Legal Question in Construction Law in California
Our contractor walked off the job, and now we are involved in a mechanics lien law suit filed against us by a lumber supplier, who supplied for our framing material AND exterior siding material. Below is the summary of what happened:
1/5/2010 Lumber supplier sent a P-20 to our old address. We never received it or knew about it until the lawsuit was filed. Based on the amount and date on the P-20, we understand the notice was for framing material and the estimated amount is $47k. We later received lien release of $48k from the supplier in July.
From June to August of 2010, our contractor ordered and installed $20k of siding material from the same supplier. We received lien releases from our contractor (dated after the material delivery), but later learned that the contractor did not pay the lumber supplier for the siding material.
November 19, 2010, lumber supplier file a mechanics lien to the County recorder.
In mid Jan, 2011, lumber supplier file a lawsuit to both us the homeowners, the contractor, and our construction loan bank.
We have paid the contractor in full and of course don't think we should paid twice, but the mechanics' law isn't very homeowner friendly. The couple of arguing points that we can think of:
1. P-20 was sent to wrong address that was not on the building permit.
2. The intent of the original P-20 was for framing material and was not for siding material which was delivered more than 6 months later. We believed these were two separate orders (hence two separate contracts) and thereby a separate P-20 with a new estimated amount should have been served between June and September.
The attorney for the lumber supplier, however, claimed that one P-20 is sufficient for the entire project. We want to see if it is legitimate to argue that the two orders were separate contracts deserving separate P-20's with correct amount for each, because when the first P-20 was issued, we had no intention of ordering siding materials from them and had not talked to anyone in their company about potential subsequent purchases.
3 Answers from Attorneys
The laws tend to protect the material suppliers on a construction project. This is why it is very important to make sure you secure lien releases from your contractor before you make payment to him, regardless of whether you've received the 20-day notice.
But it does not appear you secured all the releases. It would have been nice if you did.
In terms of the strength of you issues, the rank as follows, with the top one being the best strength:
1, Lack of notice
2. Excessive amount
3. incorrect description of work
If you send me an email, I can put you in contact with a friend of mine who focuses on construction law.
Best,
Daniel Bakondi, Esq.
415-450-0424
The Law Office of Daniel Bakondi, APLC
870 Market Street, Suite 1161
San Francisco CA 94102
http://www.danielbakondi.com
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The address issue may be a winner depending on how and why the supplier used your "old" address. The supplier's attorney is, however, 100% correct that they only had to give one notice regardless of how much material they supplied under how many orders. Under Civil Code section 3097(g), only one notice is required. The only exception is on larger jobs where a supplier or sub-subcontractor my be claiming under more than one subcontractor. In this case, however, you indicate that the supplier was supplying directly to the contractor, so that exception does not apply. Returning to the address issue, the elephant in the corner that you have not addressed is why the supplier had and used your "old" address. As a general rule, sending the notice to the wrong address would be a failure of the "strict compliance" with the notice requirements, and therefore fatal to the claim. If, however, the supplier had legitimate reason to believe that the address you used was your current address at the time the notice was given, then you may be estopped to assert that the misdirection of the notice is fatal to their claim. They do not, by the way, have any obligation to use the address on the building permits. That is only one of several addresses they are permitted to use per the code. If you need further help with this, please let me know. I have just under 25 years of construction litigation experience, I worked on the construction litigation team of one of the 75 largest law firms in the world for the first six years out of law school, and my last job for a paycheck was Construction Counsel in the San Francisco Intl. Airport General Counsel's Office.
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