Monthly Lien Law Update: October 2019
Mechanics Lien Amount Cannot Include Consequential Losses
The Michigan Court of Appeal considered the validity of a mechanics lien filed by TSP Services, Inc. against National-Standard, LLC. National entered into a construction contract with TSP to perform asbestos abatement, demolition, and related services for $414,950.00. TSP also intended to make additional profit from salvaging steel from the demolition and selling it for scrap. Although profiting from the scrap steel was not included in the construction contract, National was aware of TSP's plan to salvage and sell the steel.
National's construction project suffered delays which required them to suspend TSP's work after only 9% of the steel had been extracted. TSP filed a lien against National's property for the unpaid balance of the contract plus scrap value of the steel remaining. TSP received an arbitration award in its favor which included a finding that the entire mechanics lien amount was valid and enforceable. National appealed this award.
The Michigan Court of Appeal modified the arbitrator's finding that TSP's lien was fully valid and enforceable. The Court held that a mechanics lien may only include the unpaid portion of the construction contract but not profits lost as a consequence of the contract breach. The Court found that TSP's claim for loss of money from selling the scrap steel was a valid consequential damages claim but Michigan lien laws were intended only to include amounts unpaid pursuant to the construction contract.
http://publicdocs.courts.mi.gov/OPINIONS/FINAL/COA/20190910_C342530_46_342530.OPN.PDF
Kentucky Processing Plant Construction Delayed as the Mechanic Liens Pile Up
In early 2019, GenCanna Global began constructing a new hemp processing facility in Mayfield Kentucky. Construction on the new facility was recently halted due to issues obtaining financing for the project. GenCanna assured the public the new facility was still on track despite the construction delay. However, contractors working on the project have filed over $13 million dollars in liens against the facility. GenCanna is also under pressure from local hemp farmers who planted crops anticipating the new facility would start operations on schedule.
New Vocational School in Maine Opens with a Mechanics Lien
Mid Coast School of Technology officially opened its new vocational education facility in Rockland Maine on September 9, 2019. On October 7, 2019 ELCO Electric filed a mechanics lien against the property for $255,000.00 worth of unpaid work. The lien alleges ELCO's work arises from a contract from September 26, 2017 to perform electrical services. ELCO's attorney asserts all efforts are being made to reach a friendly resolution with the school. However, if negotiations fail, ELCO will seek late fees, interest and attorney's fees in addition to the $255,000 mechanics lien.
https://www.penbaypilot.com/article/electrical-contractor-files-lien-against-mid-coast-school-technology/125788
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