779.14(1)(a)
(a) Any person who has a direct contractual relationship, expressed or implied, with the prime contractor or with any subcontractor of the prime contractor to perform labor or furnish materials, except as provided in
par. (b).
779.14(1)(b)
(b) With respect to contracts entered into under
s. 84.06 (2) for highway improvements, any person who has a direct contractual relationship, expressed or implied, with the prime contractor to perform labor or furnish materials.
779.14(1e)
(1e) Contract requirements regarding duties of prime contractor. 779.14(1e)(a)(a) All contracts involving $10,000 or more for the performance of labor or furnishing materials when the same pertains to any public improvement or public work shall contain a provision for the payment by the prime contractor of all claims for labor performed and materials furnished, used or consumed in making the public improvement or performing the public work, including, without limitation because of enumeration, fuel, lumber, building materials, machinery, vehicles, tractors, equipment, fixtures, apparatus, tools, appliances, supplies, electric energy, gasoline, motor oil, lubricating oil, greases, state imposed taxes, premiums for worker's compensation insurance and contributions for unemployment insurance.
779.14(1e)(b)
(b) All contracts that are in excess of $30,000, as indexed under
sub. (1s), and that are for the performance of labor or furnishing materials for a public improvement or public work shall contain a provision under which the prime contractor agrees, to the extent practicable, to maintain a list of all subcontractors and suppliers performing labor or furnishing materials under the contract.
779.14(1m)
(1m) Payment and performance assurance requirements. 779.14(1m)(c)(c)
State contracts. The following requirements apply to contracts with the state for the performance of labor or furnishing materials for a public improvement or public work:
779.14(1m)(c)1.
1. In the case of a contract with a contract price exceeding $10,000, as indexed under
sub. (1s), but not exceeding $100,000, as indexed under
sub. (1s):
779.14(1m)(c)1.a.
a. The contract shall include a provision which allows the state to make direct payment to subcontractors or to pay the prime contractor with checks that are made payable to the prime contractor and to one or more subcontractors. This
subd. 1. a. does not apply to any contract entered into by the state under authority granted under
chs. 84,
85 and
86.This
subd. 1. a. also does not apply to any contract with a town, city, village, county or school district for the construction, improvement, extension, repair, replacement or removal of a transportation facility, as defined under
s. 84.185 (1) (d); bikeway, as defined under
s. 84.60 (1) (a); bridge; parking lot or airport facility.
779.14(1m)(c)1.b.
b. The contract shall comply with written standards established by the department of administration. Written standards established under this
subd. 1. b. shall include criteria for determining whether the contract requires payment or performance assurances and, if so, what payment or performance assurances are required.
779.14(1m)(c)2.
2. In the case of a contract with a contract price exceeding $100,000, as indexed under
sub. (1s), but not exceeding $250,000, as indexed under
sub. (1s):
779.14(1m)(c)2.a.
a. The contract shall include a provision which allows the state to make direct payment to subcontractors or to pay the prime contractor with checks that are made payable to the prime contractor and to one or more subcontractors. This
subd. 2. a. does not apply to any contract entered into by the state under authority granted under
chs. 84,
85 and
86.This
subd. 2. a. also does not apply to any contract with a town, city, village, county or school district for the construction, improvement, extension, repair, replacement or removal of a transportation facility, as defined under
s. 84.185 (1) (d); bikeway, as defined under
s. 84.60 (1) (a); bridge; parking lot or airport facility.
779.14(1m)(c)2.b.
b. The contract shall require the prime contractor to provide a payment and performance bond meeting the requirements of
par. (e), unless the department of administration allows the prime contractor to substitute a different payment assurance for the payment and performance bond. The department of administration may allow a prime contractor to substitute a different payment and performance assurance for the payment and performance bond only after the contract has been awarded and only if the substituted payment and performance assurance is for an amount at least equal to the contract price and is in the form of a bond, an irrevocable letter of credit or an escrow account acceptable to the department of administration. The department of administration shall establish written standards under this
subd. 2. b. governing when a different payment and performance assurance may be substituted for a payment and performance bond under
par. (e).
779.14(1m)(c)3.
3. In the case of a contract with a contract price exceeding $250,000, as indexed under
sub. (1s), the contract shall require the prime contractor to obtain a payment and performance bond meeting the requirements under
par. (e).
779.14(1m)(d)
(d)
Local government contracts. The following requirements apply to contracts, other than contracts with the state, for the performance of labor or furnishing materials for a public improvement or public work:
779.14(1m)(d)1.
1. In the case of a contract with a contract price exceeding $10,000, as indexed under
sub. (1s), but not exceeding $50,000, as indexed under
sub. (1s):
779.14(1m)(d)1.a.
a. The contract shall include a provision which allows the governmental body that is authorized to enter into the contract to make direct payment to subcontractors or to pay the prime contractor with checks that are made payable to the prime contractor and to one or more subcontractors. This
subd. 1. a. does not apply to any contract with a town, city, village, county or school district for the construction, improvement, extension, repair, replacement or removal of a transportation facility, as defined under
s. 84.185 (1) (d); bikeway, as defined under
s. 84.60 (1) (a); bridge; parking lot or airport facility.
779.14(1m)(d)1.b.
b. The contract shall comply with written standards established by the public body authorized to enter into the contract. Written standards established under this
subd. 1. b. shall include criteria for determining whether the contract requires payment or performance assurances and, if so, what payment or performance assurances are required.
779.14(1m)(d)2.
2. In the case of a contract with a contract price exceeding $50,000, as indexed under
sub. (1s), but not exceeding $100,000, as indexed under
sub. (1s):
779.14(1m)(d)2.a.
a. The contract shall include a provision which allows the governmental body that is authorized to enter into the contract to make direct payment to subcontractors or to pay the prime contractor with checks that are made payable to the prime contractor and to one or more subcontractors. This
subd. 2. a. does not apply to any contract with a town, city, village, county or school district for the construction, improvement, extension, repair, replacement or removal of a transportation facility, as defined under
s. 84.185 (1) (d); bikeway, as defined under
s. 84.60 (1) (a); bridge; parking lot or airport facility.
779.14(1m)(d)2.b.
b. Except as provided in
sub. (4), the contract shall require the prime contractor to provide a payment and performance bond meeting the requirements of
par. (e), unless the public body authorized to enter into the contract allows the prime contractor to substitute a different payment assurance for the payment and performance bond. The public body may allow a prime contractor to substitute a different payment and performance assurance for the payment and performance bond only if the substituted payment and performance assurance is for an amount at least equal to the contract price and is in the form of a bond, an irrevocable letter of credit or an escrow account acceptable to the public body. The public body shall establish written standards under this
subd. 2. b. governing when a different payment and performance assurance may be substituted for a payment and performance bond under
par. (e).
779.14(1m)(d)3.
3. Except as provided in
sub. (4), in the case of a contract with a contract price exceeding $100,000, as indexed under
sub. (1s), the contract shall require the prime contractor to obtain a payment and performance bond meeting the requirements under
par. (e).
779.14(1m)(e)2.2. A bond required under
par. (c) or
(d) shall carry a penalty of not less than the contract price, and shall be conditioned for all of the following:
779.14(1m)(e)2.b.
b. The payment to every person, including every subcontractor or supplier, of all claims that are entitled to payment for labor performed and materials furnished for the purpose of making the public improvement or performing the public work as provided in the contract and
sub. (1e) (a).
779.14(1m)(e)3.
3. A bond required under
par. (c) shall be approved for the state by the state official authorized to enter the contract. A bond required under
par. (d) shall be approved for a county by its corporation counsel, for a city by its mayor, for a village by its president, for a town by its chairperson, for a school district by its president and for any other public board or body by the presiding officer thereof.
779.14(1m)(e)4.
4. No assignment, modification or change of the contract, change in the work covered thereby or extension of time for the completion of the contract may release the sureties on a bond required under
par. (c) or
(d).
779.14(1m)(e)5.
5. Neither the invitation for bids nor the person having power to approve the prime contractor's bond may require that a bond required under
par. (c) or
(d) be furnished by a specified surety company or through a specified agent or broker.
779.14(1m)(f)
(f)
Direct purchase contracts. Paragraphs (c) and
(d) do not apply to a contract for the direct purchase of materials by the state or by a local unit of government.
779.14(1s)
(1s) Indexing of contract thresholds. If a dollar amount is to be indexed under this subsection, the department of workforce development shall adjust the dollar amount biennially, the first adjustment to be made not sooner than December 1, 1998. The adjustment shall be in proportion to any change in construction costs since the effective date of this subsection under this subsection, or the last adjustment whichever is later. No adjustment shall be made for a biennium, if the adjustment to be made would be less than 5%.
779.14(2)
(2) Actions on a performance and payment bond. 779.14(2)(a)(a) Except as provided in
par. (am), no later than one year after the completion of work under the contract, any party in interest, including any subcontractor or supplier, may maintain an action in that party's name against the prime contractor and the sureties upon the bond for the recovery of any damages sustained by reason of any of the following:
779.14(2)(a)1.
1. Failure of the prime contractor to comply with the contract.
779.14(2)(a)2.
2. Except as provided in
subd. 3., failure of the prime contractor or a subcontractor of the prime contractor to comply with a contract, whether express or implied, with a subcontractor or supplier for the performance of labor or furnishing of materials for the purpose of making the public improvement or performing the public work that is the subject of the contract with the governmental entity.
779.14(2)(a)3.
3. With respect to contracts entered into under
s. 84.06 (2) for highway improvements, failure of the prime contractor to comply with a contract, whether express or implied, with a subcontractor or supplier of the prime contractor for the performance of labor or furnishing of materials for the purpose of making the highway improvement that is the subject of the contract with the governmental entity.
779.14(2)(am)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 has provided or will provide labor or materials to the public work or 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.
779.14(2)(am)2.
2. A notice under
subd. 1. is not required if any of the following applies:
779.14(2)(am)2.a.
a. The contract for the provision of the labor or materials does not exceed $5,000.
779.14(2)(am)2.b.
b. The action is brought by an employee of the prime contractor, the subcontractor or the supplier.
779.14(2)(am)2.c.
c. The subcontractor or supplier is listed in the list required to be maintained under
sub. (1e) (b) or in a written contract, or in a document appended to a written contract, between a subcontractor or supplier and the prime contractor.
779.14(2)(b)
(b) If the amount realized on the bond is insufficient to satisfy all claims of the parties in full, it shall be distributed among the parties proportionally.
779.14(3)
(3) Actions by a county. In an action by a county upon the bond all persons for whose protection it was given and who make claim thereunder may be joined in the action. The county highway commissioner may take assignments of all demands and claims for labor or material and enforce the same in the action for the benefit of the assignors, and the judgment may provide the manner in which the assignors shall be paid.
779.14(4)
(4) Bonding exemption. A contract with a local professional football stadium district under
subch. IV of ch. 229 is not required under
sub. (1m) (d) 2. b. or
3. to include a provision requiring the prime contractor to provide or obtain a payment and performance bond or other payment assurance.
779.14 Annotation
A subcontractor can maintain an action against the prime contractor and the prime contractor's surety if the claim is brought within one year after completion of work on the principal contract. Honeywell, Inc. v. Aetna Casualty & Surety Co.
52 Wis. 2d 425,
190 N.W.2d 499 (1971).
779.14 Annotation
In a complaint seeking to foreclose a construction lien on a municipal arena, an allegation that the lessee of the arena was acting as the city's agent in contracting for improvements thereto was sufficient to withstand a demurrer. James W. Thomas Const. Co., Inc. v. Madison,
79 Wis. 2d 345,
255 N.W.2d 551 (1977).
779.14 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) [now 66.0903 (3).] Consent to be a named party under s. 66.293 (3) may occur after one year when 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).
779.14 Annotation
A prime contractor is responsible for and must provide a bond in the amount of its own contract, not in the amount of the total of all prime contractors together. Golden Valley Supply Company v. American Insurance Company,
195 Wis. 2d 866,
537 N.W.2d 58 (Ct. App. 1995),
95-0357.
779.14 Annotation
Completion of work under a contract under sub. (2) occurs when a contractor has completed the work, not when the work is accepted. Arbor Vitae-Woodruff Joint School District No. 1 v. Gulf Insurance Co. 2002 WI App 24,
250 Wis. 2d 637,
639 N.W.2d 788.
779.15
779.15
Public improvements; lien on contractor; duty of officials. 779.15(1)(1) Any person furnishing labor or materials to be used or consumed in making public improvements or performing public work, including fuel, lumber, machinery, vehicles, tractors, equipment, fixtures, apparatus, tools, appliances, supplies, electrical energy, gasoline, motor oil, lubricating oil, greases, state imposed taxes, premiums for worker's compensation insurance and contributions for unemployment insurance, to any prime contractor, except in cities of the 1st class, shall have a lien on the money or bonds or warrants due or to become due the prime contractor therefor, if the lienor, before payment is made to the prime contractor, gives written notice to the debtor state, county, town or municipality of the claim. The debtor shall withhold a sufficient amount to pay the claim and, when it is admitted by the prime contractor or established under
sub. (3), shall pay the claim and charge it to the prime contractor. Any officer violating the duty hereby imposed shall be liable on his or her official bond to the claimant for the damages resulting from the violation. There shall be no preference between the lienors serving the notices.
779.15(2)
(2) Service of the notice under
sub. (1) shall be made by registered mail upon the clerk of the municipality or in the clerk's absence upon the treasurer. If any of the money due the prime contractor is payable by the state, service of the notice under
sub. (1) shall be served by registered mail upon the state department, board or commission having jurisdiction over the work. A copy of the notice shall be served concurrently by registered mail upon the prime contractor.
779.15(3)
(3) If a valid lien exists under
sub. (1) and the prime contractor does not dispute the claim within 30 days after service on the prime contractor of the notice provided in
sub. (2), by written notice to the debtor state, county, town or municipality, the amount claimed shall be paid over to the claimant on demand and charged to the prime contractor pursuant to
sub. (1). If the prime contractor 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. If the action is not brought within 3 months from the time the notice required by
sub. (1) is served, and notice of bringing the action filed with the officer with whom the claim is filed, the lien rights are barred.
779.15(4)(a)(a) When the total of the lien claims exceeds the sum due the prime contractor and where the prime contractor has not disputed the amounts of the claims filed, the debtor state, county, town or municipality, through the officer, board, department or commission with whom the claims are filed, shall determine who is entitled to the money and shall notify all claimants and the prime contractor in writing of the determination. Unless an action is commenced by a claimant or by the prime contractor within 20 days after the mailing of the notice, the money shall be paid out in accordance with the determination and the liability of the state, county, town or municipality to any lien claimant shall cease.
779.15(4)(b)
(b) If an action is commenced, all claimants shall be made parties and the action shall be commenced within 3 months after acceptance of the work by the proper public authority except as otherwise herein provided.
779.15(4)(c)
(c) Within 10 days after the filing of a certified copy of judgment in any such action with the officers with whom the notice authorized by
sub. (1) is filed, the money due the prime contractor shall be paid to the clerk of court to be distributed in accordance with the judgment.
779.15 History
History: 1975 c. 147 s.
54;
1975 c. 199,
224,
422;
1979 c. 32 s.
57;
1979 c. 176; Stats. 1979 s. 779.15;
1997 a. 39.
779.15 Annotation
A public improvement lien under this section is subject to the waiver provision of s. 289.05 (1) [now s. 779.05 (1)]. Since waiver of a public improvement lien disposes of the lien itself, the refiling of a claim for a lien after a waiver was a nullity and the fact that the claim was not disputed following the refiling did not revive the lien. Druml Co., Inc. v. New Berlin,
78 Wis. 2d 305,
254 N.W.2d 265 (1977).
779.15 Annotation
In a complaint seeking to foreclose a construction lien on a municipal arena, an allegation that the lessee of the arena was acting as the city's agent in contracting for improvements thereto was sufficient to withstand a demurrer. James W. Thomas Const. Co., Inc. v. Madison,
79 Wis. 2d 345,
255 N.W.2d 551 (1977).
779.155
779.155
Judgment creditors, attachment of funds due to public contractors. 779.155(1)
(1)
Limitations. This section does not apply to cases covered by
s. 812.42. Demands covered by
s. 779.15 have priority over judgments filed under this section. The remedies afforded by
s. 779.15 and by this section are complementary.
779.155(2)
(2) Certified copies of judgments filed. In this section, "municipality" includes city, village, county, town, school district, technical college district and any quasi municipal corporation. When the state or any municipality is indebted to any contractor, the owner of a judgment against the contractor may attach the debt by filing a certified copy of his or her judgment in the manner and subject to the conditions and limitations of this section. If the debt is owed by the state upon a contract for public improvements, the certified copy shall be filed with the officer, board, department or commission having jurisdiction over the work. Otherwise, the copy shall be filed with the department of administration. If the debt is owed by a municipality, the copy shall be filed with the municipal clerk or corresponding officer. The judgment creditor shall promptly notify the judgment debtor of the filing, within the time and as provided by
s. 812.07 for service upon the defendant.
779.155(3)
(3) Payment to judgment creditor; exception. Except as to contractors on public works, the proper officers of the state or municipality shall pay the judgment out of moneys due the contractor or which become due the contractor, but no payment shall be made until 30 days after the creditor has filed with such officers proof that the contractor had been notified of the filing of a copy of the judgment against the contractor.
779.155(4)
(4) Same; funds due public contractors. When the state or a municipality is indebted to a contractor for public improvements, payment shall not be made to the judgment creditor until 3 months after final completion and acceptance of the public work and then only out of moneys due the contractor in excess of unpaid lienable claims having priority under
s. 779.15.
779.155(5)(a)(a) For the purpose of administering this section, sworn statements of the contractor setting forth the unpaid lien claims that have been or may be filed under
s. 779.15 may be accepted by the proper officer, board, department, or commission, unless the judgment creditor or other interested person gives written notice that an action is pending to determine whether specified lien claims were incurred in performing the public work and the amount thereof, or to determine priorities in which event payments shall await the result of the action.
779.155(5)(b)
(b) Within 10 days after filing the certified copy of the judgment under
sub. (2), the contractor shall file the sworn statement in duplicate, with the proper officer, board, department or commission, who shall immediately furnish the judgment creditor with one of the statements. The judgment creditor shall have 10 days from the receipt thereof in which to serve the notice of pendency of the court action.
779.155(6)
(6) Payments to judgment creditor. After the expiration of the 3-month period, the moneys due the contractor in excess of unpaid lienable expenses and claims incurred in performing the public work shall be paid to the judgment creditor, but not exceeding the amount due on the judgment.
779.155(7)
(7) Priority of judgments over assignments. Any judgment filed under this section has priority over an assignment made by the contractor after the commencement of the action in which the judgment was obtained.
779.155 History
History: 1971 c. 154; Sup. Ct. Order,
67 Wis. 2d 585, 775 (1975);
1975 c. 218;
1979 c. 32 ss.
57,
92 (9);
1979 c. 176; Stats. 1979 s. 779.155;
1993 a. 80,
399,
486;
1999 a. 185;
2001 a. 38.
779.16
779.16
Theft by contractors. All moneys, bonds or warrants paid or to become due to any prime contractor or subcontractor for public improvements are a trust fund only in the hands of the prime contractor or subcontractor and shall not be a trust fund in the hands of any other person. The use of the moneys by the prime contractor or subcontractor for any purpose other than the payment of claims on such public improvement, before the claims have been satisfied, constitutes theft by the prime contractor or subcontractor and is punishable under
s. 943.20. This section shall not create a civil cause of action against any person other than the prime contractor or subcontractor to whom such moneys are paid or become due. Until all claims are paid in full, have matured by notice and filing or have expired, such money, bonds and warrants shall not be subject to garnishment, execution, levy or attachment.
779.16 History
History: 1973 c. 231;
1975 c. 409;
1979 c. 32 s.
57; Stats. 1979 s. 779.16.
779.16 Annotation
A fiduciary relationship exists between a prime contractor and subcontractor when the prime contractor has received payment for a public improvement. Loehrke v. Wanta Builders,
151 Wis. 2d 695,
445 N.W.2d 717 (Ct. App. 1989).
779.16 Annotation
Misappropriation of funds under this section was a nondischargeable debt in bankruptcy. Matter of Thomas,
729 F.2d 502 (1984).
779.17
779.17
Release of funds on filing bond. At any time after the service of a notice of lien claim or filing of judgment or pending the determination of any action commenced thereunder, the contractor shall be entitled to the release of any moneys due the contractor under the contract upon filing a bond, executed by a surety company duly authorized to transact business in this state, with the public authority having jurisdiction over the work, guaranteeing that the contractor will pay any judgment of the court rendered in favor of the lien claimant and all judgments filed. Such bond shall be in an amount sufficient to insure payment of the lien claims and judgments, and shall be approved as to form and amount by the public authority.
779.17 History
History: 1979 c. 32 s.
57;
1979 c. 176; Stats. 1979 s. 779.17.
OTHER LIENS
779.18
779.18
Log liens; priority. 779.18(1)(1) Any person who, personally or by a beast or machine or vehicle, performs any services in cutting, hauling, running, felling, piling, driving, rafting, booming, cribbing, towing, sawing, peeling, kiln drying or manufacturing logs, timber, stave bolts, heading staves, pulp wood, cordwood, firewood, railroad ties, piling, telegraph poles, telephone poles, fence posts, paving timber, tan or other barks or in preparing wood for or manufacturing charcoal shall have a lien upon the material for the amount owing for the services, which shall take precedence of all other claims, liens or encumbrances thereon or sales thereof.
779.18(2)
(2) The right of lien given by this section survives any change in the property through manufacture and the lienor has a lien upon the manufactured product as though the services had been performed directly thereon.
779.18 History
History: 1979 c. 32 s.
57;
1979 c. 176; Stats. 1979 s. 779.18;
1981 c. 370.
779.19
779.19
Petition for log lien; filing same. No demand for the services may become a lien unless a petition therefor is signed and verified by the claimant or by someone in the claimant's behalf setting forth the nature of the demand, the amount claimed, a description of the property upon which the lien is claimed and that the petitioner claims a lien thereon. The petition shall be filed in the office of the clerk of the circuit court of the county in which the services or some part thereof were performed within 3 months after the last day of performing continuous services, and the services shall be deemed continuous notwithstanding a change of ownership in the property on which the lien is claimed. The clerk shall receive the fee prescribed in
s. 814.61 (5) for filing the petition.
779.19 History
History: 1979 c. 32 s.
57;
1979 c. 176; Stats. 1979 s. 779.19;
1981 c. 317.
779.20
779.20
Action to enforce log lien; parties; costs; change of venue. 779.20(1)(1) An action to enforce any lien under
s. 779.18 may be brought in the circuit court of the county where the petition is filed. This claim shall cease to be a lien unless an action to foreclose it is commenced within 4 months after filing the petition. If the claim is not due at the time of filing the petition the time when the claim will become due shall be stated in the petition, and in this case the claim shall not cease to be a lien until 30 days after the claim has become due and until 4 months after the filing of the petition.
