A recent Utah Court of Appeals ruling creates uncertainty regarding the enforceability of mechanic's liens subordination agreements in Utah.

The Facts: In Olsen v. Chase, a contractor entered into a construction agreement to build a new home. The contractor started construction on November 1, 2006, triggering the date for the priority of its mechanic's lien. The home owner obtained a construction loan from the bank on November 9, 2006, which the contractor also signed. The contractor relied on the bank's representations that the agreement merely required the contractor to finish construction in the event that the owner became insolvent. The contractor failed to carefully review the loan agreement, which also contained aprovision subordinating the contractor's mechanic's lien to the loan.

Around this time last year the green community was buzzing with speculation surrounding a lawsuit against the U.S. Green Building Council ("USGBC") alleging deception and fraud in the rating system's claims. On August 15, 2011, this court dismissed the suit for lack of standing.

Original Complaint
In October 2010, Henry Gifford filed a class action complaint in the U.S. District Court of New York against the USGBC. Gifford attempted to certify the following classes against the USGBC:

• All persons who paid for LEED certification¹ in reliance of deceptive marketing;
• All persons who design energy-efficient buildings and whose livelihoods are injured by USGBC's monopolization of the market through fraudulent and intentionally misleading representations;
• All taxpayers whose city and state tax dollars are spent on the cost of LEED certification; and
• Trades that are injured by USGBC's deceptive trade practices because they lose money and valuable time to comply with LEED specifications.