The verbs lie and lay are commonly confused. This is not because of the meaning of the verbs, but because of the way they are conjugated. Lay means "to place something down." It is something you do to something else. It is a transitive verb. Lie means "to recline" or "be placed." It does not act on anything or anyone else. It is an intransitive verb. (I'm ignoring the other meaning "falsehood" for this post.)
The reason lay and lie are so darn confusing is their preterite (simple past) tenses. The past tense of lay is laid. And the past tense of lie is lay.
I laid it down here yesterday. (It is being done to something else.)
Last night I lay awake in bed. (It is not being done to anything else.)
The past participle of lie is lain. The past participle of lay is like the past tense, laid.
I could have lain in bed all day.
They have laid an average of 500 feet of sewer line a day.
Layed is a misspelling and does not exist. Use laid.