Nevada Court Reaffirms That Attorneys’ Fees and Costs in Actions to Release Mechanics’ Liens Under NRS 108.2275 Are Only Available in Limited Circumstances

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NRS 108.2275 allows parties to, among other things, recover attorneys’ fees and costs associated with seeking relief from frivolous or excessive mechanic’s liens. The Nevada Court of Appeals recently examined NRS 108.2275—and specifically the attorneys’ fees issue—in Tiburon Construction of Nevada v. Abrams.1

As background, Nevada’s mechanic’s lien statutes provide contractors with a powerful tool to ensure they get paid. These statutes allow contractors to record a lien against a property for their unpaid work, materials, or equipment used for construction, alteration, or repair on that property. See NRS 108.222. Conversely, NRS 108.2275 protects property owners against frivolous or excessive liens. Under the statute, if the debtor or property owner can show that the notice of lien is frivolous and was made without reasonable cause, the court shall issue an order releasing the lien and awarding costs and reasonable attorneys’ fees to the applicant for bringing the motion. See NRS 108.2275(6)(a). Or alternatively, if the debtor or property owner can show that the amount of the notice of lien is excessive, the court may, in its discretion, issue an order reducing the lien to an appropriate amount and awarding costs and reasonable attorneys’ fees to the applicant. See NRS 108.2275(6)(b). However, if the debtor or property owner brings such a motion under NRS 108.2275 and the court ultimately finds that the notice of lien was not frivolous and made with reasonable cause or that the amount was not excessive, the court shall award attorneys’ fees and costs to the party forced to defend against the motion. See NRS 108.2275(6)(c).

In Tiburon, contractor Tiburon Construction had recorded a notice of lien against property owned by Abrams following a dispute the parties had regarding payment for Tiburon’s work on that property. Despite the statutory expiration of the lien, Abrams filed a motion with the district court under NRS 108.2275, alleging that the lien was frivolous, and asked the district court to release the lien and award attorneys’ fees and costs. After Abrams served Tiburon with the motion to release, Tiburon recorded a discharge and release of the lien, and then filed an opposition to the motion. The district court declared the request to release the lien moot but granted the motion with respect to the request for fees and costs. The Nevada Court of Appeals reversed on the fee award aspect, holding that the district court never determined that the lien was frivolous or excessive. Instead, the district court only noted that Tiburon voluntarily released the lien after Adams filed his motion. This alone did not satisfy the requirements of NRS 108.2275.

In short, contractors should note that the voluntarily release of a mechanic’s lien does not by itself expose them to a fee award under NRS 108.2275. The debtor or property owner seeking fees under the statute are required to show that the notice of lien was frivolous and made without reasonable cause or was excessive in amount. Therefore, contractors may want to consider utilizing the robust protections of Nevada’s mechanic’s lien statutes to ensure they are properly paid for their work, and utilize the additional protections of NRS 108.2275(6)(c) when forced to defend their properly attached mechanic’s liens. Conversely, property owners looking to ensure that their fee awards under NRS 108.2275(6)(a)–(b) are not overturned on appeal may want to consider making sure the district court finds sufficient facts to conclude that the lien was either frivolous and made without reasonable cause or was excessive in amount, and that these facts are sufficiently detailed in the court’s order.

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Notes:

[1]Tiburon Constr. of Nevada v. Abrams for Robert A. Abrams Family Tr., Dated Nov. 20, 1997, No. 73358, 2018 WL 3873419, at *1 (Nev. App. July 27, 2018).

DISCLAIMER: Because of the generality of this update, the information provided herein may not be applicable in all situations and should not be acted upon without specific legal advice based on particular situations.

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