New Wyoming Lien Law

Change in Wyoming lien law – Have you filed your pre-lien notice?

A number of our clients have done work or will soon be doing work or supplying goods and services for projects located in Wyoming.  Unlike Colorado, Wyoming is a pre-lien state and thus a supplier of goods and services must provide a notice to the owner and general contractor within thirty (30) days of FIRST supplying to the project.  Although the pre-lien notice has been a requirement under Wyoming lien law for quite some time, there have been a few loopholes in the statute that would allow a lien claimant to pursue their lien even if the pre-lien notice was not done.   However, the Wyoming statutes changed as of July 1, 2011 doing away with the loopholes.  Thus,  a pre-lien notice is a mandatory requirement to filing a lien in Wyoming and failure to timely do so will bar the claimant from filing a lien.  Wyoming requires that a pre-lien notice be filed even on public projects.

There have also been a number of other changes to the mechanic’s lien law. Among them is extending the time for filing a lien claim.  The old statute required that a lien claim be filed by the general contractor within 120 days of his last work and within 90 days of last work for subcontractors and suppliers.  The statutory changes have lengthened these time periods to 150 days for general contractors and 120 days for subcontractors and suppliers.  Again it is important to remember that without the pre-lien notice a claimant will not be able to file a lien at all.

There are other changes that have occurred in the statute which effect mechanic’s liens claims as well as oil and gas claims and public projects.  I have only touched on two of those changes in this blog.  If your company is doing business or planning on doing business in Wyoming it is best that you know the requirements for protecting your lien rights.  Feel free to contact our office with questions regarding the statutory requirements or any other issues you may have doing business in Wyoming.

Sources:

TITLE 29 Wyoming Statutes

Section 29-2-106 When statement of lien to be filed.

Section 29-2-112 Preliminary Notices

How to get your property back from a debtor who is not paying you.

SELF-HELP REPOSSESSION

A creditor can only use self-help repossession if it has a security interest (UCC filing or a title)  in personal property.   If a creditor has a perfected (it has been filed with the Secretary of State) security interest, it is entitled to use self-help under the UCC.  Section 4-9-609 C.R.S. allows a secured party to take possession of the personal property (collateral), without an order from the court, if the creditor can do so without breaching the peace.  If the collateral is behind a locked door or gate, then repossession would breach the peace.  If the collateral is unreachable or the location is unknown, a creditor can file a replevin action under Rule 104, C.R.C.P.   Rule 104 requires the following to be filed with the Court:

1.         A verified complaint alleging that the Plaintiff is the owner of the property or is entitled to possession, attaching a copy of the document entitling the Plaintiff to possession;

2.         An allegation that the property is being detained by the defendant against the Plaintiff’s right to possession thereof and the specific facts constituting detention against the right of the Plaintiff to possession;  

3.         A particular description of the property, a statement of its actual value, a statement of the location of the property, and;

4.         a statement that the property has not been taken for a tax assessment, or fine; or seized under an execution against the property of the Plaintiff.

The Court reviews the Verified Complaint and issues a show cause order directed at the Defendant to show cause why the property should not be taken from the Defendant and delivered to the Plaintiff.  The hearing shall be not more than 10 days from the date of the issuance of the order and the order must be served on the Defendant at least 5 days prior to the hearing date.  The Plaintiff may request a hearing date longer than 10 days, which waives the right to a hearing not more than 10 days after the date of the order. This hearing takes precedence over all civil actions, except other cases to which special precedence is given by law.  If the Defendant fails to appear for the Show Cause hearing, then the Court will issue an order granting possession of the property to the Plaintiff.

The Court can grant an Order for Possession prior to the hearing, if:

a)                  the defendant gained possession of the property by theft;

b)                  the property consists of negotiable instruments or credit cards;

c)                  the property is perishable or the defendant may destroy, dismantle, remove parts from or in any way substantially change the character of the property; or will conceal or remove the property from the jurisdiction of the court; or

d)                  the defendant, by contract, voluntarily, intelligently, and knowingly waived his right to a hearing prior to losing possession of the property.

The Court can require a bond, in its discretion, not to exceed double the value of the property. The Court can also order the Defendant to preserve the property.

The order for possession will describe the specific property and specify the probable location or locations where the property can be found. The sheriff is directed to take the property and retain it in his custody.  The sheriff can deliver the property to the Plaintiff, after receiving his fees.  The sheriff can also cause a building or enclosure to be broken into, if necessary. The Sheriff generally will require a Writ of Assistance for this. The Sheriff then serves a copy of the order for possession upon the Defendant.

Submitted by Terry Ehrlich, Esq.

HELP! MY TENANT STOPPED PAYING RENT - The Quick Guide to Eviction

HELP! MY TENANT STOPPED PAYING RENT!

The Quick Guide to Eviction

If you are a landlord having trouble collecting your rents, this is a quick guide to eviction.  You can also read Colorado eviction instructions and find the necessary forms by following our link at http://www.arnoldarnold.com/Resources.shtml or going directly to http://www.courts.state.co.us/Forms/Forms_List.cfm?Form_Type_ID=28.

Step #1- You need to post either the Demand for Compliance (if the tenancy has a specified termination date) or the Notice to Quit (if the tenancy does not have a specified termination date).  This posting should be on the door of the property.  The notice should be posted for the applicable time period before filing any court action.  The forms can be found at the above links.

Step #2- Once the time period has passed from posting the Demand for Compliance or Notice to Quit, you are ready to file an action for Forcible Entry and Detainer in the County Court where the property is located.  The "plaintiff" filing the action should be the named landlord on the lease.  The maximum amount of damages you are allowed to request is $15,000.00.

Print the Summons, Complaint, and Affidavit of Service forms available at the above links.  You are the plaintiff and the tenant(s) are the defendant(s).  You can request all back rent owed plus late fees if they are specifically mentioned in your signed lease.  You need to attach a copy of the signed lease to the complaint.  You can also request all costs for filing the action in your judgment.  This would include filing and service fees.

Filing- Once all the paperwork is filled out, you need to go to the courthouse and file it with the clerk of court.  They will give you a case number and a court date. There is a fee. 

Service- you can either post the summons and complaint with the attached lease on the door of the property again OR you can have the defendant(s) personally served.  If you just want the tenants evicted, you can just post the paperwork on the door.  However, if you want to request a money judgment from the court, you must have them personally served.  The county sheriff or a private process server can do this for you.  The person serving the documents cannot be the named plaintiff or anyone related to the named plaintiff.  It needs to be a neutral person with no interest in the case.  If you serve the defendant(s) personally, the server will have to fill out the affidavit of service, sign it in front of  a notary and have it notarized. 

Step #3- Go to court on the day your summons states and bring copies of all your documents.  Make sure to bring the original signed and notarized affidavit of service and give it to the court clerk upon arrival.  You will either meet with the defendant(s) and try to work out a deal or the defendant(s) will need to file an answer.

If the defendant(s) do not file an answer or do  not show up at court, you can request judgment against them.  If you had them personally served, you can request judgment for possession and the money judgment.  If you only posted the paperwork on the door, you can only request judgment for possession.  This means you can evict the tenants.  You will need to get a Writ of Restitution from the Court and take this to the county sheriff's department. 

Step #4- Once the sheriff has the writ of restitution, they will serve this upon the tenants and give them 3 days to get out or be forced out.  You may need to have people ready to move the tenants out.  The sheriffs will usually only give you one hour to do this. Be prepared.

Kelley G. Shirk, Esq.

GETTING TO YES WHEN YOU WANT TO SAY NO - JOINT PAYMENT ARRANGEMENTS

GETTING TO YES WHEN YOU WANT TO SAY NO

JOINT PAYMENT ARRANGEMENTS

Jean C. Arnold, Esq.

Whether selling materials, renting equipment, or providing labor, consider whether your customer has the financial ability to pay without funds from the project.  Perhaps, establish a "joint payment" arrangement with either the owner or general contractor when you want to say “no” to the customer, but “yes” to the project.  Beware, however, of some pitfalls.

Joint Check Agreements.  First, analyze your customer’s contract.  Check the contract for “pay-when” and “pay-if” paid terms that could impact when and if payment will occur. 

Second,  understand the joint payment agreement is a contract creating rights and obligations.  In White Construction Company, Inc. v. Sauter Construction Company, Inc., 731 P.2d 734 (Colo. App. 1986), a sub-subcontractor was held liable to the general contractor for work not performed in a workmanlike manner because the general contractor and the sub-subcontractor had entered into a joint check agreement.  In Buttermore v. Firestone Tire and Rubber Company, 721 P.2d 701 (Colo. App. 1986), the owner was held to be personally liable to subcontractors because of a joint check arrangement on a project.

Finally, employ caution when using the owner’s or general contractor’s joint payment agreement form.  Many owners and general contractors, in order to limit liability to suppliers, will include such language as: "This arrangement is made merely as an accommodation to the supplier and is not intended to be relied upon by the supplier or to prove any contractual obligations owing from contractor to supplier."  Others will include language:  (1) limiting their payment obligation to the amount due the subcontractor; (2) incorporating arbitration or other dispute resolution conditions stated in the subcontract agreement; and (3) language waiving mechanic’s lien rights or other supplier’s payment remedies.  If you are a supplier, beware of these limitations.   

Remitting joint payments to your customer.  Some material suppliers remit portions of the joint check proceeds to their customers even though they are still owed money for materials for the project.  A materialman can make loans to his customer, but not with the owner's or general contractor’s money intended to avoid liens against the property.  Section 38-22-127, C.R.S.  Additional language would need to be added to the joint payment form if you are planning to remit funds to your customer from joint payments received.  Be sure to keep the owner or general contractor apprised as to the amounts remitted.

Payment application.  Often suppliers will apply joint payments received to oldest invoices rather than to the invoices for the project – even knowing the source of funds.  In the case of Jackson v. A.B.Z. Lumber Co., 155 Colo. 33, 392 P.2d 288 (1964),  the Colorado Supreme Court found that a lumber supplier could not maintain its mechanic’s lien against the property because the lumber company knew the source of funds used by the subcontractor to pay the delinquent material bill even though the subcontractor never directed the lumber company how to apply the payment.

Submitted June 16, 2011.

Copyright 2011.  Jean C. Arnold.  All rights reserved.  No portions of this textual material may be reproduced without the prior written permission of Jean C. Arnold, Arnold & Arnold, Attorneys at Law, LLP, 7691 Shaffer Parkway Suite A, Littleton, CO 80127 720-962-6010.

e-mail:  jeanarnold@arnoldarnold.com.

COLLECTION OF A JUDGMENT

COLLECTING THE JUDGMENT

A.                                       USE OF JUDGMENT LIENS ON REAL PROPERTY

RECORDING THE TRANSCRIPT OF JUDGMENT:  One of the easiest and most cost-effective collection tools in your arsenal is the transcript of judgment.  You can lien any real property owned by the judgment debtor. (See 13-52-102, C.R.S.) .  As soon as judgment is entered, you should obtain the transcript of judgment from the Clerk of the Court for a fee of $25.00 (as of July 1, 2008) and record it with the Clerk and Recorder of each county where the judgment debtor owns property.  The transcript of judgment only encumbers real property in the county that it is recorded in, so you need to verify the correct county prior to recording the lien.  You can record the transcript in multiple counties.  The recording of the transcript does not effectuate execution of the judgment. Recording the lien makes the judgment a lien against the property, which needs to be paid off if the property is sold or refinanced.  It may also make the judgment creditor a secured creditor in the event of a bankruptcy as long as the transcript is recorded at least 90 days prior to the filing of bankruptcy.  It also gives the creditor the right to redeem the property in the event of a foreclosure.

REVIVAL OF THE JUDGMENT LIEN:  Pursuant to Section 13-52-102(1), C.R.S. the lien expires 6 years from the judgment date, unless revived as set forth in Rule 54, C.R.C.P.  A Motion to Revive the lien must be filed and the Court will issue a Show Cause Order, ordering the judgment debtor to file cause, in writing, within 10 days as to why the judgment lien should not be revived.  The Order to Show Cause must be served upon the judgment debtor.  If the debtor files an answer, a hearing must be held.  If the Court finds no cause or no answer is filed, then the Court will enter an order reviving the judgment lien and the clerk will issue a revived transcript of judgment.  The revived transcript of judgment must be recorded in the same county to keep the same priority date.     

http://www.arnoldarnold.com/Practice-Areas/collections-and-creditor-bankruptcy.shtml

What should you do with a Judgment when a debtor files for Bankruptcy?

Collections, Asset Recovery and Creditor Bankruptcy Representation

Last week Terry Ehrlich and Jean Arnold conducted a seminar on Seeking and Collecting a Judgment.  The following is an excerpt from Jean Arnold's seminar materials answering the question: 

What should you do with a Judgment when a debtor files for Bankruptcy?  The creditor should immediately determine the relevant time frames to take action in the bankruptcy.  The key determinations are:

A.                 First meeting of creditors.  Under Chapter 7 the first meeting of creditors shall be held not less than 20 nor more than 40 days after the Court enters the order for relief.  In Chapter 13 cases the first meeting of creditors shall be held not less than 20 nor more than 50 days after the order for relief enters.  The creditor should attend this meeting, after reviewing the schedules, and ask questions of the debtor who is under oath.  This limited questioning can alert the Trustee to issues in the bankruptcy and allow the creditor to gather important information as to the debtor’s intentions.    

B.                 Deadline to file proof of claim.  90 days after the first date set for the meeting of creditors under 11 U.S.C. § 341(a).  See Bankruptcy Rule 3002(c).  This deadline will be shown on the bankruptcy notice.  In case under Chapter 7 the notice will often state it is a “no asset” case and tell the creditor not to file a claim until directed by the Court.  The creditor will then need to pay particular attention to the bankruptcy proceedings and watch for any further notices of “bar date” for filing claims coming from the U.S. Trustee’s office.

C.                 Deadline to object to discharge of debt.  A complaint to determine the dischargeability of a debt under § 523(c) shall be filed no later than 60 days after the first date set for the meeting of creditors under § 341(a).  A new time period for filing complaints objecting to discharge commences when a Chapter 11 or Chapter 13 case is converted to a Chapter 7 case.  No new time period is available, however, if a case started in Chapter 7, and the applicable period expired in that original chapter, and the case thereafter was converted to Chapter 11 or 13 and then reconverted to Chapter 7.  See  Bankruptcy Rule 1019(3) and discussion in 10 Colo. Prac., Creditors' Remedies - Debtors' Relief § 9.32 (2010).   

D.                Determination of whether to seek relief from stay. If the creditor has a security interest in property of the debtor, the creditor must determine whether there is equity in the property.  If there is not or the creditor is not adequately protected due to declining value or misuse of the secured property, then the creditor may seek relief from stay.

COLLECTIONS: SEEKING AND COLLECTING A JUDGMENT

On April 25, 2011, Terry Ehrlich and Jean Arnold will be teaching at a seminar put on by National Business Institute at the Red Lion Inn at 4040 Quebec Street.  Terry will be teaching on Identifying Fraudulent Conveyances, Asset Searches and the Judgment Debtor Exam and Post-Judgment Collection Strategies.  Jean will be teaching on Creditor Remedies available in Bankruptcy, Fair Debt Collection Practices, and Averting Potential Ethical Problems in Collection.  If you want to learn about collection, this is the seminar to go to!

FRAUDULENT CONVEYANCES:  What happens if you are trying to collect from a debtor and you find that he/she recently transferred all or a large portion of their property to another person, most likely the spouse.  I recently became involved in litigation regarding just that issue.  The husband owned a large house in Elbert County with his wife.  As litigation loomed, he quit claimed his interest in the house to his wife, so that she is now the sole owner.  Is this a fraudulent transfer?  Colorado Statute defines a fraudulent transfer two ways: either a transfer made with actual intent to hinder, delay, or defraud any creditor, or a reasonably equivalent value was not given in exchange for the transfer and the debtor was engaged in a business or transaction in which the remaining assets of the debtor were unreasonably small in relation to the business or transaction. 

The second of these factors would eliminate a sale of an asset made to a unrelated third party for the value of the asset, such as a sale of real property.  In my situtation, there was no a sale to an unrelated third party.  How do we prove intent to defraud?  The Court can look at multiple factors.  Was the transfer made to an insider?  The wife is considered an insider.  Did the debtor retain control of the property after it was transferred?  Since his wife is the owner, it can be assumed that the use of the property is still available to the debtor.  Before the transfer was made, was the debtor sued or threatened with lawsuit?  The debtor had been sued personally in multiple lawsuits totalling hundreds of thousands of dollars. Was the transfer was of substantially all of the debtor's assets?  It was a large portion of his assets.  Did the debtor abscond?  This  debtor moved to Texas, which is very protective of debtors.  Did the transfer occur shortly before or after a substantial debt was incurred?  The transfer occurred shortly before subtantial judgments were entered  against the debtor.  Did the debtor become insolvent as a result of the transfer?  This fact is not known at this time. Was a reasonably equivalent value received for the transfer?  The wife has alleged that she gave her husband consideration, but she has has not given proof of what that consideration was.  Was this a fraudulent transfer?  Soon the judge will decide. that question, if the parties do not settle it before trial.

http://www.arnoldarnold.com/Practice-Areas/collections-and-creditor-bankruptcy.shtml