779.02 Annotation Because an entire project was covered by one contract, 3 buildings on 3 adjoining lots constituted a single improvement under sub. (1) (c). Cline-Hanson, Inc. v. Esselman, 107 Wis. 2d 381, 319 N.W.2d 829 (1982).
779.02 AnnotationSub. (1) (c) is discussed. Sullivan Bros. v. State Bank of Union Grove, 107 Wis. 2d 641, 321 N.W.2d 545 (Ct. App. 1982).
779.02 Annotation Sub. (5) does not require that payments be made directly from the owner to subcontractors for a trust to be created. Money deposited into a bank did not lose its trust fund status. Kraemer Bros. v. Pulaski State Bank, 138 Wis. 2d 395, 406 N.W.2d 379 (1987).
779.02 Annotation A trust fund under sub. (5) is created when an owner constructively pays an insolvent contractor by delivering money to the clerk of court seeking a declaratory judgment as to distribution. A subcontractor need not preserve lien rights. Wis. Dairies Coop. v. Citizens Bank, 160 Wis. 2d 758, 467 N.W.2d 124 (1991).
779.02 Annotation A violation of sub. (5) may be found without showing that the prime contractor intended to permanently deprive laborers and suppliers of compensation. The intent required is the intent to use the moneys subject to a trust inconsistent with the purpose of the trust. State v. Sobkowiak, 173 Wis. 2d 327, 496 N.W.2d 620 (Ct. App. 1992).
779.02 Annotation Under sub. (5), a corporate officer who had the power and authority to ensure that corporate affairs were properly managed and who did not receive a personal benefit may be personally responsible for a misappropriation. Capen Wholesale, Inc. v. Probst, 180 Wis. 2d 354, 509 N.W.2d 120 (Ct. App. 1993).
779.02 Annotation The prime contractor's duty under sub. (6) to defend the property owners against subcontractors' lien claims is not altered because the prime contractor is also owed money. Torke/Wirth/Pujara v. Lakeshore Towers, 192 Wis. 2d 481, 531 N.W.2d 419 (Ct. App. 1995).
779.02 Annotation The exemption under sub. (1) (c) to the notice requirement for improvements where more than 4 residential units are provided is not restricted to the actual provision of the dwellings, but also applies to improvements that facilitate providing the dwellings where the improvements are not provided to each living unit separately but are provided to a project as a whole. Riverwood Park, Inc. v. Central Ready-Mixed Concrete, Inc. 195 Wis. 2d 821, 536 N.W.2d 722 (Ct. App. 1995).
779.02 Annotation The test for a violation of sub. (5) is whether all the money received by the contractor was paid for labor and materials used for contracted improvements. It is not whether an individual subcontractor received its full billed amount. Capital City Sheet Metal, Inc. v. Voytovich, 217 Wis. 2d 683, 578 N.W.2d 643 (Ct. App. 1998).
779.02 Annotation Where a lien claimant's work was essential to allow an improvement to be used for its intended purpose and the improved area exceeded 10,000 square feet, the work "provided" 10,000 square feet of space to the facility under sub. (1) (c) and the claimant was exempt from the sub. (2) lien notice requirement. U.S. Fire Protection v. St. Michael's Hospital, 221 Wis. 2d 410, 585 N.W.2d 659 (Ct. App. 1998).
779.02 Annotation Monies paid to the trustee in bankruptcy of an insolvent contractor are not trust funds. In re Mercury Heating Co. 322 F. Supp. 1161.
779.03 779.03 Lien valid unless waived by claimant personally, or unless payment bond furnished.
779.03(1) (1)No agreement by other than claimant may invalidate lien. Subject to s. 779.05, a lien claimant may waive the lien given by s. 779.01 by a writing signed by the lien claimant, but no action by nor agreement between any other persons shall invalidate the lien, other than payment in full to the claimant for the labor or materials to which the lien claim relates.
779.03(2) (2)Payment bond may eliminate lien rights. In any case where the prime contractor, pursuant to agreement with the owner, has furnished a payment bond under s. 779.035, all liens provided by s. 779.01 except those of any prime contractor do not exist, ss. 779.02 (1) to (4) and (6) and 779.06 do not apply and all claimants who have no lien shall follow the requirements and procedures specified in ss. 779.035 and 779.036.
779.03 History History: 1973 c. 230; 1979 c. 32 ss. 57, 92 (9); Stats. 1979 s. 779.03; 1993 a. 486.
779.035 779.035 Form of contract; payment bond; remedy.
779.035(1)(1) To eliminate lien rights as provided in s. 779.03 (2), the contract between the owner and the prime contractor for the construction of the improvement shall contain a provision for the payment by the prime contractor of all claims for labor performed and materials or plans or specifications furnished, used or consumed, except plans or specifications furnished by the architect, professional engineer or surveyor employed by the owner, in making such improvement and performing the work of improvement. The contract shall not be effective to eliminate lien rights unless the prime contractor gives a bond issued by a surety company licensed to do business in this state. The bond shall carry a penalty for unpaid claims of not less than the contract price, and shall be conditioned for the payment to every person entitled thereto of all the claims for labor performed, and materials furnished under the contract and subsequent amendments thereto, to be used or consumed in making the improvement or performing the work of improvement as provided in the contract and subsequent amendments thereto. The bond shall be approved by the owner and by any mortgage lender furnishing funds for the construction of the improvement. No assignment, modification or change in the contract, or change in the work covered thereby, or any extension of time for completion of the contract shall release the sureties on the bond.
779.035(2) (2)
779.035(2)(a)(a) Except as provided in par. (b), any party in interest may, not later than one year after the completion of the contract for the construction of the improvement, maintain an action in his or her own name against the prime contractor and the sureties upon the bond for the recovery of any damages sustained by reason of the failure of the prime contractor to comply with the contract or with the contract between the prime contractor and subcontractors. If the amount realized on the bond is insufficient to satisfy all of the claims of the parties in full, it shall be distributed among the parties proportionally.
779.035(2)(b)1.1. Except as provided in subd. 2., a subcontractor or supplier may maintain an action under par. (a) only if the subcontractor or supplier has notified the prime contractor in writing that the subcontractor or supplier was providing labor or materials for the construction of the improvement. The notice must be provided no later than 60 days after the date on which the subcontractor or supplier first provided the labor or materials.
779.035(2)(b)2. 2. A notice under subd. 1. is not required if any of the following applies:
779.035(2)(b)2.a. a. The contract for the provision of the labor or materials does not exceed $5,000.
779.035(2)(b)2.b. b. The action is brought by an employee of the prime contractor, the subcontractor or the supplier.
779.035(2)(b)2.c. c. The subcontractor or supplier is listed in a written contract, or in a document appended to a written contract, between a subcontractor or supplier and the prime contractor.
779.035(3) (3) In any case in which the improvement contract and bond have been prepared and executed pursuant to sub. (1) upon inquiry by any subcontractor, materialman, laborer or mechanic furnishing labor or materials for said improvement, the prime contractor and the owner shall so advise the person making the inquiry and shall give the person reasonable opportunity to inspect and examine the contract and bond.
779.035 History History: 1973 c. 230; 1979 c. 32 ss. 57, 92 (9); 1979 c. 110 s. 60 (12); 1979 c. 176; Stats. 1979 s. 779.035; 1991 a. 200; 1993 a. 213; 1995 a. 395.
779.035 Annotation The liability of a prime contractor for damages to employees of a subcontractor under s. 779.14 (2) did not include wage penalties under s. 66.293 (3). Consent to be a named a party under s. 66.293 (3) may occur after one year where the action is for damages under s. 66.293 in the name of the plaintiffs and other similarly situated employees and was filed within the one year time period. Strong v. C.I.R., Inc. 184 Wis. 2d 619, 516 N.W.2d 719 (1994).
779.035 Annotation A provision in a contractor's payment bond requiring a supplier of a subcontractor to provide notice to the prime contractor within 90 days after supplying materials in order to secure his rights under the payment bond was not inconsistent with the one-year statute of limitations provided by sub. (2), which was also incorporated into the agreement, and hence was not contrary to public policy. R.C. Mahon Co. v. Hedrich Construction Co. 69 Wis. 2d 456, 230 N.W.2d 621.
779.036 779.036 Contracts with payment bond; lien; notice; duty of owner and lender.
779.036(1) (1) In any case in which an improvement is constructed or to be constructed pursuant to a contract and payment bond under s. 779.035, any person furnishing labor or materials or plans or specifications to be used or consumed in making the improvement, to any prime contractor or subcontractor shall have a lien on the money or other payment due or to become due the prime contractor or subcontractor therefor, if the lienor, before payment is made to the prime contractor or subcontractor, gives written notice of the lienor's claim by registered mail with return receipt requested to the owner or authorized agent and to any mortgage lender furnishing funds for the construction of the improvement. Upon receipt of the notice, the owner and lender shall assure that a sufficient amount is withheld to pay the claim and, when it is admitted by the prime contractor or subcontractor involved or established under sub. (3), shall pay the claim and charge it to the prime contractor or subcontractor as appropriate. Any owner or lender violating this duty shall be liable to the claimant for the damages resulting from the violation. There shall be no preference among lienors serving such notices.
779.036(2) (2) A copy of the notice provided in sub. (1) also shall be served by the lienor, within 7 days after service of the notice upon the owner and lender, upon the prime contractor or subcontractor by registered mail with return receipt requested.
779.036(3) (3) If the prime contractor or subcontractor does not dispute the claim within 30 days after service of written notice under sub. (2), by registered mail with return receipt requested to the owner and lender, the amount claimed shall be paid over to the claimant on demand and charged to the prime contractor or subcontractor pursuant to sub. (1). If the prime contractor or subcontractor disputes the claim, the right to a lien and to the moneys in question shall be determined in an action brought by the claimant or the prime contractor or subcontractor. If the action is not brought within 3 months from the time the notice required by sub. (1) is served, the lien rights under this section are barred.
779.036(4) (4)
779.036(4)(a)(a) When the total lien claims exceed the sum due the prime contractor or subcontractor concerned and where the prime contractor or subcontractor has not disputed the amounts of the claims filed, the owner with the concurrence of the lender shall determine on a proportional basis who is entitled to the amount being withheld and shall notify all claimants and the prime contractor or subcontractor in writing of the determination. Unless an action is commenced by a claimant or by the prime contractor or subcontractor within 20 days after the mailing of said notice, the money shall be paid out in accordance with the determination and the liability of the owner and lender to any claimant shall cease.
779.036(4)(b) (b) If an action is commenced, all claimants, the owner and the lender shall be made parties. Such action shall be brought within 6 months after completion of the work of improvement or within the time limit prescribed by par. (a), whichever is earlier.
779.036(4)(c) (c) Within 10 days after the filing of a certified copy of the judgment in any such action with the owner and lender, the money due the prime contractor or subcontractor shall be paid to the clerk of court to be distributed in accordance with the judgment.
779.036 History History: 1979 c. 32 ss. 57, 92 (9); 1979 c. 110 s. 60 (11); 1979 c. 176; Stats. 1979 s. 779.036.
779.036 Annotation The initial availability to the supplier of a lien under this section on payments made to a subcontractor, did not preclude the bringing of an action on the payment bond, since nothing in the statute itself indicates it is to be an exclusive remedy, and the legislative history indicates it was intended as a supplementary remedy to the supplier's rights under the payment bond provided for in s. 779.035. R.C. Mahon Co. v. Hedrich Construction Co. 69 Wis. 2d 456, 230 N.W.2d 621.
779.036 Annotation A construction lien protects employee benefits in addition to hourly wages. Plumber's Local 458 v. Howard Immel, 151 Wis. 2d 233, 445 N.W.2d 43 (Ct. App. 1989).
779.04 779.04 Claims assignable; notice; prior payment. All claims for liens and right to recover therefor under this subchapter are assignable. Notice in writing of such assignment may be served upon the owner of the property affected and all payments made by the owner before service of such notice shall discharge the debt to the amount paid. The assignee may file petitions for such liens and may bring an action in the assignee's name to enforce the same, subject to the limitations in s. 779.01 (5).
779.04 History History: 1979 c. 32 ss. 57, 92 (9); 1979 c. 176; Stats. 1979 s. 779.04.
779.05 779.05 Waivers of lien.
779.05(1)(1) Any document signed by a lien claimant or potential claimant and purporting to be a waiver of construction lien rights under this subchapter, is valid and binding as a waiver whether or not consideration was paid therefor and whether the document was signed before or after the labor or material was furnished or contracted for. Any ambiguity in such document shall be construed against the person signing it. Any waiver document shall be deemed to waive all lien rights of the signer for all labor and materials furnished or to be furnished by the claimant at any time for the improvement to which the waiver relates, except to the extent that the document specifically and expressly limits the waiver to apply to a particular portion of such labor and materials. A lien claimant or potential lien claimant of whom a waiver is requested is entitled to refuse to furnish a waiver unless paid in full for the work or material to which the waiver relates. A waiver furnished is a waiver of lien rights only, and not of any contract rights of the claimant otherwise existing.
779.05(2) (2) A promissory note or other evidence of debt given for any lienable claim shall not be deemed a waiver of lien rights unless the note or other instrument is received as payment and expressly declares that receipt thereof is a waiver of lien rights.
779.05 History History: 1979 c. 32 s. 57; Stats. 1979 s. 779.05.
779.05 Annotation Public improvement liens under this section are subject to the waiver provision of s. 289.05 (1), 1977 stats. [now s. 779.05 (1)]. Since waiver of a public improvement lien disposes of lien itself, refiling of a claim for lien after a waiver was nullity and the fact that the claim was not disputed following refiling did not revive the lien. Druml Co., Inc. v. New Berlin, 78 Wis. 2d 305, 254 N.W.2d 265.
779.06 779.06 Filing claim and beginning action; notice required before filing; contents of claim document.
779.06(1)(1) No lien under s. 779.01 shall exist and no action to enforce a lien under s.779.01 shall be maintained unless within 6 months from the date the lien claimant furnished the last labor or materials a claim for the lien is filed in the office of the clerk of circuit court of the county in which the lands affected by the lien lie, and unless within 2 years from the date of filing a claim for lien an action is brought and summons and complaint filed. A claim for a lien may be filed and entered in the judgment and lien docket, and action brought, notwithstanding the death of the owner of the property affected by the action or of the person with whom the original contract was made, with like effect as if he or she were then living.
779.06(2) (2) No lien claim may be filed or action brought thereon unless, at least 30 days before timely filing of the lien claim, the lien claimant serves on the owner, personally or by registered mail with return receipt requested, a written notice of intent to file a lien claim. The notice is required to be given whether or not the claimant has been required to and has given a previous notice pursuant to s. 779.02. Such notice shall briefly describe the nature of the claim, its amount and the land and improvement to which it relates.
779.06(3) (3) Such a claim for lien shall have attached thereto a copy of any notice given in compliance with s. 779.02 and a copy of the notice given in compliance with sub. (2), and shall contain a statement of the contract or demand upon which it is founded, the name of the person against whom the demand is claimed, the name of the claimant and any assignee, the last date of the performance of any labor or the furnishing of any materials, a legal description of the property against which the lien is claimed, a statement of the amount claimed and all other material facts in relation thereto. Such claim document shall be signed by the claimant or attorney, need not be verified, and in case of action brought, may be amended, as pleadings are.
779.06 History History: 1979 c. 32 ss. 57, 92 (9); 1979 c. 176; Stats. 1979 s. 779.06; 1995 a. 224.
779.06 Annotation Personal service under sub. (2) is subject to a less stringent standard than service of summons. Notice under sub. (2) may be given by an agent of a claimant. Kruse v. Miller Brewing Co. 89 Wis. 2d 522, 279 N.W.2d 198 (1979).
779.06 Annotation The limitation period under sub. (1) commenced on the date the claimant furnished the last materials for the project, although the claimant supplied 2 succeeding subcontractors and the 2nd subcontractor paid in full. Fredrick Redi-Mix, Inc. v. Thomson, 96 Wis. 2d 715, 292 N.W.2d 528 (1980).
779.06 Annotation Where a contractor gave a lien notice to the initial owner when work commenced and had no notice of subsequent transfer of title, the contractor's lien rights prevailed against subsequent owners who received no lien notice. Wes Podany Const. Co., Inc. v. Nowicki, 120 Wis. 2d 319, 354 N.W.2d 755 (Ct. App. 1984).
779.06 Annotation Mail service under sub. (2) is completed upon mailing. Torke/Wirth/Pujara v. Lakeshore Towers, 192 Wis. 2d 481, 531 N.W.2d 419 (Ct. App. 1995).
779.06 Annotation Sub. (3) does not restrict when amendments to lien claims can be made, but only provides that if an amendment is made after an action is brought it may be amended in the same manner as pleadings. Torke/Wirth/Pujara v. Lakeshore Towers, 192 Wis. 2d 481, 531 N.W.2d 419 (Ct. App. 1995).
779.06 Annotation A subcontractor's liens are not protected by incorporation into the prime contractor's lien if the subcontractor makes an independent claim. If the subcontractor brings a lien claim independent from the prime contractor, it is required to follow the procedures required for all claimants under the statutes. Torke/Wirth/Pujara v. Lakeshore Towers, 192 Wis. 2d 481, 531 N.W.2d 419 (Ct. App. 1995).
779.07 779.07 Judgment and lien docket.
779.07(1) (1) Every clerk of circuit court shall keep a judgment and lien docket in which shall be entered, immediately upon filing, the proper entries under the appropriate headings specified in this subsection, relative to each claim for lien filed, opposite the names of the persons against whom the lien is claimed. The names shall be entered alphabetically. Each page in the judgment and lien docket shall be divided into 9 columns, with headings in the following sequence to the respective columns, as follows:
779.07(1)(a) (a) Name of person against whom lien is claimed.
779.07(1)(b) (b) Name of claimant or assignee.
779.07(1)(c) (c) Attorney for claimant.
779.07(1)(d) (d) Last date of performance of labor or furnishing materials.
779.07(1)(e) (e) Description of copies of notices attached to claim when filed.
779.07(1)(f) (f) Date and time of filing claim.
779.07(1)(g) (g) Description of property.
779.07(1)(h) (h) Amount claimed.
779.07(1)(i) (i) Satisfaction.
779.07(2) (2) The judgment and lien docket shall be presumptive evidence of the correctness of its entries.
779.07 History History: 1979 c. 32 s. 57; Stats. 1979 s. 779.07; 1993 a. 486; 1995 a. 224.
779.08 779.08 Release of lien; undertaking.
779.08(1) (1) The person against whom a lien is claimed or any other interested party may file with the clerk of court in whose office the claim for lien is filed an undertaking executed by 2 or more sufficient sureties to the effect that the person against whom the lien is claimed shall pay the amount of the claim and all costs and damages which may be awarded against that person on account of the lien or in lieu thereof deposit with the clerk of the court a sum of money, certified check or negotiable government bonds in par value equal to 125% of the claim for lien. The court in which any action to foreclose the lien may be brought shall determine any question of sufficiency of the sureties if exception is taken thereto by the lien claimant within 10 days after notice of the filing of such undertaking or deposit of other security and may upon notice and upon motion of any party, order any sum of money deposited to be invested. The depositor shall be entitled to any income from the investments, certified check or negotiable U.S. government bonds deposited and the clerk shall pay the income to the depositor without order when received or, in the case of coupons, as the income becomes due.
779.08(2) (2) If an undertaking is furnished, it shall be accompanied by the affidavits of the sureties in which each states that the surety is worth, over and above all debts and liabilities in property within this state not exempt from execution, an amount in the aggregate equal to 125% or more of the amount of the claim for lien.
779.08(3) (3) The person against whom the lien is claimed or other interested party depositing the security shall cause to be served upon the lien claimant a notice of the filing of the undertaking or deposit of other security and, if an undertaking, a copy thereof, which notice shall state where and when the undertaking was filed or the security was deposited.
779.08(4) (4) Any action brought after the furnishing of security or pending at the time of the furnishing thereof in accordance with this section shall proceed as if no security had been furnished, except that after the time within which exceptions may be taken to the security, or pursuant to order of the court upon any exception so taken, the clerk shall satisfy the claim for lien of record and discharge any lis pendens filed, and except that the lien thereupon shall attach to the security and the amount adjudged due in the proceeding for foreclosure thereof shall be satisfied out of the security, and the property described in the lien claim shall thenceforth be entirely free of the lien and shall in no way be involved in subsequent proceedings.
779.08(5) (5) If no action to foreclose the lien is brought within the time specified by s. 779.06 (1), the clerk of circuit court in whose office the undertaking or other security was filed or deposited shall on request, and without notice, return the undertaking or security to the party filing or depositing it.
779.08 History History: 1979 c. 32 ss. 57, 92 (9); 1979 c. 176; Stats. 1979 s. 779.08.
779.09 779.09 Foreclosure of lien; procedure; parties. In the foreclosure of liens mentioned in s. 779.01, ch. 846 shall control as far as applicable unless otherwise provided in this subchapter. All persons having filed claims for liens under s. 779.01 may join as plaintiffs, and if any do not join they may be made defendants. All persons having liens subsequent to such lien may be joined as defendants. If any person who is a proper party is not a party to the action the person may, at any time before judgment, be made a defendant, and any person who after the commencement of the action obtains a lien or becomes a purchaser may, at any time before judgment, be made a defendant.
779.09 History History: 1973 c. 189 s. 20; Sup. Ct. Order, 67 Wis. 2d 585, 775 (1975); 1975 c. 218; 1979 c. 32 ss. 57, 92 (9); Stats. 1979 s. 779.09.
779.10 779.10 Judgment. The judgment shall adjudge the amount due to each claimant who is a party to the action. It shall direct that the interest of the owner in the premises at the commencement of the work or furnishing the materials for which liens are given and which the owner has since acquired, or so much thereof as is necessary, be sold to satisfy the judgment, and that the proceeds be brought into court with the report of sale to abide the order of the court. If the premises can be sold in parcels without injury to the parties, the court may adjudge that the sale be so made. If the plaintiff fails to establish a lien upon the premises but does establish a right to recover for labor or materials, the plaintiff may have a judgment against the party liable.
779.10 History History: 1979 c. 32 s. 57; 1979 c. 176; Stats. 1979 s. 779.10.
779.11 779.11 Distribution of proceeds of sale. The several claimants whose liens were established in the action shall be paid without priority among themselves. If the sum realized at the sale under s. 779.10 is insufficient after paying the costs of the action and the costs of making the sale to pay the liens in full they shall be paid proportionally.
779.11 History History: 1979 c. 32 ss. 57, 92 (9); 1979 c. 110 s. 60 (12); Stats. 1979 s. 779.11.
779.12 779.12 Sale; notice and report; deficiency judgment; writ of assistance.
779.12(1)(1) All sales under judgments in accordance with s. 779.10 shall be noticed, conducted and reported in the manner provided for the sale of real estate upon execution and shall be absolute and without redemption. In case such sale is confirmed, the deed given thereon shall be effectual to pass to the purchaser all that interest in the premises which is directed to be sold.
779.12(2) (2) If any deficiency arises upon the sale in the payment of the sums adjudged to be due to any lien claimant, the court, upon confirming the sale, may render judgment for the deficiency if demanded in the pleadings against the defendant legally liable to pay the deficiency. The judgment may be entered in the judgment and lien docket and enforced in the same manner that ordinary judgments are. The purchasers at the sale shall be entitled to a writ of assistance under s. 815.63 to obtain possession of the premises sold.
779.12 History History: Sup. Ct. Order, 67 Wis. 2d 585, 775 (1975); 1979 c. 32 ss. 57, 92 (9); Stats. 1979 s. 779.12; 1995 a. 224.
779.13 779.13 Satisfaction of judgment or lien; correction of errors.
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