Legal Question in Real Estate Law in New Mexico

Mechanics' liens are a remedy that can be used by subcontractors who are not paid for their work. However, when the owner has paid the general contractor, who then stiffs the subs, the law has this to say:

�Subcontractors' suits against property owners are generally not favored. Remedy is instead viewed as best sought from the underlying general contractor.� Ontiveros Insulation Co. v. Sanchez, 2000�NMCA�051, � 12, 129 N.M. 200, 3 P.3d 695 (citations omitted). This view is based on the notion that �equity does not take the place of remedies at law, it augments them; in this regard, an action in contract would be preferred to one in quasi-contract.� Id. Generally, a subcontractor has no right to claim quantum meruit against an owner when the owner has paid all or substantially all of what it owes under its contract with the prime contractor. See Hydro Conduit, 110 N.M. at 175�76, 793 P.2d at 857�58 (recognizing the general rule that the subcontractor's claim of unjust enrichment cannot be sustained against the owner when the owner has paid the general contractor for the work performed and material supplied); see also Sundance Mech. & Util. Corp. v. Atlas, 118 N.M. 250, 255, 880 P.2d 861, 866 (1994) (stating that �[g]enerally, a subcontractor cannot recover against the landowner in quasi-contract [for unjust enrichment] when that landowner has paid �a very substantial part� of the contract amount to the general contractor�). Important to Hale's claim, the Court in Hydro Conduit also stated that �a subcontractor who has lost his mechanic's lien claim against a property owner may have a claim in quantum meruit where the owner has not paid the general contractor.� 110 N.M. at 175, 793 P.2d at 857 (internal quotation marks and citation omitted).

That's from the opinion of Judge Sutin in J.R. Hale Contracting Co., Inc. v. Union Pacific R.R.,

143 N.M. 574, 179 P.3d 579, N.M.App.,2007.

They can file a lien as long as they did work on theproject within the 90 days prior to filing. The law would prefer that the subcontractor pursue the GC, who bounced the check. That's not your fault. They can file the lien but you should be able to get it dismissed. How you recover attorneys fees from these clowns is another matter entirely: this can get expensive, and the General Contractor has "disappeared." Not an unusual occurrence; odds are he's back in business under another name. You should bring this situation to the attention of the State Attorney: a crime has been committed and by reporting it, you helo to distance yourself from the bad guys.

IF they actually file a lien, feel free to contact me through the lawguru system. Don't let the NYC address throw you: I'm a NM lawyer, I just split my time between my office in NY and my home practice in NM.