In order to enforce a stop notice or to foreclose on a mechanic’s lien, a material supplier must prove, among other things, that (1) its materials were furnished for use in the particular job; and (2) the materials were actually used in the job. Unfortunately, proof of delivery of the materials to the project does not create a presumption of their use in the project. Therefore, competent evidence showing use of the materials in the project must be offered at trial. This burden of proof may present some difficulty for a materials supplier if the purchasing contractor has gone out of business and no employees of the contractor are available to testify that the materials were used in the construction project.
This precise situation was addressed in the case of Consolidated Electrical Distributors, Inc. v. Kirkham, Chaon & Kirkham (1971) 18 Cal. App.3d 54. The plaintiff in Consolidated Electrical was a materials supplier that furnished fixtures to an electrical subcontractor for use in the construction of an elementary school. After the electrical contractor filed for bankruptcy, the supplier filed suit seeking payment pursuant to a stop notice and a labor and material bond.
At trial, in support of its claim, the supplier relied on the electrical contractor’s purchase orders, invoices showing shipment of the materials to the jobsite and a certified copy of the blueprints from the job. Additionally, the supplier’s office manager testified that he had reviewed the school’s blueprints, including the “electrical-site plan & schedules” and “fixture schedule” in detail, and prior to its completion, he had made two visits to the school and observed the subcontractor incorporating the materials into the school building. In essence, he testified that the types of fixtures provided for in the blueprints were in the finished school and corresponded to the types and amount of fixtures which had been ordered by the subcontractor from plaintiff. The manager, however, did not physically inspect every room in the school, but testified that according to the blue prints, the materials used in every room in the school were the same.
The court held that the manager’s testimony was sufficient to sustain the supplier’s burden of proving the incorporation of the materials into the project. In doing so, the court stated that “actual use” of the material could be inferred from the testimony of the manager that the plans called for the use of identical materials throughout the project. Thus, in accordance with the Consolidated Electrical case, a material supplier must show more than delivery of the materials to a site to enforce a stop notice or to foreclose on a mechanic’s lien. Indeed, once a purchaser’s account becomes overdue, a prudent material supplier should begin gathering evidence which shows its materials were actually used in the subject project. Moreover, where plans call for the repetitive use of materials on identical structures or rooms, “actual use” of the materials throughout the entire project may be shown by extrapolation evidence (i.e. an inference that the same materials were used throughout the project based on the identical nature of the rooms and physical examination of the materials used in a some of the rooms.)