Mechanic’s Liens- Big Exception
January 22, 2024 —
Christopher G. Hill - Construction Law MusingsMusings has discussed mechanic’s liens on
numerous occasions.
As we discussed in earlier posts, the general rule is that a
mechanic’s lien jumps to the head of the line of liens when filed. This is true in most instances. In the typical case, a contractor puts up a building and, when the owner refuses payment, it files a mechanic’s lien that takes priority over all other liens on that property, including the construction loan
deed of trust (or
mortgage, depending on your state’s property laws).
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The Law Office of Christopher G. HillMr. Hill may be contacted at
chrisghill@constructionlawva.com
The Vallagio HOA Appeals the Decision from the Colorado Court of Appeals
August 04, 2015 —
David M. McLain – Colorado Construction LitigationAs highlighted in our most recent post, the Colorado Court of Appeals’ Vallagio decision upheld a declaration provision that prohibited the amendment of a mandatory arbitration clause without the consent of the developer/declarant. Vallagio at Inverness Residential Condominium Association, Inc. v. Metropolitan Homes, Inc., et al., 2015COA65 (Colo. App. May 7, 2015). This case protects a developer/declarant’s ability to arbitrate construction defect claims with a well-crafted declaration that requires declarant consent in order to amend the mandatory arbitration provisions for construction defect actions.
However, the Vallagio ruling still hangs in the balance while the Colorado Supreme Court considers the condominium association’s petition for certiorari review, filed June 18, 2015. In its petition, the association argues that the declarant consent requirement violates public policy and four separate sections of the Colorado Common Interest Act (“CCIOA”).
For instance, the association argued in the courts below that a declarant consent requirement violates section 217 of CCIOA, which governs unit owners’ voting percentage requirements and provides that declarations may not require more than 67% affirmative vote for amendments. The Court of Appeals rejected this argument, reasoning that other provisions of section 217 contemplate consent requirements by parties other than unit owners, such as first mortgagees.
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David M. McLain, Higgins, Hopkins, McLain & Roswell, LLCMr. McLain may be contacted at
mclain@hhmrlaw.com
Will a Notice of Non-Responsibility Prevent Enforcement of a California Mechanics Lien?
August 06, 2019 —
William L. Porter - Porter Law GroupThe “Notice of Non-Responsibility” is one of the most misunderstood and ineffectively used of all the legal tools available to property owners in California construction law. As a result, in most cases the answer to the above question is “No”, the posting and recording of a Notice of Non-Responsibility will not prevent enforcement of a California Mechanics Lien.
The mechanics lien is a tool used by a claimant who has not been paid for performing work or supplying materials to a construction project. It provides the claimant the right to encumber the property where the work was performed and thereafter sell the property in order to obtain payment for the work or materials, even though the claimant had no contract directly with the property owner. When properly used, a Notice of Non-Responsibility will render a mechanics lien unenforceable against the property where the construction work was performed. By derailing the mechanics lien the owner protects his property from a mechanics lien foreclosure sale. Unfortunately, owners often misunderstand when they can and cannot effectively use a Notice of Non-Responsibility. As a result, the Notice of Non-Responsibility is usually ineffective in protecting the owner and his property.
The rules for the use of the Notice of Non-Responsibility are found in California Civil Code section 8444. Deceptively simple, the rules essentially state that an owner “that did not contract for the work of improvement”, within 10 days after the owner first “has knowledge of the work of improvement”, may fill out the necessary legal form for a Notice of Non-Responsibility and post that form at the worksite and record it with the local County Recorder in order to prevent enforcement of a later mechanics lien on the property.
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William L. Porter, Porter Law GroupMr. Porter may be contacted at
bporter@porterlaw.com
2019 Legislative Changes Affecting the Construction Industry
July 09, 2019 —
Melinda S. Gentile & Cadian T. Baker - Peckar & Abramson, P.C.The 2019 Florida Legislative Session recently concluded and a number of important construction-related House Bills (HB) and Senate Bills (SB) were presented during the Session. Below is a summary of those construction-related bills set to become law in 2019.
Bills Becoming Law in 2019
HB 1247: Relating to Construction Bonds. This bill passed both the House and the Senate and is awaiting the Governor’s signature. Once the Governor has approved the bill it becomes effective as of October 1, 2019.
This bill addresses how to properly perfect a claim against a contractor’s payment bond.
(1) The Notice of Nonpayment that must be served on the contractor and the surety, must be made under oath and include the following provisions:
The nature of the labor or services performed or to be performed;
The materials furnished or to be furnished;
The amount paid on the account; and if known, the amount owed and the amount to become due.
A Notice of Nonpayment that includes the sums for retainage must specify the portion of the amount claimed for retainage.
(2) A subcontractor, laborer, or material supplier (claimant) who files a fraudulent Notice of Nonpayment loses their rights under the bond. The filing of a fraudulent notice is a complete defense to claimant’s claim against the bond. A notice is fraudulent if the claimant willfully exaggerated the amount due, willfully included a claim for work not performed or materials not furnished or prepared the notice with willful and gross negligence, which resulted in willful exaggeration. However, a minor mistake in the notice, or a good faith dispute as to the amount due, is not considered fraudulent. Please note that this provision mirrors the existing statute relative to a fraudulent lien.
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Melinda S. Gentile, Peckar & Abramson, P.C.Ms. Gentile may be contacted at
mgentile@pecklaw.com
Georgia Amends Anti-Indemnity Statute
June 02, 2016 —
David R. Cook Jr. – AHHC Construction Law BlogIn its most recent session, the Georgia General Assembly passed HB 943, which amends Georgia’s Anti-Indemnity Statute. The amendment expands the Anti-Indemnity Statute beyond construction contracts to include contracts for engineering, architectural, and land surveying services (“A/E Contracts”).
In a
prior post, we discussed
Georgia’s Anti-Indemnity Statute, which generally prohibits indemnity clauses in construction contracts that require one party (the “Indemnitor”) to indemnify another party (the “Indemnitee”) if property damage or bodily injury results from the Indemnitee’s sole negligence. The
prior post, discussed the Supreme Court of Georgia’s broad interpretation of the Anti-Indemnity Statute.
HB 943 adds subpart (c), which states:
A covenant, promise, agreement, or understanding in or in connection with or collateral to a contract or agreement for engineering, architectural, or land surveying services purporting to require that one party to such contract or agreement shall indemnify, hold harmless, insure, or defend the other party to the contract or other named indemnitee, including its, his, or her officers, agents, or employees, against liability or claims for damages, losses, or expenses, including attorney fees, is against public policy and void and unenforceable, except for indemnification for damages, losses, or expenses to the extent caused by or resulting from the negligence, recklessness, or intentionally wrongful conduct of the indemnitor or other persons employed or utilized by the indemnitor in the performance of the contract. This subsection shall not affect any obligation under workers’ compensation or coverage or insurance specifically relating to workers’ compensation, nor shall this subsection apply to any requirement that one party to the contract purchase a project specific insurance policy or project specific policy endorsement.
(Emphasis added.)
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David R. Cook Jr., Autry, Hanrahan, Hall & Cook, LLPMr. Cook may be contacted at
cook@ahclaw.com
Know Whether Your Course of Business Operations Are Covered Or Excluded By Your Insurance
December 27, 2021 —
David Adelstein - Florida Construction Legal UpdatesIt is a good idea to know what your insurance covers and does not cover. This way, if your course of business has you performing a certain (risky) operation, you know whether that operation is covered or excluded under your policy. If you are not sure, discuss with your insurance broker — this is important. There is little value performing an operation that is NOT covered by your insurance policy, as you are now performing a risk that is not covered by insurance. If you know it is not covered by insurance you may elect to change your operations or see if there is insurance to cover the risk. Below is a case study of this occurrence dealing with a commercial automobile liability policy where an insured’s operations using a crane mounted to a super duty truck was not covered under their automobile liability policy.
In People’s Trust Ins. Co. v. Progressive Express Ins. Co., 46 Fla. L. Weekly D262a (Fla. 3d DCA 2021), homeowners hired a company to install a shed. The company hired another company to deliver and install the shed using a crane; the company used a crane mounted to a Ford F-750 super duty truck. This company improperly operated the crane resulting in the shed falling and damaging the homeowner’s roof. The homeowners submitted a claim to their property insurer and their property insurer subrogated to their rights and sued. The company operating the crane’s commercial automobile liability insurer denied coverage, and thus, denied the duty to defend. As a result, a
Coblentz-type agreement was entered into where the company operating the crane consented to a judgment in favor of the property insurer (subrogee) and assigned its rights under its commercial automobile liability policy to the property insurer. The property insurer then sued the automobile liability carrier for coverage. The trial court granted summary judgment in favor of the automobile liability insurer finding there was no coverage and this was affirmed on appeal. Why?
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David Adelstein, Kirwin Norris, P.A.Mr. Adelstein may be contacted at
dma@kirwinnorris.com
COVID-19 Business Closure and Continuity Compliance Resource
March 30, 2020 —
Adam Chelminiak, Joshua Mooney & Ryan Udell - White and Williams LLPIn less than a few weeks’ time, COVID-19 has changed the way we live and work. Businesses, large and small, have had to grapple with unprecedented challenges, including orders to close or significantly curtail operations in order to stem the transmission of the coronavirus. Often, these orders have not been clear or businesses are unsure whether they fit in a category that is deemed essential, life sustaining or other similar category that permits them to continue to operate. Or, the business believes that it is necessary for it to continue to operate for reasons that may not have been apparent to the governmental authority issuing the order.
White and Williams has been busy assisting our clients in Connecticut, Delaware, Massachusetts, New Jersey, New York, Pennsylvania, Rhode Island and other states in understanding these orders. Below are government orders, and related resources, that have been announced and/or are currently in effect. White and Williams will continue to monitor these orders and add additional orders and resources as they are announced.
Reprinted courtesy of White and Williams LLP attorneys
Adam Chelminiak,
Joshua Mooney and
Ryan Udell
Mr. Chelminiak may be contacted at chelminiaka@whiteandwilliams.com
Mr. Mooney may be contacted at mooneyj@whiteandwilliams.com
Mr. Udell may be contacted at udellr@whiteandwilliams.com
Read the full story for government orders, and related resources, that have been announced and/or are currently in effect.
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Failing to Pay Prevailing Wages May Have Just Cost You More Than You Thought
April 01, 2015 —
Garret Murai – California Construction Law BlogMechanics lien claims, payment bond claims, stop payment notice claims, delay claims, defect claims, abandonment claims . . .
With the variety of claims unique to construction projects it’s easy to forget that construction disputes are simply a category of business disputes in which broader business-related torts apply.
In Roy Allan Slurry Seal, Inc. v. American Asphalt South, Inc., Case No. B255558 (February 20, 2015), the California Court of Appeal for the Second District held for the first time that a second-place bidder on a public works contract may sue a winning bidder – who failed to pay its workers prevailing wages – under the business tort of intentional interference with prospective economic advantage.
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Garret Murai, Wendel Rosen Black & Dean LLPMr. Murai may be contacted at
gmurai@wendel.com
