Under our current mechanic’s lien statute, a construction lender who records its mortgage prior to the recording of a mechanic’s lien takes priority over the mechanic’s lien. There are three exceptions to this rule. The first exception is in the case of the construction of houses. The second is in the construction of improvements auxiliary to houses. The third is constructing property which is property controlled by a utility. (more…)
Construction Law Blog
Court Clarifies Priorities Between Mechanic’s Lienholders and Construction Lenders on Subdivision Improvements
Tuesday, January 3rd, 2012No More Hand-Held Devices for Commercial Drivers
Tuesday, December 27th, 2011Commercial drivers are banned from driving while using a hand-held mobile phone beginning on January 3, 2012. The rule does not restrict the use of hands-free devices, or two-way or CB radio services. Texting by commercial drivers has been prohibited since October 27, 2010.
This new law prohibits CMV drivers (operating vehicles of 10,001 pounds or more) from holding or dialing a mobile phone while in the vehicle. Using the hand-held device while the vehicle is not moving is also a violation. For example, drivers should be instructed not to talk with a hand-held device while stopped in traffic or at a traffic light.
Violations of this law will result in stiff penalties against both drivers and their employers. Drivers can be sanctioned up to $2,750 for each offense, and multiple offenses can result in disqualification from operating a CMV. Employers can be fined up to $11,000 per offense even if the employer has a policy against the use of hands-free devices.
Employers should immediately notify drivers and implement written policies prohibiting the use of hand-held devices. It is also a good time to remind drivers that texting is now banned. If you have questions about the new law, please contact us.
Local Bidder Beware!
Thursday, December 1st, 2011The high bidder for a construction project for the Tippecanoe County Library filed suit against the library for awarding the project to the low bidder. According to the lawsuit, the high bidder was
the only contractor who could and did claim the new Indiana local preference. The lawsuit was filed by J. R. Kelly which is located in the Tippecanoe County. The project was awarded to Mattcon General Contractors which is principally located inIndianapolis.
In its claim for the local preference, J. R. Kelly stated that in 2010, it had paid over $2,000,000 to employees who were residents of Tippecanoe County and adjacent counties, employed 81 employees who were residents of Tippecanoe County and adjacent counties, and purchased over $600,000 in construction tools and equipment from local suppliers.
The low bidder was Mattcon with a bid of $630,000. J. R. Kelly’s bid was the third lowest at $686,000. The bid was awarded to Mattcon at a public hearing. J. R. Kelly objected to the bid award, advised the library that the new Indiana local preference law should have mandated the contract be awarded to J. R. Kelly, and then filed suit.
The Tippecanoe County Judge found in favor of Mattcon, affirming the bid award to Mattcon. In its order, the Judge stated that applying the “plain meaning” local preference statute would produce “an absurdity.” The court went on to say that interpreting the statute as written “could open the door for abuse of the rule later on” because public agencies might be “forced to either award contracts to contractors with bids indefinitely higher,” or be “faced with the prospect of rejecting all bids and starting the entire process over.”
The order was issued on November 2, 2011. J. R. Kelly has an opportunity to appeal the decision, but as of this posting, no appeal had been filed. Until a decision is issued by the Indiana Court of Appeals or the Indiana Supreme Court, this decision will not be binding upon other judges in their interpretation of the same statute.
If you have questions about the Indiana local preference law or this case, please contact a member of the Bamberger Construction Team.
Title Insurance Coverage for Mechanic’s Liens
Tuesday, November 1st, 2011Contractors, subcontractors, owners, lenders and title companies often become intertwined when a party seeks to purchase title insurance coverage for mechanic’s liens. Since mechanic’s liens for most commercial projects may be recorded in Indiana up to 90 days after the completion of work, title insurance commitments and policies have a general exception for “unfiled mechanic’s or materialmen’s liens.” However, in many situations, a title company will agree to delete this exception and thereby insure the owner or lender against such risks.
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Construction Mediation – Even When You Don’t Have To
Tuesday, October 11th, 2011The construction industry is very familiar with arbitration. It can be a quick and relatively inexpensive way to resolve a dispute – argue a point, get a decision, deal with it and move on. [I should probably note, as the industry is aware, though, that it is not always quick, not always inexpensive, and the absence of an appeal can be devastating if you get an arbitrator who just doesn’t get your point or the law.] Some contracts are even adding mediation as a component of the contract, requiring mediation before arbitration. (more…)
Low Bidders Beware
Wednesday, September 21st, 2011The high bidder for a construction project for the Tippecanoe County Library filed suit against the library for awarding the project to the low bidder. According to the lawsuit, the high bidder was the only contractor who could and did claim the new Indiana local preference. (more…)
Hunt Construction: Lucas Oil Stadium Jobsite Injury
Monday, September 19th, 2011Hunt Construction was hired as the construction manager for the Lucas Oil Stadium project in Indianapolis. Baker Concrete was a contractor on the project. Baker and Hunt did not sign a contract together; rather, the owner hired Baker directly. (more…)
What is Tax Abatement?
Wednesday, August 17th, 2011Tax abatement is an incentive tool used by local government to attract private investment, economic development, and job creation by phasing in all or a portion of new or increased assessed value resulting from such investment from taxation. Tax abatement can apply to both real and personal taxation. (more…)
A Financial Face-Off: Bank Loans vs. Mechanic’s Liens
Thursday, August 11th, 2011A contractor and construction lender were recently pitted against each other in a priority contest, and the lender won. The contractor filed suit in Indiana to collect what it was owed on a construction project from the owner. The owner had borrowed money from a bank to fund the construction project, and the loan was secured by a mortgage on the real estate. The mortgage was recorded before the contractor began work. When the contractor was not paid for its work, the contractor recorded a mechanic’s lien against the property. (more…)
Indiana Legislature Adds New “Buy Local” Provisions for Public Works Contracts
Tuesday, July 26th, 2011Effective July 1, 2011, the Indiana Legislature has mandated that a public works contract in the State of Indiana be awarded to a “local Indiana business” that claims the preference provided in Indiana Code 36-1-12-22. This new legislation requires an Indiana political subdivision to award a public works contract to a “local Indiana business” even if a non-local contractor has a lower bid price. (more…)