Our client was a large construction company.
Our client contracted to provide infrastructure improvements for more than 100 acres where a subdivision would be built. Improvements included grading the land, installing water and sewer lines, paving, curbs, gutters and sidewalks.
A dispute erupted between the developer and contractor over what work was included in the contract. As a result, the developer stopped paying our client. At the time, the contractor’s outstanding receivable from the developer was approaching $3 million dollars.
Our client wanted to lien the property and pursue recovery, but the property had been subdivided into 350 lots. Even though it was treated as one project by the contractor, the work needed to be apportioned and liens stated specifically as to each lot.
It appeared to the contractor that a lien service would need to prepare and record 350 separate liens. That didn’t even include the substantial task of trying to calculate how much work should be apportioned to each lot.
Because the developer wasn’t paying our client, resources were limited and the prospect of paying for preparation and recording of so many separate liens was daunting.
We worked with the client to develop a model to apportion the work among the 350 lots. Then, we prepared a chart listing the owners, lien amounts and lots. This allowed us to efficiently prepare and record a single lien with the chart as an exhibit.
After recording the lien, some lot owners turned over the claims to their title insurers. One of the insurers hired counsel to examine the lien. Their attorney concluded it was in perfect order, and the insurer began paying claims.