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Tenant Improvements Lead to Mechanic's Lien on Owner's Property
For the first time, a Missouri Court of Appeals has held that a contractor who has performed work for a shopping mall tenant may have mechanic's lien rights on the landlord's simple interest in the entire mall.
In Crafton Contracting Co. v. Swenson Construction Co., No. ED102910, (Mo. App. E.D. April 12, 2016), landlord Plaza Frontenac Acquisition, LLC, and tenant Allen Edmonds Corporation entered into a 10-year lease for space in which the tenant desired to operate an Allen Edmonds shoe store. The lease required the tenant to improve the leased space, including a bump-out of the storefront; installation of storefront signs, customer entrance doors, and floor coverings; applying plaster; undertaking interior decoration; connecting plumbing lines to the mall system; and completing extensive electrical work. As required by the lease, the tenant submitted plans for these improvements to the landlord for approval, and the landlord approved them.
The tenant hired Swenson Construction Company (SCC) as general contractor to perform the work. SCC then subcontracted the demolition, framework, drywall, carpentry, heating, ventilation and air-conditioning work to two subcontractors, Crafton Contracting Company (Crafton) and Vogel Sheet Metal and Heating, Inc. (Vogel). Upon completion of the work, the tenant paid SCC, but SCC never paid subcontractors Crafton and Vogel. Soon thereafter, SCC went out of business. Crafton and Vogel then filed mechanic's liens on the mall against the landlord and filed suit to enforce the liens. The trial court found that the liens were unenforceable against the landlord because Crafton and Vogel failed to establish that the tenant was the landlord's agent under Missouri's mechanic's lien statute.
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