Delaware Court Upholds “Homeowners’ Defense” in Mechanic’s Lien Action

January 2013Articles In the Zone

In the case of Swift Flooring Contracting, LLC v. Zeccola Builders, Inc., the Delaware Superior Court upheld the “homeowners’ defense” to a mechanics’ lien action.

In this case, the defendants, Mr. and Mrs. Christ, entered into a contract with Zeccola Builders whereby Zeccola agreed to build a home on a lot and sell the house and the lot to the Christs. The plaintiff, a flooring subcontractor, supplied labor and materials during the construction of the house. Upon completion of the house, final settlement was held and, at that time, the Christs made final payment to the builder in exchange for the standard release of mechanics’ liens.

Following settlement, the Christs took possession and occupied the home as their primary residence. Shortly thereafter, the plaintiff filed a mechanics’ lien action claiming that it was still owed money for the work it performed.

The Christs defended the action and asserted the “homeowners’ defense” which, pursuant to 25 Del. C. §2707, provides “payment of contractor by owner of residence as a defense; certification of payment for labor and materials or release of liens by contractor”.

The plaintiff argued that the homeowners’ defense was not available to the Christs as they were not the owners of the property at the time that the labor and materials were supplied. The Superior Court disagreed and found that the terms of the homeowners’ defense as set forth in §2707 provides that the defense applies where an owner uses the structure solely as his residence and has made final payment in good faith to the contractor. The court further found that the defense does not require the owner to have owned the residence at the time that the labor and materials were being supplied by the subcontractor.