Monthly Archives: December 2015

As many contractors and subcontractors know, despite high quality work, sometimes payment is hard to come by. No business can last if it isn’t compensated for its work. Contractors and sub-contractors are well aware of the general availability of the mechanic’s lien statute (Ind. Code sec 32-28-3 et seq.) as a means of obtaining payment from a recalcitrant client. For the uninitiated, the mechanic’s lien statute generally provides that when property is improved through the application of labor or services, then the party providing such labor or services may place a lien on the property to compel payment. (Ind. Code sec 32-28-3-1). Importantly, the mechanic’s lien statute provides that the lienholder shall also recover attorney’s fees and the cost of collection. See Clark v. Hunter, 861 N.E.2d 1202, 1209 (Ind. Ct. App. 2007) (award of reasonable attorney’s fees is mandatory). The recovery of attorney’s fees is important among other reasons because (1) construction disputes can be fact intensive and therefore expensive, and (2) the owner often has the “deep pockets” and can wear down the unpaid lienholder. Often, a payment dispute arises between the general contractor and a sub-contractor, not the property owner and general contractor. An owner of property can avoid liability for attorney fees by paying the general contractor the full amount due under the contract. (Ind. Code sec. 32-28-3-14(b)). Recently, the Indiana Supreme Court considered a case in which the owner paid its general, the general did not pay its subcontractors, and the subcontractors filed contract claims against the general and a mechanic’s…