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Question about a supplier lien

GeorgiaLien Releases

i have a question regarding a suppliers lien in georgia. we were the plumbing sub on a job that we left in August. We had not received payment for June, July or August pay apps, and had subsequently not been able to pay our supplier (approx $100K) for material and fixtures on the job purchased during those months. We DID pay them for material purchased during the months that we were paid. The GC expressed an intent to utilize the unpaid contract balance and retainage (per the contract) to pay the supplier and complete the job. The supplier filed a lien and settled with the GC for less than the balance owed, leaving a balance of $9K, for which they are now pursuing us. Can the supplier pursue us for this balance, which they negotiated for, or were their rights extinguished when they accepted a lower payment?

2 replies

Nov 3, 2020

Accepting payment on the lien for a reduced amount typically does not involve releasing rights to collect the balance against the customer. I doubt the GC bargained for a release that protects you in that way. It's not his problem.

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Nov 3, 2020

That's a good question. The answer will likely depend in parge part upon the documents that were signed by the supplier when it settled the claim with the GC. Look for language reserving the supplier's right to pursue the balance. Also look at the language in the lien release. Does it cover everything? I interpret from your explanation that the GC did not pay you and as a result you were unable to pay the supplier, correct? If so, why did the GC not pay you? If the GC does not have a valid defense, you can pursue a claim against the GC. In fact, you can file a lien if you're still within the 90-day lien period. However, if the GC paid you for the materials in question or if the GC has a valid defense for not paying you, you may be liable.  

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