I came across an article in the Kansas City Business Journal last week about a mechanics lien filed against JE Dunn Construction’s Kaufman Center for the Performing Arts project: “A. Zahner has designs on satisfying Kauffmann Center’s lien.”
A. Zahner Co. – an architectural metal design and fabrication company – filed a mechanics lien against the project for $306,577. It appears they filed the mechanics lien immediately before their lien deadline, and are now foreclosing on the lien with a lawsuit before the expiration of that deadline.
A statement from JE Dunn blames “pending warranty documents” as holding up final payment, and comments negatively on the subcontractor’s use of the mechanics lien process:
It is unfortunate after completing such a successful project that a subcontractor believed it necessary to file the papers concerning the lien.
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This quote comes from JE Dunn’s Chief Legal Officer Tom Whittaker. The statement seems pretty insensitive to the subcontractor to me. If the lien and foreclosure was filed towards the end of their respective deadlines it means A. Zahner Co. has waited almost an entire year for its $306k payment. How long should cooperation and politness last?
Plus, the comment appears to be part of a double standard for Mr. Whittaker. Tom Whittaker is quoted in article from just two months ago in the same publication about steps JE Dunn takes to avoid risk. In the article – Construction company lawyers see more time devoted to finances, risk avoidance – the in-house counselor acknowledges that a significant amount of his workload is spent mitigating financial risks.
Is it fair that JE Dunn implement risk mitigating procedures but deny the same risk mitigation (filing a lien) to their subcontractors? This sort of double standard makes my blood boil.
This brings me to the purpose of this post: mechanics lien claims are always unfortunate.
It’s unfortunate for prime contractors, construction managers, developers and property owners. You know who it’s most unfortunate for? That’s right, the lien claimant.
While the document and the procedure is unfortunate, it’s a necessary evil in some circumstances. Further, since the mechanics lien deadines are not flexible (promises to pay mean squat to your lien deadlines), there are circumstances when the parties may be working together but a lien filing is still necessary to preserve each party’s rights.
If you’re a subcontractor or supplier, don’t let the Tom Whitaker comment and point of view discourage you from filing a lien. If you have money on the line – especially $300k+ – file your mechanics lien and preserve your rights. You can still cooperate with the prime contractor or the property owner…you can just do so on equal footing.