Recent New Hampshire cases on mechanics liens limits subcontractors remedies. Two recent cases have substantially narrowed a subcontractor’s ability to recover from a property owner for the labor and materials they provide on a construction project.
In the past, subcontractors who were unable to obtain payment from a general contractor or obtain a mechanics lien have usually asserted some non-contractual or quasi- contractual theories of relief such as unjust enrichment or quantum meruit to recover from a property owner. Two recent cases have substantially narrowed a subcontractor’s ability to recover from a property owner for the labor and materials they provide on a construction project under these theories.
In Axenics v. Turner Construction Co., the New Hampshire Supreme Court basically adopted a rule that a subcontractor cannot recover against a property owner upon some implied promise to pay arising from the owner’s receipt and acceptance of the benefit and labor furnished. The court did leave the door open for special circumstances which would justify the requiring the owner to pay, such as when the owner accepts benefits rendered under such circumstances as reasonably notify the owner that the one performing such services expect the owner to compensate the subcontractor.
In Mangiardi Brothers Trucking, Inc. V. Dewey Enviromental, LLC, the Federal District court of New Hampshire limited what “special circumstances” meet the Axenics’ test. In Mangiardi, a third tier subcontractor agreed to remove hazardous waste from a job site in exchange for a second tier subcontractors promise to pay for the removal. The second tier subcontractor failed to pay for the removal services and the third tier subcontactor sued a number of defendants, including the property owners. The defendants relied on the Axenics’ ruling and Mangiardi argued special circumstances existed because (1) it believed the subcontractor was going out of business and contemplating bankruptcy and (2) the property owner may not have paid the general contractor in full for the removal of the hazardous waste. The court found these situations did not meet the definition of “special circumstances” because the third tier subcontractor did not allege any circumstances that would reasonably notify the property owner that it expected the property owner to pay its invoices if the other contractors did not. The court went on to find that neither another contractors potential bankruptcy nor the possibility that a property owner has not paid another contractor justify a claim against the property owner under quasi-contract theories.
These cases make it even more important to use your statutory rights under the mechanics lien statute to protect your rights.
McGrath Law Firm, PA attorneys often handle such matters successfully. You can meet with one of our experienced attorneys at McGrath Law Firm and obtain an evaluation as how these decisions may affect your rights to recover for the labor and materials you provided on a construction project.
To learn more about how mechanics lien statutes can be used to protect your business or learn more about your legal rights, contact an experienced and results oriented attorney at the McGrath Law Firm, PA. To make an appointment, call (603) 224-7111 or (800) 283-1380, or visit www.mcgrathlawfirm.com.