payment dispute

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Richard F. Kline, Inc. v. Shook Excavating & Hauling, Inc.
165 Md. App. 262, 885 A.2d 381, 2005 Md. App. LEXIS 273 (Maryland Ct Spec. App., October 31, 2005)
Richard F. Kline, Inc. (“Kline”) contracted with the City of Frederick, Maryland (the “City”) for the construction of a flood control project. Kline subcontracted with Shook Excavating & Hauling, Inc. (“Shook”) to perform a portion of the excavation work. The subcontract did not contemplate Shook’s removal of any contaminated soils. When such soils were discovered, the City and project engineer directed Kline to begin remediation. Kline in turn requested that Shook perform this work, and Shook did so. Eventually, the Maryland Department of the Environment determined that the soils were not in fact contaminated. Disagreeing with this determination, however, Kline and Shook continued to remediate the soil before using it as backfill.

Environmental Energy Partners Inc. v. Siemens Building Technologies,Inc., et al.
Nos. 26521 & 26702, 2005 Mo. App. LEXIS 1568 (Mo. Ct. App., Oct. 25, 2005)
In Environmental Energy Partners Inc. v. Siemens Building Technologies, Inc., et al., Nos. 26521 & 26702, 2005 Mo. App. LEXIS 1568, a payment dispute arose between a contractor and its subcontractor on a hospital renovation project. When the contractor refused to pay the subcontractor the remaining subcontract balance ($201,178.75) on the basis that the subcontractor’s work was not completed, the subcontractor filed a mechanic’s lien against the property. The subcontractor then filed a petition to enforce its lien, naming the contractor and owner as defendants. Because of the subcontractor’s lien, the owner withheld the last installment payment of $148,475 due to the contractor under their agreement. Thereafter, and unbeknownst to the contractor, the subcontractor and the owner entered into a confidential “Settlement Agreement and Release” under which the owner agreed to pay directly to the subcontractor the $148,475 amount that it was withholding from the general contractor in exchange for a release of the lien upon entry of judgment in the litigation.

American Rock Mechanics, Inc. v. N. Abbonizio Contractors, Inc. and Fidelity and Deposit Company of
2005 PA Super 390; 2005 Pa. Super. LEXIS 4086 (Pa. Super. Ct. 2005)
In American Rock Mechanics, Inc. v. N. Abbonizio Contractors, Inc. and Fidelity and Deposit Company of Maryland, 2005 Pa. Super. 390, (Pa. Super. Ct. 2005), the Court held that the terms of the parties’ subcontract concerning time for payment took precedence over the those set forth in the Commonwealth Procurement Code, 62 Pa.C.S. § 3933.

Worth Constr. Co. v. I.T.R.I. Masonry Corp.,
2001 U.S. Dist. LEXIS 2144 (S.D.N.Y. Feb. 21, 2001)
Worth Construction entered into a masonry subcontract with ITRI Masonry for a correctional facility in New York. Due to cash flow concerns, ITRI requested and Worth acquiesced to an arrangement where Worth would pay ITRI’s actual payroll costs, but not payroll taxes or benefits, on a weekly basis. These costs would then be deducted from ITRI’s monthly progress payment. Nevertheless, ITRI began to fall behind in its payments to vendors and its workforce. Subsequently Worth began paying ITRI’s payroll and suppliers by joint check. Eventually Worth terminated ITRI for nonperformance on March 13, 1998 and hired all of ITRI’s tradesmen and supervisors to complete the masonry work.

Allgood Electric Co. v. Martin K. Eby Constr. Co.,
85 F.3d 1547, 1996 U.S. App. LEXIS 15252 (11th Cir. June 25, 1996)
Under Georgia law, subcontractor’s release of all claims against property on which project was located did not operate to release claims against contractor, nor was contractor entitled to benefit of release in which contractor was not mentioned by name.
Plaintiff Allgood Electric Company (“Allgood”) was the electrical subcontractor on a prison project for the Georgia Building Authority (“GBA”). Defendant Martin K. Eby Construction Company, Inc. (“Eby”) was the general contractor. Allgood sought to recover increased costs allegedly caused by Eby’s failure to coordinate various aspects of the project. Allgood also claimed entitlement to retainage.