G&G Mech. Constructors, Inc. v. Jeff City Indus., Inc., No. WD80840, 2018 Mo. App. LEXIS 271 (Mar. 20, 2018)

This case arose out of a project in Columbia, Missouri on which Jeff City Industry, Inc. (“JCI”) was the general contractor and G&G Mechanical Constructors, Inc. (“G&G”) was a subcontractor.

The draft subcontract contained an interest provision which provided that overdue payments “shall bear interest at the annual rate of 18% or the highest rate allowed by law, if lower. Retainage shall not be held out of payment.”  JCI struck through this provision, wrote “5% Retiange [sic]” in the margin, initialed it, and sent it to G&G.  G&G also initialed the revision.

When JCI failed to pay G&G for its work, G&G sued JCI for breach of contract, unjust enrichment, and violation of Missouri’s Prompt Pay Act.  A jury returned a verdict against JCI, and the trial court entered a judgment against it which included prejudgment interest at the rate of 9% pursuant to Missouri Revised Statute § 408.020.
Continue Reading If You Want to Avoid Prejudgment Interest You Have to Expressly Say So in the Contract, Merely Striking the Interest Provision From the Contract May Not Work

RSP Architects, Ltd. v. Five Star Dev. Resort Communities, LLC
306 P.3d 93 (Ariz. Ct. App. 2013)

This action arose from a payment dispute on a construction project where an architectural firm, RSP Architects, Ltd. (“RSP”), contracted with a developer, Five Star Development Resort Communities, LLC (“Five Star”), to provide architectural services for a development known as the Palmeraie (the “Project”). Pursuant to the architectural services contract (the “Architectural Agreement”), RSP was tasked with several different duties, including “construction administration,” “overall coordination,” and “conceptual design” related to the Project. For its services, RSP was to receive approximately $3,000,000. Prior to completion, however, RSP ceased work on the Project and sued Five Star, alleging, among other claims, a violation of Arizona’s Prompt Payment Act, A.R.S. § 32-1129 et seq. (the “PPA”).Continue Reading Arizona Court of Appeals Rules Prompt Payment Act Does Not Apply To Design Professionals When Performing Normal Architectural and Engineering Services

Imperial Excavating & Paving, LLC v. Rizzetto Construction Management, Inc.
2007 PA Super 318, 2007 Pa. Super LEXIS 3540 (Pa. Super. Ct.. Oct. 23, 2007)
General contractor Rizzetto entered into a contract to perform extensive work for the Southern Lehigh School District, including work on the two high school soccer fields. Rizzetto contracted with subcontractor Imperial to perform earthwork on the fields including the removal of topsoil, grading and compacting of the subsoil. After Imperial’s earthwork on the fields had been completed, Rizzetto had been paid by the school less retainage and Rizzetto had paid Imperial, Rizzetto hired a landscaper to perform additional work on the fields including correction of irregularities in soil structuring, tilling and seeding, and the addition of six inches of topsoil.Continue Reading Pennsylvania Superior Court Affirms Award to Subcontractor of Penalty Interest and Attorneys Fees Under the Pennsylvania Prompt Payment Act

James Corp. v. North Allegheny School District
No. 1268 C.D., 2007 Pa. Commw. LEXIS 636 (Pa. Commw. Ct. Nov. 30, 2007)
The Pennsylvania Commonwealth Court held that the “measured mile” method of proving damages for an acceleration claim was legally sufficient to establish the extent of the contractor’s damages. The Court also held the contractor’s failure to provide notice in accordance with the contract was not fatal to the claim, and that attorney fees and expenses under the Prompt Payment Act must be apportioned to those fees and expenses associated with recovering payment’s due under the contract.Continue Reading Pennsylvania Commonwealth Court Holds Written Notice of Claim Requirement Excused and Accepts “Measured Mile” Method of Proving Inefficiency Damages

DGS v. Pittsburgh Building Co.
2007 Pa. Commw. LEXIS 160 (Pa. Commw. Ct. April 5, 2007)
The Pennsylvania Commonwealth Court held that a contractor was entitled to recover penalty interest and attorney fees under the Pennsylvania Prompt Payment Act from the Department of General Services (“DGS”) when DGS had engaged in arbitrary and vexatious conduct by withholding payment for costs associated with a five-month suspension and unsuitable soil conditions when DGS was aware of, yet failed to disclose, problematic soil conditions.
Continue Reading Pennsylvania Department Of General Services’ Conduct In Withholding Memorandum Disclosing Unsuitable Soil Conditions From Bidders Was Vexatious, Entitling Contractor To Recover Penalty Interest And Attorney Fees Under Prompt Payment Act