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On April 12, 2019, the Iowa Supreme Court affirmed a lower court ruling which held that, inter alia, the Iowa mechanic’s lien statute would not permit the attachment of mechanic’s liens to the property of a lessor in connection with a contract to supply materials and labor to a lessee.
The Defendant, Cargill, Incorporated, entered into a 50-year lease with HF Chlor-Alkali, LLC (HFCA) to permit HFCA to construct a chlor-alkali manufacturing facility on a property that Cargill owned in Eddyville, Iowa. HFCA then contracted with a pair of general contractors, who in turn hired several subcontractors, including the Plaintiffs. None of the general contractors or the Plaintiffs had any contracts with Cargill in connection with the construction of the chlor-alkali manufacturing facility. Eventually, the project unraveled and the Plaintiffs were not paid in full.