Introduced Version
Senate Bill 85 History
| Email
Key: Green = existing Code. Red = new code to be enacted
Senate Bill No. 85
(By Senators Sypolt and Barnes)
____________
[Introduced February 13, 2013; referred to the Committee on
Government Organization; and then to the Committee on the
Judiciary.]
____________
A BILL to amend and reenact §38-2-36 of the Code of West Virginia,
1931, as amended, relating to permitting a person to file a
bond in escrow with a court in an amount sufficient to cover
a mechanic's lien.
Be it enacted by the Legislature of West Virginia:
That §38-2-36 of the Code of West Virginia, 1931, as amended,
be amended and reenacted to read as follows:
ARTICLE 2. MECHANICS' LIENS.
§38-2-36. Discharge or release of lien; recordation; escrow;
disbursement of escrow.
(a) When a debt secured by any lien mentioned in this article
is fully paid at any time after the lien creditor shall have filed his or her notice of such the lien in the office of the clerk of
the county commission, such the creditor assignee shall cause the
clerk to enter a discharge of such the lien in the margin of the
book in which such the account is entered and immediately opposite
thereto, or shall execute a release thereof, which shall be
recorded in the book in which such the notice is entered and noted
on the margin of such the notice.
(b) (1) At any time after a lien creditor has given notice of
lien as required by the provisions of this article and has
subsequently duly filed such the notice of lien with the clerk of
the county commission as provided for in this article, the owner or
any person against whom the lien is claimed may apply to the
circuit court having jurisdiction to enforce such the lien, by
petition, for an order authorizing such the owner or other person
against whom the lien is claimed to deposit, in escrow, with the
clerk of the circuit court, an amount equal to the sum set out as
due in the notice of lien, and directing the circuit clerk to
execute a release of the lien. Previous to the filing of such the
petition, the petitioner shall cause to be served upon the lien
creditor a notice of the time and place that such the application
will be made, which notice shall be served by registered mail,
return receipt requested, addressed to the lien creditor or his or
her authorized agent at the address set forth in the notice of lien: Provided, That if no such address is set forth in the notice
of lien, the petitioner shall serve the notice, setting forth the
time and place that his or her application will be made, in the
same manner as original process is served for the commencement of
civil actions.
(2) At the hearing upon the petition, the court shall
ascertain what interest, if any, might reasonably be expected to
accrue on the sum claimed to be due, either by contract or by
operation of law, and subsequently be payable to the lien creditor,
should he or she prevail upon his or her claim. The court shall
also determine the current rate of return upon investments made by
the general receiver of the court at the time of the hearing, and
ascertain what rate of interest might reasonably be earned upon the
petitioner's escrow deposit when paid into the court. To the
extent that the anticipated interest due to the lien creditor
exceeds the anticipated return upon the investment of the escrow
deposit, the court may require an additional deposit beyond the sum
set forth in the notice of lien, as the interests of the parties
may require. The order authorizing the deposit and directing the
execution of the release shall, if the court anticipates that
complex or extended litigation may arise in resolving the issue of
the validity of liens or claims in the case, require that the
petitioner or other parties give security before the court, or the clerk thereof, for payment of the costs which may be awarded in the
court, and of the fees due, or to become due, in any action to
determine such issue.
(3) If an escrow deposit is authorized by the court, such the
deposit shall be made by cash, or good and sufficient bond or
security, and when paid into court, shall be received by the
general receiver of the court, who shall take charge of and invest
the money deposited in the manner provided for in section one,
article six, chapter fifty-one of this code until otherwise ordered
to pay out or dispose of the same by the circuit court. Upon
presentation to the clerk of the county commission wherein the
notice of lien is filed of an order of the court and a receipt
executed by the clerk of the circuit court for the amount required
to be deposited by the terms of the order, the clerk of the county
commission shall file the order and shall enter a discharge of the
lien in the margin of the book in which such the account is entered
and immediately opposite thereto, or shall execute a release
thereof, which shall be recorded in the book in which such the
notice is entered and noted on the margin of such the notice.
(4) Unless an action to determine the validity of the
creditor's claim is commenced within six months after the creditor
shall have filed his or her notice of lien in the office of the
clerk of the county commission as provided for in this article, the court shall, upon motion of the depositor, order the general
receiver to pay out to the depositor the sum deposited, together
with any dividends and interest, if any, earned upon the investment
of the deposit, less any compensation for the services of the
general receiver as the court may direct in accordance with the
provisions of section seven, article six, chapter fifty-one of this
code. If the claim is satisfied or settled and compromised at any
time while secured by the deposit made with the general receiver
but before an action is commenced, the court shall, upon proof of
satisfaction or settlement and compromise, order the general
receiver to pay out the deposit to the depositor in the same manner
as though suit was not commenced within the requisite period of six
months as described above. If an action is commenced, the general
receiver shall thereafter pay out the money deposited and the
dividends and interest, if any, earned upon the investment of the
deposit, as the court may order or decree, less any compensation
for the services of the general receiver as the court may direct in
accordance with the provisions of said section seven, article six,
chapter fifty-one of this code.
NOTE: The purpose of this bill is to permit a person to file
a bond, instead of cash, in escrow with a court in an amount
sufficient to cover a mechanics' lien.
Strike-throughs indicate language that would be stricken from
the present law, and underscoring indicates new language that would
be added.