In a court decision that will delight the construction industry, the Pennsylvania Superior Court recently held for the first time that contractors and subcontractors may recover interest, penalties, attorney fees and other expenses incurred after a judgment against a developer or property owner.

In the case in question, Zimmerman v. Harrisburg Fudd, a contractor sued the owner of a new restaurant who had not paid for construction work under the state contractor payment law. Even after the contractor won, the owner still didn't pay. Only after incurring additional attorney fees and other costs was the contractor able to get a lien against the owner's bank accounts and recover the amount of the award.

The contractor then filed to get the interest and penalties from the time of the original award until the contractor was paid, plus the contractor's attorney fees and other costs to collect. After the trial court turned the contractor down, the Superior Court unanimously reversed the ruling and told the restaurant owner to pay the additional amount.

Not paying backfired on the owner, as the initial amount owed to the contractor was a little more than $10,000 and the final total of the claim after the Superior Court decision came to almost $42,000.

Often contractors and subcontractors don't pursue litigation after being stiffed for smaller amounts because they are afraid of getting stuck with the additional costs of the lawsuit. The ruling gives further incentive to unpaid contractors and subcontractors on small and medium-sized projects to pursue payment for completed work.

-- Ryan James,
Meyer, Unkovic & Scott,
rj@muslaw.com

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