Construction Law

Construction Law | Wernette Heilman PLLC

Construction Liens – ‘Builder’s Trust Fund’ Act – Bond claims and more.

The construction industry operates within a legal framework designed to allocate payment and performance risks and protect certain players. These rights and obligations come with many technical, and often misunderstood, requirements. Experience counts – and Wernette Heilman PLLC principal attorneys Mike Wernette and Ryan Heilman have delivered results for architects, owners, materials suppliers, general contractors, and subcontractors in matters including contract negotiations, collections, workouts, construction lien litigation, ‘Builder’s Trust Fund’ litigation, bond claim issues, indemnity agreement issues, and bankruptcy claims.

Representative Matters

Recovered a six-figure settlement in favor of a prominent architectural firm in a fee dispute against a developer. Mr. Wernette generated settlement leverage with an unheard-of approach: by filing a construction lien for his client against a leasehold interest in portions of the Michigan State Fairgrounds. The developer had entered into a lease with the State covering sections of the Fairgrounds, and engaged the architectural firm to prepare structure, landscaping, and hardscaping concepts and plans for a proposed development. The developer made an initial payment to the architectural firm but disputed any obligation to pay the additional fees charged by the firm. Although the law forbids filing of a construction lien against public land, Mr. Wernette filed the construction lien against the developer’s leasehold interest in the public land — which is distinct from the land itself, although the effect would be equally problematic for the State. Under heavy pressure from the State, the developer caved and settled with Mr. Wernette’s client.

Defended a contractor against ‘Builder’s Trust Fund’ claims brought by the UAW. The contractor was unable to pay a subcontractor on a roofing project at the UAW’s facility. The subcontractor filed suit to foreclose its construction lien on the UAW facility. The UAW filed a third-party complaint against attorney Mike Wernette’s client personally, alleging violation of the ‘Builder’s Trust Fund’ Act, breach of contract, and fraud. Mr. Wernette went on the offensive, filing a motion to dismiss the UAW’s complaint and seeking monetary sanctions. The UAW agreed to dismiss all claims against Mr. Wernette’s client rather than respond to the motion.

Won a $600,000 trial verdict against a site prep/underground contractor and its owner in a ‘Builder’s Trust Fund’ action in federal court. The client, a novice developer, owned a partially-finished, failed residential development. The client had paid over $900,000 to the contractor, but hundreds of thousands of dollars in construction liens were subsequently filed against the development by subcontractors and suppliers, placing the client’s project at risk of foreclosure. Attorney Mike Wernette filed suit against the contractor and its owner under the ‘Builder’s Trust Fund’ Act. The defendants argued that they had no liability because the contractor lost money on its work at the development, through cost overruns caused by unexpected soil conditions and remediation work required by government agencies — and that in fact the contractor was owed money by Mr. Wernette’s clients. Mr. Wernette presented detailed trial evidence showing the contractor had used contract funds to pay for business expenses falling outside the required use of funds under the Act — officer compensation, equipment rentals, fuel costs, vehicle lease charges, supervisor cell phone charges, and other items. Mr. Wernette held the contractor and its owner to the letter of the law and the court rendered a trial verdict in favor of his client for over $600,000 against both the contractor and its owner.

Collected settlement payments on behalf of an architectural firm against several clients who failed to pay the firm’s fees in full, using the construction lien litigation as leverage.

Removed a $1.5 million construction lien from a client’s real estate development project through fast-track litigation in bankruptcy court. After two days of taking evidence and argument, the court ruled that the construction lien was invalid, which paved the way for Mr. Wernette’s client to close on a sale of the project instead of losing it to foreclosure.