Chapter 779

779.14(1m)(f) (f) Direct purchase contracts. Paragraphs (c) and (d) do not apply to a contract for the direct purchase of materials by the state or by a local unit of government.

779.14(2) (2) Actions on a performance and payment bond.

779.14(2)(a) (a) Except as provided in par. (am), no later than one year after the completion of work under the contract, any party in interest, including any subcontractor, supplier, or service provider, may maintain an action in that party’s name against the prime contractor and the sureties upon the bond for the recovery of any damages sustained by reason of any of the following:

779.14(2)(a)1. 1. Failure of the prime contractor to comply with the contract.

779.14(2)(a)2. 2. Except as provided in subd. 3., failure of the prime contractor or a subcontractor of the prime contractor to comply with a contract, whether express or implied, with a subcontractor, supplier, or service provider for performing, furnishing, or procuring labor, services, materials, plans, or specifications for the purpose of making the public improvement or performing the public work that is the subject of the contract with the governmental entity.

779.14(2)(a)3. 3. With respect to contracts entered into under s. 84.06 (2) for highway improvements, failure of the prime contractor to comply with a contract, whether express or implied, with a subcontractor, supplier, or service provider of the prime contractor for performing, furnishing, or procuring labor, services, materials, plans, or specifications for the purpose of making the highway improvement that is the subject of the contract with the governmental entity.

779.14(2)(am) (am)

779.14(2)(am)1. 1. Except as provided in subd. 2., a subcontractor, supplier, or service provider may maintain an action under par. (a) only if the subcontractor, supplier, or service provider has served a written notice on the prime contractor that the subcontractor, supplier, or service provider has performed, furnished, or procured, or will perform, furnish, or procure labor, services, materials, plans, or specifications to the public work or improvement. The notice must be served no later than 60 days after the date on which the subcontractor, supplier, or service provider first performed, furnished, or procured the labor, services, materials, plans, or specifications.

779.14(2)(am)2. 2. A notice under subd. 1. is not required if any of the following applies:

779.14(2)(am)2.a. a. The contract for performing, furnishing, or procuring the labor, services, materials, plans, or specifications does not exceed $5,000.

779.14(2)(am)2.b. b. The action is brought by an employee of the prime contractor, subcontractor, supplier, or service provider.

779.14(2)(am)2.c. c. The subcontractor, supplier, or service provider is listed in the list required to be maintained under sub. (1e) (b) or in a written contract, or in a document appended to a written contract, between a subcontractor, supplier, or service provider and the prime contractor.

779.14(2)(b) (b) If the amount realized on the bond is insufficient to satisfy all claims of the parties in full, it shall be distributed among the parties proportionally.

779.14(3) (3) Actions by a county. In an action by a county upon the bond all persons for whose protection it was given and who make claim thereunder may be joined in the action. The county highway commissioner may take assignments of all demands and claims for labor, services, materials, plans, or specifications and enforce the same in the action for the benefit of the assignors, and the judgment may provide the manner in which the assignors shall be paid.

779.14(4) (4) Bonding exemption. A contract with a local professional football stadium district under subch. IV of ch. 229 is not required under sub. (1m) (d) 2. b. or 3. to include a provision requiring the prime contractor to provide or obtain a payment and performance bond or other payment assurance.

779.14 History History: 1973 c. 90; 1975 c. 147 s. 54; 1975 c. 224; 1977 c. 418; 1979 c. 32 s. 57; 1979 c. 110 s. 60 (12); 1979 c. 176; Stats. 1979 s. 779.14; 1985 a. 225; 1987 a. 399; 1989 a. 31, 290; 1995 a. 395, 432; 1997 a. 27, 39, 237; 1999 a. 167; 2005 a. 204; 2013 a. 173 s. 33; 2017 a. 59.

779.14 Annotation A subcontractor can maintain an action against the prime contractor and the prime contractor’s surety if the claim is brought within one year after completion of work on the principal contract. Honeywell, Inc. v. Aetna Casualty & Surety Co., 52 Wis. 2d 425, 190 N.W.2d 499 (1971).

779.14 Annotation In a complaint seeking to foreclose a construction lien on a municipal arena, an allegation that the lessee of the arena was acting as the city’s agent in contracting for improvements to the arena was sufficient to withstand a demurrer. James W. Thomas Construction Co. v. City of Madison, 79 Wis. 2d 345, 255 N.W.2d 551 (1977).

779.14 Annotation The liability of a prime contractor for damages to employees of a subcontractor under sub. (2) did not include wage penalties under s. 66.293 (3) [now s. 66.0903 (3)]. Consent to be a named party under s. 66.293 (3) [now s. 66.0903 (3)] may occur after one year when the action is for damages under s. 66.293 [now s. 66.0903] in the name of the plaintiffs and other similarly situated employees and was filed within the one-year time period. Strong v. C.I.R., Inc., 184 Wis. 2d 619, 516 N.W.2d 719 (1994).

779.14 Annotation A prime contractor is responsible for and must provide a bond in the amount of its own contract, not in the amount of the total of all prime contractors together. Golden Valley Supply Co. v. American Insurance Co., 195 Wis. 2d 866, 537 N.W.2d 58 (Ct. App. 1995), 95-0357.

779.14 Annotation Completion of work under a contract under sub. (2) occurs when a contractor has completed the work, not when the work is accepted. Arbor Vitae-Woodruff Joint School District No. 1 v. Gulf Insurance Co., 2002 WI App 24, 250 Wis. 2d 637, 639 N.W.2d 788, 01-0993.

779.14 Annotation The deletion of former sub. (1m) (b) 1., 1995 stats., which specifically required a municipality to require a prime contractor to furnish a bond, did not eliminate municipal liability in the event the municipality fails to ensure the existence of a contractor’s bond. Holmen Concrete Products Co. v. Hardy Construction Co., 2004 WI App 165, 276 Wis. 2d 126, 686 N.W.2d 705, 03-3335.

779.15 779.15 Public improvements; lien on money, bonds, or warrants due the prime contractor; duty of officials.

779.15(1) (1) Any person who performs, furnishes, procures, manages, supervises, or administers any labor, services, materials, plans, or specifications used or consumed in making public improvements or performing public work, to any prime contractor, except in cities of the 1st class, shall have a lien on the money or bonds or warrants due or to become due the prime contractor therefor, if the lienor, before payment is made to the prime contractor, serves a written notice of the claim on the debtor state, county, town, or municipality. The debtor shall withhold a sufficient amount to pay the claim and, when it is admitted by the prime contractor or established under sub. (3), shall pay the claim and charge it to the prime contractor. Any officer violating the duty hereby imposed shall be liable on his or her official bond to the claimant for the damages resulting from the violation. There shall be no preference between the lienors serving the notices.

779.15(2) (2) Service of the notice under sub. (1) shall be made upon the clerk of the municipality or in the clerk’s absence upon the treasurer. If any of the money due the prime contractor is payable by the state, service of the notice under sub. (1) shall be served upon the state department, board, or commission having jurisdiction over the work. A copy of the notice shall be served concurrently upon the prime contractor.

779.15(3) (3) If a valid lien exists under sub. (1) and the prime contractor does not dispute the claim within 30 days after service on the prime contractor of the notice provided in sub. (2), by serving written notice on the debtor state, county, town, or municipality and the lien claimant, the amount claimed shall be paid over to the claimant on demand and charged to the prime contractor pursuant to sub. (1). If the prime contractor disputes the claim, the right to a lien and to the moneys in question shall be determined in an action brought by the claimant or the prime contractor. If the action is not brought within 3 months from the time the notice required by sub. (1) is served, and notice of bringing the action filed with the officer with whom the claim is filed, the lien rights are barred.

779.15(4) (4) 

779.15(4)(a) (a) When the total of the lien claims exceeds the sum due the prime contractor and where the prime contractor has not disputed the amounts of the claims filed, the debtor state, county, town or municipality, through the officer, board, department or commission with whom the claims are filed, shall determine on a proportional basis who is entitled to the money and shall notify all claimants and the prime contractor in writing of the determination. Unless an action is commenced by a claimant or by the prime contractor within 20 days after the mailing of the notice, the money shall be paid out in accordance with the determination and the liability of the state, county, town or municipality to any lien claimant shall cease.

779.15(4)(b) (b) If an action is commenced, all claimants shall be made parties and the action shall be commenced within 3 months after acceptance of the work by the proper public authority except as otherwise herein provided.

779.15(4)(c) (c) Within 10 days after the filing of a certified copy of judgment in any such action with the officers with whom the notice authorized by sub. (1) is filed, the money due the prime contractor shall be paid to the clerk of court to be distributed in accordance with the judgment.

779.15 History History: 1975 c. 147 s. 54; 1975 c. 199, 224, 422; 1979 c. 32 s. 57; 1979 c. 176; Stats. 1979 s. 779.15; 1997 a. 39; 2005 a. 204.

779.15 Annotation A public improvement lien under this section is subject to the waiver provision of s. 289.05 (1) [now s. 779.05 (1)]. Since waiver of a public improvement lien disposes of the lien itself, the refiling of a claim for a lien after a waiver was a nullity and the fact that the claim was not disputed following the refiling did not revive the lien. Druml Co. v. City of New Berlin, 78 Wis. 2d 305, 254 N.W.2d 265 (1977).

779.15 Annotation In a complaint seeking to foreclose a construction lien on a municipal arena, an allegation that the lessee of the arena was acting as the city’s agent in contracting for improvements to the arena was sufficient to withstand a demurrer. James W. Thomas Construction Co. v. City of Madison, 79 Wis. 2d 345, 255 N.W.2d 551 (1977).

779.155 779.155 Judgment creditors, attachment of funds due to public contractors.

779.155(1) (1) Limitations. This section does not apply to cases covered by s. 812.42. Demands covered by s. 779.15 have priority over judgments filed under this section. The remedies afforded by s. 779.15 and by this section are complementary.

779.155(2) (2) Certified copies of judgments filed. In this section, “municipality” includes city, village, county, town, school district, technical college district and any quasi municipal corporation. When the state or any municipality is indebted to any prime contractor, the owner of a judgment against the prime contractor may attach the debt by filing a certified copy of his or her judgment in the manner and subject to the conditions and limitations of this section. If the debt is owed by the state upon a contract for public improvements, the certified copy shall be filed with the officer, board, department or commission having jurisdiction over the work. Otherwise, the copy shall be filed with the department of administration. If the debt is owed by a municipality, the copy shall be filed with the municipal clerk or corresponding officer. The judgment creditor shall promptly notify the judgment debtor of the filing, within the time and as provided by s. 812.07 for service upon the defendant.

779.155(3) (3) Payment to judgment creditor; exception. Except as to prime contractors on public works, the proper officers of the state or municipality shall pay the judgment out of moneys due the prime contractor or which become due the prime contractor, but no payment shall be made until 30 days after the creditor has filed with such officers proof that the contractor had been notified of the filing of a copy of the judgment against the contractor.

779.155(4) (4) Same; funds due public prime contractors. When the state or a municipality is indebted to a prime contractor for public improvements, payment shall not be made to the judgment creditor until 3 months after final completion and acceptance of the public work and then only out of moneys due the prime contractor in excess of unpaid lienable claims having priority under s. 779.15.

779.155(5) (5) Adjustment of lien claims.

779.155(5)(a) (a) For the purpose of administering this section, sworn statements of the prime contractor setting forth the unpaid lien claims that have been or may be filed under s. 779.15 may be accepted by the proper officer, board, department, or commission, unless the judgment creditor or other interested person gives written notice that an action is pending to determine whether specified lien claims were incurred in performing the public work and the amount thereof, or to determine priorities in which event payments shall await the result of the action.

779.155(5)(b) (b) Within 10 days after filing the certified copy of the judgment under sub. (2), the prime contractor shall file the sworn statement in duplicate, with the proper officer, board, department or commission, who shall immediately furnish the judgment creditor with one of the statements. The judgment creditor shall have 10 days from the receipt thereof in which to serve the notice of pendency of the court action.

779.155(6) (6) Payments to judgment creditor. After the expiration of the 3-month period, the moneys due the prime contractor in excess of unpaid lienable expenses and claims incurred in performing the public work shall be paid to the judgment creditor, but not exceeding the amount due on the judgment.

779.155(7) (7) Priority of judgments over assignments. Any judgment filed under this section has priority over an assignment made by the prime contractor after the commencement of the action in which the judgment was obtained.

779.155 History History: 1971 c. 154; Sup. Ct. Order, 67 Wis. 2d 585, 775 (1975); 1975 c. 218; 1979 c. 32 ss. 57, 92 (9); 1979 c. 176; Stats. 1979 s. 779.155; 1993 a. 80, 399, 486; 1999 a. 185; 2001 a. 38; 2005 a. 204.

779.16 779.16 Theft by contractors. All moneys, bonds or warrants paid or to become due to any prime contractor or subcontractor for public improvements are a trust fund only in the hands of the prime contractor or subcontractor to the amount of all claims due or to become due or owing from the prime contractor or subcontractor for labor, services, materials, plans, and specifications performed, furnished, or procured for the improvements, until all the claims have been paid, and shall not be a trust fund in the hands of any other person. The use of any such moneys by any prime contractor or subcontractor for any other purpose until all claims, except those which are the subject of a bona fide dispute and then only to the extent of the amount actually in dispute, have been paid in full or proportionally in cases of a deficiency, is theft by the prime contractor or subcontractor of moneys so misappropriated and is punishable under s. 943.20. If the prime contractor or subcontractor is a corporation, limited liability company, or other legal entity other than a sole proprietorship, such misappropriation also shall be deemed theft by any officers, directors, members, partners, or agents responsible for the misappropriation. Any of such misappropriated moneys which have been received as salary, dividend, loan repayment, capital distribution or otherwise by any shareholder, member, or partner not responsible for the misappropriation shall be a civil liability of that person and may be recovered and restored to the trust fund specified in this subsection by action brought by any interested party for that purpose. Except as provided in this subsection, this section shall not create a civil cause of action against any person other than the prime contractor or subcontractor to whom such moneys are paid or become due. Until all claims are paid in full, have matured by notice and filing or have expired, such money, bonds and warrants shall not be subject to garnishment, execution, levy or attachment.

779.16 History History: 1973 c. 231; 1975 c. 409; 1979 c. 32 s. 57; Stats. 1979 s. 779.16; 2005 a. 204.

779.16 Annotation A fiduciary relationship exists between a prime contractor and subcontractor when the prime contractor has received payment for a public improvement. Loehrke v. Wanta Builders, Inc., 151 Wis. 2d 695, 445 N.W.2d 717 (Ct. App. 1989).

779.16 Annotation In this case, the court’s determination that the subcontractor did not prove its theft-by-contractor claim because the prime contractor was “solvent and always able to pay” was incorrect as a matter of law when the evidence unquestionably showed that the prime contractor retained and used the money it owed to the subcontractor to support the prime contractor’s general account for payment of its own business obligations. The fact that the prime contractor, almost a year after it refused the subcontractor’s first demand for payment and after the subcontractor’s second demand, placed the entire contract amount into the trust account of the prime contractor’s attorney amounted to little more than a continued refusal to pay the amount owed. Century Fence Co. v. American Sewer Services, Inc., 2021 WI App 75, 399 Wis. 2d 742, 967 N.W.2d 32, 19-2432.

779.16 Annotation In this case, when the subcontractor undisputedly completed the job as the contract required, a question about how much work was necessary to complete the job was irrelevant to the question of what was owed to the subcontractor under the contract. The prime contractor had no legitimate ground for withholding payment simply because it, after-the-fact, may have regretted not negotiating the contract differently. There was no “bona fide” dispute. Century Fence Co. v. American Sewer Services, Inc., 2021 WI App 75, 399 Wis. 2d 742, 967 N.W.2d 32, 19-2432.

779.16 Annotation A prime contractor cannot cure its theft once the crime is completed. Century Fence Co. v. American Sewer Services, Inc., 2021 WI App 75, 399 Wis. 2d 742, 967 N.W.2d 32, 19-2432.

779.16 Annotation Misappropriation of funds under this section was a nondischargeable debt in bankruptcy. In re Thomas, 729 F.2d 502 (1984).

779.17 779.17 Release of funds on filing bond. At any time after the service of a notice of lien claim or filing of judgment or pending the determination of any action commenced thereunder, the prime contractor shall be entitled to the release of any moneys due the prime contractor under the contract upon filing a bond, executed by a surety company duly authorized to transact business in this state, with the public authority having jurisdiction over the work, guaranteeing that the prime contractor will pay any judgment of the court rendered in favor of the lien claimant and all judgments filed. Such bond shall be in an amount sufficient to insure payment of the lien claims and judgments, and shall be approved as to form and amount by the public authority.

779.17 History History: 1979 c. 32 s. 57; 1979 c. 176; Stats. 1979 s. 779.17; 2005 a. 204.

subch. II of ch. 779 SUBCHAPTER II

OTHER LIENS

779.18 779.18 Log liens; priority.

779.18(1) (1) Any person who, personally or by a beast or machine or vehicle, performs any services in cutting, hauling, running, felling, piling, driving, rafting, booming, cribbing, towing, sawing, peeling, kiln drying or manufacturing logs, timber, stave bolts, heading staves, pulp wood, cordwood, firewood, railroad ties, piling, telegraph poles, telephone poles, fence posts, paving timber, tan or other barks or in preparing wood for or manufacturing charcoal shall have a lien upon the material for the amount owing for the services, which shall take precedence of all other claims, liens or encumbrances thereon or sales thereof.

779.18(2) (2) The right of lien given by this section survives any change in the property through manufacture and the lienor has a lien upon the manufactured product as though the services had been performed directly thereon.

779.18 History History: 1979 c. 32 s. 57; 1979 c. 176; Stats. 1979 s. 779.18; 1981 c. 370.

779.19 779.19 Petition for log lien; filing same. No demand for the services may become a lien unless a petition therefor is signed and verified by the claimant or by someone in the claimant’s behalf setting forth the nature of the demand, the amount claimed, a description of the property upon which the lien is claimed and that the petitioner claims a lien thereon. The petition shall be filed in the office of the clerk of the circuit court of the county in which the services or some part thereof were performed within 3 months after the last day of performing continuous services, and the services shall be deemed continuous notwithstanding a change of ownership in the property on which the lien is claimed. The clerk shall receive the fee prescribed in s. 814.61 (5) for filing the petition.

779.19 History History: 1979 c. 32 s. 57; 1979 c. 176; Stats. 1979 s. 779.19; 1981 c. 317.

779.20 779.20 Action to enforce log lien; parties; costs; change of venue.

779.20(1) (1) An action to enforce any lien under s. 779.18 may be brought in the circuit court of the county where the petition is filed. This claim shall cease to be a lien unless an action to foreclose it is commenced within 4 months after filing the petition. If the claim is not due at the time of filing the petition the time when the claim will become due shall be stated in the petition, and in this case the claim shall not cease to be a lien until 30 days after the claim has become due and until 4 months after the filing of the petition.

779.20(2) (2) Where the property subject to such lien has been taken from the county where such work was done the lienor may bring an action to foreclose the lien in any county where said property may be found. In all foreclosure actions the person liable for such claim shall be made defendant and any other person claiming to own or have any interest in such property may be made a defendant, but shall not be liable for costs unless defending the action. In actions appealed from municipal court no change of venue shall be allowed except for prejudice of the judge or of the people.

779.20 History History: 1977 c. 449; 1979 c. 32 ss. 57, 92 (9); 1979 c. 176; Stats. 1979 s. 779.20.

779.21 779.21 Attachment, affidavit for; undertaking; service of writ.

779.21(1) (1) The plaintiff in this action may have remedy by attachment of the property upon which the lien is claimed as in personal actions; this attachment may be issued, served and returned and like proceedings had thereon including the release of any attached property as in personal actions. The affidavit for the attachment must state that the defendant who is personally liable is indebted to the plaintiff in the sum named, above all setoffs, for services which entitle the plaintiff to a lien, describe the property on which it is claimed that the services were performed and that the plaintiff has filed the petition for a lien pursuant to law. No other fact need be stated. No order may be made by any court or any judge thereof requiring an undertaking or security for costs except upon 10 days’ notice to the plaintiff.

779.21(2) (2) The writ of attachment shall direct the officer to attach the property described or so much thereof as shall be necessary to satisfy the sum claimed to be due and to hold the same subject to further proceedings in the action. The officer shall make return but it shall not be necessary for the officer to make an inventory or appraisal of the property attached; the officer shall pay any charges that may be due for booming or driving the property attached, and the amount paid shall be taxed as costs. Where personal service of the summons and writ of attachment cannot be made service shall be made as provided for service of summons on nonresidents or persons who cannot be found as in other actions.

779.21 History History: 1977 c. 449; 1979 c. 32 s. 57; 1979 c. 176; Stats. 1979 s. 779.21.

779.24 779.24 Lien for camp supplies. All persons furnishing supplies necessary for the performing of the labor and services upon any property mentioned in s. 779.18, at the request of the person engaging such labor or services, shall have the right of lien therefor and may enforce the same by action as herein provided for the enforcement of liens upon logs and timber.

779.24 History History: 1979 c. 32 ss. 57, 92 (9); Stats. 1979 s. 779.24.

779.25 779.25 Lien for joint log driving. When logs or timber of different owners are so intermixed that they cannot be conveniently separated for driving and either owner neglects to make the necessary provision for driving them any other owner may drive all such logs or timber to the destination and shall receive reasonable compensation for driving the logs of the owner so neglecting and shall have a lien for such compensation and may enforce the same as provided for the enforcement of liens upon logs or timber.

779.25 History History: 1979 c. 32 s. 57; Stats. 1979 s. 779.25.

779.26 779.26 Lien of improvement companies. Every company whose charter authorizes it to collect tolls on logs, lumber or timber shall have a lien thereon, with the remedies herein given to enforce liens for labor and services in respect to logs or timber.

779.26 History History: 1979 c. 32 s. 57; Stats. 1979 s. 779.26.

779.28 779.28 Execution. In actions to enforce liens on property mentioned in s. 779.18 the execution, in addition to the directions of ordinary executions upon judgments for money, shall direct that the property upon which a lien is found to exist or so much thereof as may be necessary for such purpose be sold to satisfy the judgment.

779.28 History History: 1979 c. 32 ss. 57, 92 (9); Stats. 1979 s. 779.28.

779.29 779.29 Intervention. In an action for the enforcement of a lien upon property under s. 779.18 a person not a party may, at any time before sale of the property upon which a lien is claimed, become a party defendant by filing with the clerk of the court where the action is pending an affidavit made in behalf of or by the person that the person is the owner of or of some interest in the property upon which a lien is claimed and believes that the claim for lien is invalid. Upon filing this affidavit the person may defend this action so far as a claim for a lien is concerned. If judgment has been previously rendered for a lien, the person may move the court for relief from the judgment within 20 days after the filing of the affidavit. The right to file an affidavit shall not extend beyond one year from the rendition of the judgment.

779.29 History History: 1979 c. 32 ss. 57, 92 (9); 1979 c. 176; Stats. 1979 s. 779.29; 1983 a. 219.

779.29 Note Judicial Council Note, 1983: This section is amended by repealing an appeal procedure and substituting the right to move the trial court for relief from its judgment. [Bill 151-S]

779.30 779.30 Undertaking by intervenor; procedure. The filing of an affidavit under s. 779.29 shall not stay execution unless the intervenor files an undertaking, with 2 or more sureties, who shall each justify in a sum equal to double the amount of the judgment, conditioned that if the plaintiff establishes the right to a lien on the property they will pay the amount of judgment in the plaintiff’s favor with costs; the undertaking shall be approved by the judge of the court; and upon filing it all proceedings upon the judgment shall be stayed during the pendency of the proceedings. If execution has been previously issued the same shall, upon presenting to the officer in whose custody it may be a certified copy of the affidavit and undertaking, be returned, and all property in which the intervenor claims an interest that may have been levied upon shall be released from the levy. If upon the trial the plaintiff recovers judgment of lien upon this property the judgment may be entered against the intervenor and sureties; but if the plaintiff does not establish the right to a lien the intervenor shall recover judgment for costs.

779.30 History History: 1979 c. 32 ss. 57, 92 (9); 1979 c. 176; Stats. 1979 s. 779.30; 1983 a. 219.

779.31 779.31 Cook’s lien. The person who prepares or serves the food for persons while they are performing lienable services upon any property mentioned in s. 779.18, at the request of their employer shall have the right of lien therefor the same as those persons.

779.31 History History: 1975 c. 94 s. 91 (9); 1979 c. 32 ss. 57, 92 (9); Stats. 1979 s. 779.31.

779.32 779.32 Commission liens.

779.32(1) (1) Definitions. In this section:

779.32(1)(a) (a) “Broker” means a real estate broker licensed under ch. 452.

779.32(1)(b) (b) “Commercial real estate” means any real property other than any of the following:

779.32(1)(b)1. 1. Real property containing 8 or fewer dwelling units.