On July 25, 2025, the Fourth Department issued a decision in Esperanza Mansion Group LLC v. Mehlenbacher, 2025 NY Slip Op. 04370, holding that whether the exaggeration of a mechanic’s lien was willful is a question of fact for a jury, explaining:
To meet their initial burden on the cross-motion with regard to the counterclaim for willful exaggeration of the mechanic’s lien, defendants were required to demonstrate as a matter of law that the amounts set forth in the lien were intentionally and deliberately exaggerated. The fact that a lien may contain improper charges or mistakes does not, in and of itself, establish that a plaintiff wilfully exaggerated a lien. Further, Section 39-a of the Lien Law is penal in nature, and must be strictly construed in favor of the person upon whom the penalty is sought to be imposed.
The issue of wilful and/or fraudulent exaggeration is one which ordinarily must be determined at trial, in part, because proof of willfulness necessarily involves proof as to the credibility of the lienor. Evidence from which wilfulness might be inferred is not sufficient to meet a moving party’s burden, because every available inference must be drawn in the non-moving party’s favor. Thus, summary judgment is appropriate only where the evidence that the amount of the lien was wilfully exaggerated is conclusive.
Defendants failed to make such a showing here, and thus the court properly denied their cross-motion with respect to the willful exaggeration counterclaim. Although defendants submitted conclusive evidence that the lien contained certain non-lienable charges, their submissions failed to establish as a matter of law that the inclusion of such charges was attributable to something other than good faith mistake. With regard to the remaining allegedly exaggerated amounts, because no formal agreement was reached between the parties as to how plaintiffs would be compensated for their work on the Mansion, numerous questions of fact remain as to whether the lien sought more than the reasonable value of the labor plaintiffs expended. Questions of fact also exist whether any errors were the result of ignorance or honest mistake.
(Internal quotations and citations omitted).