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DRAFT FOR ATTORNEY REVIEW — NOT FINAL

Electric Man, Inc. v. Charos, 179 Vt. 351 (2006)

Citation
Electric Man, Inc. v. Charos, 179 Vt. 351 (2006)
Parent Document
Electric Man, Inc. v. Charos, 179 Vt. 351 (2006)
Jurisdiction
Vermont (state)
Effective Date
2006-02-10

Full Text

1,565 chars
¶ 12. There are practical and policy reasons to apply the statute relatively broadly. A claim of failure to pay will virtually always be met with some defense that reflects a breakdown in the working relationship between the owner and the contractor — for example, as here, a defense of breach of contract or defective workmanship. In fact, the prompt payment act specifically contemplates owners withholding payments in good faith on grounds such as “unsatisfactory job progress, defective construction, disputed work or third-party claims.” 9 V.S.A. § 4007(a). It will always be possible to use different labels and theories to describe claims and defenses. The purpose of the prompt payment act is to provide protection against nonpayment to contractors and subcontractors. See R.W. Sidley, Inc. v. United States Fid. & Guar. Co., 319 F. Supp. 2d 554, 560 (W.D. Pa. 2004) (decided under virtually identical Pennsylvania statute). If the statute’s attorneys’-fees authorization is read narrowly, as the trial court read it here, contractors and subcontractors will not be able to recoup collection costs even when they are found to have fully complied with their contractual obligations. Similarly, owners who demonstrate that they should not have to pay a contractor’s bill because of nonperformance or poor-quality work may end up, through a narrow reading of the attorneys’ fee provision, paying attorneys’ fees that exceed the amount of their nonpayment. We believe that the Legislature intended a more effective remedy provision than the trial court allowed.