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.
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