July 2019 - WPDN

It’s time to begin working on your forms for the Preliminary Notice and the Notice of Intention to File Lien. We will continue our discussion of the lien process and how you can expect to be paid after a lien has been filed. Again, these steps cannot be ignored and each one is crucial to the survival of your lien against a project.

Lien Statement. As you will recall, the Notice of Intention to File Lien must be submitted at least twenty (20) days before the lien can be filed. If the parties are unable to reach a resolution during that window, it is time to file the Lien Statement. An example of a Lien Statement can be found at Wyo. Stat. § 29-10-104. Generally, it is a simple form. However, as discussed earlier, it is important to plan ahead. The following deadlines are in place for contractors or subcontractors to file their lien statements with the county:

If acting as the contractor: The Lien Statement must be filed within 150 days of the earlier of: (i) the last day when work was performed or (ii) from the date of substantial completion of the project. Note, the property owner can file a Notice of Substantial Completion of the project. If they do, the 150-day deadline begins to count down. If the owner does file this notice, they must also send you a copy.

If acting as a subcontractor: The Lien Statement must be filed within 120 days of the earlier of: (i) the last day when work was performed or (ii) from the date of substantial completion of the project. Or after the last day work was performed at the direction of the contractor or other person authorized to provide direction on the project.

With the above deadlines in place, it is imperative that you continuously monitor your clients’ payment progression. If you wait three or four months to begin acting on a delinquent account, you may already be too late to file a Lien Statement. Be mindful of the dates, get the Lien Statement filled-out, signed, notarized and filed as soon as possible.

Notice of Filing. Within thirty (30) days of filing the Lien Statement, you must send a Notice of Filing Lien to the record owner of the property.  While not required by the form found in Wyo. Stat. § 29-10-103, we also recommend also submitting a copy of the filed Lien Statement (it tends to give the property owner a “boost” in issuing a payment or initiating a claim against other contractors whom they may have already paid).

Satisfaction of Lien. If the record owner of the property pays the amount due and owing under the Lien Statement, a Satisfaction of Lien (an example is found in Wyo. Stat. § 29-10-106) must be filed with the County Clerk’s Office within thirty (30) days of the payment. In addition, within that same timeframe, the recorded Satisfaction of Lien should be mailed to the record owner of the property. Failing to file the Satisfaction of Lien may subject you to liability under Wyoming Statute § 29-1-314.

Foreclosing Lien. If the record owner of the property does not pay the amount due and owing, it will be necessary to foreclose upon the Lien Statement. Note, this action must be started within 180 days of first filing the Lien statement. After that timeframe, the Lien Statement shall expire and you cannot hold the property for payment.

Foreclosing the Lien Statement will be a lawsuit filed in the applicable District Court for the county where the property is located (we highly recommend obtaining the assistance of an attorney who is experienced in these actions). Be completely certain that the proceedings are filed prior to the expiration of the 180 day period.

So long as all of the prior forms and paperwork are properly complied with, you can expect to be in the lawsuit anywhere from eight (8) months to two (2) years (depending on the issues presented and the availability of the court in your area). Fortunately, Wyoming’s Statutes provide that the prevailing party in a foreclosure action is entitled to recover all costs and expenses reasonably associated with the action, including reasonable attorney fees. If all goes as expected, you will receive an order from the court which grants you the ability to sell the real property at a public auction.

The sale of the property is conducted in a fashion similar to a bank foreclosing upon a mortgage. If the property has other liens or encumbrances against its title, those parties are entitled to notice of the lawsuit and of the sale. Unfortunately, having the right to sell a piece of property does not always mean that you will recover the full amount of your work as the other parties may get a piece of the pie (depending on the type and timing of their encumbrance of the property). Regardless, having the ability to sell the property is a powerful weapon for you to utilize when payments are not received for your hard work.

In conclusion, having a valid and perfected lien is a matter of timing and attention. Spending sufficient time on these forms and proceedings now can result in significant savings and realizations later. Do not be hesitant to contact an attorney to discuss these matters and how you may be able to prepare yourself for when (not if) a client does not pay you. This investment will now help you relax.

WPDN recently represented a client who assumed responsibility for a fatal bus crash which resulted in three deaths and personal injuries to several others.  After resolving the three wrongful death claims and other personal injury claims which arose out of this accident, one passenger on the bus sued WPDN’s client, Powder River Transportation, and its driver, Rhoda Steel, seeking $28 million in compensatory and punitive damages from both Defendants.  WPDN successfully argued the punitive damage claim against the company should be dismissed and, through the effective presentation of evidence at trial, convinced the Plaintiff to dismiss the punitive damage claim against driver Rhoda Steel.  In the end, the jury awarded $310,000, the exact amount suggested by the Defense in the closing argument for compensatory damages.

The case, which took place in Campbell County, was presided over by District Judge Thomas W. Rumpke, and it was tried in front of a jury of 13, eight men and five women. Anna Mitchell, of Aladdin Wyoming, was seeking $28 million in damages for the pain, suffering, emotional distress and loss of quality of life as the result of a 2014 crash on Highway 59, in Wyoming. ($1M per year for the rest of her natural life).

WPDN Attorneys Ryan Schwartz and Pat Murphy agreed that a terrible accident had occurred and that their clients, Powder River Transportation, as well as Ms. Steel, were liable.  They did not agree, however, that $28 million was a realistic sum to be awarded, or that punitive damages were appropriate.  This was what Pat and Ryan argued, and the court and jury agreed.

Punitive damages are, according to Schwartz, “a dangerous aspect of litigation for defendants.  The amount awarded for punitive damages depends on the financial condition of the defendant, and the jury is asked to determine an amount which will send a message to the defendant (and others similarly situated) that the conduct was not acceptable.  It is not based on actual damage suffered by the Plaintiff.”

Schwartz and Murphy successfully argued against the punitive damage claim. Judge Rumpke agreed, and punitive damages against PRTS were dismissed by the Court, leaving only the punitive damage claim against driver Rhoda Steel.  In August of 2015, Ms. Steel had pled guilty to three amended charges of misdemeanor vehicular manslaughter and was sentenced to 30 days in jail.  She felt enormous guilt for her part in the accident and further noted that it was, in fact, she who was at fault.  “There was a very emotional moment during the trial,” Schwartz described, “where the driver of the bus had a complete emotional breakdown while asking the Plaintiff and the jury for forgiveness.”  After this powerful testimony, Plaintiff voluntarily dismissed her punitive damage claim against Ms. Steel.   

The two opposing sides then argued the rest of the case.

The plaintiff’s attorneys alleged that the accident had damaged their client’s vertebrae and spinal cord, necessitating multiple neck surgeries.  Plaintiff also described her “daily PTSD” to the jury.  The defense argued that the Plaintiff had preexisting injuries unrelated to the accident and that her PTSD wasn’t really as severe as Plaintiff suggested.  The jury agreed with the defense.

After deliberating for two hours, the jury returned to the courtroom and awarded the plaintiff $310,000 for damages suffered.

There is never a victory when lives are lost and people are injured, but the judgment rendered by the jury was deemed fair by the client and its representative.

“We had a really wonderful client and client representative,” Ryan Schwartz stated. “They personally knew some of the folks who were hurt in the accident.  It was a very personal case for them.  One of the men that died in the accident was a relative of the owner of the company.”

It was a hard case for all parties involved, but WPDN’s client assumed responsibility and they believe that the $310,000 verdict was a just and fair decision.  The defense strategy of accepting responsibility for the accident – but contesting the nature and extent of Plaintiff’s injuries – was a winning strategy.

Our office can tell when winter time has hit for the construction industry. One week contractors are calling and asking questions about subcontractors, AIA forms or OSHA inspections. The next week, the same contractors call and say they need help collecting bad debts from property owners (let’s face it – when business is good and the weather is nice, no one wants to chase down that lazy client who has not paid their bill). During these calls, we are frequently faced with the following question: “I just realized that I have not been paid on this job – can you help me get a lien on this guy’s property?” Each time, our office counters with our first question: “Did you provide the Preliminary Lien Notice to the owner of the property?” You can guess the answer: “No, but I want paid!”

While you are waiting for the winter blues and lulls to pass, help your legal counsel help you at this time next year by working on updating your lien process now. It is easier than you might think and, in the long-run, following this process may save you time, energy and expenses in dealing with those owners who snub their nose at your hard work. If followed correctly, Wyoming’s lien statutes (Wyo. Stat. § 29-2-101 et seq.) provide you as the contractor or subcontractor with the most effective tool to get paid – the ability to sell the owner’s property (and if you follow the steps in this article, you really only need to perform one task – you can tell us to do the others!). Should Wyoming’s lien statutes not be properly followed, you can expect to be going through at least twelve (12) months of legal proceedings, unpaid invoices and associated fees and expenses.

In Wyoming, before any lien can be filed, there are steps which must be taken. If these steps are not taken, a lien will not be valid, and you risk liability for filing a lien. Thus, it is important to make sure you follow these preliminary steps. These steps are: 1) send a Preliminary Notice; and 2) send a Notice of Intent to File Lien.

Send a Preliminary Notice: A Preliminary Notice must be sent to the owner and/or contractor as follows: (i) If acting as the contractor: Send the written notice to the property owner prior to receiving any payment from the owner, including advances; (ii) If acting as a subcontractor: Send the written notice to the property owner and give a copy to the contractor within thirty (30) days after first providing services or materials to the project.

It is important to note that there is nothing which states that the preliminary notice cannot be provided prior to the work being started. Consequently, we routinely advise our clients to send the preliminary notice to the applicable parties with the initial bid or proposal for the project. If you get into this practice, this is the only item you would need to complete prior to getting your legal counsel involved in a matter. Also, by including the preliminary notice in the initial bid documents, the other contractors, owners and project coordinators must sign your documents (effectively acknowledging your preliminary notice). To include this document is simple – print your bid or proposal and make the preliminary notice form as the very last page of your work documents.

If you are acting as the contractor for a project, you are obligated to provide all subcontractors with the name and address of the record owner of the property and a legal description of the site of the project work.

Send a Notice of Intention to File Lien: The next step is the provision of a Notice of Intention to File Lien. Before filing a lien, a lien claimant must send written notice to the property’s record owner of the intention to file a lien. This provides the parties with a window to resolve their issues prior to the lien being filed. If the person authorizing the work is different than the record owner, it is advisable to send the notice to both parties.

The notice must be sent no later than twenty (20) days prior to filing a lien statement. That is, the notice must be mailed at least twenty (20) days before the lien can be filed. Thus, it is important to plan ahead. For example, if acting as a subcontractor, you have 120 days (as detailed below) to file a lien statement. If this notice is not mailed until day 110, the timeline for filing a lien will have expired prior to the 20 day stay and the lien will not be enforceable.

In the end, as you can tell from above and in our next article, the lien process is not difficult. However, if you are not 100% certain, you should be asking your attorney questions early and often. We recommend not letting more than 30 days pass on an account without dealing with these issues. And, your attorney can only help you if the proper steps are taken up front, and so long as you take the preliminary step of providing your Preliminary Notice, you have anywhere from 3-6 months to deal with the remaining issues. However, if that preliminary step is missed, you have nothing.

In our next article, we will discuss the remaining steps of the lien process. Until then, take time this winter to add the Preliminary Notice Form to your initial documents, and then you can put the rest of the burden on your attorney.

Scott E. Ortiz and David E. Shields defended Dr. Eric Dash and Carbon County Memorial Hospital, in the matter of Elaine Loeffel v. Eric Dash, MD, and Carbon County Memorial Hospital. This matter was tried in Carbon County District Court, during March of 2019, before the Honorable Judge Dawnessa Snyder. This case consisted of four trial days, involving claims of significant lifelong disability, due to podiatry malpractice. Believing she was the victim of a failed toe surgery and abandonment, Ms. Loeffel also claimed that her right great toe could only warrant a 20-30˚ extension.

Because Dr. Dash was unable to testify at trial, Scott Ortiz and David Shields won this trial solely on cross-examination and our own experts’ testimony. DEFENSE VERDICT. (Opposing Counsel Fred Harrison.)