Attempt to block online construction registry fails

An attempt by several Utah construction industry organizations to block the state’s recently launched online construction registry has been declined by a district judge, though a temporary restraining order has been issued.

The lawsuit, filed April 28 in Salt Lake City’s 3rd District Court, contends liability for registry mistakes should fall on Utah Interactive, a company hired to create the online resource, rather than suppliers and subcontractors. Those users are currently required to sign a contract absolving Utah Interactive of liability.

John Young, attorney for the Utah Subcontractors Council and the Utah Construction Suppliers Association, sought the injunction to delay or prohibit the site. Instead, District Judge Stephen Roth issued a temporary restraining order on terms in the site’s registration agreement that limited or excluded liability for Utah Interactive.

“Having a registration agreement that signs away these rights is wrong,” Young said.

The construction registry, which went live May 1, allows suppliers and subcontractors to list themselves as participants in construction projects and preserves the right to place a lien on a property in the event they are not paid.

But because many state municipalities aren’t ready to go online – some still send data by postal mail or fax – Young thinks a “substantial risk of mistakes” exists.

“If they’re doing that [entering data manually], the risk of incorrect information would be quite high,” he said. With more time and acceptance of liability, Young said the registry could be effective in its services.

Utah Interactive did not return phone calls for comment on the lawsuit.

Other state construction associations, such as the Utah chapter of the Associated General Contractors of America, are choosing to stay out of the lawsuit, but are keeping tabs on its outcome.

Richard Thorn, president of the Utah AGC chapter, said the registry has many benefits, especially in reducing the cost and burden for contractors to notify parties involved in a project of important information.

“We think it’s a step in the right direction, frankly,” Thorn said.

When Utah legislature approved House Bills 136 and 105 to create the groundwork for the website, Thorn said all the construction organizations were present. He didn’t understand why those organizations, which are now plaintiffs in the lawsuit, didn’t voice their opposition at that time.

“If they didn’t want it to happen, I assure you we could have killed the bill,” he said.

Patrick Beeson can be contacted at pbeeson@randallpub.com.