When Was Your Last Date of Work — Are You Sure?
While garnering less attention than the recent amendments to the Pennsylvania Lien Law, recent court decisions on both sides of the Delaware show that the failure to identify the proper date of last work can result in the forfeiture of valuable lien rights. Recently in an unpublished decision, WJV Materials, LLC v. Erin Contracting, Inc., the New Jersey Superior Court upheld the dismissal of a concrete supplier’s construction lien claim because the supplier identified the wrong last date of work.
New Jersey’s Construction Lien Law (New Jersey Lien Law) requires that a claimant commence an action to enforce a construction lien within one year of the date of the last provision of work, services, material, or equipment.
WJV involved a construction lien enforcement action filed by a concrete supplier. In its complaint, the supplier alleged that its last day of work was the day its quality control supervisor performed a final walkthrough to review and approve the concrete installation. However, this walkthrough occurred approximately one month after the supplier last delivered concrete to the project site. The supplier, thinking that it last provided services on the walkthrough date, filed the complaint to enforce the lien within one year after the date of the walkthrough but more than a year after the last delivery of concrete to the site.
The Court disagreed and held that the date the supplier unilaterally inspected the installation of its materials by a subcontractor did not constitute the last day of work under the New Jersey Lien Law. Instead, the Court reasoned that it was the last provision of the concrete, as set forth in the contractual scope of services, that qualified as last work. As a result, the Court found that the supplier’s failure to file a complaint within one year of the last day that the supplier delivered concrete rendered the construction lien claim untimely and unenforceable.
Though unpublished, the Superior Court’s decision in WJV is an important reminder to contractors and suppliers that they must follow lien laws precisely because courts frequently construe the law strictly. In fact, the WJV case in New Jersey is similar to the Pennsylvania case Neelu Enters v. Agarwal, decided in December 2012. The courts’ reasoning in these two cases indicates a theme of strict application of lien laws.
Under the Pennsylvania Mechanics’ Lien Law, a claimant must file a mechanics’ lien claim within six months after completion of the work. Completion of the work is defined in the lien statute as performance of the last of the labor or the last delivery of materials — whichever occurs last.
In Neelu, a contractor was terminated by an owner without being fully paid and then returned to the job months later to perform corrective work. The contractor subsequently filed a lien claim, using the last day of corrective work as the date of completion. The Pennsylvania Superior Court held that the last day of labor under the Pennsylvania Lien Law does not include the last day that corrective work is performed by a contractor because corrective work is not called for in the contract.
In comparing the two cases, Neelu held that subsequent work to compensate for defective performance does not extend the date of completion, as it was not called for in the contract, and was done without charge to the owner. WJV similarly held that the walk-through inspection did not constitute last work to extend the date of completion because the contract did not include any inspection after the final delivery date.
The reasoning in these cases will likely apply to a wide array of work performed on projects in both Pennsylvania and New Jersey. Therefore, parties should pay close attention to what type of work they are performing and the definitions and deadlines in the lien laws. Best practices suggest parties take note of exactly what scope of work is required under the contract, and avoid relying upon the performance of work not specified under the contract. In addition, parties should not rely on corrective work, warranty work, or call-back work where no billings will be generated as “last work” for lien purposes. Reliance upon more conservative last work dates will better protect a party’s rights by ensuring timely notice and assertion of mechanics’ lien claims.
