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Victory for Contractors in Supreme Court’s Lien Decision

The Washington State Supreme Court voted unanimously to overturn a lower court decision that would have endangered mechanics lien claims filed by contractors.

In Williams v. Athletic Field Inc. a lower court invalidated a lien filed by a lien service on behalf of the contractor. The contractor’s lien service had used the exact lien form known as the sample or safe harbor form which the law says shall be sufficient to state a valid claim of lien. But the Court of Appeals relying on an esoteric technicality held that the lien was not properly “acknowledged” pursuant to another section of the lien law statutes and was therefore invalid.

AGC filed an amicus brief in the case as it was concerned that hundreds of pending liens could potentially be ruled invalid even though the contractors had in good faith used the safe harbor form. In fact AGC-member Hos Bros. Construction had a lien declared invalid and their case was consolidated with Williams. AGC’s Legal Affairs Committee reviewed the case and Mike Grace Partner with Groff Murphy and Chair of the Committee wrote and argued on behalf of AGC’s amicus brief with the assistance of Daniel Carmalt Of Counsel with Groff Murphy.

The Supreme Court agreed with the contractors’ and AGC’s position saying that a properly filed safe harbor form is indeed sufficient. The court also said that the mechanics lien statute is to be “liberally construed” by the courts in order to provide payment security for claimants.

“Although the Williams decision is important because it confirms that claimants can rely on the sample lien form perhaps the broader significance of the decision is the Court’s clarification of the liberal construction standard” said Grace. “There are a variety of issues and defenses raised in lien disputes to which the liberal construction standard will apply in favor of lien claimants. “

The State Legislature had intentionally maintained that judges should allow some reasonable wiggle room for lien claimants and there are other very substantial Court Rules which have always served to protect claimants against abuse of that discretion. With this decision the Supreme Court has issued a strong warning to lower courts that they feel the same way.

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