{"id":901465,"date":"2023-07-27T19:05:44","date_gmt":"2023-07-28T01:05:44","guid":{"rendered":"https:\/\/www.myconstructionexpert.com\/blog\/?p=901465"},"modified":"2023-07-27T19:05:47","modified_gmt":"2023-07-28T01:05:47","slug":"prompt-pay-subcontractor-or-pay-consequences","status":"publish","type":"post","link":"https:\/\/www.myconstructionexpert.com\/blog\/prompt-pay-subcontractor-or-pay-consequences\/","title":{"rendered":"Promptly Pay the Subcontractor or Pay the Consequences"},"content":{"rendered":"\n<p>Justin Croniser | <a href=\"https:\/\/www.hahnlaw.com\/insights\/promptly-pay-the-subcontractor-or-pay-the-consequences\/\" target=\"_blank\" rel=\"noreferrer noopener nofollow\">Hahn Loeser &amp; Parks<\/a><\/p>\n\n\n\n<p>Under Ohio\u2019s <a href=\"https:\/\/www.myconstructionexpert.com\/blog\/dot-cross-ts-ohios-prompt-pay-act\/\" target=\"_blank\" rel=\"noreferrer noopener\">Prompt Pay Act<\/a>, a general contractor could end up paying more for the subcontractor\u2019s attorneys\u2019 fees than the general contractor owed to the subcontractor. That was the ruling by the Ohio appellate court in\u00a0<em>Atlas Piers NEO v. Summit Construction Co., Inc.<\/em>, 2021-Ohio-2024 (9th Dist.). In\u00a0<em>Atlas Piers<\/em>, the general contractor hired a subcontractor to provide \u201cservices that help stabilize buildings constructed in poor soil conditions.\u201d\u00a0<em>Id<\/em>. at \u00b6 2. In particular, the subcontractor installed helical screws and piers in a series of buildings to be built for the Akron Metropolitan Housing Authority.\u00a0<em>Id<\/em>.<\/p>\n\n\n\n<p>A dispute later arose regarding the piers and the subcontractor\u2019s work on the piers. The subcontractor sought a change order for work that the general contractor instructed the subcontractor to perform. But the general contractor refused to issue a change order because \u201cit believed one was not necessary.\u201d&nbsp;<em>Id<\/em>. at \u00b6 9. When the subcontractor refused to act without a change order, the general contractor terminated the subcontract.<\/p>\n\n\n\n<p>The subcontractor then filed a lawsuit against the contractor, seeking \u201cmoney for lost time, extra work performed, lost profits, and\u201d retainage that had not been paid by the contractor.&nbsp;<em>Id<\/em>. at \u00b6 10. The subcontractor also sought damages and attorneys\u2019 fees under Ohio\u2019s Prompt Pay Act because the general contractor \u201cfailed to timely pay\u201d the subcontractor in violation of Ohio Rev. Code \u00a7 4113.61.&nbsp;<em>Id<\/em>. at \u00b6 11. Following a bench trial, the trial court found that the contractor owed the subcontractor approximately $20,000, plus 18% interest, as well as attorneys\u2019 fees.&nbsp;<em>Id<\/em>. at \u00b612.<\/p>\n\n\n\n<p>Next, the court held a hearing to determine the amount of attorneys\u2019 fees that should be awarded to the subcontractor. The court rejected the contractor\u2019s arguments that the subcontractor \u201cfailed to satisfy the factors in the\u201d Prompt Pay Act and that the subcontractor should only recover fees relating to the Prompt Pay Act claim. All told, the court awarded the subcontractor $64,974.88 in attorneys\u2019 fees\u2014more than three times the amount owed to the subcontractor.<\/p>\n\n\n\n<p>On appeal, the contractor raised several arguments in an attempt to throw out the attorneys\u2019 fees award. But the appellate court rejected each of those arguments. In particular, the court disagreed with the contractor\u2019s argument that the attorneys\u2019 fees award was \u201cdisproportionate and unreasonable in light of the sum recovered by\u201d the subcontractor.&nbsp;<em>Id<\/em>. at \u00b6 34. The appellate court explained that \u201c[n]othing in the statute . . . indicate[s] that it is per se unreasonable for an award of attorney fees to substantially exceed the funds recovered by the prevailing party. While it is true that [the subcontractor] did not recover a large proportion of the money it sought, it was nonetheless successful in its litigation.\u201d&nbsp;<em>Id<\/em>.<\/p>\n\n\n\n<h2 class=\"wp-block-heading\" id=\"h-the-moral-of-the-story\">THE MORAL OF THE STORY<\/h2>\n\n\n\n<p>Attorneys\u2019 fees could make a Prompt Pay Act claim much more costly for a contractor. Those fees could greatly exceed the actual amount owed to the subcontractor. Plus, courts could assess those fees even when the subcontractor does not recover the total amount that it claims that it is owed. Therefore, contractors should pay particular attention to Prompt Pay Act claims made by their subcontractors and consider the potential award of attorneys\u2019 fees in evaluating those claims.<\/p>\n\n\n\n<hr class=\"wp-block-separator has-alpha-channel-opacity\"\/>\n\n\n\n<p><strong>When one of your cases is in need of a construction expert, estimates, insurance appraisal or umpire services in defect or insurance disputes &#8211; please call Advise &amp; Consult, Inc. at 888.684.8305, or email <a href=\"mailto:experts@adviseandconsult.net\" target=\"_blank\" rel=\"noreferrer noopener\">experts@adviseandconsult.net<\/a>.<\/strong><\/p>\n","protected":false},"excerpt":{"rendered":"<p>Justin Croniser | Hahn Loeser &amp; Parks Under Ohio\u2019s Prompt Pay Act, a general contractor could end up paying more for the subcontractor\u2019s attorneys\u2019 fees than the general contractor owed to the subcontractor. That was the ruling by the Ohio appellate court in\u00a0Atlas Piers NEO v. Summit Construction Co., Inc., 2021-Ohio-2024 (9th Dist.). In\u00a0Atlas Piers,&hellip; <a class=\"more-link\" href=\"https:\/\/www.myconstructionexpert.com\/blog\/prompt-pay-subcontractor-or-pay-consequences\/\">Continue reading <span class=\"screen-reader-text\">Promptly Pay the Subcontractor or Pay the Consequences<\/span><\/a><\/p>\n","protected":false},"author":1,"featured_media":0,"comment_status":"open","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"jetpack_post_was_ever_published":false,"_jetpack_newsletter_access":"","_jetpack_dont_email_post_to_subs":false,"_jetpack_newsletter_tier_id":0,"_jetpack_memberships_contains_paywalled_content":false,"_jetpack_memberships_contains_paid_content":false,"footnotes":"","jetpack_publicize_message":"","jetpack_publicize_feature_enabled":true,"jetpack_social_post_already_shared":false,"jetpack_social_options":{"image_generator_settings":{"template":"highway","enabled":false},"version":2}},"categories":[172],"tags":[9895,9120,520],"class_list":["post-901465","post","type-post","status-publish","format-standard","hentry","category-construction-law-2","tag-advise-consult","tag-ohio","tag-prompt-pay-act","entry"],"jetpack_publicize_connections":[],"yoast_head":"<!-- This site is optimized with the Yoast SEO plugin v25.0 - https:\/\/yoast.com\/wordpress\/plugins\/seo\/ -->\n<title>Promptly Pay the Subcontractor or Pay the Consequences - Advise &amp; 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