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Can Contractors File a Lien for Unpaid Work?
How About This asks: "Typically contractors are considered unsecured creditors, and if a company is having financial problems it is the unsecured creditors that usually lose out the most, or at least that's my understanding. Is it possible for a contractor that did software design and programming work to file a lien against a company for not paying for work performed? My searches have revealed references to mechanic's liens against land and property, but nothing directly with technology/computer related areas. Anyone have any links to sites or pages with this information? Or references to good (CA) lawyers in this field that can explain things (and has a reasonable initial consultation fee since obviously money is in short supply)."
They can milk you dry.
See also: http://www.fullertonlaw.com/chapt1.htm#mechlien
The thing about things we don't know is we often don't know we don't know them.
<ianal>
IIRC, mechanics liens are not "active" devices for securing payment, but "passive" devices that prevent the property owner from getting a mortgage or otherwise transferring his asset by sale. A good title search puts the brakes on any kind of transfer, so they have to settle with you before selling assets with recorded titles and deeds like real property.
I dunno if you need a contractor's licences to file a mechanics lien, but I think there may also be liens designed for suppliers of materials that are left unjustly unpaid.
</ianal>"Provided by the management for your protection."
you say you've checked out mechanic's leins.
but you say you want $$$. mech's leins are only on the property that the mech is working on (ie your care, etc). if you're trying to get compensation, i don't think mech's leins are the way to go.
Maybe he thought the community would have common experiences with his.
What else is Ask Slashdot for?
By default, independent software contractors own the copyright on work they produce. Unless you specifically signed over the rights, you probably still own it. Normally if they pay you, then they can use it (that's what they are buying). If they haven't paid you they may be commiting copyright infringement by using your code after you inform them that you have not authorized them to use it unless they pay. If they have revenue flow tied to the software, you might be able to threaten them with an injunction (but see below).
Even if you have signed over the rights, if they breach the contract that transfers the rights by not paying you, then the whole contract might be thrown out.
Unfortunately, if they are in bankruptcy, you usually can't sue them until they come out of it. However, if you send them a C&D letter informing them that you own the copyright and want them to stop using it and they blow you off, then they will be notching it up to "willful" violation which has hefty penalties. It is very rare for a company to completely liquidate, so eventually you have some leverage.
You absolutely need a lawyer (IANAL). Look up the names of some on some of the filings in the DVD-CCA case -- that was in California.
Since you are apparently unable to read the actual question, I'll repost it here for you. As an added convenience, I've highlighted in bold text the parts I believe apply to your post:
Typically contractors are considered unsecured creditors, and if a company is having financial problems it is the unsecured creditors that usually lose out the most, or at least that's my understanding. Is it possible for a contractor that did software design and programming work to file a lien against a company for not paying for work performed? My searches have revealed references to mechanic's liens against land and property, but nothing directly with technology/computer related areas. Anyone have any links to sites or pages with this information? Or references to good (CA) lawyers in this field that can explain things (and has a reasonable initial consultation fee since obviously money is in short supply).
I hope that helps, and I sincerely hope that you are able to sort out the problem your browser is apparently having with displaying the actual text of slashdot articles.
Under capitalism man exploits man. Under communism it's the other way around.
If you are just getting into the business you will still want to seek advice from a lawyer. Ask about ways you can structure your contracts so that you get what you are owed. I would ask for a downpayment if you think the company may be short on cash. You can also bill them as you go, once or twice a month.
Go down to the courthouse (I know, it's harder than posting your question on slashdot) and ask the cleck to show you the lien form. Read it over, determine whether or not signing it would constitute perjury, and do the right thing.
"Eve of Destruction", it's not just for old hippies anymore...
What exactly do you want a lien for? Are you afraid that they are going to transfer the rights to your software? It seems to me that's the only angle that's going to work - trying to stop them from transferring rights in your software. The best approach for that probably involves claiming that they don't have the rights in your software to begin with, because they haven't paid, but IANAL so I don't know how productive that argument would be. As you've said, their debt to you is unsecured, so if you're just trying to get your money and they don't have it you have to fight with all the other debtors, and you're pretty much last in line (before the shareholders).
A place for people to ask questions who can't fingure out google?
You've fallen prey to the suggestion that legal terminology has any bearing to legal practice. The legal term "Mechanic's Lien" comes from before the era of the automotive mechanic. According to tort law, a Mechanic's Lien is that which is filed against property in posession of the debtor in which the creditor has some stake. It involves titles, etc, as explained by other posters, and is commonly called a "Construction Lien" since it's usually used by contractors.
You're thinking of an Artisan's Lien, which applies to property of the debtor that is physically in posession of the creditor. This commonly the case with auto mechanics.
So yes, it's odd -- my business law professor had a field day with this one on the exam :)
Nope. In a typical Chapter 11 bankruptcy (a "reorganization," as distinguished from a Chapter 7 liquidation), the court generally reduces the debtor's debts substantially, including debts arising from, say, contracts. These days, a business debtor typically pays just 20 cents per dollar of debt. A bankruptcy court has broad and substantial powers, including the power to reform contracts, but this extraordinary power is generally wielded, if at all, to the benefit of the debtor, not the creditors.
FWIW, yes, IAAL (now turned technologist), but I have been out of the legal field for years now. Furthermore, I was in taxation and public utility law, not bankruptcy. For self-help, try www.nolo.com (Nolo Press) or a damned good trade association bankruptcy site: www.abiworld.org.
A lawyer & digital forensics examiner. Also an expert on open source software (OSS).
Standard disclaimer: you should really see a lawyer regarding your own particular circumstances. This isn't legal advice, just some general information you might be interested in.
A workman's lien, as others have pointed out, is a proprietary right over an objet that you surrender to a workman for him/her to work on it. In a certain sense, the workman becomes the "owner" of the property you surrender (or, to put it another way, your title and interest in the property is burdened or encumbered by the lien) and the workman has the right to prevent you from taking back the property until you're paid the price of his or her work. It doesn't really apply in contracts for sale or construction of goods.
In that case, different rules apply. In a contract for the sale of goods, title usually passes the moment the contract of sale is finalized, i.e. when vendor and purchaser agree that the sale should go ahead. If the purchaser goes bankrupt, then all creditors have rights against those goods as the purchaser's property, and the vendor simply has the status of an unsecured creditor through his unsecured right to payment
The traditional way to get around this is the insertion of a clause into the contract to override the default position and stipulate that title only passes once payment has been made, and that up until that point the purchaser has "only" an unrestricted licence to use and convert the goods as s/he wishes. If the purchaser goes bankrupt, the vendor then has a property right in those goods (provided they're still capable of recovery) over and above the rights of other creditors. In the case of contracts for the production and sale of intellectual property, the default position would be governed by the provisions regarding ownership according to the circumstances when it is related. IIRC, US copyright law provides that copyright always vests with the author unless there is an express contractual term to the contrary. I am unaware of the position for patents, designs, or other forms of IP in the US.
Bottom line, you should try to have a term included in your contract stipulating that assignment or exclusive licence in the copyright or other IP right will only transfer once you've received payment. That's likely to be difficult, as your employer is likely to be making regulard part payments (through your pay cheque) for your work, and doubtless is expecting to see something for it. Note that you may have trouble doing this retrospectively, especially if the person or compnay who's paying you is in trouble. That's called a voidable preference, and bankruptcy/insolvency law takes a dim view of such attempts of creditors to secure parts of a prospective bankrupt's assets for themselves when it becomes clear that the ship's going down.
A friend of mine was working for a small ISP back in '94-'95, and they didn't give him a paycheck for like 3mo. One night, he walked out with several thousand dollars of routers and servers. If you still have physical access to the facility, this is always an option.
my sig's at the bottom of the page.
if the company has serial numbers they can show up on your doorstep with a cop and reclaim it, as well as file theft charges against you
your best bet so far is to send via certified mail a C&D -- assert your copyrights, and threaten and then absolutely try and file a UCC against them
it can and will prevent them from obtaining any kind of financing from a bank since it will stick out like a sore thumb
Old age and treachery almost always overcome youth and skill.
1)Pay girlfriend a huge consulting fee.
2)Transfer $ to dummy off shore.
3)Buy a huge estate in Miami
4)Declare bankruptcy.
Your friggen little lien is off my RADAR.
I worked this summer as an intern at an Ohio municipal courthouse, and I had the joy of being a substitute baliff in small claims court for a few days (which really is a lot like the TV shows!), so I think I learned a few things. I'm no expert (I just ran the tape machine!), so take this with a grain (or pound) of salt:
* with small companies, sometimes it can be useful to redefine the target of your suit- I saw a few instances where folks added the individual's name (perhaps the owner), as well as the company name to the list of defendants in order to track somebody down that can be held accountable. I'm not sure if you could change the name of the defendant from a financially insecure company to a finacially secure owner for purposes of collection. I'm also not sure how/if such a thing would work after the case is decided. Obviously, if such a thing were to work, the owner would have to be somehow personably accountable for your debt.
*What kind of bankruptcy are they filing for? If it's chapter 11, or something like that, I think you could still hit them with bank attachments.
*If they are not filing for Chapter 7, how about a debtors exam to figure out where you can get your dough? That can be done without an attorney, although it is better if you have one. It gets really fun when they don't show up, and they're is a warrant out for the CEO's arrest!
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Short answer, yes.
Long answer, yes, but this is only really effective if they are trying to sell the object/property you are putting the lien on. Otherwise I would recomend small claims court.
Oh, and IANAL, but I do have contracting experience.
I'm not entirely clear what's going on here, but from the sound of it, you've sold software on credit. If that's so, then you might have what is called a Purchase Money Security Interest, which, although it isn't perfected, could still entitle you to priority over unsecured creditors in the event that the debtor has entered bankruptcy. But you really need to talk to a lawyer. Chris
A comp sci teachers assistant (read: grad student) of mine back in my University days told a story about a friend of his who did some contract work for some company. He'd heard that the company didn't pay their bills sometimes, so he left a timebomb in the code he wrote (3 months, stop running).
Sure enough, he had problems collecting, and sure enough, they called in 3 months when they had problems. He agreed to come in to look providing that,
1) They have a check waiting for his unpaid invoce
2) The hours he spent fixing the problem was at an overtime rate and paid onsite. He spent 2 hours playing some UNIX net-game, removed the timebomb, recompiled, and left.
Knowledge is power, and in certain situations you may have to so something unethical to ensure you aren't screwed over.