Subcontractor on Quantum Meruit Claim Could Not Recover Prompt Pay Interest and Attorney’s Fees
Kegler Brown Construction Newsletter November 1, 2001
In Wild-Fire, Inc. v. Laughlin (Clark Cty. 2001), 2001 Ohio App. LEXIS 976 (unreported), a dispute arose between a general contractor and a subcontractor regarding payment for the installation of three electric services. The subcontractor claimed that its original bid included only one electric service, and that the general's failure to pay was a breach of contract; conversely, the general claimed that the original bid included all three electric services and consequently denied liability for any additional payment under the contract. The lower court decided in the general's favor on the scope of the original bid, but then awarded the subcontractor a somewhat lower amount of recovery in quantum meruit (the reasonable value of the work performed).
On review, the Clark County Court of Appeals followed its prior decision in Soloman v. Excel Marketing, holding that a plaintiff recovering damages in quantum meruit cannot recover interest or attorney's fees under the Prompt Payment Act (R.C. §4113.61), because the statute requires a valid and enforceable contract claim as a basis for recovery. Because the plaintiff recovered under a theory of quantum meruit, and not for breach of contract, recovery of interest and attorney's fees under the Prompt Payment Act was inappropriate. The court went on to hold that recovery under the Prompt Payment Act was inappropriate because there was credible evidence of a good-faith dispute between the parties — namely the dispute over what was included in the original bid and contract. Existence of a good-faith dispute precluded recovery of interest and fees under the Prompt Payment Act.