The Appellate Division recently turned up the heat on general contractors who fail to pay subcontractors forcing them to incur legal fees to prosecute their legitimate claims. In JHC Industrial Services, LLC v. Centurion Cos., (approved for Publication September 17, 2021), the Court declined to enforce a proportionality requirement into the PPA’s fee shifting provision and remanded the issue of counsel fees.
The trial court originally imposed a limit on counsel fees (found no where in the PPA) and allowed only $16,000 for the counsel fee award, on the subcontractor’s claim of $30,000 despite the wronged subcontractor having incurred over $100,000 in legal fees due to the general contractor’s legal maneuvering. The Appellate Division noted that the general contractor had no defense to the subcontractor’s claim. Judge Allison Accurso wrote that general contractor should “not be allowed to evade responsibility for running up plaintiff’s fees by its own legal maneuvering and obdurate approach to the litigation, forcing plaintiff to trial on claims to which Centurion had no defense.” Moreover, the the fee-shifting provision of the PPA exists “to ensure ‘that plaintiffs with bona fide claims are able to find lawyers to represent them[,] … to attract competent counsel in cases involving statutory rights … and to ensure justice for all citizens.’”
This ruling will assist wronged subcontractors in obtaining justice in situations where in the past they might not have pursued payment because the counsel fees made pursuit unfeasible.
If you have any questions, please contact Jacqueline Greenberg Vogt.