Below is a link to a webinar I did with SunRay Construction Solutions, LLC on using lien waivers in Arizona. I cover all four of Arizona’s statutory lien waivers and then discuss some general lien waiver do’s and don’ts. As I try to make clear in the webinar, be careful when signing lien waivers!
Arizona Preliminary 20-Day Notices, Mechanics’ Liens, and Bond Claims
It has been a while since my last blog post. But that does not mean that I haven’t been busy! Among other things, I have conducted a series of webinars with the good folks at SunRay Construction Solutions, LLC that have subsequently been uploaded to YouTube.
Below is one of the earlier installments in this series of webinars, which generally addresses preliminary twenty day notices, mechanics’ liens, and bond claims in Arizona.
Contractors’ Right to Recover: Licensed Work, Nothing More, Nothing Less
The plain language of Arizona Revised Statute § 32-1153 has long prohibited unlicensed contractors from filing lawsuits to collect payment for unlicensed work. The statute “conditions…claim[s] for unpaid work on licensure ‘when the contract sued upon was entered into and when the alleged cause of action arose.'” Crowe v. Hickman’s Egg Ranch, Inc., 202 Ariz. 113, 115, 41 P.3d 651, 653 (App. 2002).
But what happens when a licensed contractor performs both work for which he is licensed and work for which he is not licensed on a construction project? Is the contractor precluded as a matter of law from seeking to recover for the work performed pursuant to his license because he performed the unlicensed work? The Arizona Court of Appeals recently addressed this issue in Chavira v. Armor Designs of Delaware, Inc., 356 P.3d 334 (App. 2015).
In Chivara, the court ultimately held that, pursuant to § 32-1153, the contractor could sue for the value of the work performed pursuant to his license. 356 P.3d at 336-37. The court found support for its decision in Shultz v. Lujan, 948 P.2d 558 (Hawaii Ct. App. 1997), where the Hawaii Court of Appeals addressed the same issue in connection with a statute similar to § 32-1153. Indeed, the Arizona Court of Appeals quoted the concise holding in Lujan, which reads as follows:
If a person contracts to perform the work of a contractor and, at the time of contracting, the person is not licensed to do any of the work, then that person cannot bring a civil action to recover payment for any of the work he has done; however, if the person, at the time of contracting, is licensed to perform some of the work contracted for, then that person can bring a civil action to recover payment for the licensed work he has done, while payment for the unlicensed work remains unrecoverable.