Q: When Is a Monthly Release Not a Release?

A: When the issue is decided in arbitration.  An arbitrator's decision that a periodic subcontractor release had not waived claims made in arbitration was upheld by the Rhode Island Supreme Court¹, although one could read between the lines to conclude that the court would have ruled otherwise on the merits.  This case highlights – with an issue that is controversial of its own accord – the distinction between arbitration and litigation.

The sub signed a monthly lien waiver and release, which arguably released the claims ultimately submitted in arbitration.  The arbitrator considered the terms of the monthly release, concluded that it could be distinguished from prior case law that barred claims based on similar release language, and awarded damages to the sub.  The prime contractor argued that this represented "manifest disregard for the law" and thus grounds to overturn the arbitrator's award.  The lower court agreed with the contractor that the arbitrator had