File a Lawsuit

If you filed a lien and did not receive payment, then filing a lawsuit to foreclose on the lien is simply just the next step. If you did not file a lien and have missed the deadline to do so, then a lawsuit is your first step (other than sending a formal Payment Demand Letter) to enforcing payment.

When you file a Lawsuit, you force the debtor to defend against the claim. This is something they do not want to do if there is not a legitimate basis for withholding payment–it is cheaper (and easier) to just pay the amount owed. Second, even if there is a legitimate dispute over the amount owed, filing a Lawsuit will bring out the disputed facts and may speed up resolution of the dispute. Third, if you are suing to foreclose on the lien, the law mandates that you sue the Property Owner. This usually not good for the debtor; especially if the Property Owner has already paid the debtor for your work and the debtor has diverted the funds to pay Non-Project debts in violation of the Trust Fund Statute.

Depending upon your specific circumstances, the Petition (which is the document that initiates the lawsuit) should include a cause of action for breach of contract, fraudulent inducement to enter into a contract (if applicable), violation of the Trust Fund Statute (if applicable), violation of the Prompt Payment Act, and foreclosure of the lien (if a lien has been filed). The Petition should request the court to award money damages in the amount owed, interest on that amount, costs, attorneys’ fees, and statutory penalties (when applicable).