When Does a Claim on Funds / “Public Lien” Expire in Ohio?
Six years after the cause of action accrued, not six years after perfecting the lien, according the recent holding in Akron Concrete Corp. v. Medina City School Dist. Bd. of Edn. , 2012 Ohio 2971 (June 29, 2012 9th Dist.). An appellate court recently confirmed our long-held interpretation of Ohio lien law that public liens do not expire after six years.
The Court noted, “Unlike private mechanics’ liens, liens against funds for unpaid labor or materials for a public project do not expire after six years.” Id. The Court specifically noted that there is no other statute of limitations in Chapter 1311 applicable to public liens. So, the Court applied Ohio Revised Code section 2305.07, “Contract not in writing – statutory liability.” The statute requires that, “[an] action upon a contract not in writing, express or implied, or upon a liability created by statute other than a forfeiture or penalty, shall be brought within six years after the cause thereof accrued.”
In the Akron Concrete case the following facts were undisputed:
9/13/01 – Subcontractor, Akron Concrete submitted its public lien
to the school district;
2003 – General contractor, Moser Construction sued the school district;
3/17/09 – Pursuant to a settlement between Moser Construction and the school
district, project funds were distributed to Moser Construction, but not
Akron Concrete (the public lien holder).
10/09 - Akron Concrete sued the school board to recover amounts claimed
in the public lien.
The Court determined the claim accrued in 2009 when the project funds were distributed without payment to the lienholder – not in 2001 when the lien was perfected. Since the public lien holder filed suit just months after the claim accrued, the claims were not barred by the six-year statute of limitations.
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C. Michael Shull, III focuses his practice on construction law and litigation. Michael's client representations range from casinos and ENR Top 400 contractors to design firms and subcontractors.