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Legal Alert - The Status of Lien Waivers in Utah Remains Cloudy

01/16/2015

by Mark O. Morris

On December 19, 2014, the Utah Supreme Court issued its opinion in Lane Myers Construction, LLC v. National City Bank, et al. 2014 UT 58 (UT 2014). In this case, a total of nine Utah jurists considered the question of whether a general contractor’s signing of a “final” draw request containing averments that no liens or claims could attach to the property was an effective lien waiver under Utah law. The trial court judge determined that it was. The three members of the panel on the Utah Court of Appeals considering the question held that it was not. Three members of the Utah Supreme Court reversed the Court of Appeals decision by ruling that the final draw request at issue could be a lien waiver under Utah law, but that factual issues surrounding the intent of the general contractor precluded summary judgment. Finally, two members of the Utah Supreme Court believed that as a matter of law, the final draw request was not a lien waiver under Utah law. As much as one hopes that the Lane Myers decision would clarify Utah Law on lien waivers, the fact that so many Utah jurists have disagreed on the subject only throws more doubt upon when, and to what extent, an owner or a financial institution may rely upon a “lien waiver” before dispersing construction funds.

[Read the full alert.]