Subcontractor's Mechanic's Lien Fails Due to Late Filing and Breach by General Contractor

I recently posted on recent changes to the Mechanic’s Lien Law that allow “design professionals” to create and enforce liens. Following up on the mechanic’s lien topic, on August 29, 2011, the Appeals Court ruled that a lien filed by a subcontractor was not allowed because prior nonperformance by the general contractor had released the project owner from any duty to make further payments under the original contract. The important point under the Mechanic’s Lien Law, G.L. c.254, §4, is that a payment “due or to become due” from the owner to the general contractor must exist at the time the subcontractor files its notice of contract.


The particular case (Maverick Construction Management Services, Inc. v. Fidelity & Deposit Company of Maryland, Inc.) concerned the reconstruction of an athletic field complex at Nichols College by the general contractor, Evergrass, Inc. Evergrass had subcontracted with Maverick Construction Services, Inc., to excavate the site, place subsurface materials and install a drainage system. Evergrass delivered the facility to the College in September 2005, just in time for the football season. However, serious drainage problems quickly developed that Fall. The cost of the repairs were later determined to far exceed the outstanding balance due under the general contract. Although the College never formally issued a notice of termination to Evergrass, the College broke off negotiations with Evergrass and subsequently hired a new general contractor to remove the deficient field and install a new one.

During the course of the unsuccessful negotiations between the College and Evergrass, Maverick filed its “notice of contract” under the Mechanic’s Lien Law to assert its unpaid subcontract balance. Maverick subsequently sued Evergrass for the unpaid subcontract balance and sued the College for enforcement of its lien.

The Superior Court’s rejected Maverick’s lien because no payment was “due or to become due” to Evergrass under the original contract at the time Maverick filed its notice of contract, which the Appeals Court affirmed. No amounts were due to Evergrass at the time the project was delivered to the College because, at that time, Evergrass’ breach of contract required remedial expenditures that far exceeded the general contract’s retainage balance. Because Maverick’s subcontractor lien was asserted after the project was delivered, when no amounts were “due or to become due” under the contract, Maverick’s subcontractor lien failed.

This case is another reminder to owners, contractors and subcontractors that the Mechanic’s Lien Law, G.L. c.254, contains numerous, detailed requirements that must be followed strictly in order to create and enforce a lien. Additionally, for subcontractors, it is important to understand the status of the general contractor’s contract with the owner in order to evaluate the viability of a possible lien.

Please contact me if you or a colleague has a question regarding creation or enforcement of a mechanic’s lien.