Turbine structure removal not subject to mechanic’s lien for rental equipment.

Often whether a project is subject to Ohio’s mechanic’s lien statute is a clear-cut determination for a construction attorney and not subject to serious dispute.  There can be projects where it is more difficult to determine if the project is subject to the statute, which is a preliminary question for whether contractors, subcontractors, and suppliers possess lien rights.

In BND Rentals, Inc. v. Dayton Power & Light Co., 2020-Ohio-4484 (2nd Dist. 2020), an appellate court addressed whether certain removal work gave rise to lien rights.  Dayton Power & Light (“DP&L”) had closed a coal-fired electric power plant in Ohio.  As part of the shutdown, DP&L sold the plant’s steam turbine and generator units.  The turbine and generator units were 20’ high and wide metal structures located inside a building.  The purchaser was to dismantle and remove the units.  The purchaser was also to cover, seal, and bolt down with steel plates any openings created by the removal.

An equipment rental company furnished equipment used in the removal project.  After it was not paid, it filed a mechanic’s lien for rented equipment.  On appeal, the main issue was whether the work the equipment was rented for was subject to Ohio’s mechanic’s lien statute.  The court discussed that Ohio’s mechanic’s lien statute applied to improvements.  And the statutory definition of an improvement did include removal.

However, the removal must be to either a building or appurtenance thereto, fixture, or other structure.  Therefore, the court determined that the lien for rented equipment could only be within the scope of the statute if the steam turbine units were fixtures, appurtenances, or other structures.

After considering case law, criteria, and legal tests for the meanings of each of those terms – including one test that dated back to 1853 – it was decided that the turbines were personal property of the business for conducting the business operations rather than being akin to real property.  Despite their size and general immobility the turbines were not fixtures, appurtenances, or other structures.  This finding meant that the rented equipment was not for a project subject to Ohio’s mechanic’s lien statute.  As a result, the rental equipment company had no lien rights.

Schwandner Law Firm is located in Cincinnati and files, defends, and litigates mechanic’s liens across Ohio.