In a recent unpublished opinion, the Court of Appeals of Minnesota upheld a trial court’s ruling that mechanic’s liens erroneously filed by a construction company were published with malice sufficient to support a homeowner’s slander-of-title claim. In LeMaster Const., Inc. v. Woeste, the homeowners contracted with LeMaster Construction, Inc. to remediate fire damage to their home. The lower court held that work performed by LeMaster was incompetently performed, and the homeowners eventually terminated their arrangement with LeMaster. Although LeMaster never sent the homeowners a bill for the services performed, it filed a mechanic’s lien against their property in excess of $300,000 without notifying the homeowners.

LeMaster later filed suit to foreclose on the lien, and the homeowners filed a counterclaim alleging, among other claims, slander of title for the malicious filing of an instrument known to be inoperative. The Court of Appeals upheld the lower court’s finding that the false liens were published maliciously, as they “contained claims for sums owed to [LeMaster] for things clearly not ‘lienable’ under Minnesota law, including claims for liquidated damages, contents handling, items that were intentionally overcharged, amounts related to fraudulent invoices from subcontractors, amounts for items that [LeMaster] purchased but expressly refused to release to the [homeowners], work that was not done at the premises and work for which [LeMaster] had already paid for and received lien waivers.” LeMaster argued that the employee who completed the lien forms was trained by an attorney, and her testimony evidenced an intent to complete the lien statements accurately. However, the employee’s testimony indicated that she knew nothing about what could properly be included in a mechanic’s lien.

The court agreed with the district court’s finding that LeMaster “knowingly inflated the amounts on its invoices, and in turn knowingly employed a person with little knowledge of mechanic’s liens to prepare them.” The court further concluded that the record was fully sufficient to support a finding of malice, agreeing with the district court’s scathing statement that “[t]he very best that can be said about these liens is that at a minimum they were sloppily and carelessly prepared without regard to the law by a marginally trained employee who by any objective standard was grossly incompetent to perform this function, and whose lack of training was or should have been known to [LeMaster’s] President.”

LeMaster Const., Inc. v. Woeste, No. A08-0956, 2009 WL 1048194 (Minn.App. April 21, 2009)