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Home>Levelset Community>Legal Help>We requested final billings and change orders from all of our vendors and subs on a construction project. We then paid all of the billings and change orders and we requested unconditionals with 0 balance owed from all of the vendors and subs after the checks were cleared. We received all the signed uncondiotionals with 0 balance owed and then 3 days later we receive a huge billing form a sub even though they sent us a 0 balance owed signed uncondtional. The job is complete and we submitted all the unconditionals to the owner/landlord so we could get paid in full. we were paid. Now this one sub wants to be paid AFTER the fact. What are the legal terms here?

We requested final billings and change orders from all of our vendors and subs on a construction project. We then paid all of the billings and change orders and we requested unconditionals with 0 balance owed from all of the vendors and subs after the checks were cleared. We received all the signed uncondiotionals with 0 balance owed and then 3 days later we receive a huge billing form a sub even though they sent us a 0 balance owed signed uncondtional. The job is complete and we submitted all the unconditionals to the owner/landlord so we could get paid in full. we were paid. Now this one sub wants to be paid AFTER the fact. What are the legal terms here?

CaliforniaPayment Disputes

As stated in the question, we have a sub who was paid in full and he submitted his signed unconditional with a zero balance and then 3 days after that, he sent a bill for $30,000. There was no "contract", it was a time and material sub. We requested all subs and vendors to submit final bill and change orders. Then we paid all the submissions and requested signed, zero balance unconditional's after the checks cleared, in order for us to submit our package of unconditional's to the client landlord in order for us to get paid. We felt bad for him as he has been a long time sub and recently had a stroke so we paid half to him out of our own profit as the landlord was not going to give a dime towards this bill and stated he had a signed unconditional zero balance from this sub. Now this sub wants to sue us for the remaining $15,000. The last 4 projects he has worked on all had major issues that has cost us thousands to fix and feel if anyone should be sued it should be this sub. What does the law state?

1 reply

Aug 9, 2018
I'm sorry to hear about that. I'll assume you were referring to an Unconditional Waiver and Release on Final Payment ("final unconditional waiver") since waivers we being exchanged to close out the job. Anyway, the language on California final unconditional waivers is quite clear. Under § 8138 of the California Civil Code, this notice must contain the language: "THIS DOCUMENT WAIVES AND RELEASES LIEN, STOP PAYMENT NOTICE, AND PAYMENT BOND RIGHTS UNCONDITIONALLY AND STATES THAT YOU HAVE BEEN PAID FOR GIVING UP THOSE RIGHTS. THIS DOCUMENT IS ENFORCEABLE AGAINST YOU IF YOU SIGN IT, EVEN IF YOU HAVE NOT BEEN PAID. IF YOU HAVE NOT BEEN PAID, USE A CONDITIONAL WAIVER AND RELEASE FORM." Further, the waiver continues to discuss that lien, bond, and stop payment rights are waived by the document, and the waiver concludes with "The Claimant has been paid in full." When a claimant has submitted a final unconditional waiver which clearly shows no sums are left owed on the job - their rights to secure payment via lien, bond claim, or stop notice is quite clearly waived. Final unconditional waivers waive lien rights regardless of whether payment had been made or if it's ever made. But beyond that - a lien waiver like this is also a signed, written statement that all payments have been made. While a sub could certainly still bring legal action for alleged nonpayment, such a statement should go a long way to showing that the claimant does not have a valid claim for payment. When this comes after requesting final bills and change orders, if the alleged unpaid amounts weren't mentioned, it would seem to provide even more firepower proving that payments aren't owed. Then again, there's an argument that making partial payment towards an alleged debt would thereby acknowledge that a debt is owed, which might seem to support the claim (depending on the circumstances, communications, and documentation surrounding that payment). Ultimately, since a $15,000 payment claim might be on the horizon, it might be a good idea to reach out to a local construction attorney and provide all of the relevant documentation and information for their review - they should be able to advise you on how to proceed. This is especially true if the claimant takes steps to escalate the dispute.
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