Defendant Coyle/Reno brings this Motion to Remove and/or Reform the Stop Notice and Mechanics Lien filed by Plaintiff Silverline Construction Inc. (“Silverline”).

The subject litigation arises out of a dispute relating to an agreement between Coyle/Reno, as general contractor, and Silverline, as subcontractor, to perform labor and services on a private work of improvement known as Riverview Parcel 4 (“Riverview Project”) in San Jose, California.  Plaintiff Silverline contends that Defendant Coyle/Reno breached its contract by failing to pay Silverline for work performed pursuant to the contract and for failing to pay for the cost of extra work once it was completed.  On March 19, 2013, Silverline filed a Stop Payment Notice with the Project Owner whereby Silverline contended that it was due $3,895,214 for the work performed by it and its subcontractors on the Project.  Thereafter, Silverline recorded a mechanic’s lien in the amount of $2,267,384.  On November 19, 2013, Silverline filed the instant action to foreclose its stop payment notice and its lien.

In its moving papers, Coyle/Reno argues that both the amount of the Stop Notice and the Mechanic’s Lien should be reduced because after Silverline filed the Stop Payment Notice and recorded the Mechanic’s Lien, Coyle/Reno made substantial payments to satisfy obligations under the Silverline subcontract.  Specifically, Coyle/Reno contends that payments totaling $2,576,561.39 were issued to Silverline and/or its subcontractors after the Stop Payment Notice was filed and payments totaling $259,644.48 were issued after the recordation of the lien.  In light of these subsequent payments, Coyle/Reno argues that the Sop Payment Notice should be reduced to $1,318,652.61 and the lien should be reduced to $2,007,739.52.  In support of its motion, Coyle/Reno refers to California Civil Code Section 8128 which provides that “A Claimant may reduce the amount of, or release in its entirety, a stop payment notice.  The reduction or release shall be in writing and may be given in a form other than a waiver and release form provided in this article.”

In its Opposition papers, Silverline argues that Civil Code Section 8128 is inapplicable in the instant case because Coyle/Reno is not the “claimant” and therefore lacks standing to seek a remedy under Section 8128.  Silverline argues that Section 8128 outlines a voluntary remedy that is available to the stop notice claimant, i.e. the contractor that actually served the stop notice claim.  As Silverline is the claimant, Coyle/Reno cannot seek reduction of the stop payment notice or lien amount under this statute.  Silverline further argues that the same procedural deficiencies apply to the request to reduce the mechanic’s lien and that the mere fact that subsequent payments were made to either Silverline and/or its subcontractors does not necessarily result in an automatic reduction of the amount claimed.

In Reply, Coyle/Reno argues that motions to reduce or remove mechanic’s liens are common and do not require the use of a summary adjudication proceeding or prevent the court from considering evidence submitted in showing that an encumbrance is excessive.  Coyle/Reno cites to the case of Basic Modular Facilities, Inc. v. Ehsansipour (1999) 70 Cal.App.4^th 1480 in support of its argument that a court may reduce or remove a lien by means of a noticed motion.

As a preliminary matter, Silverline is correct in its argument that Coyle/Reno’s reliance on Civil Code Section 8128 for affirmative relief is misplaced.  Coyle/Reno is not the stop notice “claimant” and its reliance on this statue for seeking a reduction of both the stop payment notice and the lien claim is erroneous.  To the contrary, Section 8128 simply indicates that the claimant may reduce the amount of, or release in its entirety, a stop payment notice.  Although Coyle/Reno contends that it has made subsequent payments reducing the amount of the stop payment notice, the “claimant” remains Silverline and they have chosen not to reduce the amount on the notice.

With that said, the issue turns to whether Coyle/Reno is entitled to seek relief from this Court in reducing the amount of the stop payment notice and lien and if so, what is the proper procedure for doing so.  It is well settled that the lien claimant has the burden of establishing the validity of a lien.  (Selby Constructors v. McCarthy (1979) 91 Cal.App.3^rd 517)  The actual amount due on the lien, however, presents a question of fact for the trial court regardless of whether that question is resolved by motion or requires a full-trial.  (Basic Modular Facilities, Inc., at 1486).  In the present motion, Coyle/Reno has provided evidence of payments made after filing of the stop payment notice and recordation of the lien (See Declaration of Michael Webb and supporting exhibits), however, it remains unclear as to what amounts, if any, should be used to offset or reduce the respective claims which reflected work performed up to the time of the claim.  While Mr. Webb’s Declaration states that the payments were made after the filing of the stop payment notice and/or lien recordation, it remains unclear as to how the paid amounts relate to the amounts claimed in the stop payment notice and lien claim.  Without further evidentiary support, the Court cannot simply conclude that an offset or reduction is warranted just because payments were made after the fact.  Accordingly, the Motion to Remove and/or Reform the Stop Payment Notice and Mechanic’s Lien is DENIED WITHOUT PREJUDICE.