West Builders, Inc. v. Residency at Empire I LP, et al.

(Stanley Mosk Courthouse: Dept. 509) August 27, 2026 DEPARTMENT 509 LAW AND MOTION RULINGS

Empire I LP, et al. MOTION FOR ORDER RELEASING, DISCHARGING, OR REDUCING MECHANIC'S LIENS AND STOP PAYMENT NOTICES MOVING PARTY: Defendants Residency at Empire I, LP and Residency at the Mayer, LP RESPONDING PARTY(S): Plaintiff West Builders, Inc. STATEMENT OF MATERIAL FACTS AND/OR PROCEEDINGS: Plaintiff West Builders, Inc. (Plaintiff) brings this action against defendants Residency At Empire I LP; ABS Empire 1, LLC; Kingdom Empire 1 LLC; Residency At The Mayer, LP; ABS Mayer, LLC; Kingdom Mayer, LLC; Residency At The Entrepreneur, LP; ABS Entrepreneur, LLC; Kingdom Entrepreneur, LLC; and Greystone Housing Impact Investors LP, seeking money owed pursuant to a construction contract.

Plaintiff brings causes of action for: (1) foreclosure of mechanic's lien; (2) breach of written contract; (3) prompt payment penalties under Cal. Civil Code Sec. 8800, 8812, & 8818; and (4) enforcement of stop payment notices under Cal. Civil Code Sec.Sec. 8500 et seq.

Now, defendants Residency at Empire I, LP (Empire) and Residency at the Mayer, LP (Mayer, collectively, Defendants) move for, among other things: (1) An order determining that West has not established the probable validity of the $1,811,489 Mayer mechanic's lien recorded May 4, 2026 as Instrument No. 20260319676, and releasing and discharging it as untimely under Civil Code section 8412; alternatively, reducing it to the amount West proves was then due from the Mayer Owner, unpaid, and lienable, after excluding the separate $1,200,000 Promissory Note and crediting West's receipt of the $1,239,125.77 payment; (2) An order determining that the $1,811,489 Mayer Stop Payment Notice is invalid under Civil Code section 8508 and discharging it; (3) An order releasing and discharging the Empire mechanic's lien recorded January 26, 2026 as Instrument No. 20260059986 if West fails to prove any presently due, unpaid, and lienable amount; alternatively, reducing the lien to the amount actually proven, which on the present record cannot exceed $4,262,273 and remains subject to further credits, offsets, and reductions; (4) An order withdrawing and discharging the Empire Stop Payment Notice unless West proves a presently valid amount; alternatively, reducing it to the amount actually proven, which on the present record cannot exceed $4,262,273; Plaintiff opposed.

TENTATIVE RULING: Defendants' Motion to Discharge the Mayer Mechanic's Lien Recorded May 4, 2026, and the Mayer Stop Payment Notice is GRANTED. Defendants' Motion to Discharge or Reduce the Empire Mechanic's Lien Recorded January 26, 2026, and the Empire Stop Payment Notice is DENIED. Moving parties are ordered to give notice, unless waived.

DISCUSSION: Motion to Release Funds I. Judicial Notice Defendants seek judicial notice of Exhibits 1-4. Pursuant to Defendants' request and without objection, Defendants' request for judicial notice is GRANTED. II.

Analysis

Defendants seek orders to release or modify stop payment notices and mechanic's lien. The Court addresses Defendants' requests in turn. As an initial matter, Plaintiff alleges that "electronic service had to occur no later than July 14, 2026 -- service on July 15 was one court day late. The motion is untimely and should be denied." (Opp. at p. 12:22-24.) While the Court acknowledges the motion was untimely by a day, the Court exercises its discretion to consider the motion. Plaintiff may raise any argument it was unable to raise in its opposition arising from the delay in the oral hearing.

1. Mayer Mechanic's Lien Recorded May 4, 2026, and Mayer Stop Payment Notice Defendants seek an order "determining that West has not established the probable validity of the $1,811,489 Mayer mechanic's lien recorded May 4, 2026 as Instrument No. 20260319676, and releasing and discharging it as untimely under Civil Code section 8412; alternatively, reducing it to the amount West proves was then due from the Mayer Owner, unpaid, and lienable, after excluding the separate $1,200,000 Promissory Note and crediting West's receipt of the $1,239,125.77 payment." (Not. of Mot.)

Defendants argue the Mayer Final Certificate of Occupancy was issued March 18, 2025, and Plaintiff performed no subsequent work under the contract that could extend the statutory period. (Srivastava Decl. P.P.6-9.) Plaintiff argues that "West's lien is timely because contract required fire alarm work was performed on May 1, 2026, which extended the deadline for lien filing." (Opp. at p. 13:4-6.)

Civil Code, section 8412 states: A direct contractor may not enforce a lien unless the contractor records a claim of lien after the contractor completes the direct contract, and before the earlier of the following times: (a) Ninety days after completion of the work of improvement. (b) Sixty days after the owner records a notice of completion or cessation. "In order to have a valid mechanic's lien, a claimant must record a claim of lien within a prescribed period of time after completion of the work of improvement or after a notice of completion or notice of cessation has been filed." (Picerne Construction Corp. v. Castellino Villas (2016) 244 Cal.App.4th 1201, 1209, (Picerne).)

"Courts have looked at whether the work at issue was required under the claimant's contract in determining whether a work of improvement was completed." (Id. at p. 1215.) In Picerne, the Court held that "even though the City had issued certificates of occupancy for the 11 buildings within the project, roof and stairway work required under the general contract continued between July 25, 2006, and September 19, 2006." (Id. at p. 1216.) Specifically, an employee "testified he worked 22 and a half hours on September 15, 18, and 19, 2006, installing grip tape on all of the stairs at the project. The general contract called for the installation of anti-slip grip tape on all concrete stair treads." (Ibid.) Notably, the employee's "testimony established the work he performed on September 15, 18, and 19, 2006, was not corrective or repair work." (Ibid.)

Here, it is undisputed that the general contract included the installation of the fire alarm. (Mirkovich Decl. P.6.) However, such work was completed prior to March 18, 2025. (Srivastava Decl. P.P.6-9.) Thereafter, around June 16, 2025, Plaintiff was required to file the mechanic's lien. (Civ. Code Sec.8412, subd. (b).) Plaintiff did not file the mechanic's lien until May 4, 2026, and therefore, the Mayer mechanic's lien is untimely.

Now, Plaintiff argues that the fire alarm work performed on May 1, 2026, extended the prescribed period. However, while the general contract does include the installation of the fire alarm, repair work completed does not extend the statutory period. The Picerne court considers the actual completion of the work of improvement and specifically omitted "corrective or repair work." (Picerne Construction Corp. v. Castellino Villas, supra, 244 Cal.App.4th at p. 1216.) Plaintiff's evidence demonstrates that the fire alarm work done on May 1, 2026, was merely corrective because "the May 1, 2026 work was necessary to restore the proper connection and operation of the affected devices and to complete the fire alarm system required under West's contract." (Mirkovich Decl.

P.P. 9-12, Ex. C.) Therefore, this repair work is insufficient to demonstrate that work required under the general contract continued from March 2025 through May 1, 2026. Instead, the work was completed sometime in early-2025 and the May 4, 2026, mechanic's lien is therefore untimely.

As the mechanic's lien is untimely, the stop payment notice is likewise untimely as it was noticed on May 13, 2026. (Srivastava Decl., P.P. 18-19, Ex. H.) "A stop payment notice is not valid unless... [t]he claimant gave the stop payment notice before expiration of the time within which a claim of lien must be recorded under Chapter 4." (Civ. Code, Sec. 8508, subd. (b).) As time to notice the stop payment expired in mid-2025, the stop payment notice is likewise untimely. Accordingly, Defendants' Motion to Discharge the Mayer Mechanic's Lien Recorded May 4, 2026, and the Mayer Stop Payment Notice is GRANTED.

2. Empire Mechanic's Lien Recorded January 26, 2026 Next, Defendants argues the Court should discharge "the Empire mechanic's lien recorded January 26, 2026 as Instrument No. 20260059986 if West fails to prove any presently due, unpaid, and lienable amount; alternatively, reducing the lien to the amount actually proven, which on the present record cannot exceed $4,262,273 and remains subject to further credits, offsets, and reductions." (Not of Mot.)

The common law recognizes a motion to "remove" an improper mechanic's lien, otherwise known as a "Lambert" motion. "Under California's mechanic's lien law, a mechanic's lien attaches to any interest in a work of improvement and the real property on which it is situated. The lien is a direct lien, similar to a mortgage, and is imposed as security for payment of sums due the mechanic." (Wachovia Bank v. Lifetime Industries, Inc. (2006) 145 Cal.App.4th 1039, 1050; see also Cal. Const., art. XIV, Sec. 3.) The California mechanic's lien statutes are intended "to prevent unjust enrichment of a property owner at the expense of a laborer or material supplier." (Burton v. Sosinsky (1988) 203 Cal.App.3d 562, 568.)

The relevant statute, California Civil Code, section 8430, governs amounts permissibly included in mechanic's liens, and provides as follows: (a) The lien is a direct lien for the lesser of the following amounts: (1) The reasonable value of the work provided by the claimant. (2) The price agreed to by the claimant and the person that contracted for the work. "When a claimant has recorded a mechanic's lien and then secured a stay of an action to foreclose the lien, an owner must have a speedy court remedy for showing that the lien is invalid." (Lambert v.

Superior Court (1991) 228 Cal.App.3d 383, 389.) Accordingly, a Lambert motion examines the "probable validity of the lien" under Civil Code section 8430. (Id. at p. 388.) The question is "not the ultimate merit of the contractor's claim but whether the contractor should be entitled to retain the security of the mechanic's lien . . . pending a resolution of the matter." (Cal Sierra Construction, Inc. v. Comerica Bank (2012) 206 Cal.App.4th 841, 850.) The court is empowered to reduce or remove the lien to the extent that it does not comply with Civil Code, section 8430.

Here, however, Defendants do not dispute the validity of the lien, but rather seek a reduction totaling $991,921. "West's original Empire lien was $8,179,893. West then recorded a Partial Release reducing the claimed principal to $5,254,194." (Mot. at p. 13:10-11.) "The subsequent $991,921 escrow funding further reduced the maximum possible amount. West agreed in writing to amend its lien after receiving the funds, received their benefit, and later identified $4,262,273 as the amount claimed against the Empire Project." (Mot. at p. 13:13-15.)

In opposition, Plaintiff does not dispute the partial payment of $991,921. (Anderson Decl. P.20.) Instead, Plaintiff offer that the "parties subsequently entered into Prime Contract Change Order No. 12 ("PCCO 12"). Under PCCO 12, Residency at Empire I LP was to make direct payments totaling up to $2,237,419 to the subcontractors and vendors identified in that change order." (Anderson Decl. P.13.) "Based on those credits, West reduced its Empire mechanic's lien from $8,179,893 to $5,254,194." (Anderson Decl.

P.13.) "West made this reduction in good faith and in reliance on Residency at Empire's representation that the subcontractors and vendors identified in PCCO 12 had been or would be paid directly." (Anderson Decl. P.16.) "As of the date of this declaration, West has not received canceled checks, wire confirmations, subcontractor acknowledgments, releases, ledger entries, or other documentation establishing that Residency at Empire made the direct payments required by PCCO 12." (Anderson Decl. P.19.)

What remains undisputed is that the original lien was $8,179,893 on a $45,000,000 project. (FAC P.16, Srivastava Decl. P.22.) No party disputes the original $8,179,893 as improper under Section 8430. Therefore, the Court will consider this amount as the proper baseline for future reductions. However, the only evidence demonstrating a reduction is an undisputed payment totaling $991,921. This would leave the total outstanding balance at $7,187,972 which is above the current lien totaling $5,254,194.

As a result, the mechanic's lien abides by Civil Code, section 8430, as the totality of the evidence indicates the current mechanic's lien is less than the agreed upon price minus the payments made to date. (See Civ. Code. Sec.8430, subd. (a)(2).) Certainly, if Empire was to demonstrate a payment of $2,237,419 was made to reduce this lien, the Court would consider such a reduction in the overall outstanding debt. However, instead of demonstrating that payments have been made pursuant to PCCO 12, Defendants argue that the mere filing of the reduced mechanic's lien indicates that Plaintiff has waived their rights to recover the $2,925,699. Defendants cite no authority that stands for such proposition. As it stands, the reduction in the mechanic's lien does not disturb the evidence that the overall unpaid sum totals $7,187,972.

In the end, "the question presented is not the ultimate merit of the contractor's claim but whether the contractor should be entitled to retain the security of the mechanic's lien or stop notice pending resolution of the matter." (Cal Sierra Construction, Inc. v. Comerica Bank, supra, 206 Cal.App.4th at p. 850.) The totality of the evidence demonstrates that a mechanic's lien in the amount of $5,254,194 against Empire is valid and warranted pursuant to Section 8430 and the Lambert standards.

Finally, Plaintiff served an Empire Stop Payment Notice in May 2026, in the amount of $6,925,766.47. (Srivastava Decl. P.28.) As discussed above, this is less than the present outstanding balance owed totaling $7,187,972. Therefore, the Empire Stop Payment Notice is valid and warranted pursuant to Section 8430 and the Lambert standards. Accordingly, Defendants' Motion to Discharge or Reduce the Empire Mechanic's Lien Recorded January 26, 2026, and the Empire Stop Payment Notice is DENIED.

3. Attorney's Fees Both parties seek attorney fees pursuant to Civil Code, section 8488(c). It appears that neither party is a prevailing party under this provision and therefore attorney fees would be improper. To any extent a party is a prevailing party, the Court declines to award such fees in the interest of justice.

IT IS SO ORDERED. Dated: August 27, 2026 ___________________________________ Randolph M. Hammock Judge of the Superior Court

Any party may submit on the tentative ruling by contacting the courtroom via email at [email protected] by no later than 4:00 p.m. the day before the hearing. All interested parties must be copied on the email. It should be noted that if you submit on a tentative ruling the court will still conduct a hearing if any party appears. By submitting on the tentative you have, in essence, waived your right to be present at the hearing, and you should be aware that the court may not adopt the tentative, and may issue an order which modifies the tentative ruling in whole or in part. | Home -->)" -->