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Washington Court Limits Lien Rights of Construction Managers

Managers left out in the cold?

 

A newly filed, yet unpublished, court opinion opines that a construction manager cannot file a construction lien in Washington state. So, how far reaching is this opinion?

 

In the case of Blue Diamond Group Inc. v. KB Seattle 1, Inc., et al, a New York construction manager filed a lien against the Westfield Southcenter Mall in Tukwila, Washington. The lien was filed after the owner of a coffee stand failed to pay Blue Diamond for consulting services used in the construction of a kiosk.

 

Blue Diamond served as the owner’s agent, assisting with managing subcontractors, vendors and other tasks. The manager’s tasks also included paying invoices, managing deliveries, setting schedules and other site managerial tasks. Blue Diamond was not registered as a contractor under Washington’s RCW 18.27.

 

The trial court found that Blue Diamond did not have a claim under RCW 60.04, because its services did not form the basis of a lien under RCW 60.04.031. Further, the court decided that Blue Diamond was required to have a contractor’s license in order to file a lien. The Court of Appeals only reviewed the applicability of RCW 60.04.021, in upholding the trial court’s finding.

 

The appellate court relied on an earlier decision that found that managerial services do not fall within the statutory definition of “labor” in RCW 60.04.021. While the court did provide that a manager may illustrate that it performed “labor,” the trial court record indicated that Blue Diamond had not. The court also upheld an award of attorneys’ fees awarded under RCW 60.04.181.

 

How far does this finding reach? Well, as its unpublished the court apparently felt it offered little in the way of new law. But, it does damper the rights of construction managers and other owner agents who manage and direct construction.

 

The opinion does leave the door open for those construction managers who perform physical labor on the job site in the furtherance of improving the site. If your business was to perform those type of services, it should be registered as a contractor under RCW 18.27.

 

 

 


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