Category: Lien

Building the New West

Oct 31 2008

Bovis Strikes Back - Nevada Supreme Court Takes Mulligan On Pay-if-Paid

In June, the Nevada Supreme Court released its opinion in Bovis v. Bullock, 124 Nev. Adv. Op. 39, 185 P.3d 1055 (June 2008). See this blog post on the case for details of the facts. In the Court's June opinion, it held that pay-if-pay provisions in subcontract agreements violate Nevada public policy. Although the subcontract at issue was entered into before the 2001 amendments to NRS Chapter 624, the Court declared in Footnote 33 that the prompt payment sections included in the 2001 amendments render pay-if-paid provisions unenforceable for contracts entered into after the amendments.

Now, the Supreme Cout has withdrawan its June opinion and replaced it with Bovis v. Bullock, 124 Nev. Adv. Op. 92 (Oct. 30, 2008).

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Oct 21 2008

Is a Lien Claimant Entitled to Post-Judgment Attorney Fees?

In Carl B. Barney v. Mt. Rose Heating & Air Conditioning, 124 Nev. Adv. Op. 71 (Sept. 18, 2008), the Nevada Supreme Court addressed, among other things: (1) whether NRS 108.237(1), which allows for recovery of attorney’s fees in a mechanic’s lien action, covers all fees incurred to enforce the mechanic’s lien, including those post-judgment attorney fees incidental to the lien’s enforcement through foreclosure; and (2) whether the district court erred in denying a post-judgment motion to enter satisfaction of the judgment because not all of the attorney fees were paid. Carl B. Barney (“Barney”) contracted with Reno Construction, Inc. (“RCI”) to renovate his house. RCI subcontracted with Mt. Rose Heating & Air Conditioning (“Mt. Rose”) to provide equipment and services as part of the renovations. Barney refused to pay for the work, which he determined was defective, and RCI and Mt. Rose filed mechanic’s liens against the property. Both RCI and Mt. Rose obtained judgments and decrees of foreclosure against Barney. Mt. Rose, prior to any foreclosure sale, garnished funds Barney held in a bank, and attempted to execute upon Barney’s personal property. Barney filed and won a motion to exempt his bank account from execution and to quash the garnishment. Mt. Rose sought supplemental attorney fees and costs (“First Mt. Rose Motion”); the court granted their request. Later, Mt. Rose filed a supplemental motion (“Second Mt. Rose Motion”), seeking fees for post-judgment matters, including the judgment’s execution, the garnishment, and the release of Barney’s bank funds.

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Posted by Jeffrey Steffen at 12:31 PM | Email Post | 0 comments
Categories: Construction | Lien | Nevada

Jun 28 2008

Nevada Supreme Court Decides Enforceability of Contractual Lien Waiver Provisions

The Nevada Supreme Court recently addressed two issues of concern to contractors and owners: (1) the enforceability of lien waiver provisions, and (2) the enforceability of pay-if-paid provisions. Lehrer McGovern Bovis, Inc. v. Bullock Insulation, Inc., 124 Nev. Adv. Op. 39 (June 2008), is the latest saga from the Venetian mechanics' lien lawsuits. The case involved the owner and general contractor attempting to foil a subcontractor's lien foreclosure and breach of contract claims by asserting a lien waiver provision and a pay-if-paid provision in the subcontract agreement. The Court declared that Nevada's public policy "favor[s] contractors' rights to secured payment for labor, materials, and equipment furnished." Based on this policy, the Court struck down both the lien waiver provision and the pay-if-paid provision. The subcontract agreement at issue predated the legislative amendments to the mechanics' lien statutes, NRS Chapter 108, requiring specific forms for lien waivers and predated the amendments to NRS Chapter 624, which created Nevada's prompt payment statutes. Although not at issue, the Court thought it necessary to state, without explanation or analysis in what will become known as the infamous Footnote 33, that the amendments to Chapter 624 creating the prompt pay statutes, "make pay-if-paid provisions entered into subsequent to the Legislature's amendments unenforceable."

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