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CONSTRUCTION: MOREL CONSTRUCTION COMPANY, INC. V. T.S.P. INC., ET AL.

12.01.2006

Greenebaum is currently handling a construction litigation matter of first impression on appeal with the Kentucky Court of Appeals, Morel Construction Company, Inc. v. T.S.P. Inc., et al., 2005-CA-000319-MR. Morel Construction Company, Inc. was hired to build an addition to the Grant County public school offices. Morel hired T.S.P., Inc. and Equipment Concepts, Inc., the lien claimants, to do the masonry work on the project. A dispute arose over the masonry work and T.S.P. filed a public project mechanics’ lien against the funds which were owed to Morel.

In reviewing the documents relevant to the case as well as the relevant Kentucky lien statutes, Greenebaum lawyers discovered that the liens against the funds owed to Morel were not timely filed. Specifically, Greenebaum lawyers, J. Mark Grundy, Member in our Louisville office, successfully obtained a dismissal of the case by arguing to the Grant Circuit Court that the lien claimants were required not only to file suit on their lien within the 30 day period prescribed by Kentucky’s lien statute, KRS 376.250, but also were required to serve the public authority in charge of the project with the complaint in that same time frame. Since the dismissal of the claim by the Grant Circuit Court, the Kentucky Supreme Court in a separate case, 3D Enterprises and Contracting Corp. v. Metro Sewer Dist., 174 S.W.3d 440 (Ky. 2005), has upheld Greenebaum’s interpretation of KRS 376.250, requiring a lien claimant to both file its complaint and serve the public authority within the 30 day period therein.

The subcontractors appealed the dismissal by the Grant Circuit Court to the Court of Appeals. Greenebaum has raised another issue on appeal, an issue of first impression in Kentucky, whether the Kentucky lien statute, KRS 376.250, requires a lien claimant to file its claim within 30 days from the date the notice of the general contractor’s protest of the lien is mailed by the public authority to the lien claimant or within 30 days from the date the notice is received by the lien claimant. The issues in this case have been fully briefed by the parties and await a decision by the Court of Appeals. The outcome of these issues will be important to any contractor that works on public construction projects.

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