In Precision
Roofing, Inc., Appellant v. David Zavelson & Tracy Zavelson, Appellees,
No. 03-17-00550-CV, 2018 WL 5852680, at *1 (Tex. App. Nov. 9, 2018), the Texas
Court of Appeals addressed the validity of a subcontractor’s materialman’s liens.
In October 2014, David
Zavelson—but not Tracy Zavelson—signed a contract with Cox Development
Corporation to remodel and expand their home. Cox subcontracted “roofing and
flashing services” to Precision.
In December 2014, David
Zavelson terminated the contract with Cox. Shortly after David terminated the
contract, Precision filed two affidavits in the real property records of Travis
County claiming a lien on both the Property and the retainage in the total
amount of $15,374.00. Precision subsequently filed suit to hold the Zavelson’s
personally liable. Precision pursued its claim utilizing both the traditional
materialman’s lien statute, as well as Texas’s retainage statute.
Under Texas law, “[t]o
fix a lien on a homestead, the person who is to furnish material or perform
labor and the owner must execute a written contract setting forth the terms of
the agreement.” And, “[i]f the owner is married, the contract must be signed by
both spouses.”
The Zavelson’s asserted
that this requirement was not met because Tracy did not sign the contract. The
trial court agreed and held that because Tracy had not signed the contract,
Precision’s traditional materialman’s lien claim could not move forward. Precision
would therefore only be left with the option to pursue its retainage claim
against David.
Unfortunately for
Precision, the Court held that the plain statutory language reflects that the
legislature intended [Texas’s retainage statute] to address contractual, rather
than statutory, retainage claims. Because David’s contract with Cox did not
require him to retain funds as progress payments were made, David could not be
held personally liable for Cox’s default. Because Precision was left with no
remedy against the Zavelson’s, the statute also required the Court to force
Precision to pay the Zavelson’s attorney’s fees for bringing the claim.
Precision maintained
that a lien on the owner’s property cannot be a derivative claimant’s sole
remedy for the failure to retain because it would undermine the statutory
purpose of protecting subcontractors and other derivative claimants working on
homesteads. Precision argued that such persons are usually not in a position to
see that the “highly technical legalities” to fix a lien to a homestead are
fulfilled. The Court of Appeals acknowledged those
concerns, but noted that its hands were tied based upon the plain language of
the statute.
Although this decision is specific to Texas, this case is nonetheless a good reminder of the harsh outcome that can result in pursuing a materialman’s lien against a property owner. There are specific deadlines and requirements that must be met and a Court will be unable to provide any type of equitable remedy if they are not strictly followed. For this reason, we recommend all contractors should consider consulting a construction attorney to ensure their standard contracts provide an adequate remedy should a general contractor default.
