Most state mechanic’s lien statutes allow successful lien claimants to recover reasonable attorney fees incurred in the foreclosure of a lien. The foreclosure process is necessarily judicial; in today’s environment, however, the underlying determination of entitlement to payment may be made through some form of alternative dispute resolution. Are attorney fees incurred in those proceedings recoverable under a lien statute?
An Iowa appeals court recently answered this question in the affirmative. A subcontractor’s attorney fees incurred during binding arbitration of its payment dispute with the prime contractor were permissible. The reasoning was that without the subcontract’s arbitration clause, the question of entitlement to payment would have been before the court in the lien foreclosure action.
The second case in this issue involves the default termination of a federal contract. Having failed to file a timely challenge to the default, the contractor could not use a backdoor approach and file certified claims for the financial impacts of the default.
The third case addresses the proper venue for a public works payment bond claim in Florida. A surety could not enforce a “venue selection” clause in a subcontract against the subcontractor bond claimant. The subcontract and the payment bond were two distinct documents.