Source: https://www.ctconstructionlaw.com/author/goldbergsegalla/
Timestamp: 2019-04-23 22:57:47+00:00

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This author Scott Orenstein has created 19 entries.
In a recent decision, the Superior Court discharged the mechanic’s liens of several subcontractors, because the general contractor had already filed a lien for the unpaid contract balance. Wegrzyniak v. Hanley Constr., LLC, WL 5706192 (Conn. Super. Ct. Oct. 30, 2017). Insofar as any substantial construction project will involve a general contractor, subcontractors, sub-subcontractors, and suppliers, there are obviously many potential lien claimants. Nonetheless, the court said that “[f]or good reasons, the mechanic’s lien statutes don’t permit multiple liens,” and with regard to the subcontractor whose lien included a claim for extra work, the court said that “[w]ithout an agreement to support the additional work…, [the subcontractor’s] lien must be discharge.” Id. In light of the foregoing, Wegrzyniak may stand for the proposition that subcontractors, sub-subcontractors, and/or suppliers are precluded from filing mechanic’s liens when the general contractor files a mechanic’s lien covering the entire project, but, in my opinion, subcontractors, sub-subcontractors, and suppliers should continue filing their own mechanic’s liens.
The false statement must result in actual damages.
Neri Corp. v. McDermott Rd., LLC, 2016 Conn. Super. LEXIS 2067, *18 (Conn. Super., July 26, 2016). The requirement for the statement to have been made “with malice” means that the lienor either had acknowledged that the statements in its mechanic’s lien were false or that the lienor acted with “a reckless disregard of the truth.” Id. Both are very unlikely in the context of a mechanic’s lien.
As stated previously in this blog, the purpose of a mechanic’s lien is to provide security for an alleged debt arising out of work performed. Notwithstanding the foregoing, the “[f]iling of a mechanic’s lien like that of any other lien can be the basis of a slander of title action as long as all of the elements of the tort are met.” Id.
A common provision in construction contracts requires a contractor to give notice to the owner within a certain number of days of an event giving rise to a claim. Such provisions have a reasonable basis insofar as they ensure an owner will have a reasonable opportunity to investigate the conditions for which a claim for additional compensation is being made. Traditionally, such notice provisions were not strictly enforced. The general approach seemed to be that — provided the owner was not prejudiced by any delay in giving notice of claim — a claim that was not submitted within the specified time limit would not be barred. The more recent trend, however, has been to more strictly construe such provisions.
In J. Wm. Foley, Inc. v. United Illuminating, the Appellate Court held that the contractor’s failure to submit its delay claim within the ten-day time limit specified by the contract was a bar to the claim. This decision is potentially troublesome for a couple of reasons: First, there is no reference to the owner suffering any prejudice as a result of the delay. Second, the decision indicated that the submission of the delay claim required a critical path analysis of the delay.
As I have written before, a mechanic’s lien provides a contractor with an attachment to real property to secure the amount claimed due for work performed. However, before the mechanic’s lien can be successfully foreclosed and converted to a court judgment, the contractor has to prove the underlying contract debt. The benefits of the mechanic’s lien procedure is that it requires nothing more than the contractor’s sworn statement to be put in place. Essentially, in the case of subcontractor claims, the statutes allow a contractor to attach the property of the owner, who may not be aware of the claim, based upon nothing more than the contractor’s good word.
Anyone involved with public construction projects is familiar with the term “prevailing wage,” which is generally understood to mean the minimum wages established by the government for each labor class that works on a given project. 29 C.F.R. § 1.2(a)(1). Connecticut’s prevailing wage requirements are far less onerous than the federal law, which apply to any project that costs more than $2,000. 40 USCS § 3142. Connecticut’s prevailing wage law only applies to new construction where the total cost of the work is $400,000 or more, and on remodeling or rehabilitation projects where the total cost of the work is $100,000 or more. Conn. Gen. Stat. § 31-53. Nonetheless, the state is currently considering increasing the project costs for which the prevailing wage law requirements will apply, i.e. the law’s threshold limits; indexing the threshold limits to inflation; and/or exempting certain public projects from the requirements entirely.
Parties are free to enter into contracts with any terms and conditions to which they both agree — but that right is not absolute. Certain contract terms are void by statute or case law based upon public policy considerations. For example, in Connecticut, the General Statutes do not allow contractors to prospectively waive their mechanic’s lien rights and the General Statutes do not allow contracting parties to have another state’s laws govern a dispute arising out of a construction project within Connecticut. However, the most onerous example of a statute that potentially voids an otherwise enforceable contract is the Home Improvement Act.
As previously discussed here, the Home Improvement Act can lead to unfair results. As upheld by the Connecticut Supreme Court, any contract that does not contain certain elements required by Conn. Gen. Stat. § 20-429 is unenforceable and the contractor that enters into such an agreement with an owner may also be held liable for a violation of the Connecticut Unfair Trade Practices Act. Under the terms of the Home Improvement Act, a contract that does not include notice of cancellation rights violates the statute. Thus, the owner of any home improvement project must be allowed three business days to cancel a home improvement contract after it is executed.
As discussed numerous times on this blog, the mechanic’s lien laws provide a security interest in privately owned real property in favor of those that improve it. According to Conn. Gen. Stat. §49-33, “[i]f any person has a claim for more than ten dollars for materials furnished or services rendered in the construction, raising, removal or repairs of any building or any of its appurtenances or in the improvement of any lot or in the site development or subdivision of any plot of land …then the plot of land, is subject to the payment of the claim.” While it is true that the type of work for which a mechanic’s lien may be enforced is sometimes subject to dispute, prior to the recent decision in CLW Real Estate Developments, LLC v. SAB Construction Management, LLC, the issue had been fairly well resolved.
Generally speaking, the types of services that support a mechanic’s lien are those that substantively improve the property. The Connecticut Appellate Court has “observed that a ‘mechanic’ has been defined as ‘a skilled worker who brings about a result by the use of tools, machines or equipment.’” Weber v.
It is not uncommon for a construction contract between an owner and a general contractor to state the owner may terminate the contract for convenience. In other words, the owner may be allowed to terminate the contract even if the contractor had not done anything wrong merely because the owner has had a change in circumstance that no longer makes it reasonable to continue with the subject project. General contractors often include similar provisions in their contracts with their subcontractors. The question is whether there are any limits on one party’s right to terminate a contract when the other party has done nothing wrong. In most jurisdictions, there is a limit to such a right but, unfortunately, not in all.

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