Archive for the 'Construction News' Category
This article appeared in June 2013 Construction News
By Dorsey R. Carson, Jr. and Christopher D. Meyer, Burr & Forman LLP
The constitutionality of the Mississippi Stop Notice statute, Miss. Code Ann. § 85-7-181, has now been challenged; leaving it possible that unpaid subcontractors and suppliers will be completely without any legal remedy against an owner in Mississippi. Specifically, in Noatex Corporation v. King Construction of Houston, LLC, 884 F.Supp.2d 478 (N.D.Miss. 2012), Mississippi’s Stop Notice statute was ruled unconstitutional by a federal court. That issue is now on appeal before the U.S. Court of Appeals for the Fifth Circuit sitting in New Orleans. The Fifth Circuit is expected to soon rule on whether unpaid subcontractors and suppliers have any lien rights on construction projects in Mississippi.
Unlike most if not all other states, Mississippi limits lien rights on construction projects to prime contractors and others having a direct contract with the owner. Therefore, subcontractors and suppliers who provide labor and materials to construction projects cannot “lien the project” to protect their payment rights. Stated differently, except in certain limited situations, unpaid subcontractors and suppliers in Mississippi are not allowed to file a lien on real property.
Instead, the Mississippi Stop Notice statute, Miss. Code Ann. § 85-7-181, allows an unpaid subcontractor or supplier to “lien the funds.” The Mississippi Stop Notice statute provides that if an unpaid subcontractor, laborer or materialman of the prime contractor provides written notice to the owner of the amount it is owned, from that date forward that amount is bound in the owner’s hands until the claim is resolved (or, if the amount in the owner’s hands is less than the amount owed, then the entire amount remaining in the owner’s hands is bound). The statutory notice necessary to lien the funds is known as a “stop notice.”
In Noatex Corporation v. King Construction of Houston, LLC, 884 F.Supp.2d 478 (N.D.Miss. 2012), Noatex, a general contractor, brought a declaratory judgment action against King Construction, a subcontractor on a project to construct a manufacturing plant, seeking to have King Construction’s “stop notice” claim and the statute authorizing it declared unconstitutional. Noatex and King Construction worked together from February through June 2011, but then, after Noatex began to question the validity of King Construction’s invoices, King Construction filed a stop notice with the project owner, binding just over a quarter of a million dollars. Noatex argued that the stop notice statute violated its due process rights by depriving it of property without proper procedures for notice and hearing.
The federal district court agreed and declared the statute unconstitutional, both facially and as applied, for violating due process. The federal district court compared the statutory scheme, which allowed an unpaid subcontractor to bind monies allegedly owed with the owner solely by simply filing a notice, to a prejudgment attachment of the type, which had previously been declared unconstitutional. According to the federal district court, a traditional mechanic’s lien clouds title but does not alienate property, and other states’ comparable statutes that have been upheld all provide either notice and a hearing or other safeguards, such as affidavits and security bonds, to minimize the risk of wrongful withholding.
According to the federal district court, Mississippi’s alternative offered no immediate process by which to judge the validity of the stop notice or challenge it until a trial on the merits. Although the federal district court acknowledged the beneficent aims of the statute, it also recognized that stop notices often had the effect of compounding nonpayment and stopping projects.
The federal district court’s decision is currently on appeal before the U.S. Court of Appeals for the Fifth Circuit. The Mississippi State Board of Contractors and the Homebuilders Association of Mississippi filed amici (“friend of the court”) briefs, and briefing by all parties to the Fifth Circuit was completed on December 26, 2012.
An opinion from the Fifth Circuit is expected to come down in the near future. Subcontractors and suppliers performing work and supplying material in Mississippi are cautiously awaiting the ruling in hopes that the federal court’s decision will be reversed. Until then, the status of the Mississippi Stop Notice statute remains in limbo. Subcontractors and suppliers doing business in Mississippi need to be aware of the unique difficulties in collecting payment in Mississippi, and should seek joint checks and other contractual provisions to protect against non-payment.
Montreal-based Major Wire Industries Limited has named Kirby-Smith Machinery, Inc. as its new Authorized Dealer for aggregate, asphalt and recycle operations in Eastern Kansas, Oklahoma and Northern Texas. The dealership offers all of Major Wire’s screen media solutions, including the advanced technology Flex-Mat® 3 Self-Cleaning Screen Media in tensioned and modular versions and OptimumWire® Woven Wire. For more than 30 years, Kirby-Smith has specialized in a wide range of quality products known for their dependability and performance, and backed by manufacturers’ support. With 9 locations the company can quickly meet the screen media needs of their customers.
“Kirby-Smith makes customer service a top priority,” states Gary Pederson, Major Wire Vice President of Sales. “In addition to their full staff of service personnel working with customers on-site, they also offer seminars throughout the year to help their customers stay on top of industry changes and advancements. Their dedication to providing customers with superior service and expertise fits perfectly with the value-added programs offered by Major Wire, including on-site Screening Plant Audits, Screen Maintenance Seminars and our Flex-Mat 3 Results Guaranteed Program.”
Major Wire’s advanced Flex-Mat 3 High-Performance, Self-Cleaning Screen Media is available in a tensioned version as an alternative to traditional woven wire and a modular version designed to replace polyurethane and rubber modular screen panels. Independently vibrating wires increase product throughput by up to 40 percent over traditional woven wire or polyurethane panels by increasing screening action and open area and eliminating blinding, pegging and clogging.
Major Wire’s OptimumWire Woven Wire has a unique chemical makeup that provides up to 40 percent longer wear life when compared to traditional woven wire of the same diameter. Delivering the industry’s best combination of ductility, hardness and tensile strength, OptimumWire is less susceptible to breaking in high-impact conditions and with highly abrasive materials, so it lasts longer and minimizes labor, maintenance and lost production costs.
“We add value to our customers by going the extra mile,” states David Baker, Vice President of Parts & Service at Kirby-Smith. “One of our salesman has over 30 years of experience selling screen media and introduced us to the product line. It didn’t take long for us to realize that Major Wire was a great fit for our company and customers. Major Wire screen media increases production and our customers like that.”
For more information about Kirby-Smith visit www.kirby-smith.com.
For more information on Major Wire visit Major Wire’s website at www.majorwire.cc.
Associated Builders and Contractors (ABC) has named Cajun Industries, LLC, Baton Rouge, La., its 2012 Contractor of the Year. Cajun Industries Founder and Chairman, Lane Grigsby, accepted the award on behalf of the company during ABC’s 23rd annual Excellence in Construction and National Safety Excellence Award program held Feb. 20 at the Harbor Beach Marriott in Ft. Lauderdale, Fla.
“Each year, ABC recognizes an individual or company that attains a level of achievement that raises the bar for all of us, and Cajun Industries certainly fits the bill,” said 2013 ABC National Chairman Greg Hoberock, president of hth companies, Inc. Union, Mo. “Their commitment to safety and excellence on all levels helps to advance our organization, the construction industry and the principles of free enterprise.”
Cajun Industries was founded in 1973 by Lane Grigsby as Cajun Contractors and Engineers to capitalize on his extensive experience in the heavy civil/industrial phases of the construction industry. Today, the company is called Cajun Industries and includes five companies under one holding company, which allows Cajun Industries to concentrate on specialized areas important to their customers, including construction, deep foundations, maritime and equipment services.
Cajun Industries provides a broad range of services to various markets, including government, water quality, manufacturing and industrial. The company is licensed or permitted to perform construction in 24 states.
The company has been involved with ABC since 1974. Cajun Industries is a member of three ABC chapters, including the ABC New Orleans/Bayou chapter, ABC Pelican chapter and the ABC Greater Houston chapter.
Toro continues to grow its commitment to the rental industry with the addition of several new rental representatives across North America. These Toro partner organizations will assist with sales and service support for Toro’s rental equipment, which includes compact utility loaders and attachments, trenchers and vibratory plows, concrete and masonry equipment, compaction equipment, turf renovation equipment and tree care equipment.
“Toro is committed to being top provider of equipment and service to the rental industry,” says Rick Rodier, general manager of Toro’s Siteworks Systems Business. “Through equipment design innovation and makingkey equipment acquisitions, we believe rental store owners can maximize their return-on-investment by operating Toro equipment. That said, we knew it wasn’t enough to just have great equipment, we need to ensure we have the best industry representatives providing sales and service support to our customers. We believe we have accomplished that. There has never been a better time to own Toro equipment.”
The following is list of Toro rental partners and their territory responsibilities:
- Cavalier Industries: Western Canada – British Columbia, Alberta, Manitoba, Saskatchewan and Ontario, Website http://cavalier-industries.ca
- Hooten & Hooten Sales and Marketing: New Brunswick, Nova Scotia, Prince Edward Island, Newfoundland and Labrador
- Lew Hudson Sales: Georgia, Alabama, Tennessee, Texas, Oklahoma, Arkansas, Louisiana, Mississippi, Website http://lewhudson.com
- Marketing Concepts: Florida, Website http://marketingconceptsinc.net
- MM Sales: North Carolina, South Carolina, Website http://mmsales.biz
- Meridian Pacific Sales: Arizona, New Mexico, Nevada, Utah, Website http://meridianpacificsales.com
- Wirant Sales, California, Website http://www.wirantsales.com
- Prairie Star Equipment Construction: Nebraska, Kansas, Western Missouri and Southwest Iowa, Website http://prairiestarequipment.com
- CSI Marketing, Inc., North Dakota, South Dakota, Minnesota and Iowa
- T. Nestor Sales and Service, LLC: Eastern Missouri and Southern Illinois
- M.J. Miller C.C.: Northern Illinois, Indiana, Kentucky, Ohio, Wisconsin, Michigan, and central and eastern Iowa, Website http://www.mjmillercc.com
- Thomas Sales Company: Southern New Jersey, Pennsylvania, and West Virginia
- Gullivan Sales Company: Virginia, Washington D.C., Maryland and Delaware
- Summit Sales: Northern New Jersey, New York, Connecticut, Rhode Island, Massachusetts, Vermont, New Hampshire and Maine, Website http://summit-sales.com
- Essex Sliverline West: Alaska, Washington, Oregon, Idaho, Montana, Website http://essexsilverlinewest.com
Information About The Toro Companyis available at http://www.toro.com