How To Preserve Claims When Submitting a Lien Waiver and Release Form

{"version":"0.3.0","atoms":[],"cards":[],"markups":[["i"],["a",["href","https:\/\/www.aiacontracts.org\/contract-documents\/6500348-generic-conditional-lien-waiver-and-release-on-progress-payment"]],["sup"],["a",["href","https:\/\/acdoperations.zendesk.com\/hc\/en-us\/articles\/1500009278362-Important-Considerations-for-Sworn-Construction-Statements-and-Lien-Waiver-and-Release-Forms?_gl=1*hj8cp9*_ga*MzIzNDU5NjcwLjE2NjAxNTI0MzU.*_ga_E3VWY9JRK3*MTY2NDIwNjkyOS4zMzMuMC4xNjY0MjA2OTI5LjYwLjAuMA.."]],["a",["href","https:\/\/www.youtube.com\/watch?v=wbKju8nsSxw"]],["strong"]],"sections":[[1,"p",[[0,[],0,"September 27, 2022"]]],[1,"p",[[0,[],0,"Lien waiver and release forms are short, but powerful,\ndocuments that are often used throughout the lifecycle of construction\nprojects. These documents substantially impact the claims and rights of project\nparticipants. For this reason and more, it is imperative to pay close attention\nto their terms and conditions, especially when it comes to a contractor\u2019s\npreservation of claims. These forms may be submitted without consideration to their\nfuture impact because they required for cash flow and payment. Unfortunately, overly\nbroad release language, incorrect values, or other accidental errors can be\nheld against the contractor, as many jurisdictions strictly enforce these\ndocuments. A strict interpretation of the form may bar a contractor from later bringing\na claim for payment. "]]],[1,"p",[[0,[],0,"A case that highlights the importance of this concept\nis "],[0,[0],1,"Dommer Const. Corp. v. Savarino Const. Servs. Corp., and the Cincinnati\nInsurance Company\u00b8"],[0,[],0," 85 A.D.3d 1617, 925 N.Y.S.2d 305 (2011). This case arose\nout of construction of a new emergency room and heart center at a medical\ncenter in New York. Savarino subcontracted with Dommer to perform certain construction\non the project. After Dommer completed its work, it submitted a conditional\nwaiver and release form that waived, released, and relinquished all claims,\ndemands, and rights of lien up to the amount shown on the lien waiver and\npreviously received by Dommer. After accepting payment from Savarino, Dommer later\nclaimed that it was owed additional sums for overtime and extra work on the\nbasis that these sums were not encompassed by the waiver and release form. "]]],[1,"p",[[0,[],0,"On appeal, the New York Appellate Court upheld the\nlower court\u2019s dismissal of Dommer\u2019s complaint. In ruling in favor of Savarino,\nthe Court stated that where \u201ca release is unambiguous, the intent of the\nparties must be ascertained from the plain language of the agreement.\u201d "],[0,[0],1,"Id. "],[0,[],0,"at\n1618. The Court found that Dommer unambiguously waived, released, and\nrelinquished any and all claims and demands for its work on the Project and\nthus, \u201cthe fact that [Dommer] may have intended something else is irrelevant.\u201d The\nterms of the release were found to be a complete bar to any action on the\nsubcontract between the parties. "]]],[1,"p",[[0,[],0,"Unfortunately, it is not unheard of for contractors to\nunintentionally release claims as part of lien waiver and release forms. "],[0,[0],1,"Dommer\n"],[0,[],0,"shows the importance of explicitly reserving claims that arise during the\nproject, and limiting the scope of the release. To help avoid issues like this,\nAIA Contract Documents developed four generic lien waiver and release forms\nthat prompts users to consider their claims before submitting the form. Each of\nthese generic forms contain an \u201cexceptions\u201d paragraph that requires the user to\ncomplete information pertaining to rights or claims that may be waived, if not\nexplicitly reserved. For example, the "],[0,[1],0,"G901"],[0,[2],1,"\u00ae"],[0,[],1,"-2022\nConditional Lien Waiver and Release on Progress Payment"],[0,[],0," contains\nspecific language pertaining to a contractor\u2019s lien rights on future work,\nunpaid retention, extras, pending modifications and changes, and disputed\nclaims. Under the title \u201cExceptions,\u201d this form reads:"]]],[1,"p",[[0,[0],1,"\u201cThis Conditional Waiver\nand Release on Progress Payment covers a progress payment for Work furnished\nfor the Project or the Property and the improvements thereon through [date]\n(\u201cEffective Date\u201d). This Conditional Waiver and Release on Progress Payment\ndoes not cover (i) Work furnished after the Effective Date, (ii) unpaid\nretention, (iii) extras for which Contractor has not received payment, (iv)\npending modifications and changes, (v) disputed claims in the total amount of\n$[amount], and other exceptions described below, if any:"]]],[1,"p",[[0,[0],1,"Other exceptions:"],[0,[],0,"\u201d"]]],[1,"p",[[0,[],0,"In this paragraph, users may list their rights and\nclaims that will be excepted from the waiver and release. If a contractor is\naware of any claims that it has (or may have) due to common construction issues\nlike additional scope, delays, resequencing, or remobilization costs, then those\nclaims may be explicitly listed here for preservation purposes. Users may also\nconsider using more general language to protect and preserve their rights and\nclaims on the project. In any event, prior to submitting a lien waiver and\nrelease, it is crucial to carefully review the document to ensure what claims\nare being released or reserved, and under what circumstances."]]],[1,"p",[[0,[],0,"To learn more about AIA Contract Document lien waiver\nand release forms, visit "],[0,[3],1,"Important\nConsiderations for Sworn Construction Statements and Lien Waiver and Release\nForms"],[0,[],0," or watch a short video "],[0,[4],1,"AIA\nContract Documents New Sworn Construction Statement and Lien Waiver and Release\nForms."]]],[1,"p",[[0,[0,5],2,"AIA Contract Documents has provided this\narticle for general informational purposes only. The information provided is\nnot legal opinion or legal advice and does not create an attorney-client\nrelationship of any kind. This article is also not intended to provide guidance\nas to how project parties should interpret their specific contracts or resolve\ncontract disputes, as those decisions will need to be made in consultation with\nlegal counsel, insurance counsel, and other professionals, and based upon a\nmultitude of factors. "]]]]}