The Pennsylvania Supreme Court recently issued a ruling that limits a contractor’s ability to sue for unpaid work under the Pennsylvania Contractor and Subcontractor Payment Act, referred to as CASPA. The Court held that contractors and subcontractors do not have a right to sue the agents of a property owner if they are not paid for work that they have performed.
In this case, Robert DeBolt, the majority shareholder of a development company, verbally requested that contractor Scungio Borst & Associates (SBA) perform additional work on an ongoing project. The additional work cost an estimated $2.6 million. After the developer failed to pay SBA, SBA sued the development company, another LLC property owner, and DeBolt for $1.5 million. At trial, SBA was awarded a $2 million judgment, to be paid by the property owner and development company. DeBolt, the company’s agent, was not held liable. The Superior Court and Supreme Court upheld the ruling.
Pursuant to the relevant provision of CASPA, the property owner is liable for breach of contract. SBA argued that CASPA defines “property owner” as including “agents of the owner acting within their authority.” But the court disagreed. Justice Debra Todd, on behalf of the court, said that this definition was ambiguous, and looked at the purpose and intent behind the statute to resolve the ambiguity.
The Court found that the overarching purpose of CASPA is to provide a remedy for contractors, but also to avoid some of the flaws inherent in traditional contract lawsuits. For example, without CASPA, a contractor may have to pay their own litigation, or wait until the project was completed before they could sue for payment on a theory of breach. Because an agent is not a party to the contract, SBA’s interpretation would expand a contractor’s right to payment too broadly.
Philadelphia Employment Lawyers at Sidkoff, Pincus & Green P.C. Win Compensation for Workers Denied Overtime Pay
There is nothing more unsettling than the thought of putting in honest work and not getting paid for it. The Fair Labor Standards Act (FLSA) protects employees by requiring employers to pay both minimum wage and overtime pay. Some states have their own, more stringent overtime laws. If you work more than 40 hours a week, in most situations, you must be paid at least one and a half times your regular pay rate for that time. At Sidkoff, Pincus & Green, our experienced Philadelphia employment lawyers have extensive experience fighting for workers denied overtime pay. We are also experienced in fighting for employees who have been involved in breach of contract actions, such as contractors who are not paid for work performed pursuant to an agreement. To schedule a consultation, call us at 215-574-0600 or contact us online today.