Trump Hotel Contractors Say They Haven’t Been Paid

From labor disputes cases to labor and employment publications, for your research, you’ll find solutions on Bloomberg Law®. Protect your clients by developing strategies based on Litigation...

By Jon Steingart

Construction contractors filed mechanic’s liens with a Washington, D.C., land deeds office alleging they’re owed over $5 million for work performed on the new Trump International Hotel.

The three Washington-area contractors say they are due $5,138,252.61 for their work on the Trump Organization Inc. project, which was carried out by its affiliate Trump Old Post Office LLC. Two of the contractors say their work has concluded, while an electrical contractor says its work is ongoing. The liens were recorded with the Washington, D.C., Recorder of Deeds in November and December 2016.

A lien is a claim against property rather than against the person or company who hired the contractor, James Fullerton, a Virginia-based attorney with Fullerton & Knowles P.C., told Bloomberg BNA Jan. 5. “It’s very common. It’s very important to contractors” in construction projects, he said. Fullerton represents contractors and businesses that hire contractors in Washington and nearby states.

“An employee has mechanic’s liens rights for the labor that they contribute to the building,” Fullerton said. “If the owner becomes insolvent or if the property is sold, you still have a claim.”

The term “mechanic’s lien” is used for a range of services, David Umansky, a spokesman for the Recorder of Deeds, told Bloomberg BNA in an e-mail Jan. 5. “A mechanic’s lien is not necessarily limited to mechanics. To prevent confusion, other names may be used for the same concept (e.g., construction lien, laborer’s lien, artisan’s lien, supplier’s lien, materialman’s lien, and design professional’s lien).”

Liens ‘Not Uncommon,’ Trump Organization Says

“In developments of this scale and complexity the filing of nominal liens at the conclusion of construction is not uncommon as part of the close out process,” a Trump Organization spokesperson who declined to be named said in an e-mailed statement provided to Bloomberg BNA Jan. 5.

“In the case of Trump International Hotel, Washington D.C., the Trump Organization has invested over $200 million dollars into the redevelopment of the historic Old Post Office and is incredibly proud of what is now considered to be one the most iconic hotels anywhere in the country,” the statement said.

President-elect Donald Trump has acknowledged not always paying all his bills, saying it’s often a negotiating tactic when work is subpar. His companies have been sued numerous times over unpaid work. Among them were landscapers at Riverside South Park in Manhattan, who sued in 2001 seeking $111,000. Contractors at Trump Park Avenue sued in 2003 seeking $206,000. And in 2010 a painter in Chicago sued a Trump entity developing a high-rise claiming to be owed more than $4 million.

The Washington hotel contractors are A&D Construction of Virginia, Joseph J Magnolia, Inc., and AES Electrical, Inc. which does business as Freestate Electrical Construction Company. Each company’s lien will terminate if it doesn’t file a lawsuit to enforce its lien within 180 days.

The Trump Organization leases the hotel building from the federal government, which owns the Old Post Office that the hotel is located within. The lease prohibits liens against the property. If one is recorded on it, the lease requires the Trump Organization to pay off the lien or defend against it in court.

Representatives for the contractors didn’t immediately respond to requests for comment Jan. 5.

—Andrew M. Harris contributed to this story.

To contact the reporter on this story: Jon Steingart in Washington at jsteingart@bna.com

To contact the editors responsible for this story: Peggy Aulino at maulino@bna.com; Terence Hyland at thyland@bna.com; Christopher Opfer at copfer@bna.com

Copyright © 2017 The Bureau of National Affairs, Inc. All Rights Reserved.

Request Labor & Employment on Bloomberg Law