Subcontractor Barred from Recovery by Signing Release
Kegler Brown Construction Newsletter February 1, 1999
In this case, a general contractor agreed to make future payments by joint check but failed to do so with respect to one of the payments.
Other disputes arose between the parties which were eventually resolved when the parties executed a document entitled "Conditional Waiver and Release upon Final Payment" stating that once the settlement check was received the waiver would "become effective to release any mechanic's lien, stop notice, or bond right" the subcontractor had on the project.
After the subcontractor had signed the waiver and release, it attempted to sue the general contractor for its earlier failure to comply with the joint check agreement (during the course of the job). The Court of Appeals ruled that the plain language of the release extinguished all claims for labor or material furnished on the job and therefore the subcontractor's claim was dismissed. Harry S. Peterson Co. v. Detzel Construction, 1998 WL 107662 (Ohio App. 1 Dist. 1998).
This case emphasizes the need for subcontractors to carefully scrutinize the language of releases or waivers they are signing and for contractors to follow through on any joint check obligations they may assume.