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Statutory Compliance Required to Protect Lien


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Hanson

By Doug Hanson

A homeowner hired a contractor to construct a house.  The contractor referred the homeowner to a subcontractor for installation of the flooring.  The homeowner paid the contractor the entire amount due under the construction contract, which included the amount the contractor was to pay the subcontractor for the flooring.  The contractor, however, failed to pay the subcontractor for materials and labor it furnished to the owner.  

The subcontractor filed suit against the homeowner and the contractor.  The homeowner moved to dismiss the subcontractor’s claim for failure to comply with the materialman’s lien statutory provisions.  The subcontractor responded to the motion and filed a counter motion asking for the court to enter judgment in his favor.  The trial court granted the subcontractor’s motion and entered judgment against the homeowner and the contractor.

On appeal
The homeowner appealed to the Alabama Court of Civil Appeals.  The court examined whether the subcontractor properly complied with the materialman’s lien statute when asserting its claim for “full price” against the homeowner.  To establish full price, the court found a supplier must:  (1)  have an express contract with the property’s owner or the owner’s agent to supply the material or labor; or (2)  have given notice to the owner in writing of the cost of the materials or labor to be supplied before beginning work or delivering materials and the owner must not have responded in writing that the owner will not be liable for payment.

The court found that the subcontractor did not have an express contract and had asserted a claim under the second provision requiring notification to the property owners of its intent to reserve its right to claim a lien.  The court held strict statutory compliance is required to protect a materialman’s claim under this provision.  

In analyzing the evidence presented by the subcontractor, the court reviewed an affidavit submitted by the subcontractor’s salesmen. The affidavit reflected that the salesman had met with the homeowners early in September of 2009 and the homeowner selected the flooring for the home. After the salesman measured the home, he met with the homeowner again on September 22, 2009, where the homeowner completed the subcontractor’s standard “Notification to Owner of Furnishing Labor and/or Materials” (“notification”).  The notification reflected $40,650 as the cost of the material and labor to be supplied. The court also noted that the evidence presented indicated that the materials for the project had been supplied on or about October 15, 2009.

In reviewing the homeowner’s evidence, the court noted that he agreed that he filled out some information on September 22, 2009.  He, however, stated that the amount of $40,650 was not written on the form, and that the total cost section was left blank. The homeowner argued the failure to include the price on the notification rendered the subcontractor’s lien unenforceable under the statute. In addition, the homeowner argued that much of the hardwood flooring was in place when the September 22, 2009, notification was provided.  

The appellate court concluded that the homeowner’s evidence created a genuine issue of fact as to whether the subcontractor notified the homeowner of the total price prior to delivering any materials or labor.  The appellate court remanded to the trial court for further proceedings.

 

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