Most practitioners expected the answer as the court would simply deduct the unallowable amounts; however, the Virginia Supreme Court held in Smith Mountain Bldg. Supply v. Windstar Props., 277 Va. 387, 672 S.E.2d 845 (2009) that including prohibited amounts invalidates the entire lien; a much more draconian result. Therefore, establishing dates the dates of work is critical to lien enforceability.
Virginia Code § 43-4 provides, in pertinent part, that “no memorandum filed . . . shall include sums due for labor or materials furnished more than 150 days prior to the last day on which labor was performed or material furnished to the job preceding the filing of such memorandum.” However, Virginia Code § 43-15 provides as follows:
No inaccuracy in the memorandum filed, or in the description of the property to be covered by the lien, shall invalidate the lien, if the property can be reasonably identified by the description given and the memorandum conforms substantially to the requirements of §§ 43-5, 43-8 and 43-10, respectively, and is not wilfully false.
One would think the latter statute could be used to "save" a lien that might include proscriptive amounts. But the court in Smith Mountain in contrast held that the inclusion of sums for labor or materials outside of the 150-day period was not an inaccuracy, and therefore invalidated the lien in its entirety and denied any mechanic's lien relief to the contractor. One interesting aspect of that decision was how the court distinguished an earlier case where it applied the saving provision of Virginia Code § 43-15 to not invalidate the lien of a contractor that had included monies for a fine levied by the state beyond the 150-day deadline.
In doing so, the court noted that the fine was not labor or materials. Therefore, even though the earlier decision was written then in terms of discussion of the 150-day rule, the court noted in distinguishing it later in Smith Mountain that since the fine was not labor or materials it fell with the definition of an inaccuracy, whereas - it concluded - including non-allowable sums for labor or materials was a prohibition and not an inaccuracy.
While such thin distinctions are regularly made by courts, one of the key problems with that decision lies in the impracticality of determining every date of labor or materials, and their values, and the unfairness to contractors who look to mechanic's liens as their best, and often only, means of getting paid. Lesson learned: days count, and the dates of when labor or materials were furnished and their value in relation to the filing of a mechanic's lien are critical and must be analyzed before filing a lien.