It is Critical to Understand the Applicable Lien Law

Recently, a Louisiana Appellate Court affirmed a lower court's ruling that, to preserve its lien claim under Louisiana state law, a material supplier on a public works project must provide notice of nonpayment for each month that materials were delivered rather than providing a single notice of nonpayment for all deliveries. In J. Reed Constructors, Inc. v. Roofing Supply Group, LLC, the roofing subcontractor on a public project purchased roofing materials on an open account from a roofing material supplier, Roofing Supply Group. That supplier made a number of deliveries during the months of June, July, August and September, with the last delivery made September 26, 2011, pursuant to multiple purchase orders with the roofing subcontractor. Along with each delivery, the roofing supplier provided the subcontractor an invoice that reflected the due date for payment, which was the tenth day of the second month after delivery.

After a little more than two months from its last delivery, the supplier sent written notice to the general contractor and owner, informing them of the roofing subcontractor's nonpayment of invoices for roofing supplies delivered for use on the public project. Because the supplier did not receive payment after providing this notice, it filed and recorded its lien claims for the full amount owed for all material deliveries. In response, the general contractor challenged the supplier’s lien claim, contending that the supplier’s notice was untimely as to its deliveries in the months of June, July, and August 2011 because the supplier provided notice only once, in December of 2011. The supplier opposed the general contractor's contention and argued that its single notice was timely and sufficient under the Louisiana Public Works Act for all of its deliveries.

Under the Louisiana Public Works Act, a materialman who has not received payment for materials supplied must provide the general contractor and owner written notice “on or before seventy-five days from the last day of the month in which the material was delivered . . . .” The court found that the statute’s language was “clear and unambiguous,” and concluded that the time period for notice commences on the last day of the month in which any materials are delivered during that month “[r]egardless of the month of delivery or the number of deliveries . . . .” Thus, the court held that the supplier’s notice was untimely for all of its deliveries made prior to September because the notice was provided outside of the seventy-five day requirement for those deliveries.

Based on the court’s ruling in J Reed, Louisiana law requires a supplier to send multiple notices-of-nonpayment within seventy-five days of the last day of the month for each month that material is delivered. Failure to do so can result in the loss of one's lien rights. Other states have different notice requirements, some of which allow a single notice for all deliveries. However, like Louisiana, most, if not all, states require strict compliance with lien laws. Because strict compliance is required, materialmen, subcontractors, and general contractors should all be familiar with the lien laws in any state in which materials are supplied or work is performed.

Topics:  Construction Contracts, Construction Disputes, Liens

Published In: Civil Procedure Updates, Construction Updates, Government Contracting Updates

DISCLAIMER: Because of the generality of this update, the information provided herein may not be applicable in all situations and should not be acted upon without specific legal advice based on particular situations.

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