The Thomas Group, Inc. v. Wharton Senior Citizen Housing, Inc.

A-5510-97T2 (N.J. Super. App. Div. 1999) (Unpublished)
  • Opinion Date: March 24, 1999

CONSTRUCTION LIEN LAW—Until a contractor is contractually entitled to be paid, it can not assert a lien for the remaining contract balance.

A contractor filed a construction lien claim and then filed a complaint to foreclose it. On cross-motions for summary judgment, the lower court discharged the contractor’s lis pendens and construction lien and barred the contractor from filing any subsequent lien claim for the same amount because it determined that a substantial portion of the contractor’s lien claim represented the retainage withheld by the property owner throughout the contractor’s performance of the contract. The lower court’s reasoning, which was upheld by the Appellate Division, was that the contractor had failed to observe all requirements of its contract. In particular, although it did file an application for final payment, it did not submit an Affidavit of Indebtedness, a Consent of Surety, a Certificate of Insurance, nor a Release of Liens from Subcontractors, all which were required by the contract. Consequently, because the statutory entitlement to a lien upon a provision of services cannot be divorced from the terms of the contract governing payment, the contractor’s lien claim filing was premature.