Must Certified Mailing of Mechanic’s Lien Notice be actually received?

By:  Saphronia Young – syoung@syounglaw.com

No.  The statutes requiring notice of the claim of lien to be sserved upon the Owner of the property does not specifically require receipt of the notice.  Rather, RCW 60.04.031(1)(a) and RCW 60.04.091 (the attorney fees provision) state that the lien claimant must mail the notices by certified mail.  At least one court has held that the mailing to the last known address satisfies the requirement, whether or not the Owner actually received the notice.  Baker v. Altmayer, 70 Wn.App. 188, 851 P.2d 1257 (1993).  More recent cases have upheld the rule, for other statutory situations, and have cited to the Baker opinion.  While the lien statutes have been amended since 1993, the language concerning the mailing requirement has not been revisited.  In a Labor & Industries case, the court specifically declined to impose an implied “restricted delivery” requirement upon the Department, and cited to Baker with approval.  The certified mailing requirement is reasonably calculated to ensure that lien claimants will make the effort to comply, and that the Department would make reasonable efforts to comply with mailing materials to injured workers.  See, Duskin v. Carlson, 136 Wn.2d 550 (1998) and Washington Cedar & Supply Co. v. State, 137 Wn.App. 592, 154 P.3d 287 (2007) (concerning notice of a safety violation citation).

Our office advises lien claimants to send the Notices to every possible known address, by certified mail.  One may check the tax assessor, the recorder of deeds, and for corporate owners, the Secretary of State’s website to send notice to the registered agent of the corporation.  That site is:  http://www.secstate.wa.gov.  One may also check with the Department of Revenue, athttp://www.dor.wa.gov, for the proper addresses of non-corporate businesses  (sole proprietors, for example).

This summary is not intended to be legal advice. You should consult an attorney in regard to your particular situation.

Question: Is exterior painting lienable?

Answer by:  Saphronia Young — syoung@syounglaw.com

Yes, I think so.  Whether or not it is commercial or residential, most paint products are guaranteed to last for a period of years.  I believe that painting is done to protect the structure, and not just for an aesthetic appeal.  Because painting actually protects the structure, I would characterize it as a repair and improvement.  Many types of repairs and improvements must be done repeatedly, but if you look at the installation of certain long-term fixtures, you will find case law analyzing the length of the improvement as relevant.

 

You can contrast it to mowing lawns (not an improvement) which must be done every two weeks, washing windows, janitorial services, and other work that cannot conceivably be considered an improvement.

 

Painting requires special tools and equipment, and the investment in those items can be costly, and in fact is one of the reasons that people choose to hire painters rather than do it themselves.  This is especially true for multi-story homes/buildings, where ladders, scaffolding, etc. are required.

 

Moreover, painters obtain licenses, bonds, insurance.  Per RCW 18.27.010, persons who erect scaffolding as part of their work to “repair [or] improve” realty must be licensed.

This summary is not intended to be legal advice. You should consult an attorney in regard to your particular situation.

Mechanic’s Lien Basics

By:  Saphronia Young  — syoung@ameryounglaw.com

Much of our construction practice is devoted to litigating mechanic’s liens.  The right to file a mechanic’s lien arises from RCW 60.04, and there are very specific requirements that must be met in order to “perfect” this unique type of security interest.  No matter how long one has practiced in this area of law, most attorneys find themselves reviewing the relevant statutes in each case, because no two cases that I’ve handled have ever been the same.  One may focus on the issue of who has the right to file a lien; the next case may focus on whether the correct parcel was identified.  Generally, here are some basic lien-filing rules: (1) The lien must be filed within 90 days from the last date of work on the site; (2) The lien must be filed against the same parcel upon which the work was performed; (3) The suit foreclosing the lien must be filed in Superior Court, and it must be filed within eight months from the lien filing date; (4) Any party whose interest is sought to be foreclosed against must be joined in the lawsuit.

Liens are often very straightforward, and the issues are clear.  Many times, the parties will engage in very brief discovery, and the matter is resolved well prior to trial.  Lien litigation CAN be complex, however.  Some cases involving multiple parties, with competing claims, and large amounts of money (and even project completion) can hang on the outcome.

Liens can only be amended after the 90-day filing period if the initial lien that was filed was proper.  Thus, a truly defective lien cannot be revived by filing a perfected amendment.  (See, DKS Construction Management Services v. Real Estate Improvement Company, Division II of the Court of Appeals).  However, not every problem renders a lien “defective,” and the amount of the lien is frequently amended to reflect payments, adjustments, credits, or other issues that do not render the original lien defective.

Liens are valuable as payment enforcement mechanisms because they provide for recovery of reasonable attorney fees, in situations where the underlying contract may not.  However, this sword cuts both ways…the landowner that successfully defeats the claim of lien is entitled to recover attorney fees as well.  SEE, RCW 60.04.185.

Another interesting issue with liens involves when notices are required, and what notices must be given.  Not every party is required to provide pre-lien notice, under RCW 60.04 — persons with direct contracts with the general contractor do not have to provide pre-lien notice, nor do persons with direct contracts with the owner.  Additionally, the lack of notice defense is often not available to the construction professionals themselves, but only to the land owner.  Moreover, in some (but not all) cases, an additional notice is required under RCW 18.27 (the contractor’s licensing statute).  Many construction professionals are unaware of this fairly new law, although it is only required within certain dollar parameters, and for certain types of work.

If you have specific legal questions concerning your situation, please don’t hesitate to call either Saphronia Young, or Rita Amer.  Our office telephone is: (253) 833-3004 and we try to keep every Friday open for appointments.

This summary is not intended to be legal advice. You should consult an attorney in regard to your particular situation.

Bidding on Public Works Projects in Washington State

BASIC INFORMATION ON THE FORMAL BIDDING PROCESS FOR PUBLIC WORKS IN WASHINGTON STATE – RCW 39.04

by Rita F. Amer ramer@ameryounglaw.com

Public works in Washington State have been and are slated to continue receiving funds from the Federal Stimulus Program. Public works include schools, hospitals, fire stations and many other facilities that you may not think of as public institutions. Because of the influx of funding, contractors who have not previously considered bidding for public works contracts may want to consider it now.

Below is a basic introduction to the mechanics of bidding on public works. This explanation is not comprehensive. There are many issues you must also consider including, the payment of prevailing wages and the use of apprentices. Please consult the applicable statutes and administrative regulations regarding these and other issues relevant to contracting for public works.

What is a Bid Invitation?

Step 1: A governmental entity issues a bid invitation. The invitation must be in writing and include all specifications for the project, including such information as bonding requirements and experience requirement for the subs to be employed on the project. These specifications must be complete and detailed so that all bidders are on notice as to the requirements and can file a responsive bid. The governmental entity must publish the invitation in the county’s official newspaper at least 13 days prior to the date the bids are due. Bid specifications will also be posted at the clerk’s office and on the entity’s website.

The invitation must also state the time and place where bids will be opened. The statute requires that the bids be opened in the presence of the bidders or their agents, should they choose to be present. At the time of the opening, the project will be awarded to the lowest responsible bidder. Bidders can, at that the time of the opening, examine the bids and lodge a protest if a bidder believes the project has not been awarded to the lowest responsible bidder.

Recommendation: Do not miss the chance to be present at the bid opening. The owner or the person who prepared the bid should attend. Realistically, if you have to file a bid protest you must be present at the opening because bid protests must be filed within two working days of the opening. RCW 39.04.105. This means that you are very unlikely to meet the deadline if you are not present at the opening.

What is a responsible bidder?

RCW 39.04.350 lays out the basic criteria for a responsible bidder.

Responsible bidders:

(a) At the time of bid submittal, have a certificate of registration in compliance with chapter 18.27 RCW;

(b) Have a current state unified business identifier number;

(c) If applicable, have industrial insurance coverage for the bidder’s employees working in Washington as required in Title 51 RCW; an employment security department number as required in Title 50 RCW; and a state excise tax registration number as required in Title 82 RCW;

(d) Not be disqualified from bidding on any public works contract under RCW 39.06.010 or 39.12.065(3); and

(e) If bidding on a public works project subject to the apprenticeship utilization requirements in RCW 39.04.320, not have been found out of compliance by the Washington state apprenticeship and training council for working apprentices out of ratio, without appropriate supervision, or outside their approved work processes as outlined in their standards of apprenticeship under chapter 49.04 RCW for the one-year period immediately preceding the date of the bid solicitation.

In addition, entities will look at whether the bidder and its subs have a) the ability to fulfill the requirements set out in the bid invitation; b) a reputation for integrity; c) the required experience, and efficiency of the bidder; d) a reputation for meeting deadlines; e) how well the bidder performed on any previous contracts with the entity; f) bidder’s compliance with laws applicable laws; and g) any other facts that will have an impact on the bidders’ ability to fulfill the contractual requirements.

These are only the basic statutory requirements. Any governmental entity can add requirements, which will be delineated in the bid invitation.

Should I seek to pre-qualify as a responsible bidder?

For projects initiated by the Washington State Department of Transportation, the bidder must “pre-qualify.” If the bidder does not satisfy the pre-qualification requirements, its bid will not be considered.

Even though many entities do not require pre-qualification, it is a good idea for two reasons:

(1)    A contract, unless there is an exception, must be awarded to lowest “responsible” bidder. Pre-qualification establishes you as a responsible bidder even before you submit your bid.

(2)    In the event you are not the awarded the contract and bid protest ensues, you may possibly awarded the contract as the next lowest responsible bidder.

(3)    If your bid is accepted but you are not pre-qualified, the qualification process will delay your ability to accept the bids of your subs and will delay the payment for your work.
If a bidder is determined to be not responsible, the agency must provide a written basis for this determination. The bidder then has an opportunity to appeal the “not responsible” determination by “presenting additional information. The agency must consider the additional information before making a final determination regarding the responsibility of the bidder.  If the agency decides after considering the additional information that a the lowest bidder is not responsible, the entity cannot enter into a contract with any other bidder until two days after the not responsible bidder received notification of the final determination.

Remember that your subs must also meet the responsible bidder criteria.

What else must I know about bidding?

A bid must be responsive to the specifications listed in the bid invitation. The bid must be based on the materials and labor reasonably required to fulfill the contract. ALL FORMS in the bid packet must be filled out entirely and included in the bid.  Bids that do not contain all the required forms are non-responsive. Bids that do not list subs with the required credentials are non-responsive. Bids that are significantly lower than the entity’s estimate of the cost or are significantly lower than the next highest bidder may be considered non-responsive.

What kind of bonding will I need?

Other than the bond required of registered contractors ($12,000 for generals and $6,000 for subs), Bid Bonds and Performance Bonds are usually required.

Bid bonds must be included with the responsive bid. By submitting a bid you have made an offer to the entity. If the entity accepts, you are contractually bound to fulfill the contract. If for some reason you cannot enter into the contract after your bid has been accepted, you are liable for breach of contract. The bid bond, which must be for five percent of the bid amount, acts as a remedy for the entity. The entity keeps the bonds amount and does not sue the defaulting bidder.

Performance Bonds are required, except for projects of $35,000 or less where entity can opt instead to retain 50% of the contract price for up to 30 days after the project is complete.

What if I make a mistake on my bid? Do I have any recourse?

You may be able to rescind or correct a bid when you have made a clerical error. If you have made an error in judgment, such as making an error as to cost of materials or labor, you will probably not be able to rescind your bid without forfeiting the amount of your bid bond.

If you have made rescindable error, alert the entity as soon as possible. You must communicate that you made a mistake before your bid has been relied on. To be eligible to rescind or correct your bid you will have to show that  you acted in good faith, without gross negligence, gave reasonably prompt notice of the error, and that you may suffer substantial damages if you are not permitted to rescind or correct the bid.

This summary is not intended to be legal advice. You should consult an attorney in regard to your particular situation.

Triangulation in the Work Place (“gossip”)

By: Saphronia Young

Clients frequently encounter difficult situations at work that originated in triangulated communications…i.e., gossip. Such behavior is toxic, whether at work, in social settings, or even in religious communities. Gossip sometimes serves a purpose. It can reaffirm between the “in” parties the values, roles, traditions and culture that are being promoted and that the “other” person may actually have violated.

However, it frequently does so at the expense of more honest, forthright and compassionate communications around the issues being discussed. If the violator of company rules or protocol is not aware of the violation, they cannot address it. If the violator becomes aware that s/he is accused of violating a policy or protocol only through gossip, the immediate reaction is not likely to be one of honest self-reflection, but more likely will be angry, resentful, and unhappy at having been subjected to treatment as an “outsider.”

Why does this matter legally? Because such feelings can foster legal claims. Recent case law suggests that retaliation claims may be supported by evidence that the claimant was being talked about in the gossip chain. Privacy claims can be supported by allegations that information only a direct supervisor and Human Resources should have known about was being discussed in the gossip channels. Sexual discrimination claims have been supported by evidence that the victim’s private life was subject to scrutiny, where the private life of men in the office (or heterosexuals) was not.

Therefore, good managers will see triangulation for what it is…a dysfunctional way of trying to communicate. That dysfunction can blossom into legal problems. Management bears the responsibility for including “no gossip” policies in HR manuals, for sending out reminders about the “no gossip” policy, and for encouraging mediation or other direct communication between employees who have issues with each other.

This summary is not intended to be legal advice. You should consult an attorney in regard to your particular situation.