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Are my rights protected if my customer declined delivery?

CaliforniaRight to Lien

We delivered material for a COD customer. They paid half over the phone after delivery, their credit card could not cover the entire amount in one day. They ordered parts incorrectly and reordered replacements. The delivery day for the replacements parts we asked payment on all materials delivered prior to that date. They refused, saying we had no right and that they had already paid us, also stating that we should be responsible for the incorrect parts, although it is documented that they ordered incorrectly. We said our hands were tied. Later we stated that we would be happy to deliver the material as long as the material that had already been taken by the customer was paid and we could sort out payment for the replacement delivery on a later date. They refused now saying that we never got approval for the order and therefore could not charge them for it or deliver it. Those parts are still in my shop and were custom made for them, are they protected?

1 reply

May 13, 2019
That's a good question, and I'll assume you're referring to the protection of mechanics lien rights. Though, it's worth noting that when a debt is owed and unpaid, regardless of whether lien rights are available, there are always other legal remedies (such as an action for breach of contract) that might help to recover payment. When specially fabricated materials are being provided, the availability of mechanics lien rights can be a little trickier than some other trades. Generally, where materials are specially fabricated and are incorporated into an improvement, lien rights will arise due to material being furnished and actually being contributing to the permanent improvement of the property. But, when material is fabricated for a project but not actually delivered or incorporated into the project, things become less clear - though, generally, that will mean lien rights have not arisen in the project property. This is especially frustrating when those materials aren't able to be resold or repurposed since they've been custom made for the job. Looking to California, specifically, the lien statute does not specifically discuss materials that have been specially fabricated. So, the safest assumption may be that lien rights won't arise unless materials are actually furnished to the improvement. On the other hand, § 8400-8404 of the California Civil Code states that when "work" will be lienable when it is authorized by the owner or their contractor, a sub, an architect, a project manager, or someone else on a project. Though, it may be hard to argue that materials fabricated but not actually furnished or incorporated would fall under the definition for "work" under the code. Still, there may be room to argue that it does. Also, keep in mind that regardless of whether a lien could or would be filed, merely threatening a mechanics lien is often a strong payment recovery tool. By sending a document like a Notice of Intent to Lien, a claimant can inform their customer, the property owner, the prime contractor, and really anyone else on the project that a lien will be filed if their debt remains unpaid. Due to the strength of a mechanics lien, merely leveraging the potential for a lien filing might grease the wheels and lead to payment. Further, as mentioned previously, there are always other options for recovery when a mechanics lien is not available. For more information on California mechanics liens and their availability, this resource should be helpful: California Lien and Notice Overview and the California Lien Statutes.
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