Colorado § 38-22-128 - Excessive amounts claimed.

§ 38-22-128. Excessive amounts claimed.

(1) Any person who files a lien under this article for an amount greater than is due without a reasonable possibility that said amount claimed is due and with the knowledge that said amount claimed is greater than that amount then due, and that fact is shown in any proceeding under this article, shall forfeit all rights to such lien plus such person shall be liable to the person against whom the lien was filed in an amount equal to the costs and all attorney's fees.

(2) An award by a court having jurisdiction of an amount that is less than the amount for which a person's lien was filed does not render the amount excessive for purposes of subsection (1) of this section if the person had a good faith basis to believe the lien amount was due at time of filing.

(3) For purposes of this section, an amount is "due" if a person reasonably believes, in good faith, that the amount represents the value of the labor, services, equipment, or other materials or persons furnished or supplied to a contractor, as described in section 38-22-101 (1), whether or not the amount is unliquidated or disputed.

Source: L. 75: Entire section added, p. 1421, § 3, effective October 1. L. 2026: Entire section amended, (SB 26-074), ch. 39, p. 186, § 2, effective August 12.

Editor's note: Section 2 of chapter 39 (SB 26-074) provided for the addition of subsections (2) and (3) to this section. The unnumbered language in this section in existence prior to the amendment of this section by SB 26-074 has been numbered as subsection (1) on revision for ease of location.

ANNOTATION

Law reviews. For article, "Substantial Completion as it Relates to the Colorado Mechanic's Lien Act", see 26 Colo. Law. 45 (Feb. 1997).

"Knowledge" standard encompassed within "cheat or defraud". The "cheat or defraud" standard as to the lien claimant's state of mind in § 38-22-123 encompasses the "knowledge" standard in this section. If a person intends to cheat or defraud someone regarding the amount of a mechanic's lien, he would necessarily have to have had knowledge that the amount was in error. Concrete Contractors v. E.B. Roberts Constr. Co., 664 P.2d 722 (Colo. App. 1982), aff'd, 704 P.2d 859 (Colo. 1985).

The "knowledge" and "reasonable possibility" requirements of this section are not the same. A lien claimant could file a written lien without a reasonable possibility that the amount claimed was due, while simultaneously lacking knowledge that there was not a reasonable possibility that the amount claimed was due. Therefore, a district court must make two distinct determinations: whether there was no reasonable possibility that the claimed amount was due and whether the lien claimant knew there was not such reasonable possibility. Galiant Homes, LLC v. Herlik, 2025 COA 3, 565 P.3d 1109.

Reasonableness of award of attorney fees. Where lawsuits were directly attributable to the contractor's giving notice or filing a lien statement claim for an excessive amount, the trial court did not err in awarding all of the attorney fees incurred incident to the excessive claim. Heating & Plumbing Engineers v. H.J. Wilson, 698 P.2d 1364 (Colo. App. 1984).

Where nonlienable items can be separated from the lienable items at trial and no showing or allegations were made stating that the lien was knowingly and intentionally excessive, the lien will remain valid as to the lienable items. Manguso v. Am. Sav. & Loan Ass'n, 782 P.2d 866 (Colo. App. 1989).

Inclusion of accrued interest in lien statement does not render the lien void as excessive. Because lien claimants are entitled to receive interest under § 38-22-101 (5), accrued interest can be an "amount due" under this section. Honnen Equip. Co. v. Never Summer Backhoe Serv., Inc., 261 P.3d 507 (Colo. App. 2011).

Section 38-22-123 is facially irreconcilable with this section, but because this section was enacted later, it controls. Wigham Excavating v. Colo. Fed. S & L, 796 P.2d 23 (Colo. App. 1990).

Where fraudulently inflated construction charges were included in lien statement, forfeiture of lien rights was required as a matter of law. Wigham Excavating v. Colo. Fed. S & L, 796 P.2d 23 (Colo. App. 1990).

An officer of a corporation who has signed a lien in an official capacity is not personally liable for costs and attorney fees. The corporation has an independent legal identity and is considered to be the "person who files a lien". JW Constr. Co. v. Elliott, 253 P.3d 1265 (Colo. App. 2011).

Even though the intent of this section is to punish and deter those who would abuse the lien statute, section's intent is not to be unjust. Party entitled to attorney fees under this section is entitled only to those fees expended in bringing or defending an excessive lien claim, not the fees expended in bringing or defending against other claims unrelated to the lien claim in a multiple-claim suit. Moreover, although this section mandates an award of all attorney fees for successfully defending against an excessive lien, the amount awarded must be reasonable. LSV, Inc. v. Pinnacle Creek, LLC, 996 P.2d 188 (Colo. App. 1999).

A bankruptcy trustee, as a successor to a debtor's interest in real property, may not invalidate a mechanics lien and recover legal fees and costs under this section. In re Old Town N., LLC, 519 B.R. 307 (Bankr. D. Colo. 2014).

Applied in Byerly v. Bank of Colo., 2013 COA 35, 411 P.3d 732.