Volume 2, Issue 1
Newsletter of the Rees Broome Construction Law Group
Spring/Summer 2013

     

Beware of Lien Releases –
Don’t Give Up More Than You Get Paid For
By Joe Pierce

Lien releases are a part of life as a contractor or design professional.  You generally cannot get paid without signing one.  And because they are often the last thing that needs to be done in order to pick up a check, it is no wonder that contractors often treat them more like receipts than the important legal documents they are.  But the language in these releases is often overly broad.  If you are not careful, you risk giving up much more than you intend by signing one.

Many partial lien releases contain language something like this:

In exchange for the payment referenced above, Subcontractor does hereby forever release, waive, and discharge the Property, Contractor, Owner, and each of their sureties from any and all causes of action, suits, debts, accounts, damages, encumbrances, judgments, mechanic’s liens, claims, and demands whatsoever, in law or equity which Subcontractor ever had or now has against the Contractor or Owner or their sureties by reason of delivery of material and/or the performance of work relating to the construction of the Project through the date hereof.

If you sign this release, this paragraph says that you are not entitled to another penny for any work performed up to the date the release is signed.  If, as is often the case, the payment is for an older invoice, that is a problem.  You are waiving the right to payment for work performed up to the date of the release, not just through the date covered by the invoice being paid.  It could also include a waiver with respect to any retention being withheld.

If things go smoothly on the project you may never hear anything about this.  After all, at the time nobody was thinking that is what the release meant.  But if a dispute does develop, you can bet the other side’s lawyer will pick up on it.  The fact that neither party meant the release to be that broad might save you, but you cannot be sure.

 

  • Bruce Titus
  • Joe Kasimer
  • Steve Annino
  • Mark Graham
  • Andy Felice
  • Joe Pierce
  • Maureen Carr
  • Gina Schaecher
  • Alison Mullins
  • Jordy Murray



On August 1, 2013, Rees Broome, PC will open the doors to its new Leesburg Office located at:

1602 Village Market Blvd., S.E.
Suite 270
Leesburg, VA  20175
Phone: (540) 882-4747



Issue Highlights

Beware of Lien Releases – Don’t Give Up More Than You Get Paid For  
   
Practical Advice For Protecting Your Trademark Rights  
     
Principal Profiles:
Joe Kasimer
Steve Annino
 
   
What We’re Up To  


 
     
 


The broad language is especially problematic if you have pending change orders or claims for additional services which are in dispute when you sign it.  The release language is broad enough to waive them and it is harder to argue that the owner or general contractor / design professional made a mistake by using the broad release language because the claim is actually disputed.

Always remember that releases have real legal consequences.  Courts will generally enforce them as they are written.  In other words, they mean what they say.  As a result, it is important to read them carefully to be sure they only apply to what is actually meant to be released.  If they do not, they should be modified.  Some key questions to keep in mind when reviewing partial lien releases are:

a. Does the release except retention from its scope if any is being withheld?

b. Does the effective date of the release match the date through which payment is being made (e.g. if the release is for a May requisition does it cover only work through May 31, rather than the date it is signed)?

c. Does the release except any pending claims, proposed change orders, or other unpaid amounts?

If you are unsure whether release language is appropriate, you should not sign it until you get legal advice.  Fixing a badly worded release is relatively simple.  Trying to get out of one after the fact is uncertain and expensive.


Practical Advice for Protecting Your Trademark Rights
By Maureen Carr

Have you ever discovered that someone is using your business’s name, logo, or slogan (a.k.a. “mark”) without your permission?  It might be a competitor in the construction industry who is attempting to gain a business advantage.  It might be a person with no knowledge that you also use the mark.  Or it might be someone who routinely registers domain names using the marks of established businesses with an improper purpose.

All of these scenarios highlight the importance of protecting your trademark rights.  If you registered your business’s name as a trademark with the U.S. Patent and Trademark Office (PTO), you may have a host of remedies available under the federal Lanham Act, including trademark infringement, trademark dilution, and cybersquatting.  Even if your mark is not registered, you may have a claim for unfair competition under the Lanham Act.  And, regardless of whether your mark is registered, you may have common law rights to the mark if you used it before the other party.

The best way to protect your intellectual property rights in your business’s name is to choose a name that is distinctive and is not likely to be confused with other marks.  An unregistered mark is subject to federal trademark protection only if it is distinctive.  Trademark law recognizes four degrees of distinctiveness: (1) generic (general category – e.g. Construction Co.), which is entitled to no protection; (2) descriptive (describes characteristics of the product – e.g. Brick Layers Co.), which is only entitled to protection if it has acquired a secondary meaning; (3) suggestive (suggests a characteristic of the product – e.g. Rock Hard Co.), which is entitled to a high level of protection; and (4) arbitrary and fanciful (bears no logical relationship to product – e.g. Bechtel Co.), which is entitled to the most protection. 

To provide an even higher level of protection, a business may protect its mark by registering it with the PTO.  A business with a registered mark may assert a trademark infringement claim against a party who uses the mark in commerce in connection with the sale of goods in a manner that is likely to cause consumer confusion.  A business with a famous registered mark may assert a trademark dilution claim without showing a likelihood of confusion by demonstrating that the other party’s use of the mark dilutes the distinctive quality of the mark through “blurring” (similarity impairs distinctiveness of mark) or “tarnishment” (similarity harms reputation of mark).  In federal trademark actions, a court may order an infringing party to stop infringing, award monetary damages to the mark owner (treble damages under certain circumstances), and award the mark owner its attorneys’ fees in exceptional cases.

Federal trademark law provides further protections to combat cybersquatting.  Where a party registers a domain name that is identical or confusingly similar to a distinctive mark or is dilutive of a famous mark, with a bad faith intent to profit from using the domain name, the mark owner may assert a claim under the Anticybersquatting Consumer Protection Act (ACPA).  Because many cybersquatting cases involve foreign parties who register infringing domain names and are not subject to the jurisdiction of American courts, the ACPA allows the mark owner to sue the domain name directly in the event that the party that registered the domain name cannot be located – usually in the United States District Court for the Eastern District of Virginia, where the major domain name registries are located.  If cybersquatting is proven, the court can order the forfeiture, cancellation or transfer of the domain name.

All businesses, including those in the construction field, should educate themselves about their trademark rights and take appropriate actions to protect such rights – first by choosing distinctive names, then by registering their marks with the PTO (a relatively inexpensive and hassle-free process), and finally by asserting their rights through litigation if necessary.


Principal Profiles

Joe Kasimer

Joe Kasimer has more than thirty years experience representing general contractors, subcontractors, architects, engineers and material producers in the Washington metropolitan area.  His practice primarily involves disputes over road, bridge, utility and highway construction, site work and foundation projects.  He has been listed in “Best Lawyers in America” as a construction litigator and named a Virginia and District of Columbia “Super Lawyer”.  He has also been selected as a mediator for numerous construction contract disputes and was chairman of several Dispute Review Boards for the Central Artery/Tunnel project (“Big Dig”) in Boston. 

Joe is very active in construction trade associations.  He has spoken on construction contract law topics at over 100 programs for lawyers, contractors, suppliers and design professionals and has written dozens of articles in trade publications.  He is a Fellow of the Construction Specifications Institute, has been a member of the Board of Directors of the Virginia Transportation Construction Alliance, and a member of the Editorial Advisory Board of The Construction Specifier Magazine. 

In his spare time, Joe competes in triathlons, open water swimming and road races.  He prefers Florida in winter and Washington Nationals games in summer.


Steve Annino

Steve Annino has 32 years of construction and civil litigation experience.  He is a member of the Virginia, Maryland, District of Columbia and Pennsylvania Bars.  Steve is also General Counsel for the Heavy Construction Contractors Association and Helping Haitian Angels, an orphanage he supports in Haiti.  He has authored, co-authored and contributed articles which have been published on a multitude of topics related to civil litigation and construction law, and has lectured and taught classes on Construction Litigation and Business Law.  In addition, Steve has lectured and presented seminars for the National Business Institute, Inc., Associated Builders and Contractors and the Heavy Construction Contractors Association.  Recently he contributed to drafting legislation enacted by the Virginia General Assembly to clarify and amend the Mechanic’s Lien Law in Virginia. Cases in which Steve has been involved have resulted in published opinions, including a 2012 case decided by the Virginia Supreme Court involving mechanic’s liens, William A. Hazel, Inc. v. Sycolin Center, LLC, a landmark victory for Virginia contractors. 

Steve is an avid golfer and softball player.  In October, he celebrates his 38th wedding anniversary to his wife Cindy. They have three children and six grandchildren.


What We're Up To

Joe Kasimer is speaking on the topic of Virginia Department of Transportation claims procedures for the Heavy Construction Contractors Association in July.

In September, Bruce, Mark, Andy and Alison will be presenting an all day seminar on Virginia Engineering Law.


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This Rees Broome, PC newsletter is intended solely for use by its clients and subscribers and may not otherwise be reproduced or used without permission of Rees Broome, PC. The information contained herein is generally reliable but independent consultation with counsel should be engaged to confirm the applicability of the information to your circumstances.

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