Judge Says Waivers' Meanings Are Clear; Subs Lose Retainage
Subcontractors involved in a building for Scaled Mfg. in Montrose County, Colo., lost a battle against Keystone Construction in March — resulting in an approximate $250,000-loss for the subcontractors.
Colorado state court Judge J. Steven Patrick denied summary judgment to a group of subcontractors on a building project on their motion to foreclose on a mechanic’s lien for retainage.
Keystone Construction was the general contractor that made monthly progress payments to Cooling’s Heating and Air Cond-itioning Inc., San Juan Electric Inc., Par Mechanical Inc., Par Fire Protection Inc. and Western Gravel Inc. Keystone held back 10 percent retainage, but each subcontractor signed a release stating that the firm “waives and releases any and all claim or right of lien on the below described premises and the owner thereof, as well as any claims on account of labor, material or service furnished by the undersigned … and relinquishes all right to claim a mechanic’s lien (and) claims against bonds or sureties or other claims of every kind.”
Keystone made no payments after Oct. 1, 1997 because of its financial difficulties. The subcontractors sought summary judgment for the amounts due after Oct. 1 and the retainage before Oct. 1, claiming the releases they signed were ambiguous.
Judge Patrick said, “The release language is clear and unambiguous. It waives and releases any and all claim. These terms are commonly understood and capable of only one reasonable interpretation. The lien waivers in fact constituted waivers of any and all claim or right up to and including Oct. 1, 1997.”
The judge, however, did make exceptions for two firms, noting that hand-written notations by one firm on a release were sufficient to “create an ambiguity” and there was a dispute over the amount owed to Par Mechanical.