Thoughts on construction law from Christopher G. Hill, Virginia construction lawyer, LEED AP, mediator, and member of the Virginia Legal Elite in Construction Law
It is with humility and a sense of accomplishment that I announce that I have been selected for the seventh straight year to the Virginia Super Lawyers in the Construction Litigation category for 2024. Add this to my recent election to the Virginia Legal Elite in Construction and I’ve had a pretty good year. As always, I am thrilled to be included on these peer-elected lists.
So without further ado, thank you to my peers and those on the panel at Virginia Super Lawyers for the great honor. I feel quite proud to be part of the 5% of Virginia attorneys that made this list for 2024.
The full list of Virginia Super Lawyers will appear in the May edition of Richmond Magazine. Please check it out.
If you want to see the lists before then, a digital version of the Virginia Super Lawyers Magazine is available here (click on the Virginia magazine).
Thanks again to all of you who participated in my nomination and election.
As always, I welcome your comments below. Please subscribe to keep up with this and other Construction Law Musings.
For this weeks Guest Post Friday here at Musings, we have our first three time guest poster. Scott Wolfe, Jr. (@scottwolfejr on Twitter) is a construction lawyer practicing in Washington, Oregon and Louisiana. He is the founding member of the bi-coastal construction law boutique practice, Wolfe Law Group. He is also the founder of Express Lien, a nationwide lien service that offers a free web-based preliminary notice and lien management software. Check out his great blogs on various areas of construction law.
Nearly everyone in the construction industry has heard the term “lien” thrown around on a project. Depending on the type of project being constructed, however, the lien-like remedies available to you may differ significantly.
This post discusses the types of lien or claim remedies available to contractors, suppliers and laborers on the three classes of construction projects: private, state and federal. This post discusses the concepts broadly, and does not focus on the law of any particular state. Remember that laws differ from state-to-state, and it’s important to consult the laws applicable to your project.
The Lien – Private Works
When you think of the term “lien,” you are likely thinking of the remedy available to unpaid parties on a private construction project.
In most states, when a party provides labor and/or materials to an improvement, and the party is not paid, the law allows that party to file a lien on the property itself and claim a privilege thereon (similar to a mortgage privilege held by a bank on mortgaged property).
This is the key difference between a private lien and a public claim. Unlike most public claims, a private lien actually gives the unpaid party a privilege upon the property. Most states then allow the lien claimant to bring a proceeding against the property owner to foreclose on the lien (and thus, the property).
To acquire this powerful privilege, many states require contractors to send pre-lien notices. The notice may be due before work begins or immediately thereafter, and other notices may be due immediately before filing the lien itself.
The first step to knowing the notice requirements in your state, however, is knowing the type of lien you’ll file on a project. It’s something you’ll want to understand from the start of your work.
Claims on State Projects
Most states do not allow “liens” to be taken against property owned by the state. Accordingly, the traditional “lien” that can be filed on a private work cannot be filed on a public work.
However, this does not leave unpaid contractors, suppliers and laborers without a remedy.
Normally, a state project will require the general contractor to post a bond in an amount sufficient to pay for the claims of all subcontractors, laborers and suppliers. In the event you’re unpaid on a state project, most states allow the unpaid party to file a claim against that bond.
Three key things to keep in mind when working on a state project:
(1) Like a private lien, state projects may also require you to send pre-claim notices, so familiarize yourself with those requirements;
(2) Like a private lien, you will only have so long to assert your claim against the bond, so do it timely; and
(3) It’s important to know the name of the surety and the public entity in charge of the work, as you’ll be required to notify these parties of your claim. Have this information from the start of construction, or request it from the general (you’re entitled to know).
Claims on Federal Projects
Like property owned by the state, property owned by the federal government cannot be liened. Unpaid contractors, suppliers and laborers must bring a claim against the general contractor’s bond, through what is referred to as a “Miller Act Claim.”
To make a claim under the Miller Act, first tier subs and suppliers must bring suit against the bond within 1 year from last furnishing labor and/or materials, and must deliver notice to the owner and/or surety. Second tier subs and suppliers to first tier subs must deliver a Miller Act Notice to the prime contractor within 90 days from last furnishing labor and/or materials to the project, and a suit must be brought within 1 year of last furnishing labor and/or materials.
Again, as it is true with state projects, it’s important to know the name of the surety and the public entity in charge of the work. If it’s not provided to you, you can request it.
Conclusion
Regardless of what class of project you’re working on, a lien-like remedy is probably available to you in the event of non-payment. However, it’s critical to understand the different remedies available at the onset of construction, for each remedy carries different pre-lien or pre-claim requirements.
As always, both Scott and I encourage your comments below. I also encourage you to subscribe to keep up with this and other Guest Post Fridays at Construction Law Musings.
Claims for breach of contract are numerous in the construction law world. Without these claims we construction attorneys would have a hard time keeping the doors open. A 2021 case examined a different sort of claim that could arise (though, “spoiler alert” did not in this case) during the course of a construction project. That type of claim is one for tortious interference with business expectancy.
In Clark Nexsen, Inc. et. al v. Rebkee, the U. S. District Court for the Eastern District of Virginia gave a great explanation of the law of this type of claim in analyzing the following basic facts:
In 2018, Clark Nexsen, Inc. (“Clark”) and MEB General Contractors, Inc. (“MEB”) responded to Henrico County’s (“Henrico”) Request for Proposals (“RFP”) for the design and construction of a sport and convocation center (the “Project”). Henrico initially shortlisted Clark and MEB as a “design-build” team for the Project, but later restarted the search, issuing a second RFP. Clark and MEB submitted a second “design-build” proposal, but Henrico selected Rebkee Co. (“Rebkee”) for certain development aspects of the Project. MEB also submitted proposals to Rebkee, and Rebkee selected MEB as the design-builder for the Project. MEB, at Rebkee’s request, solicited proposals from three design firms and ultimately selected Clark as its design partner. From December 2019 to May 2020, Clark and MEB served as the design-build team to assist Rebkee in developing the Project. In connection therewith, Clark developed proprietary designs, technical drawings, and, with MEB, several cost estimates. In February 2020, MEB submitted a $294,334.50 Pay Application to Rebkee for engineering, design, and Project development work. Rebkee never paid MEB. Henrico paid MEB $50,000.00 as partial payment for MEB’s and Clark’s work. MEB then learned that Rebkee was using Clark’s drawings to solicit design and construction proposals from other companies. On July 23, 2020, Rebkee told MEB that Henrico directed it to cancel the design-build arrangement with MEB and Clark and pursue a different planning method. MEB and Clark sued and Rebkee for, among other claims, tortious interference with a business expectancy. Rebkee moved to dismiss the tortious interference claim. Continue reading Where Breach of Contract and Tortious Interference Collide
While it is impossible to list all of you who have contributed to Guest Post Fridays here at Musings (please use the link above to review all of these posts and see who else has contributed) and to thank you individually, please know that each and every one of your contributions have made Construction Law Musings a more vibrant and interesting place to visit. The opportunity to work with such varied, intelligent, and insightful people over the last year has been wonderful. With each post I learn something new.
Without these contributions to add a layer of color that I could not provide alone, Musings would just be another blog about construction law by a Virginia lawyer. With them, Musings is a fun place to hang out and learn. To those who have posted here in the past, the door is always open for a repeat posting, just give me a buzz with a topic and when you can do it.
In short, thank you to all of you who have contributed since this experiment began and I look forward to hearing what you all have to say in the future.
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