Reprinted from the online article featured on July 22nd, 2009 Judge Rules In Favor Of Bank Over Contractor In Boston Condo Suit BY PAUL MCMORROW | BANKER & TRADESMAN STAFF WRITER inchester contrac- closed soon after. It took paid monthly invoices. ment loan] advances will tor AJ Martini Inc. ownership of the project The suit was the most continue to have priority Wis out more than with a $17.5 million bid at significant challenge to over a lien.” $4.6 million after a Suf- auction. the state’s mechanic’s lien Martini sought $5.2 folk County Superior Martini sued TD Ban- law in more than a de- million in the suit, in- Court judge upheld a dis- kNorth, arguing that its cade, and reiterates what cluding $4.6 million for puted state statute, pro- bills should be paid be- many Bay State lenders unpaid work, and more tecting TD BankNorth fore the bank recouped have long assumed - that, than $600,000 in retainage from subordinating its money on its own devel- under normal circum- fees. Lauriat’s ruling only construction loan to Mar- opment loan. The con- stances, they can advance awarded Martini the re- tini on a now foreclosed- tractor said that the bank development loans over tainage fee. upon downtown Boston knew Broadluxe’s devel- mechanic’s liens and re- AJ Martini chairman condo development. oper was skating on dan- tain repayment priority. Paul Martini called the Martini was the con- gerously thin ice, but re- “The decision provides ruling “disappointing,” tractor on the Broadluxe mained silent. certainty to the lending and told Banker & Trades- condominium project at However, Judge Peter community and the de- man his firm is still con- 99-105 Broad St. in Bos- M. Lauriat ruled that, velopment community,” sidering its next step. He ton. Work began on the since the bank hadn’t said TD BankNorth’s at- noted that Lauriat found project in late 2005. loaned the developer any torney, Dennis McKenna, the bank had broken its Martini walked away money after the submit- a senior partner at Riemer contract when it withheld from the 44-unit condo tal of the disputed work & Braunstein. “This was information about the development in January orders, the bank’s prior- a very significant chal- health of the construction 2007, after the project’s ity was shielded by the lenge to how the lending loan, although Lauriat de- developer, Franklin Re- state’s mechanic’s lien community viewed [the clined to award damages alty Advisors, refused to statute. Lauriat also re- mechanic’s lien statute]. for that breach. pay Martini for more than jected an effort by Mar- It provides certainty that Charles Norton Jr., two months of work. TD tini to date its liens to the the statute will work as it president of Franklin Re- BankNorth, the holder of original date of the devel- was intended to work. It alty Advisors, had no com- the project’s $19 million opment contract, rather provides lenders with the ment when reached by construction loan, fore- than the dates of the un- certainty that [develop- Banker & Tradesman. n Reprinted with permission of Banker & Tradesman. This document may constitute advertising under the rules of the Supreme Judicial Court of Massachusetts..