In Aggregate Industries – Northeast Region, Inc. v. Hugo Key & Sons, Inc., 90 Mass.App.Ct. 146 (2016), the Massachusetts Appeals Court ruled in favor of Strang Scott’s position, reversing part of the trial court’s earlier decision. The Massachusetts Supreme Judicial Court (“SJC”) recently declined to further review the case. As such, the Appeals Court’s decision is now clear precedent on the standard for attorney fees under the Massachusetts Payment Bond Statute, G.L. c. 149, § 29 (“Section 29”).
The case arose over materials and services that a subcontractor / material supplier provided to a general contractor for use on a public construction project in Salem, Massachusetts. The general contractor refused to pay in full, so the subcontractor brought suit against it and the payment bond surety. The trial court awarded damages to the subcontractor for the value of certain services provided but refused to include an award of attorneys’ fees. The trial court incorrectly held that Section 29, which provides for mandatory attorneys’ fees awards to prevailing subcontractors and material suppliers, was inapplicable.
On appeal, the plaintiff argued, through counsel (Cole Young and Jennifer Lynn, at Strang Scott), that Section 29 is a remedial statute with a clear purpose of protecting unpaid subcontractors and material suppliers on state-owned projects. Said another way, an attorneys’ fee award is mandatory for prevailing claimants and is not within the court’s discretion. The statutory purpose is clearly to level the playing field where general contractors could otherwise hold back payment to deserving subcontractors and material suppliers, using litigation costs as leverage to deter them from filing suit. Now they have greater incentive to make those payments when they become due, or face greater consequences.
The precedent of this case will be far-reaching and will benefit Massachusetts suppliers and subcontractors for years to come. To learn more about securing payment on construction projects, contact an experienced Massachusetts construction attorney.