Interesting case regarding new construction law. Although out of a Missouri Court, the takeaway still applies. When obtaining a Sworn Statement from a Builder stating that all subcontractors have been paid, do you also obtain a personal indemnity? Do you know the financial condition of your builder?
In this case, Frank Miceli lied to Commonwealth Land Title when he signed sworn statements at closing that all contractors, subs and materialmen were paid on three homes. There were no assets in Miceli Homes, the name the homes were built under. The court initially found that consent judgments barred particular claims against defendant Miceli Homes.
After much ado, the courts were convinced that it not bar claims against defendant Frank Miceli, individually, who held assets in his individual capacity; trustee of the Frank Miceli Revocable Trust; Miceli Homes, Inc; Miceli Development Company; Miceli Holding Company; Masterwork Homes, Inc.; and Miceli Masterwork Homes, Inc., D/B/A Miceli Custom Homes.
With much effort, and several appeals, Commonwealth was able to convince the court to pierce corporate veils to look at recouping the $1.5 million dollar losses paid in mechanic’s lien claims. A good case for all title people to understand.
After all, we all know builders who go out of business one day, only to start up the next under a similar name. Names DO matter. And signatures on indemnities matter. Is the signature that of an officer of the Building Corporation, or is their also a personal indemnity to back it up. In the Miceli case, the personal responsibility made all the difference, because none of the assets were in the name of Miceli Homes.
Read the whole Commonwealth Land Title Vs. Frank Miceli et al here