0001|                            HOUSE BILL 92
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0002|     43RD LEGISLATURE - STATE OF NEW MEXICO - SECOND SESSION, 1998
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0003|                            INTRODUCED BY
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0004|                          R. DAVID PEDERSON
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0005|     
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0006|                                   
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0007|     
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0008|      FOR THE COURTS, CORRECTIONS AND CRIMINAL JUSTICE COMMITTEE
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0009|     
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0010|                                AN ACT
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0011|     RELATING TO THE EFFICIENT FILING AND RECORDING OF DOCUMENTS;
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0012|     PROVIDING FOR THE PROTECTION OF PUBLIC OFFICIALS, PUBLIC
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0013|     EMPLOYEES AND OTHERS AGAINST NONCONSENSUAL COMMON LAW LIENS;
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0014|     ENACTING THE LIEN PROTECTION EFFICIENCY ACT.
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0015|     
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0016|     BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF NEW MEXICO:
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0017|          Section 1.  SHORT TITLE.--This act may be cited as the
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0018|     "Lien Protection Efficiency Act".
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0019|          Section 2.  FINDINGS--PURPOSE.--
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0020|               A.  The legislature finds:
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0021|                    (1)  there is a problem with the presentation
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0022|     for filing or recording of invalid instruments that purport to
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0023|     affect the real or personal property interests of persons,
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0024|     including elected or appointed officials and employees of
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0025|     state, local and federal government.  These instruments, which
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0001|     have no basis in fact or law, have serious disruptive effects
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0002|     on property interests and title, appear on title searches and
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0003|     other disclosures based on public records and are costly and
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0004|     time-consuming to expunge.  These instruments have serious
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0005|     disruptive effects on the conduct of government business and
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0006|     are costly and time-consuming to both government entities and
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0007|     individual officials and employees;
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0008|                    (2)  officials and employees authorized by law
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0009|     to accept for filing or recording liens, deeds, instruments,
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0010|     judgments or other documents purporting to establish
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0011|     nonconsensual common law liens do not have discretionary
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0012|     authority or mechanisms to prevent the filing, recording or
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0013|     disclosure of frivolous lien claims if the documents comply
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0014|     with certain minimum format requirements.  It would be
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0015|     inefficient and would require substantial government
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0016|     expenditure to have the legal sufficiency of documents
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0017|     submitted for filing or recording determined in advance of
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0018|     acceptance; and
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0019|                    (3)  it is necessary and in the best interest
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0020|     of New Mexico and its citizens to legislatively provide a
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0021|     means to relieve this problem, to prevent the filing,
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0022|     recording or disclosure of frivolous lien claims and to
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0023|     authorize actions to void frivolous lien claims.
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0024|               B.  The purpose of the Lien Protection Efficiency
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0025|     Act is to provide for the efficient filing and recording of
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0001|     documents and the protection of public officials and employees
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0002|     and the citizens of the state against nonconsensual common law
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0003|     liens by imposing limitations on the circumstances in which
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0004|     nonconsensual common law liens shall be recognized in the
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0005|     state.
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0006|          Section 3.  DEFINITIONS.--As used in the Lien Protection
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0007|     Efficiency Act:
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0008|               A.  "court" means:
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0009|                    (1)  a court created by the constitution of
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0010|     the United States or pursuant to federal law, including but
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0011|     not limited to the United States supreme court, the United
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0012|     States courts of appeals, the United States district or
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0013|     administrative courts or other federal courts of inferior
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0014|     jurisdiction, but does not include administrative adjudicative
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0015|     bodies;
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0016|                    (2)  a court created by the constitution of
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0017|     New Mexico or pursuant to New Mexico law, including but not
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0018|     limited to the supreme court, the court of appeals, district
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0019|     courts, magistrate courts, metropolitan courts and municipal
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0020|     courts, but does not include administrative adjudicative
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0021|     bodies; and
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0022|                    (3)  a court comparable to any of those listed
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0023|     in Paragraph (2) of this subsection that is created by the
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0024|     constitution of another state or pursuant to the state law of
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0025|     another state; 
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0001|               B.  "federal official or employee" means an
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0002|     appointed or elected official or any employee of a federal
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0003|     agency, board, commission or department in any branch of the
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0004|     federal government;
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0005|               C.  "filing officer" means the secretary of state;
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0006|     the clerk of any county or court; or any state, local or
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0007|     federal official or employee authorized by law to accept for
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0008|     filing and keep as a public record any lien, deed, instrument,
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0009|     judgment or other document, whether paper, electronic or other
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0010|     form;
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0011|               D.  "lien" means an encumbrance on property as
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0012|     security for the payment of a debt;
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0013|               E.  "nonconsensual common law lien" means a
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0014|     document, regardless of self-description, that purports to
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0015|     assert a lien against the assets, real or personal, of any
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0016|     person that:
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0017|                    (1)  is not expressly provided for by a
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0018|     specific state or federal statute;
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0019|                    (2)  does not depend upon the consent of the
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0020|     owner of the property affected or the existence of a contract
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0021|     for its existence; or
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0022|                    (3)  is not an equitable or constructive lien
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0023|     imposed by a court of competent jurisdiction; and 
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0024|               F.  "state or local official or employee" means an
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0025|     appointed or elected official or any employee of a state
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0001|     agency, board, commission, department in any branch of state
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0002|     government, or state institution of higher education, or a
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0003|     school district, political subdivision or unit of local
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0004|     government of this state.
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0005|          Section 4.  CONSTRUCTION.--
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0006|               A.  Nothing in the Lien Protection Efficiency Act
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0007|     shall be construed to create a lien or interest in property
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0008|     not otherwise existing under state or federal law.
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0009|               B.  Nothing in the Lien Protection Efficiency Act
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0010|     is intended to affect any lien provided for by statute, any
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0011|     consensual lien now or hereafter recognized under common law
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0012|     of the state or the ability of the courts to impose equitable
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0013|     or constructive liens.
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0014|          Section 5.  NON-ENFORCEABILITY OF NONCONSENSUAL COMMON
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0015|     LAW LIENS.--Nonconsensual common law liens against real
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0016|     property shall not be recognized or be enforceable. 
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0017|     Nonconsensual common law liens claimed against personal
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0018|     property shall not be recognized or be enforceable if, at the
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0019|     time the lien is claimed, the claimant fails to retain actual
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0020|     lawfully acquired possession or exclusive control of the
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0021|     property.
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0022|          Section 6.  INVALIDITY OF CLAIM OF LIEN AGAINST A STATE
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0023|     OR LOCAL OFFICIAL OR EMPLOYEE OR A FEDERAL OFFICIAL OR
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0024|     EMPLOYEE--FILING OF NOTICE OF INVALID LIEN.--
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0025|               A.  A claim of lien against a state or local
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0001|     official or employee or a federal official or employee based
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0002|     on the performance or nonperformance of that official's or
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0003|     employee's duties shall be invalid unless accompanied by a
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0004|     specific order from a court of competent jurisdiction
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0005|     authorizing the filing of such a lien or unless a specific
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0006|     statute authorizes the filing of such a lien.
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0007|               B.  If a claim of lien as described in Subsection A
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0008|     of this section has been accepted for filing, the filing
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0009|     officer shall accept for filing a notice of invalid lien
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0010|     signed and submitted by an assistant attorney general
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0011|     representing the state agency, board, commission or department
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0012|     of which the individual is an official or employee; an
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0013|     attorney representing the state institution of higher
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0014|     education, school district, political subdivision or unit of
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0015|     local government of this state of which the individual is an
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0016|     official or employee; or an assistant United States attorney
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0017|     representing the federal agency of which the individual is an
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0018|     official or employee.  A copy of the notice of invalid lien
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0019|     shall be mailed by the attorney to the person who filed the
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0020|     claim of lien at that person's last known address.
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0021|          Section 7.  NO DUTY TO ACCEPT OR TO DISCLOSE A
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0022|     NONCONSENSUAL COMMON LAW LIEN--IMMUNITY FROM LIABILITY.--
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0023|               A.  A filing officer does not have a duty to accept
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0024|     for filing or recording a claim of lien unless the lien is
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0025|     authorized by statute or imposed by a court of competent
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0001|     jurisdiction having jurisdiction over property affected by the
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0002|     lien.
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0003|               B.  A filing officer does not have a duty to accept
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0004|     for filing or recording a claim of lien against a state or
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0005|     local official or employee or a federal official or employee
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0006|     based on the performance or nonperformance of that official's
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0007|     or employee's duties unless accompanied by a specific order
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0008|     from a court of competent jurisdiction having jurisdiction
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0009|     over property affected by the lien, authorizing the filing of
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0010|     the lien.
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0011|               C.  A filing officer does not have a duty to
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0012|     disclose an instrument of record or filing that attempts to
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0013|     give notice of a nonconsensual common law lien.  This
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0014|     subsection does not relieve a filing officer of a duty that
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0015|     otherwise may exist to disclose a claim of a lien authorized
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0016|     by statute or imposed by order of a court of competent
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0017|     jurisdiction having jurisdiction over property affected by the
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0018|     lien.  The existence of a claim of a nonconsensual common law
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0019|     lien in the public record does not constitute a defect in the
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0020|     title of or an encumbrance on the real property described and
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0021|     does not affect the marketability of the title to the real
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0022|     property.
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0023|               D.  A filing officer shall not be liable for
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0024|     damages arising from a refusal to record or file or a failure
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0025|     to disclose any claim of a nonconsensual common law lien of
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0001|     record pursuant to this section.
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0002|               E.  A filing officer shall not be liable for
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0003|     damages arising from the acceptance for filing of a claim of
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0004|     lien as described in Subsection B of this section, or for the
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0005|     acceptance for filing of a notice of invalid lien pursuant to
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0006|     Subsection B of Section 6 of the Lien Protection Efficiency
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0007|     Act.
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0008|               F.  Except as otherwise provided by law, a filing
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0009|     officer shall not be required to defend decisions to accept or
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0010|     reject documents pursuant to Section 6 of the Lien Protection
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0011|     Efficiency Act.
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0012|          Section 8.  ACTION TO VOID LIEN--ORDER TO SHOW CAUSE--
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0013|     SERVICE OF PROCESS.--
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0014|               A.  A person whose real or personal property is
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0015|     subject to a recorded claim of a nonconsensual common law lien
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0016|     who believes the claim of lien is invalid may petition the
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0017|     district court of the county in which the claim of lien has
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0018|     been recorded for an order, which may be granted ex parte,
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0019|     directing the lien claimant to appear before the district
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0020|     court, at a time no earlier than six days nor later than
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0021|     twenty-one days following the date of service of the petition
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0022|     and order on the lien claimant, and show cause, if any, why
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0023|     the claim of lien should not be stricken and other relief
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0024|     provided for by Section 9 of the Lien Protection Efficiency
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0025|     Act should not be granted.  The petition shall state the
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0001|     grounds upon which relief is requested and shall be supported
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0002|     by the affidavit of the petitioner or petitioner's attorney
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0003|     setting forth a concise statement of the facts upon which the
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0004|     claim for relief is based.
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0005|               B.  An order rendered pursuant to the petition and
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0006|     directing the lien claimant to appear shall clearly state that
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0007|     if the lien claimant fails to appear at the time and place
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0008|     noted, the claim of the lien shall be declared void ab initio
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0009|     and released and that the lien claimant shall be ordered to
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0010|     pay the costs incurred by the petitioner or any other party to
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0011|     the proceeding, including reasonable attorney fees, and
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0012|     damages as set forth in Section 9 of the Lien Protection
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0013|     Efficiency Act.
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0014|               C.  The petition and order shall be served upon the
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0015|     lien claimant by personal service, or, when the district court
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0016|     determines that service by mail is likely to give actual
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0017|     notice, the district court may order that service be made by a
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0018|     person over eighteen years of age who is competent to be a
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0019|     witness, other than a party, by mailing copies of the petition
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0020|     and order to the lien claimant's last known address or any
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0021|     other address determined by the district court to be
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0022|     appropriate.  Two copies shall be mailed, postage prepaid, one
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0023|     by ordinary first-class mail and the other by a form of mail
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0024|     requiring a signed receipt showing when and to whom it was
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0025|     delivered.  The envelopes must bear the return address of the
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0001|     sender.
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0002|          Section 9.  ORDERS--LIABILITY FOR COSTS AND ATTORNEY
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0003|     FEES--DAMAGES.--
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0004|               A.  If, in proceedings pursuant to Section 8 of the
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0005|     Lien Protection Efficiency Act, the lien claimant fails to
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0006|     appear at the time and place noted or, if, the lien claimant
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0007|     having appeared, the district court determines that the claim
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0008|     of lien is invalid, the district court shall issue an order
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0009|     declaring the lien void ab initio, releasing the lien,
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0010|     refunding any court docketing or filing fee to the petitioner
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0011|     and awarding other costs and reasonable attorney fees and
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0012|     damages as set forth in this section to the petitioner or any
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0013|     other party to the proceeding, to be paid by the lien
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0014|     claimant.
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0015|               B.  If the district court determines that the claim
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0016|     of lien is valid, the district court shall issue an order so
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0017|     stating and may award costs and reasonable attorney fees to
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0018|     the lien claimant to be paid by the petitioner.
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0019|               C.  A person who offers to have filed and recorded
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0020|     in the office of a filing officer a document purporting to
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0021|     create a nonconsensual common law lien against real or
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0022|     personal property, knowing or having reason to know that the
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0023|     document is forged or groundless, contains a material
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0024|     misstatement or false claim or is otherwise invalid, shall be
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0025|     liable to the owner of the property affected for actual
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0001|     damages or five thousand dollars ($5,000), whichever is
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0002|     greater, plus costs and reasonable attorney fees as provided
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0003|     in this section.
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0004|               D.  A grantee or other person purportedly benefited
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0005|     by a filed or recorded document that creates a nonconsensual
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0006|     common law lien against real or personal property, knowing or
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0007|     having reason to know that the filed or recorded document is
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0008|     forged or groundless, contains a material misstatement or
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0009|     false claim or is otherwise invalid, who willfully refuses to
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0010|     release the filed or recorded document upon request of the
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0011|     owner of the property affected, shall be liable to the owner
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0012|     for actual damages or five thousand dollars ($5,000),
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0013|     whichever is greater, plus costs and reasonable attorney fees
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0014|     as provided in this section.
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0015|               E.  A certified copy of an order rendered pursuant
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0016|     to this section shall be filed by the clerk of the district
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0017|     court in the office of the appropriate filing officer.
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0018|          Section 10.  SEVERABILITY.--If any part or application of
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0019|     the Lien Protection Efficiency Act is held invalid, the
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0020|     remainder of that act or its application to other situations
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0021|     or persons shall not be affected.
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0022|          Section 11.  EFFECTIVE DATE.--The effective date of the
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0023|     provisions of this act is July 1, 1998.
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0024|                                       
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0025|          
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