§ 16.3 Lienable Items
Library | Construction Law in Oregon (OSBar) (2019 Ed.) |
§ 16.3-1 Introduction
A judicially constructed rule dictates that a claimant's construction lien may fail if lienable items and nonlienable items are intermingled in the claim of lien. However, if it is possible to segregate the lienable items and the nonlienable items without the use of parol evidence, a valid lien exists to the extent that the lienable items are so segregated. See Anderson v. Chambliss, 199 Or 400, 414, 262 P2d 298 (1953). Unless the nonlienable amount is de minimis, or the property owner knows of the nonlienable items (Robertson, Hay & Wallace v. Kunkle, 69 Or App 99, 104, 686 P2d 399 (1984)), even a good-faith intermingling of lienable and nonlienable items may invalidate the lien (Hays v. Pigg, 267 Or 143, 147-49, 515 P2d 924 (1973)).
In Knez Bldg. Materials Co. v. Bell-Air Estates, Inc., 144 Or App 392, 398, 927 P2d 608 (1996), rev den, 325 Or 247 (1997), the court held that the rule of segregation would not defeat a lien claim when the defendant has sufficient knowledge to question the amounts set forth in the lien. The court questioned "whether segregation is in fact the rule or has been largely swallowed by its exceptions." Knez Bldg. Materials Co., 144 Or App at 395 n 2.
PRACTICE TIP: A lawyer for the lien claimant should carefully itemize all charges on which a construction lien is based and add this itemization as an exhibit to the claim of lien. See Form 16-1 (claim of construction lien for an improvement).
In Robertson, Hay & Wallace, 69 Or App at 105 n 4, the court discussed the "considerable disagreement over what constitutes a de minimis overcharge," comparing Brown v. Farrell, 258 Or 348, 358, 483 P2d 453 (1971) (a 10 percent nonlienable overcharge of $50 included in a $490 charge was considered a trivial discrepancy), with Deal v. Edwards, 51 Or App 203, 204, 624 P2d 1099 (1981) (a nonlienable charge that exceeded the total claim by not less than 9 percent was held invalid).
Furthermore, for an item to be lienable, the claimant's efforts must be in compliance with the contract between the claimant and the owner of the improvement or the owner's construction agent. ORS 87.070 (a contractor may recover "only the amount due . . . according to the terms of the contract"); King v. Suniga, 54 Or App 267, 270, 634 P2d 812 (1981) (a claim for extra transportation was not a lienable item because it was not part of parties' contract).
See § 16.4-1 for further discussion of the requirement of a contract.
§ 16.3-2 Performing Labor
A person performing labor on the improvement has a right to a construction lien for that labor. Labor that is lienable includes not only the direct wages paid to employees, but also related overhead costs, such as insurance (Paget v. Peters, 133 Or 608, 619-20, 286 P 983, reh'g den, 289 P 1119 (1930)) and Social Security payments, unemployment compensation payments, union health and welfare funds, payroll taxes, room and board costs, and travel allowances (Mathis v. Thunderbird Vill., Inc., 236 Or 425, 432, 435, 389 P2d 343 (1964)). Yet claims for labor, like other damages, that are incurred because the owner breached the contract are not lienable if work on the project has ceased. Minter-Wilson Drilling Co., Inc. v. Richins, 60 Or App 702, 716-19, 655 P2d 1060 (1982), rev den, 294 Or 613 (1983) (such damages did not add any value to the improvement and were therefore not lienable).
In addition, a construction lien is created when a person performs labor off the site of the improvement, if that labor is performed on goods specifically manufactured for use in the improvement and those goods are not generally constructed for sale in the open market. See Steel Products Co. of Oregon, Inc. v. Portland Gen. Elec. Co., 47 Or App 597, 603-04, 615 P2d 344 (1980), aff'd, 291 Or 41, 628 P2d 1180 (1981) (permitting a lien claim for steel fabrication performed offsite).
A lien may also be claimed for off-site labor if it is
(1) expended in moving a building to the site, if that labor is part of an overall plan for the alteration or repair of the building (see Janoe & Bushnell Constr., Inc. v. Jordan, 210 Or 243, 247-48, 310 P2d 310 (1957)); or
(2) used in the construction of permanent off-site improvements, when the off-site improvements are vital and necessary for the operation of the on-site operation (Robertson, Hay & Wallace v. Kunkle, 69 Or App 99, 102-03, 686 P2d 399 (1984)).
§ 16.3-3 Transporting or Furnishing Materials
§ 16.3-3(a) In General
A construction lien is created when a person transports or furnishes materials used in the construction of an improvement. Except as otherwise discussed below, to support a construction-lien claim, however...
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