Remember that recent post about the politician facing mechanics liens? No, not another mechanics lien against Donald Trump. The article I’m referring to is about Jim Justice, the West Virginia governor. During his campaign, Justice’s counterpart highlighted the fact that he was facing nearly $800,000 in West Virginia lien claims. The liened property included The Greenbrier, a renowned resort owned by Justice and home to the PGA tour’s Greenbrier Classic,. In late July, the claims were settled by paying around 70% of the liens against the West Virginia governor.
West Virginia Governor vs. Liens
As you may recall from the last post on this dispute, liens on the Greenbrier extend from West Virginia’s flood recovery. A little over a year ago, West Virginia faced one of the worst floods in recent memory. This came just weeks before the historic Louisiana floods.
In the wake of the flood, much of Greenbrier county faced severe flood damage. The resort was no exception, and The Greenbrier required extensive repairs. Despite dealing with its own flood issues, The Greenbrier actually opened its doors to over 200 flood victims. Also, prior to his election, West Virginia Governor Jim Justice also founded The Greenbrier’s Neighbors Loving Neighbors campaign to benefit flood victims.
In order to repair the damaged property, including fixing the PGA tournament office on site, extensive projects took place on the grounds. However, when the bills became due, just over $770,000 of the work went unpaid for. According to representatives from The Greenbrier, the dispute arose out of an issue with their insurance provider. Such a problem is certainly common in the construction industry, where insurance companies are constantly looking for loopholes to avoid repaying repair costs.
After a year of arguments and court filings, it appears that the West Virginia governor (well, his companies) have finally reached a settlement agreement. Filed January 25, Justice’s companies have agreed to pay out $551,420 of the $771,268 claimed by lienors. This amount represents just over 70% of the amount owed, which highlights both the power of mechanics liens and the broken nature of construction payment. On one hand, this is great news- without the use of mechanics liens, claimants might have recovered nothing. On the other hand, the idea that nonpayment is even on the table should be troubling. In most other industries, the potential of nonpayment would be utterly unacceptable.
Construction payment and financial risk go hand in hand. This is especially true following a natural disaster or storm damage. The influx of insurance proceeds all too often attracts questionable characters. In the wake of such an incident, it’s important to remain vigilant on both sides of the ball. Contractors must take extra care in abiding by laws and regulations, while property owners and subcontractors must be sure to vet every contractor looking to deal.
In this case, however, the owner argues that the entire dispute arose out of issues with the insurance company. While this could certainly be the case, the West Virginia governor has previously faced liens and his companies currently owe his own state $4.4M in unpaid taxes.