July 27, 2014

Recent Indiana Case Addresses No-Lien Contract, Residential Mechanic’s Lien, and Personal Liability Notice Statute Issues

Feitler v. Springfield Enterprises, Inc., 978 N.E.2d 1160 (Ind. Ct. App. 2012) addressed multiple lien-related issues arising from a residential construction project.  To summarize the facts, in November 2007 Mary Anna and Fred Feitler created a Family Trust of which they were the sole beneficiaries.  Real estate that Mary Anna owned was transferred to the Trust.  In July 2009, the Feitlers hired a general contractor to build a home on the property, under a no-lien contract identifying the Feitlers as the owners.  Notice of the no-lien contract was recorded.  Three weeks after the contract was signed, the Trust deeded the property to the Feitlers, who the same day obtained a mortgage loan. The Feitlers later transferred the property back to the Trust. 

In early February 2010, the general contractor went out of business.  J. Laurie, a flooring subcontractor, recorded a required pre-lien notice to preserve lien rights against residential property, and sent a notice of personal liability to the Feitlers and the Trust.  Springfield, a siding subcontractor, recorded a mechanic’s lien.  JM Woodworking, a cabinet installer, completed work based on assurances of payment from the Feitlers.  After it was not paid, JM sent a personal liability notice to the Feitlers and recorded a mechanic’s lien, without filing a pre-lien notice. 

The personal liability notices were given under Indiana Code Section 32-28-3-9, often referred to as the Personal Liability Notice (PLN) Statute, which provides a means for subcontractors and others to assert a claim against a project owner for amounts owed to the general contractor.  Essentially, the PLN Statute provides a means to assert a lien against funds the owner would otherwise pay to a general contractor.  This is an additional or alternative remedy to the mechanic’s lien rights available under Indiana law.   

Predictably, litigation ensued.  The trial court entered summary judgment, ruling that the two mechanic’s liens were valid and that the Feitlers were personally liable to all three subcontractors.  The Court of Appeals reversed.  First, the Court held that JM’s failure to provide a pre-lien notice to the Trust – the owner of the property – invalidated JM’s mechanic’s lien.  Second, the no-lien contract rendered J. Laurie’s mechanic’s lien invalid.  The Feitlers, as beneficiary of the Trust, qualified as “owners” under the no-lien provisions of the mechanic’s lien statute, in part because they were going to live in the house.  Finally, summary judgment on the personal liability claims was improper because there were factual disputes about whether the general contractor was paid in full.  If no amounts were due when personal liability notices were issued, the Feitlers could not be liable under the PLN statute.


About the Author

Timothy Abeska, Litigation Attorney, Barnes Thornburg, Law firm

Timothy J. Abeska is a member of the Litigation Department in the firm’s South Bend, Indiana office. A partner, Mr. Abeska concentrates his practice in commercial litigation, representing clients in federal and state courts. The focus of Mr. Abeska’s practice is construction claims, commercial litigation including business torts, commercial loan workout and bankruptcy litigation, lender liability defense, transportation law, and products liability defense. He represents clients at trial and on appeal, in arbitration, and in mediations. Mr. Abeska has been selected for inclusion...


Boost: AJAX core statistics

Legal Disclaimer

You are responsible for reading, understanding and agreeing to the National Law Review's (NLR’s) and the National Law Forum LLC's  Terms of Use and Privacy Policy before using the National Law Review website. The National Law Review is a free to use, no-log in database of legal and business articles. The content and links on are intended for general information purposes only. Any legal analysis, legislative updates or other content and links should not be construed as legal or professional advice or a substitute for such advice. No attorney-client or confidential relationship is formed by the transmission of information between you and the National Law Review website or any of the law firms, attorneys or other professionals or organizations who include content on the National Law Review website. If you require legal or professional advice, kindly contact an attorney or other suitable professional advisor.  

Some states have laws and ethical rules regarding solicitation and advertisement practices by attorneys and/or other professionals. The National Law Review is not a law firm nor is  intended to be  a referral service for attorneys and/or other professionals. The NLR does not wish, nor does it intend, to solicit the business of anyone or to refer anyone to an attorney or other professional.  NLR does not answer legal questions nor will we refer you to an attorney or other professional if you request such information from us. 

Under certain state laws the following statements may be required on this website and we have included them in order to be in full compliance with these rules. The choice of a lawyer or other professional is an important decision and should not be based solely upon advertisements. Attorney Advertising Notice: Prior results do not guarantee a similar outcome. Statement in compliance with Texas Rules of Professional Conduct. Unless otherwise noted, attorneys are not certified by the Texas Board of Legal Specialization, nor can NLR attest to the accuracy of any notation of Legal Specialization or other Professional Credentials.

The National Law Review - National Law Forum LLC 4700 Gilbert Ave. Suite 47 #230 Western Springs, IL 60558  Telephone  (708) 357-3317 If you would ike to contact us via email please click here.