The Statewide Title Newsletter and Legal Memorandum

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Issue  65  Article  133
Published:  12/1/2000

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Liens, Another Look
Chris Burti, Vice President and Legal Counsel

For this issue, we believe that it might be helpful to include a summary discussion of some real property liens that appear less often than usual. It is doubtful that there will be many surprises for the experienced title examiner, but it may be helpful to have a review in convenient form.

NCGS Sec. 44-51.1 provides for a lien on the real property of a recipient of ambulance service that was paid for or provided at the expense of a county or municipality. The lien created by this section is enforceable from the date of filing until satisfied. No action to enforce the lien may be brought more than 10 years after the date on which ambulance service was furnished or more than three years after the date of recipient's death. Failure to bring action within such times shall be a complete bar against any recovery and shall extinguish the lien. Filing is required under NCGS Sec. 44-51.2 and must contain a statement showing "the name and address of the person against whom the lien is claimed, the name of the county or municipality claiming the lien, the amount of the unpaid charge for ambulance service, and the date and place of furnishing the ambulance service for which charges are asserted and the lien claimed." No lien under NCGS Sec. 44-51.1 is valid unless filed within 90 days of the provision of service. Liens filed under this Article may be discharged pursuant to NCGS Sec. 44-51.3 in the following manner:

"(1) By filing with the clerk of superior court a receipt or acknowledgment, signed by the county or municipal treasurer, that the lien has been paid or discharged;

(2) By depositing with the clerk of superior court money equal to the amount of the claim, which money shall be held for the benefit of the claimant; or

(3) By an entry in the lien docket that the action on the part of the lien claimant to enforce the lien has been dismissed, or a judgment has been rendered against the claimant in such action."

NCGS Sec. 44-51.5 makes provision for an additional lien for county or city ambulance service. This lien is available for the provision of ambulance service "by a county, by a county-franchised ambulance service supplemented by county funds, or municipal agency or at the expense of a county or municipal government". This lien is available to city services, county services, volunteer rescue squads that are funded by county or municipal government or county funded franchisees. The lien attaches against the property of any person who has been furnished ambulance service or upon the real property of anyone legally responsible for their support.

NCGS Sec. 44-51.6 requires the lien to be filed in the office of the clerk of superior court. The filing must be in the form of a statement containing the name and address of the person against whom the lien is claimed, the name of the county or municipality claiming the lien, the amount of the unpaid charge for ambulance service, and the date and place of furnishing the ambulance service for which charges are asserted and the lien claimed. The lien may not be filed prior to 90 days, or more than 180 days, after the date of the furnishing of ambulance service. If filed outside of these limits, the lien is invalid. NCGS Sec. 44-51.7 provides that these liens may be discharged in the same manner as NCGS Sec. 44-51.3.

The provisions of NCGS Sec. 44-51.5 applies only to Alamance, Alexander, Alleghany, Anson, Ashe, Beaufort, Bladen, Brunswick, Buncombe, Burke, Cabarrus, Caldwell, Carteret, Camden, Caswell, Catawba, Chatham, Cherokee, Chowan, Cleveland, Columbus, Craven, Cumberland, Dare, Davidson, Davie, Duplin, Durham, Edgecombe, Forsyth, Franklin, Gaston, Graham, Granville, Greene, Guilford, Halifax, Harnett, Haywood, Henderson, Hertford, Hoke, Hyde, Iredell, Johnston, Jones, Lee, Lenoir, Lincoln, McDowell, Macon, Madison, Mecklenburg, Mitchell, Montgomery, Moore, Nash, New Hanover, Onslow, Orange, Pasquotank, Pender, Person, Pitt, Polk, Randolph, Richmond, Robeson, Rockingham, Rowan, Rutherford, Sampson, Scotland, Stanly, Stokes, Surry, Swain, Transylvania, Tyrrell, Union, Vance, Wake, Warren, Washington, Watauga, Wilkes, Wilson, Yadkin and Yancey counties.

It may be important to note that the provisions of Article 9B do not contain any limitation period. Under NCGS Sec. 1-52(2), there is a three year limitations for liability created by statute where the statute does not provide some other time. Presumably, this provision would apply. It also should be noted that when the Chapter 44 labor and material liens were recodified in Chapter 44A, NCGS Sec. 44-48 was not repealed. Subsection (4) provides that all liens created by Chapter 44 may be discharged by the "failure of the claimant to commence an action for enforcement of the lien within six months from the notice of lien filed."

NCGS Sec. 44-86 provides for a lien on real and personal property of person owing past-due child support. The operative provisions require a verified statement of child support delinquency containing the caption and file docket number of the case, the date of the order of support, the amount of the child support obligation and the amount of the arrearage as of the date of the statement. The statement must be filed in the office of the clerk of superior court in the county in which the child support was ordered. "At the time of filing the verified statement, the designated representative in a IV-D case and the obligee in a non-IV-D case shall serve notice on the obligor that the statement has been filed. The notice shall be served and the return of service filed with the clerk of court in accordance with Rule 4 of the North Carolina Rules of Civil Procedure. The notice shall specify the manners in which the lien may be discharged. Upon perfection of the lien, as set forth herein, the clerk shall docket and index the statement on the judgment docket. The clerk shall issue a transcript of the docketed statement to the clerk of any other county as requested by the designated representative in a IV-D case or the obligee in a non-IV-D case. The clerk receiving the transcript shall docket and index the transcript. A lien on real property attaches when the perfected lien is docketed and indexed on the judgment docket."

In IV-D cases, the filing of the verified statement with the clerk of court perfects the lien when duly docketed and indexed. In a non-IV-D case, the obligor has 30 days from the date of service of the notice of the filing of the verified statement to request a hearing before a district court judge to contest the validity of the lien. If the obligor fails to contest the lien, the clerk must record and index the lien on the judgment docket upon application.

NCGS Sec. 44-87 provides a penalty for failure to discharge and provides that the liens created by this Article may be discharged as follows:

"(1) By the designated representative in IV-D cases, or by the obligee in non-IV-D cases, filing with the clerk of superior court an acknowledgment that the obligor has satisfied the full amount of the lien;

(2) By depositing with the clerk of superior court money equal to the amount of the claim and filing a petition in the cause requesting a district court judge to determine the validity of the lien. The money shall not be disbursed except by order of a district court judge following the hearing on the merits; or

(3) By an entry in the judgment docket book that the action on the part of the lien claimant to enforce the lien has been dismissed, or a judgment has been rendered against the claimant in such action."

It should be noted that NCGS Sec. 44-87(2) operates in the same manner as a bond in a Chapter 44A lien.

NCGS Sec. 143-126 provides for a lien on the estate of a person dying while admitted to a North Carolina Department of Health and Human Services institution. When an admittee dies leaving any cost of care unpaid, the unpaid cost constitutes a lien on all of the decedent’s property, both real and personal. It is payable from the decedent's estate as a fourth class claim after the payment of taxes. Upon the death of an admittee, the Department must file a verified statement of account. This statement must be filed in the office of the clerk of superior court in the decedent’s county of residence and in the county or counties in which real property is located in which the decedent owns an interest. The statement must be docketed and indexed by the clerk. The statement constitutes due notice of a lien against all real property in the county owned by the decedent from the time of docketing.

No action to enforce the lien may be brought more than three years after the date of death of the person admitted. The failure to file the lien or to bring the action is not a bar against recovery, but only extinguishes the lien and its priority.

NCGS Sec. 143-126.1 provides a similar lien for admittees who are not deceased. The lien for the unpaid balance for care at the institutions applies to the property, both real and personal, of the person admitted whether held by the person or a trustee or guardian.

No action to enforce the lien may be brought more than three years after the last date of filing of the lien, nor more than three years after the death of any person admitted. The failure of the Department to file a lien or to bring an action or is not a bar against recovery but shall only extinguishes the lien and its priority. The language limiting the lien can be argued to imply permission for multiple filings until death.

It is extremely important to note that these provisions only limit the effective period of the lien and the period when action can be brought to enforce the lien. NCGS Sec. 143-122 provides that there is no limitation to when action can be brought on the indebtedness. More importantly, NCGS Sec. 143-125 provides that there is no limitation barring enforcement of a judgment obtained under this Article. Because it may appear that this statement may be a misprint or a typographical error, we quote: "NCGS Sec. 143-125 Any judgment obtained by the State under this Article shall never be barred by any statute of limitation but shall to the extent unpaid continue in force; and, at the request of the Attorney General or the director of the institution, the clerk shall issue an execution (emphasis added)." Since the legislation was first passed in 1925, a title examiner should, arguably, search judgments back to 1915. This would clearly be an impractical requirement. A title examiner must be vigilant for title evidence of institutionalization. If such is suspected, the examiner must then examine the judgment docket for the appropriate period of time.


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