Jeremy P. Brummond Published in Under ConstructionMarch 28, 2014
Jeremy P. Brummond authored an article for Under Construction, the newsletter of the American Bar Association Forum on the Construction Industry, of which he is a member. The article is entitled, Update from the Courts: Summary Judgment on Direct Claims by Sub-subcontractor against General Contractor. It discusses the ongoing Massachusetts case Auburn Door v. Suffolk Construction and focuses on what a subcontractor should do when the party who hired it runs out of money. In Auburn Door, a contractor engaged a subcontractor to supply and install doors and door hardware for a renovation project. The subcontractor then hired a sub-subcontractor to provide the labor for the door installation. After various difficulties receiving payment from the subcontractor, including a final invoice of more than $600,000, the sub-subcontractor filed suit against the subcontractor, contractor, and contractor's sureties in federal court.
After nearly four years of litigation and no guarantee of payment to the sub-subcontractor, the case stands unresolved. Jeremy cited the following lessons to be learned to avoid the sub-subcontractor's unenviable and costly position:
- Be mindful of deadlines. Failing to meet deadlines for mechanic's liens or state and federal bonds undermine a subcontractor's payment claims.
- Get it in writing. In the Auburn Door case, numerous assurances of payment made by the contractor to the sub-subcontractor via email and voicemail were not sufficient to create a formal agreement of payment. If a contractor is assuring payment for continued performance, get that promise in writing to ensure payment.
- Don't work for free. If the contractor or owner (higher in the contractual chain) refuses to sign an agreement expressly guarantying payment, the best way for a subcontractor to get paid may be to actually suspend its work.
To read the full "Under Construction" article, click here.
Jeremy is a Lewis Rice member practicing in the areas of commercial litigation and construction law. He represents property owners, architects, engineers, and general and specialty contractors. He counsels clients on contract negotiation and drafting and represents them in construction-related litigation. Jeremy is a frequent author and presenter of legal topics affecting the construction industry.
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