Your Date of Last Furnishing of Labor Might Be Earlier Than You Think

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Meeting lien and bond claim filing deadlines can sometimes feel like a race against the clock.  For claimants who provide on-site labor for a construction project, properly identifying the date such labor was last furnished is a critical component to winning that race.

Wednesday WisdomAn unpublished Fourth Circuit Court of Appeals decision illustrates the point.  In U.S. ex rel. Mavis Mechanical Services, Inc. v. Hanover Ins. Co., 182 F.3d 910 (4th Cir. 1999), a subcontractor on a federal construction project tried to establish compliance with the Miller Act’s one-year filing deadline by arguing it furnished labor on two occasions within a year of its lawsuit.  The first instance involved attendance at a coordination meeting; the second involved mobilization to the site to perform certain valve installation work it had yet to complete, but refusal by the sub to actually perform the work when the GC refused to make payment on alleged past due amounts.  On these facts, the Fourth Circuit upheld the district court’s determination that neither site visit qualified as “labor” for the purposes of the Miller Act’s one-year filing deadline.  That holding doomed the sub’s Miller Act claim to dismissal.

The moral of the story?

A conservative approach to identifying your date of last furnishing of labor, one that focuses on the following tips, is best:

  • Use the date your efforts actually added new value to the real property in question.
  • Don’t rely on site mobilization or demobilization alone, as neither activity adds value to the real property.
  • Don’t rely on the date warranty or other corrective work was performed, as these activities don’t add new value to the property.
  • Shy away from punch list work if possible, as the question of whether that work represents new value or corrective work can get sticky, and “sticky” means expensive litigation.
  • Maintain impeccable documents showing what your people were doing on-site and when.
  • Contact an experienced construction lawyer to make sure your lien and bond rights are timely preserved.

 

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Filed under Lien Law, Payment Bonds

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