A reference under the Construction Lien Act required the court to determine whether the contractual relationship between a developer and a construction company was one of owner and construction manager (agent) or owner and general contractor.
The written agreement used a construction management form contract but included amendments allowing the contractor to contract directly with trades and assume risk for cost overruns beyond a specified threshold.
The court found ambiguity in the contract language and admitted extrinsic evidence to interpret the parties’ relationship.
Examining the contractual provisions and the parties’ conduct, including direct contracting with trades and liability for payment and cost overruns, the court concluded the arrangement functioned in substance as a general contracting structure.
Accordingly, the contractor was treated as a general contractor for purposes of determining priorities and holdback obligations under the Construction Lien Act.
