Blog, Construction Law
Unpaid Subcontractor’s Right to Attorneys’ Fees
As many contractors and subcontractors know, despite high quality work, sometimes payment is hard to come by. No business can last if it isn’t compensated for its work. Contractors and sub-contractors are well aware of the general availability of the mechanic’s lien statute (Ind. Code sec 32-28-3 et seq.) as a means of obtaining payment from a recalcitrant client. For the uninitiated, the mechanic’s lien statute generally provides that when property is improved through the application of labor or services, then the party providing such labor or services may place a lien on the property to compel payment. (Ind. Code sec 32-28-3-1). Importantly, the mechanic’s lien statute provides that the lienholder shall also recover attorney’s fees and the cost of collection. See Clark v. Hunter, 861 N.E.2d 1202, 1209 (Ind. Ct. App. 2007) (award of reasonable attorney’s fees is mandatory). The recovery of attorney’s fees is important among other reasons because (1) construction disputes can be fact intensive and therefore expensive, and (2) the owner often has the “deep pockets” and can wear down the unpaid lienholder. Often, a payment dispute arises between the general contractor and a sub-contractor, not the property owner and general contractor. An owner of property can avoid liability for attorney fees by paying the general contractor the full amount due under the contract. (Ind. Code sec. 32-28-3-14(b)). Recently, the Indiana Supreme Court considered a case in which the owner paid its general, the general did not pay its subcontractors, and the subcontractors filed contract claims against the general and a mechanic’s…
Read MoreBlog, Construction Law
No wage committee. No published wage.
The construction landscape had changed. With the repeal of Indiana’s Common Construction Wage, the public project construction landscape has significantly changed. While the tedious and sometimes costly process of establishing a wage scale committee and wage for each public project has been repealed, there are still a number of requirements for owners, contractors and participants in public construction which must be closely monitored. The new requirements apply to any “public works project” undertaken by a state or local “public agency” and awarded after June 30, 2015. In the event a project was awarded prior to July 1, 2015, the prior common construction wage statute continues to apply as if it was not repealed. For projects awarded after June 30, 2015, unless required by federal or state law, a public agency is not permitted to establish or otherwise require a wage scale or wage schedule for a public works project. Consequently, no wage committee is established, no wage is published, and responding or selected contractors need not comply with a government-mandated wages with some exceptions. The price local governments have to pay for this freedom is not expensive, but it is complicated. Post-CCW public works contracts must now be drafted within the “contractor tier” requirements of the new law. Tier 1 contractors: are prime contractors with a contract for work, supplies or services directly with the public agency Tier 2 contractors: an immediate subcontractor of a prime contractor Tier 3 contractors: each person or entity that has a contract with a subcontractor and lower tier contractors including…
Read More