on March 14, 2016
In an opinion issued this week in N-Tek Construction Services, Inc. v. Hartford Fire Insurance Company, the Massachusetts Appeals Court ruled that a sub-subcontractor’s e-mail to a general contractor on a public construction project failed to clearly present a claim that would satisfy the notice requirements of M.G.L. c. 149, s. 29.
The unpaid sub-subcontractor on a public bridge painting project sent an e-mail to the general contractor that stated the following. “Enclosed is the January 15, 2010 Statement to [subcontractor] for services through that date by [sub-subcontractor] for the [project] that are still unpaid. Please give me a call at [telephone number] when you have a chance.” The attached Statement listed ten invoices. The general contractor’s project manager testified to having never heard of this sub-subcontractor prior to the e-mail, and did not understand the e-mail to be some form of claim.
M.G.L. c. 149, s. 29, requires parties that do not have a direct contractual relationship with the general contractor to provide written notice to that general contractor of any claims of non-payment within 65 days of last providing labor or material on the project. The statue merely requires that the notice state “with substantial accuracy the amount claimed, [and] the name of the party for whom such labor was performed.”
The Court’s opinion included a nuanced analysis of the purpose of this notice requirement. It held that the implied purpose is to give general contractors a clear, timely understanding that a claim is being directed against them. This is to allow an opportunity to attempt to resolve the claim prior to litigation and involvement of the payment bond surety.
In ruling against the sub-subcontractor, the Court looked at all of the circumstances surrounding the e-mail and deemed it inadequate, for failing to state “explicitly or implicitly” that the e-mail constituted a claim for an unpaid balance due on the project.
Sub-subcontractors and material suppliers on public construction projects in Massachusetts should consult with a construction attorney prior to sending 65-day notices to general contractors to insure the preservation of their payment bond rights.
on September 14, 2015
The Massachusetts Payment Bond Statute, Mass. Gen. Laws c. 149, § 29 (“Section 29”), provides subcontractors and material suppliers on public construction projects with the added security of filing claims against the general contractor’s surety when seeking damages. However, subcontractors and material suppliers must follow the strict requirements of Section 29 in order to recover on a payment bond. One requirement is that sub-subcontractors (i.e. a subcontractor’s subcontractor) must provide timely, written notice of their claim to the general contractor providing the bond.
Subcontractors who have direct contractual relationships with general contractors do not need to submit written notice of claims prior to filing suit. Direct subcontractors are covered under Section 29 for work performed, or materials supplied, once payment is 65 days overdue. Subcontractors and material suppliers that do not have direct contracts with general contractors must provide written notice to the general contractors within 65 days after last providing labor or material on projects.
Sounds simple enough, so what’s the catch?
The statute specifically requires written notice to be sent to the general contractor’s office and served through registered or certified mail or by a sheriff or constable. The written notice must also include the amount of the claim and the name of the subcontractor for whom the sub-subcontractor or material supplier performed work. Failure to provide such notice within 65 days bars that sub-subcontractor or material supplier from recovering damages on the payment bond.
Additionally, Massachusetts Courts will not recognize written notices sent before work is complete. In order for notice to be “timely” under Section 29, it must be given after the last date of work or delivery. Written notice sent before the last date on which labor or material are supplied are considered premature. Such notice will not meet the requirements of Section 29 and is fatal to any subsequent bond claim.
Section 29 is a very useful device for recovering overdue payment on public construction projects. However, sub-subcontractors and material suppliers must be careful to ensure that they closely follow all of the notice requirements of the statute. Seek the advice of a Massachusetts construction attorney for more detail.
By Jennifer Lynn