{"id":893691,"date":"2018-02-28T09:27:43","date_gmt":"2018-02-28T16:27:43","guid":{"rendered":"https:\/\/www.myconstructionexpert.com\/blog\/?p=893691"},"modified":"2018-02-28T13:37:41","modified_gmt":"2018-02-28T20:37:41","slug":"pay-paid-enforced-opening-door-subcontractor-claim-owner","status":"publish","type":"post","link":"https:\/\/www.myconstructionexpert.com\/blog\/pay-paid-enforced-opening-door-subcontractor-claim-owner\/","title":{"rendered":"Pay-if-Paid Enforced Opening Door to Subcontractor Claim Against Owner"},"content":{"rendered":"

Katharine E. Kohm | The Dispute Resolver<\/a> | February 24, 2018<\/p>\n

In\u00a0Superior Steel, Inc. v. Ascent at Roebling’s Bridge, LLC, No. 2015-SC-000204-DG, 2017 WL 6380218 (Ky. Dec. 14, 2017), a subcontractor and a sub-subcontractor\u00a0sued the\u00a0general\u00a0contractor<\/span>\u00a0and owner for the failure to pay for extra\u00a0work. The\u00a0general\u00a0contractor<\/span>\u00a0and owner cross-claimed against the other for, inter alia,\u00a0indemnification.\u00a0 At the jury trial, the subcontractors\u00a0recovered under theories\u00a0of implied contract and unjust enrichment.\u00a0 All parties appealed, in particular, as to the pay-if-paid jury instruction. The Court of Appeals vacated the judgment and remanded.\u00a0 In turn, all parties petitioned to the Supreme Court of Kentucky.<\/div>\n
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The key questions in the petition were\u00a0whether the\u00a0pay-if-paid provision was enforceable\u00a0as between the general contractor and subcontractors and, if so,\u00a0whether the subcontractors could pursue the owner directly for payment notwithstanding the lack of privity between owner and subcontractors.<\/div>\n
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The Supreme Court\u00a0concluded that, as a\u00a0result of the pay-if-paid clause,\u00a0the general\u00a0contractor<\/span>\u00a0had not\u00a0breached subcontract for\u00a0the failure to\u00a0pay for the subcontractor’s extra work.\u00a0\u00a0The relevant subcontract provisions stated:<\/div>\n