Court Saves Material Supplier From Lien Waiver Mismanagement

On August 12, 2014 by

Court Saves Material Supplier From Lien Waiver Mismanagement

Recently, the Nevada Supreme Court decided Simmons Self-Storage v. Rib Roof, Inc., and while this case is especially notable for clarifying material suppliers’ rights to file mechanics liens without proving that the delivered materials were actually used in the project (and deftly overturning more than 50 years of precedent), it is also provided interesting insight into other aspects of Nevada mechanics lien law. A particularly interesting portion of the decision dealt with lien waivers.

Important Background

unconditional lien waivers from Rib Roof . . . were subsequently produced, signed, and provided . . . in an apparent attempt to induce payment.

The mechanics liens at issue were filed by Rib Roof, Inc., a manufacturer and supplier of steel products. The GC on several related projects contracted with Southwest Steel (“Southwest”) to supply steel for the construction of same. Southwest, in turn, contracted with Rib Roof, Inc. to fulfill the obligation to supply steel to the 6 properties on which work was being performed. Delivery of the steel to one of the properties went completely unpaid, and the deliveries to the other 5 properties were only partially paid. Despite still owing Rib Roof approximately $1,000,000, Southwest requested unconditional lien waivers from Rib Roof, which were subsequently produced, signed, and provided…

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