A lien waiver form titled “Waiver of Lien to Date” was revised by the subcontractor in handwriting by striking out the words “to date” and writing in their place “Partial.”  The contractor then paid the subcontractor $33,448 per the release but refused to pay an additional $222,238 that the subcontractor later demanded.  The trial judge agreed with the contractor that the change in the title to the lien release did not alter the effectiveness of the release constituting a total waiver.  This was reversed on appeal, with the appellate court holding that a lien release is subject to the normal rules of contract interpretation, and that when a type written contract has been altered in handwriting, the courts must reconcile the differences in the wording and the handwritten change will control.  As revised through the handwritten change, the lien was only a partial release and did not bar the claim for the larger dollar amount.  Great Lakes Excavating, Inc. v. Dollar Tree Stores, Inc., 402 Wis.2d 311 (2022).

Construction liens can be waived under Wis. Stat. § 779.05(1). That statute provides in relevant part:

Any waiver document shall be deemed to waive all lien rights of the signer for all labor, services, materials, plans, or specifications performed, furnished, or procured, or to be performed, furnished, or procured, 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, services, materials, plans, or specifications.

The statute further directs that “[a]ny ambiguity in such document shall be construed against the person signing it.

[Contractor] asserts this handwritten modification creates an ambiguity because the printed body of the waiver document otherwise constitutes a full waiver under which [Subcontractor] “waive[s] and release[s] any and all lien or claim of, or right to, lien, … on account of labor, services, material, fixtures, apparatus or machinery furnished to this date,” and as of that date, all of the work had been completed. Under § 779.05(1), [Contractor] argues the resulting ambiguity must be “construed against the person signing it.” Great Lakes disagrees, arguing the waiver is unambiguously a partial waiver because there is no competing interpretation of the document. We agree with [Subcontractor]  that the waiver document is not ambiguous and satisfies § 779.05(1) as a partial waiver of the lien with respect to only the $33,448 paid. The handwritten term “Partial,” in conjunction with the specific amount of consideration, indicates the lien was waived only to the extent of that portion of the total amount owed.

The court found that the handwritten addition of “Partial” in the document title, replacing the printed words “to Date,” conflicts with the preprinted language in the body of the document indicating Great Lakes “does hereby waive and release any and all lien … on account of labor, services, material, fixtures, apparatus or machinery furnished to this date” with respect to the property. Applying contract interpretation principles to this lien release the court explained,

“The lien waiver in this case cannot be construed as a full waiver because the handwritten word “Partial” must be given effect. Because the word “Partial” is handwritten, it governs over the preprinted language waiving all lien rights to date.”  “This principle that handwritten terms control over preprinted provisions “is based on the inference that the language inserted by handwriting … is a more recent and more reliable expression of [the parties’] intentions than is the language of a printed form.”  “Consistent with the principle that handwritten terms control over the form’s printed provisions, the term “Partial” prevails over the language in the printed body of the document waiving all lien rights to date. Resolving this conflict leaves no ambiguity as to whether the document is a full or partial waiver. Because it can be only one or the other, there is no reasonable alternative construction of the document other than as a partial waiver.”



About the author: Article written by J. Kent Holland, Jr., a construction lawyer located in Tysons Corner, Virginia, with a national practice (formerly with Wickwire Gavin, P.C. and now with ConstructionRisk Counsel, PLLC) representing design professionals, contractors and project owners.  He is founder and president of a consulting firm, ConstructionRisk, LLC, providing consulting services to owners, design professionals, contractors and attorneys on construction projects.  He is publisher of ConstructionRisk Report and may be reached at Kent@ConstructionRisk.com or by calling 703-623-1932.  This article is published in ConstructionRisk Report, Vol. 25, No. 1 (January 2023).

Copyright 2023, ConstructionRisk, LLC