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Wrongful Liens

Wrongful Lien

A lien is a claim placed on real property in order to secure a debt. For example, if someone has received a judgment in court, they could place a lien on the debtor's property so that when the debtor sells that property, the creditor can get the money they are owed. In some cases the creditor could actually force a sale of the property in order to collect the debt.

A "wrongful" lien is a lien that is not authorized by:

  • state or federal statute
  • a state court order, or
  • an authorizing document signed by the owner of the real property

 

Civil Liability of a person filing a wrongful lien

A person who files a wrongful lien is subject to civil penalties:

  • Actual damages caused by the wrongful lien
  • If the person who filed the wrongful lien receives a written request to remove or correct the lien but refuses to do so within 10 days of receipt of the request, they may be liable for $3,000 or three times the actual damages, whichever is greater, as well as attorney fees and costs.
  • A person is liable to the owner of real property for $10,000 or three times the actual damages, whichever is greater, and for reasonable attorney fees and costs, who records or causes to be recorded a wrongful lien in the office of the county recorder against the real property, knowing or having reason to know that the document:
    • is a wrongful lien;
    • is groundless; or
    • contains a material misstatement or false claim

Utah Code Section 38-9-203

 

Asking the court to stop a wrongful lien

If someone believes a wrongful lien has been placed on their real property, they can ask the court for an injunction to remove or "nullify" the lien by filing a petition.

The petition can be filed in the district court of the county in which the petitioner lives, or in which the respondent lives, or in which any of the events occurred.

 

Ex parte order

If the court finds merit in the petition, it will issue a temporary "ex parte" order.

The petitioner must have a copy of the Petition for Wrongful Lien and a copy of the Ex Parte Civil Wrongful Lien Injunction served on the respondent following Utah Rule of Civil Procedure 4. See the Serving Papers web page for more information.

 

Respondent's options

If the respondent disagrees that the lien is wrongful, they can file a written request for hearing with the court within 10 days of being served with the Ex Parte Civil Wrongful Lien Injunction. The Respondent must serve a copy of the written request for hearing on the petitioner following Utah Rule of Civil Procedure 5. See the Serving Papers web page for more information.

If the respondent does not file a request for hearing within 10 days, the Ex Parte Civil Wrongful Lien Injunction automatically becomes a Civil Wrongful Lien Injunction which does not expire until 3 years after it is served. The petitioner must provide a Civil Wrongful Lien Injunction form to the court for the judge to review and sign.

The respondent may request a hearing after the 10 day period has passed, but they then have the burden of challenging the injunction.

The petitioner can ask the court to dismiss the injunction at any time.

If the court schedules a hearing, the party requesting the hearing must prepare and serve according to Utah Rule of Civil Procedure 5 a Notice of Hearing.

 

The hearing

At the hearing, both parties will tell their story to the judge.

  • The petitioner has the burden of showing that the respondent made the wrongful lien.
  • The respondent has the burden of showing why the injunction should be nullified.

The judge may modify the Ex Parte Civil Wrongful Lien Injunction, revoke it, or enter a Civil Wrongful Lien Injunction, which lasts for 3 years.

 

Forms

Forms for Petitioner

Forms for Respondent

  • 1233XX
  • 1111GE
  • 1234XX

 

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