ConstructionPro Week, Volume: 5 - Issue: 32 - 08/19/2016

Can a Contractor “Prevail” on a Lien Without a Judgment

By Bruce Jervis

 

Parties to a dispute, under the so-called “American rule,” each pay for their own legal counsel. In some circumstances, however, this rule has been modified by statute, allowing the “prevailing party” to recover its reasonable attorney fees from its opponent. This is the case, in most states, for successful mechanic’s lien claimants.

 

The Michigan Supreme Court recently addressed an interesting question. Can a contractor recover its attorney fees from the project owner when the contractor never foreclosed on its lien, recovering payment instead through an arbitration award? The court answered in the affirmative. A contractor can become a prevailing party through any binding ruling in its favor. A judgment on the lien itself is not required.

 

Does this seem reasonable? How can one prevail on a mechanic’s lien when one never pursued its lien claim to a conclusion? Your comments are welcomed.

 

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