Richard A. Lococo

A priority dispute arose between a building mortgagee and construction lien claimants over funds paid into court to vacate liens.

The plaintiff lien claimant argued the priority extended to the full amount owed by the owner to the general contractor.

The mortgagee argued priority was limited to the 10 percent statutory holdback.

The court held that paying money into court to vacate a lien does not alter the priority scheme under the Construction Lien Act, and the lien claimants' priority over the mortgagee was limited to the statutory holdback amount.

Costs were determined following a civil trial where the plaintiff succeeded against one defendant but failed against another.

The court addressed entitlement to costs as between the plaintiff and each defendant, including the impact of Rule 49 offers to settle.

The successful institutional defendant was awarded costs against the plaintiff on a partial indemnity basis before its offer and substantial indemnity thereafter.

The plaintiff was also awarded costs against the unsuccessful co-defendant, reduced to reflect time spent pursuing the unsuccessful claim against the bank.

The court declined to make either a Sanderson or Bullock order requiring the unsuccessful defendant to bear the successful defendant’s costs, finding such an order would be unfair and risk non-payment.