Hard Hat Case Notes

AuthorBy Christopher M. Burke and Lauren P. McLaughlin
Published in The Construction Lawyer, Volume 41, Number 1, Winter 2021. © 2021 American Bar Association. Reproduced with permission. All rights reserved. This information or any portion thereof
may not be copied or disseminated in any form or by any means or stored in an electronic database or retrieval system without the express written consent of the American Bar Association.
North Carolina Court
Interprets Impact of
Partial Lien Waivers
on Ongoing Work
Contractors are often required
to submit partial waivers and
lien releases with payment
applications in order to receive
periodic payments during
the course of a project. In
Gamewell Mechanical, LLC v.
Lend Lease (US) Construction,
Inc., the North Carolina Court
of Appeals addressed the reach
of such partial waivers where
change order work was ongo-
ing at the time partial waivers
were signed.
In December 2013, Gamewell
Mechanical, LLC (Gamewell) entered into a xed-price
contract with Lend Lease Construction, Inc. (Lend Lease)
for the mechanical and plumbing scope on new construc-
tion at Research Triangle Park in North Carolina. The
subcontract required that in order to receive periodic
payments, Gamewell needed to execute a partial waiver/
lien release that agreed to:
. . . waive, release, and relinquish any and all rights,
claims, demands, liens, claims for relief, causes of
action and the like, whether arising at law, under a
contract, in tort, in equity or otherwise, which the
undersigned has now or may have had arising out
of the performance of work or the furnishing of
labor or materials by the undersigned.
The release contained an exception for unresolved
claims for which written notice was provided. It also per-
mitted Gamewell to identify any other unresolved claims
for work for which Gamewell believed it was entitled to
Over the course of the project, Gamewell and Lend
Lease executed multiple change orders, and Gamewell
consistently signed the partial waivers in connection with
its payment applications. On March 31, 2016, at the end
of the project, Gamewell submitted a payment applica-
tion that included an executed partial waiver/lien release.
In early April 2016, Gamewell sent a claim to Lend Lease
seeking recovery of approximately $2.7 million in dam-
ages resulting from delays and other impacts allegedly
encountered on the project. The trial court entered an
award in favor of Gamewell for some of the damages,
including $100,000 for labor and materials that the trial
court determined had not been waived by Gamewell as
part of the partial waivers/lien releases. The trial court
also awarded Gamewell monies in connection with spe-
cic discrete change order work. Lend Lease appealed
the trial court’s ruling, arguing that Gamewell waived
and released its claims through the lien waiver process.
Lend Lease argued that because Gamewell did not
provide written notice of allegedly unresolved claims as
permitted in the partial waiver/lien release, Gamewell had
waived its right to recover for any “acts, events, circum-
stances, changes, constructive or actual delays, accelerations,
extra work, disruptions, interferences and the like which
have occurred, or may be claimed to have occurred, prior
to [March 2016].” The trial court disagreed, nding that
the “waiver and release documents submitted with each
pay application could not cover claims not readily appar-
ent due to daily changes on the job.” The trial court had
held that, while the majority of Gamewell’s claims were
precluded by the execution of the partial releases/lien waiv-
ers, it was “undisputed that there were delays, numerous
Change Orders issued, re-sequencing, and coordination
issues occurring throughout the project. Given the daily
problems that arose as a result of these issues, [Gamewell’s]
failure to reserve claims regarding the day-to-day miscella-
neous items done at the direction of [Lend Lease] is not a
material breach-of-contract.” The trial court further iden-
tied several specic change order requests where it found
sufcient evidence to award sums to Gamewell. The court
of appeals did not overturn the rationale from the trial
court’s ruling in this regard, and found that the damages
award was based on competent evidence.
The court of appeals did, however, turn a closer eye
to the additional $100,000 that the trial court awarded
for “miscellaneous” delays and impacts. Specically, the
court of appeals held that “there is no clear evidence in
the record to support the $100,000.00 award that was
based on Item 1 of the spreadsheet. The trial court’s nd-
ing of fact as to this award . . . does not support the trial
court’s conclusion of law. Therefore, we reverse the trial
court’s award of $100,000.00 for additional labor and
material caused by the redesign of the drawings, pay-
ment of which was not waived in any pay application, and
vacate that portion of the award.” The court of appeals
remanded this portion of the award for further ndings
of fact and law.
Authors’ Comments: The court of appeals’ decision
afrmed the trial court’s determination that the partial
waivers/lien releases did not waive plaintiff’s right to
recover monies associated with changed work. However,
with its remand of one portion of the award back to the
trial court, the court of appeals effectively required a
closer nexus between the impacts alleged by plaintiff and
Christoph er M. Burke
Lauren P. McLaughlin
By Christopher M. Burke and Lauren P. McLaughlin

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