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Collecting funds from general contractors

I am a distributor that supplied material for a commercial building in Chicago Illinois. The general contractor that ordered the material has a balance due of $20,000. He has stated that he will not pay. I contacted the owners to notify them of this situation. It appears that the general contractor had falsified lien waivers stating that i have been paid in full, he even had them notarized. These waivers were given to the owner and title company. He collected checks for the waiver amounts but only paid a small portion of funds collected to me. What is my next step to collect. I plan on sending lien rights notification to the building owners but what do i send to the general contractor? The building owners want him prosecuted. thanks

1 reply

Aug 6, 2020

First of all, it's probably useful that you and the building owners are on the same team here. Both you and the owners should have legal claims against the contractor for misusing the project funds, and you may have other claims available like breach of contract, fraud, a claim under the IL prompt payment laws, and more. Filing a consumer complaint with the attorney general's office might be useful, too. Unfortunately, even if your GC falsified lien waivers, there's a chance lien rights are lost at this point. In Illinois, if the GC provides the owner with a sworn statement that all parties have been paid, then the owner will no longer be liable for subcontractor lien claims after fully paying the GC. And, Illinois courts have sided with owners before under somewhat similar circumstances: Illinois Court Gives “Unpaid Balance” Rules Liberal Treatment To Favor Owners. Of course, if the owner had received notice of the outstanding debt before making payment to the GC, things might be different. Still, considering the situation falls into a somewhat gray area with Illinois lien law, threatening to file a lien by sending a Notice of Intent to Lien might be productive. What's more, threatening legal action against the GC with a payment demand letter might be valuable, too. And, as mentioned above, a variety of legal claims (both civil and criminal) should be on the table. Though, for the best run down of what claims might be most successful or appropriate, it'd be wise to consult with a local Illinois construction lawyer. If you decide to go that route, this page should help: Find a Illinois Construction Lawyer. They can also review the fraudulent documentation to best determine whether it will block a potential lien claim.

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