In the most recent chapter of litigation spanning more than 23 years, on September 27, 2017, the Pennsylvania Supreme Court affirmed a subcontractor’s $1.68 million dollar award entered pursuant to the Contractor Subcontractor Payment Act. Monica Reynolds, co-counsel to the subcontractor, has represented the subcontractor since 2002 in its efforts to pierce the corporate veil and collect its $200,000 arbitration award obtained under the Contractor Subcontractor Payment Act (“CASPA”) in 1998. In 1994, the subcontractor was unpaid for $30,000 of flooring that it installed in a residential housing development owned and constructed by various companies, all of which were controlled by a single owner.
While the subcontractor’s arbitration against those companies was proceeding, the owner shifted all of those companies’ assets to himself and his other companies, ultimately leaving the subcontractor with an uncollectible $200,000 arbitration award against those companies. In 2000, the subcontractor began a separate action to collect its arbitration award, in which the subcontractor proved that the owner’s fraudulent transfers prevented collection of the underlying arbitration award.
Our client’s victory in this case is important to all subcontractors, contractors and owners involved the construction industry in Pennsylvania because it extends the protections and amounts recoverable under the Contractor Subcontractor Payment Act to subsequent collection efforts for any judgment awarded under the Contractor Subcontractor Payment Act by allowing recovery for attorney’s fees and costs, 12% interest and 12% penalty interest to any party found to be liable for the underlying judgment.
The application of CASPA’s penalties, along with the owner’s efforts to delay resolution, increased the subcontractor’s $200,000 arbitration award to over $1,000,000.
If you have any questions about this case, or the Subcontractor Contractor Payment Act, please contact Monica Reynolds at [email protected].