General Contractor, Subcontractor, Whose Responsibility to Get Lien Removed?

[m00tpoint]

I'm Church Council Secretary for a church in the midst of a $1.5 million building project. We find ourselves in a difficult situation, and will be seeking legal advice. However, I'd like to hear what the good folks here may think.

General Contractor (GC) contracted Subcontractor (SC) for about $50K for fire sprinklers. (As I assume is standard, we had and have no direct contractual relationship with the SC.) GC & SC disagreed about what the scope of work in their contract was, and SC stopped work. GC then fired SC, and gave the remaining value of that contract ($30K of the $50K) to another sub, who completed the work. SC then filed a lien on our property for the full $50K. (For what it's worth, we and our attorney believe that the GC is pretty clearly in the right in that dispute.)

The Title Company will not disburse any funds to anyone from our construction loan while there is a lien on the property.

GC has told us that he has never gone through the process to be able to purchase a bond to post against the lien, and has no line of credit. His position is:

1) It is our responsibility, not his, to post a bond or put funds in escrow against the lien, or settle with the lienholder, so that GC can get paid and in turn pay the other subs while the dispute with the lienholder remains unresolved.

2) That if he loses his case with SC, he will simply bill us for the increased cost and we will be legally obligated to pay him.

Our position is:

1) He had the contract with the sub, the legal dispute is between GC and SC, and therefore GC is obligated to do what may be necessary to either settle with the SC, or else post bond or cash against the lien pending resolution of their dispute.

2) If he loses his dispute with SC, he has failed in his contractual duty to provide oversight, and therefore any cost above and beyond the amount of the original subcontract is his problem, not ours.

We're in Illinois, if it matters.

Am I just uneducated/ignorant/stupid, or are the legal issues here pretty straightforward? My thinking is:

1) If the GC agreed to provide sprinklers in a building for $50K, and subbed that work out, and loses in mediation or court about the language of the contract GC signed, and that costs him money, how does that become our liability?

2) In general, if a sub files a property lien due to a dispute with a GC, and if neither party alleges any wrongdoing on the part of the property owner, how should that be resolved?

3) Other than "get a good attorney," what advice might anyone have about how best to proceed?

Frustrated in IL,
m00tpoint

[m00tpoint]

The back button gave me the double post; mods please delete.

m00t