Construction Lien Law’s “Signatory-Requirement Amendments” Do Not Apply Retroactively

Diamond Beach, LLC v. March Associates, Inc., ___ N.J. Super. ___ (App. Div. 2018). Judge Fasciale’s opinion in this construction case today dealt with a narrow issue projected by a fourth-party plaintiff, Sloan & Company, Inc. That issue was whether 2011 amendments to two sections of the Construction Lien Law, N.J.S.A. 2A:44A-6(a)(1) and 2A:44A-8, which replaced the prior requirement that a “duly authorized officer” sign a corporate construction lien, applied retroactively.

Sloan had previously argued that the signature on its lien, which was filed in 2008, had been made by a “duly authorized officer.” After a plenary hearing, the Law Division rejected that position. Sloan then contended, for the first time, that the 2011 “signatory-requirement amendments” applied retroactively. The Law Division ruled against retroactivity. Applying de novo review to the pure legal question of retroactivity, the Appellate Division affirmed the Law Division’s ruling.

Sloan claimed that the 2011 amendments were “curative” or “clarifying.” Were that so, retroactive application would have been appropriate, as the Supreme Court stated most recently in Ardan v. Bd. of Review, 231 N.J. 589 (2018).

But Judge Fasciale found that there was “no basis” for characterizing the amendments as merely curative or clarifying. “Instead, [the Legislature] deleted ‘duly authorized officer’ from the text [of the statute], and created new requirements for signing corporate construction lien claims.” Thus, the Legislature “created the Section 8 claim form– which is substantially different than before– by deleting the entirety of N.J.S.A. 2A:44-6 ….”

The amendments improved the statutory scheme. Such improvements, as opposed to “an amendment intended to correct a judicial misinterpretation of an existing legislative act,” cannot be considered curative or clarifying. Moreover, there was nothing in the legislative history of the 2011 amendments that even hinted that those amendments were in response to certain cases whose outcomes Sloan cited as the basis for the amendments. Judge Fasciale detailed the backdrop for the amendments in rejecting Sloan’s position.

Sloan also offered, for the first time on appeal, the argument that the Law Division had used the wrong legal standard in determining, under the pre-amendment regime, that the signer of the lien was a “duly authorized officer.” On the record presented, Judge Fasciale found “no error, let alone error that is ‘clearly capable of producing an unjust result,'” the standard for plain error under Rule 2:10-2 where an argument has not been made below.

Finally, the Law Division had awarded plaintiff its attorneys’ fees under N.J.S.A. 2A:44A-15(a). That provision makes liable for such fees a lien claimant who, among other things, makes a claim that is not “in substantially the form” required by the Construction Lien Law. Sloan did not file its lien in accordance with the statute, so Judge Fasciale concluded that the Law Division did not abuse its discretion in awarding fees on that basis.