Thursday, March 9, 2017

Waiver danger

A recent Georgia Court of Appeals decision (Bibler Masonry Contractors, Inc. v. J.T.Turner Construction Co., 2017 Ga. App. LEXIS 86 (A16A2094 March 6, 2017), demonstrates the perils of signing a lien waiver then failing to take action under the mechanic's lien statute.  The statute deems payment to a party signing a lien waiver to be conclusive unless the signer takes specific action, including filing an Affidavit of Nonpayment in the property records within 60 days after the date of the waiver.

Aside:  I once had a case involving a subcontract that required payment in 60 days.  Subcontractors waited the 60 days, and payment was not made. The contractor argued that the lien waiver barred the subcontractors' lien and bond claims, because the subcontractor failed to file the affidavit of nonpayment.  Not good.

In the recent case, the subcontractor, Bibler, performed masonry work for J.T. Turner Construction for the Savannah Law School.  Bibler signed a Waiver and Release Upon Final Payment, and the document bore a date of December 22, 2014.  The Waiver was forwarded to Turner on February 17, 2015, and after Turner failed to make payment, Bibler filed an Affidavit of Nonpayment on February 27, 2015.

In Bibler's lien action, the trial court granted the owner's motion for summary judgment, ruling that the Affidavit of Nonpayment was untimely--it was recorded more than 60 days after the date of the waiver, back on December 22.

Bibler argued that it backdated the lien waiver at the request of Turner, and that the 60 days should run from February 17, when it signed the waiver and forwarded it to Turner.  Quoting those dreaded words that the lien statute is in derogation of common law (ouch) and that the law must be construed against the claimant, the Court of Appeals disagreed.  The court noted that the lien waiver form provides that the claimant is conclusively deemed to have been paid in full, even if it has not been paid, 60 days "after the date stated above".

Interestingly, the court explained that its decision was "undergirded" by O.C.G.A. §44-14-366(f)(1), which provides that the amount is conclusively deemed to have been paid "sixty days after the date of execution of the waiver and release..."  That section would seem to support Bibler's argument that the date of execution has relevance.  Nevertheless, the court rejected Bibler's argument that an ambiguity existed, and held that the 60 days runs from the date shown on the document, regardless of when it was signed and submitted.   The court found that unambiguously, date of execution=date of document.  

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