Menu
Home>Levelset Community>Legal Help>What is the process, of releasing a Stop Payment, in the state of California?

What is the process, of releasing a Stop Payment, in the state of California?

CaliforniaPay When Paid

We filed a Stop Payment per the previous correspondence (to Ask an Expert for Free) below: "It is a “State Construction” project in Big Bear, CA. Preliminary 20 Day Notice was filed 7/3/2018. Our subcontract with GC is $890K. We’ve only received 2 payments for $274K total to date and project will be completed this week. We have a copy of GC’s Payment Bond (for $8.5M). Can or should we file a Stop Payment Notice and/or only pursue a bond claim? Are we NOT allowed to do a Stop Payment Notice IF we are able to do a bond claim? Is there a reason we would NOT want to do both? Please advise. Thank you!" (end correspondence) No we received a credit card payment, partial payment, and a promise to pay the remainder, , when funds are released, from the contractor. When the payment clears our bank, we will then release the Stop Payment. Partial payment given: A) $26,055.00 for the remainder of the July Payment B) $33,945.00 toward September progress payment C) $ 1,800.00 3% CC fee D) TOTAL PAYMENT = $61,800.00 Contractor (MSCMG) promise: 1. MSCMG will make a Credit Card payment in the amount of $ 60,000 to pay for the following A) $26,055.00 for the remainder of July payment. Please keep in mind that the short pay on July 2019 pay application was for the change orders which was not approved by the District's Bard and MSCMG was not able to bill for the same. B) $33,945.00 toward September progress payment. 2. After the above amount is paid the card is charged, A Thru Z will release their "Stop Notice", so the County can release the previously submitted progress pay request by MSCMG to their accounting for processing. 3. After receipt of the payment from the County, MSCMG will pay the remainder balance of the A thru Z September billing in the amount of $256,808.10 to A thru Z. (end contractor promise) Balance due on bills: $256,808.10 Balance due on Retention: $59,772.98 Your advice is appreciated. Thank you.

1 reply

Feb 17, 2020
California civil code § 8128 covers the release of stop payment notices. Under § 8128(a), a claimant can either release their stop payment notice in its entirety, or the claimant can reduce the amount of the stop notice. This is done in writing and in a form other than the ordinary CA form for lien releases - but there isn't any specific statutory form. Under § 8128(b), the release must identify whether it's a reduction or full release of the stop notice. If it's just a reduction, then the form must identify what amounts should remain withheld after the reduction. So, if a claimant wants to reduce or release their stop notice claim, they can generally draw up the documentation themselves. Then, the release can be sent to whichever parties were sent the original stop payment notice. Alternatively, a claimant may be able to simply provide their signed release to their customer. While the release will need to be sent to the parties the original stop payment notice was sent to (i.e. the public agency in charge of the project, the GC, other interested parties), the customer should be able to make sure it gets there. For help releasing a stop payment notice, online services like Levelset could be helpful. Or, consulting a local California construction attorney might be an option as well. Plus, Levelset also offers a free, downloadable stop notice release template.
2 people found this helpful
Helpful