Expert: Timmy Chou - 7/22/2009

Question
I am aware that in a breach dispute of construction contract with an arbitration clause during the lien period it is customary to file suit and request a stay pending arbitration. In a similar dispute where the lien period has expired, is it customary to complete arbitration without filing suit? If the four year statute of limitations were an issue might one file suit and request a stay?

Answer
Thanks for your question.

Well this is unfortunatley a legal question I'm afraid.  I am not a lawyer and cannot give you legal advice.  

Here are my thoughts in any case.  

Typically in my experience the main reason a suit is filed first when lien rights are still valid is to preserve them so they do not expire, and in the event of all arbitration and other remedies failing the best possible legal leverage can then be exerted.  

When lien rights have expired I am not sure what advantage one might have by filing suit first -- other than the ability to posture as a serious litigant to encourage serious deliberating at the arbitration or mediation table.  Without the added leverage of mechanic's lien laws you are left with a typical civil contract lawsuit and you will still have to argue your case on its merits, at your own cost.  Any judgment would also have to be enforced, not always an easy thing either.  

Hope this helps!  Feel free to follow up with questions.