James Wakefield
When my youngest daughter was about five years old, I recall one morning I gave her some parental “advice” about something. While my “advice” has been long forgotten by all parties concerned, my wife and I will never forget her response. She looked up with some frustration from her breakfast and asked me, “Are you still a lawyer?” I said, “Yes, why do you ask?” “Because,” she responded, “You always tell us stuff we already know.”
That is often the problem with a blog like this one. There is the risk that we are going to provide you information that you are already familiar with. But sometimes people forget. And many people are new to the industry. So at the risk of “telling you stuff you already know….
In larger jobs, contractors and sub-contractors are often faced with the contractual requirement to provide fully executed conditional lien releases before they can receive their progress payments. A contractor recently learned that it is very important to complete those releases carefully.
In that case the contractor was experiencing delays, which it attributed to the owner, in completing the project. Additionally, the contractor alleged impact and efficiency claims. The contractor had complied with contract requirements and provided appropriate notice in a timely fashion during the course of the entire project for the delays and impact claims.
Each month the contractor submitted its billings for its progress payments with the required Conditional Waiver and Release upon Progress Payment fully executed. The release set forth the sums owing on the progress payments. The form itself provided the typical language: “This release covers a progress payment for labor, services, equipment, or material furnished to “customer” through “date.” The release provided a blank portion for the contractor to write exceptions. The contractor did not write anything in any of the blank portions for any of the progress payment releases indicating that it was excepting delay and impact claims.
The Contractor sued the project owner for extended overhead and impact claims. However, the court granted summary judgment on behalf of the owner and dismissed the contractor’s case because each month he waived the claims by not excepting them in his conditional release. Although the case was not a California case and our forms do not always have a place for exceptions, the contractor should always write in exceptions for damages arising from delays or acceleration of the project. Failure to do so could prove very expensive. [Note: after July 1, 2012 the form for the Conditional Waiver and Release upon Progress Payment (Civil Code §8132 will be mandatory and does provide a space for all exceptions.]
