Periodic Lien Waiver and Release Barred Subsequent Claim

Monthly lien waivers are a common element of the payment process for a construction project. Often, the lien waiver form includes acknowledgment of payment in full through a date certain, and sometimes the form includes release language. A New York court has reminded a subcontractor that these terms have meaning and can bar a subsequent request for additional money.

The subcontractor in this case had signed a monthly lien waiver form that included the following language:

the undersigned acknowledges and agrees that it will have received payment in full, less retainage withheld, for all services and work performed and all materials and equipment furnished or stored in connection with the construction of the Project through the Period Ending Date, and hereby now and forever waives, releases and quitclaims, with respect to the Project, all claims and rights to claim against the Contractor, the Owner, the Lessor, the Lender or the land upon which, or the improvements within which, the Project is situated, except for retainage withheld . . . (emphasis added)

The relationship between GC and sub had obviously soured, and when the GC issued a notice of default, the sub fired off change orders for extra work it claimed to have performed. Whether or not it had actually performed extra work (a point in dispute), the court was convinced that the sub’s claims would not survive the acknowledgment and release the sub had provided on a monthly basis. Thus, the court granted the GC’s motion to dismiss the sub’s claims.

The lesson? Pay attention to monthly lien waiver forms. And if there are pending disputes, don’t sign a certificate saying there aren’t any such disputes. The case is Metro Woodworking Inc. v Hunter Roberts Constr. Group, LLC, 2020 N.Y. Misc. LEXIS 409 (Jan. 23, 2020) (subscription required).