State mechanic’s lien statutes usually invalidate lien filings that have exaggerated or overstated amounts. The language of these statutes varies, but it is implicit that there must be some wrong-doing on the part of the lien claimant. Some statutes expressly require fraudulent intent. That is the case with the Illinois statute.

An Illinois appellate court was faced with the question of whether a contractor’s duplicate billings were evidence of a fraudulent lien filing. In this case, they were. These were not mere misstatements of charges for work. They included billing for materials furnished to a separate project and for labor at two separate projects for the same employees during the exact same hours.

The second case in this issue involves an employee’s right to sue an employer for underpayment of wages mandated by a state prevailing wage statute. If testing and inspection services qualified as maintenance—and they did—was there standing for former employees as third-party beneficiaries of the contracts between their employer and the public works owners?

Double billings and charges for costs incurred on separate property were sufficient to support a finding of fraudulent intent in filing a mechanic’s lien.

Testing and inspection services were part of “maintenance” of public works facilities and therefore subject to a state prevailing wage law. The standing of former employees to sue as third-party beneficiaries of the public works contracts was an unsettled question of law that was referred to the state’s highest court.

Statutes requiring a party to a dispute to pay their opponent’s attorney fees can produce bitter results. Fee awards comparable to the damage recovery are not unheard of. In a construction contract context, these “fee shifting” provisions are found in prompt payment statutes and mechanic’s lien statutes. In both cases, the purpose is to compensate the party that was wrongfully denied payment.

A Kansas court addressed a situation in which a prime contractor made late payment to a subcontractor. The contractor said the late payment was justified by the sub’s refusal to sign lien waivers. The sub argued the subcontract language did not mandate waivers as a precondition to payment.

A Minnesota court was asked to apply a fee shifting provision in a mechanic’s lien statute. The contractor prevailed on its lien foreclosure action, but the project owner recovered a larger amount on its negligence counterclaim against the contractor. The owner argued it would violate the policy of the lien statute to allow the contractor to recover attorney fees under those circumstances.

The third case in this issue involved a termination for the convenience of the government. Restrictive language in the contract did not necessarily apply because the contract, when terminated for convenience, had been converted into a cost reimbursement arrangement.

Once a prime contractor demanded lien waivers from its subcontractor—discretion granted to the contractor under the terms of subcontracts—execution of the waivers became a condition precedent to payment. The sub’s refusal to sign the lien waivers excused the contractor’s failure to make timely payments.

An owner’s liability for breach of contract, and the mechanic’s lien which secured the contractor’s recovery, were distinct from the owner’s successful claim against the contractor for negligent construction.

After a termination for the convenience of the government, the contractor could raise claims for the cost of out-of-scope work, even though the work had not been authorized in accordance with the terms of the contract.

When a contractor’s work is suspended by the project owner, two types of overhead continue despite the contractor’s inability to perform work: extended field overhead and continuing home office overhead. The latter is usually referred to as “unabsorbed” home office overhead, while field overhead consists of direct costs related to the performance of a specific contract. Home office overhead is one step removed and therefore viewed with skepticism. The Texas statutes make a distinction.

The Local Government Contract Claims Act waives government immunity to allow contractors to recover what they are owed under the contract. The statute authorizes recovery of a contractor’s increased cost to perform the work as a direct result of a public project owner’s suspension of the work. This has been interpreted to include extended field overhead expenses. However, the statute expressly disallows recovery of “unabsorbed home office overhead.”

The second case in this issue involves a contractual punch list procedure. The owner was deemed to have accepted work items not included on the punch list. However, contractor compliance with the procedure was a condition precedent to the owner’s waiver of a claim.

A Texas public project owner had governmental immunity from a claim for unabsorbed home office overhead, but the owner had no immunity from a claim for increases in the direct cost of performing the work resulting from owner-caused delay.

A contractor was required to comply with the contractual punch list procedure as a condition precedent to the owner’s deemed acceptance of the work and waiver of claim.