclusions of law.
The first lesson to be learned is to make sure the filing of a lien is supported by the facts and the law, because the statutory penalty for filing a knowingly false lien is substantial. A second lesson is that if the lien is challenged, be prepared to present evidence to support its validity.