Fraudulent Liens In Texas

In response to the routine practice by inmates and a separatist group known as the Republic of Texas in filing bogus liensagainst police officers and government officials purely for retaliatory reasons, the Texas Legislature enacted Civil Practices and Remedies Code Section 12.002 (“Chapter 12”). Chapter 12 provides a specific cause of action for money damages from a person who files a fraudulent lien. Damages must be paid to EACH injured person for the greater of $10,000 or actual damages incurred, plus court costs, reasonable attorney’s fees, and exemplary damages as determined by the court. A person asserting a claim under Chapter 12 must establish three elements:

  1. Knowledge that the document was fraudulent;
  1. Intent that the document be given the same legal effect as a valid document; and
  1. Intent to cause physical injury, financial injury, mental anguish or emotional distress.

However, there is one additional element which is required to prove a fraudulent mechanic’s, contractor’s or material man’s lienfiled under Chapter 53 of the Texas Property Code (“Chapter 53”). If a lien is filed under Chapter 53, a person must also be found to have acted with an intent to defraud. This last element was seemingly introduced to protect those claimants who through an error (typographical, clerical or some other explainable mistake) unintentionally submit an inaccurate lien affidavit for filing without a specific intent to defraud. However, actual case law on this specific element has yet to be reported. Because of the potentially large monetary damages for a lien determined to be fraudulent under Chapter 12, lien claimants must be vigilant in complying with all Chapter 53 deadlines and notice requirements as well as ensuring the factual accuracy and components required for each lien affidavit. Chapter 53 poses compliance challenges not only for the general public, but for experienced legal counsel who do not routinely practice in the field of construction law. The Cromeens Law Firm PLLC assists clients throughout the State of Texas in filing lien claims which comply with Chapter 53, removing fraudulent liens, as well as other issues related to the construction industry such as collection and breach of contract disputes.

This article is intended as a general educational overview of the subject matter and is not intended to be a comprehensive survey of recent jurisprudence, nor a substitute for legal advice for a specific legal matter