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In a split decision, an appellate court has ruled that a contractor cannot enforce a mechanics’ lien when Ohio’s statute of frauds invalidates the underlying contract.

The contractor contended that he entered into an oral agreement with two homeowners to maintain a vacant lot, provided that the contractor enjoys a right of first refusal to purchase the property.

When the homeowners sold the lot to a nephew, the contractor filed a lien and sued for the value of his maintenance services.

Ohio’s Statute of Frauds requires a written agreement for any interest in real estate, R.C. 1335.05. The contractor admitted that he could not enforce the sale to him, but argued the oral agreement to be divisible so as to enforce payment for the services rendered.

The three judges of the Trumbull County Court of Appeals, 11^th District, each held a different opinion. In the decisional opinion, the judge held that the terms of the oral agreement were so intertwined as to not be divisible. With no enforceable contract, likewise, the mechanics’ lien is unenforceable.

The second judge concurred, but differed as to the reason. Since the Statute of Frauds does not apply to Mechanics Lien law, the judge found that the contractor did not prevail in proving that damages for services were due.

The third judge disagreed entirely, holding that a mechanics’ lien creates an action against the land and therefore against the current owner regardless of the underlying contract.

Krlich v Clemente, 11^th Dist. Trumbull, 2017-Ohio-5633.

If you have questions, please do not hesitate to contact attorney Luther L. Liggett of Graff & McGovern at 614-228-5800, x-6.