Lee & Lum, LLP Secures Victory in Appellate Court: Mechanics' Liens Dispute Resolved in Favor Firm Clients
By Robert J. Lum
In a significant victory secured by Lee & Lum, LLP for its clients, the Appellate Division, First Department has reversed a lower court decision, thereby granting our motion to dismiss on behalf of our clients, defendants Rosemex Inc. and Mecar Metal Inc., against their former manufacturer’s representative, plaintiff SRS Enterprises, Inc. Our clients, who were manufacturers, supplied custom heating enclosures and other materials to a condominium project at the request of SRS Enterprises, Inc.
The case, SRS Enterprises, Inc. v. Rosemex, Inc. et al., 223 A.D.3d 419 (1st Dep't 2024) rooted in allegations of abuse of process and tortious interference with business relations, centered on the filing of mechanics' liens by the firm’s clients after plaintiff SRS Enterprises ordered materials from them but refused to make payment. SRS Enterprises contended that our clients improperly filed these liens to harm its business relationships with contractors and the owner of the condominium project.
However, the Appellate Division, First Department, analyzed the plaintiff’s allegations and found them lacking in substance. The court determined that the firm’s clients acted within the economic justifications provided by the Lien Law by filing the mechanics' liens to secure payment for materials supplied to the project, thereby defeating the plaintiff's abuse of process claim and tortious interference claim. Specifically, the First Department found that the plaintiff’s allegations of wrongdoing were “insufficient to show that [the firm’s client] acted with any intent to harm plaintiff” and further stated “even according plaintiff the benefit of every possible favorable inference, plaintiff fails to allege any sufficiently egregious wrong where defendants were not at least partially acting for their own economic interest within the scope of the Lien Law.”
The court's thorough examination and application of the Lien Law and precedent affirm the principle that taking legal actions, such as filing mechanics' liens, are legitimate measures for parties seeking to enforce contractual rights and secure payment for services and materials rendered. This decision is not just a win for the firm’s clients; it is a testament to the importance of retaining counsel to advise on a well-founded legal strategy, including before and after filing a mechanic’s liens.
The Lee & Lum, LLP appellate team was led by firm partner Robert J. Lum, with the assistance of firm associate Sunny Patel.