Below is an excerpt of an article published in ENR (Engineering News-Record) on August 7, 2024.
“The Massachusetts Legislature passed the state’s Prompt Pay Act 14 years ago to improve the downstream flow of money on most large-scale private construction projects. While the act established detailed protocols for administering applications for payment and other important construction phase processes, several questions about its interpretation and impact remained unanswered.
Over the years, I watched as a significant portion of the Massachusetts design and construction community either ignored the law’s exacting requirements or were unaware of their applicability. The first indication of how the act would be interpreted came in 2022, when the state appeals court decided Tocci Building Corp. v. IRIV Partners LLC. In that case, the court strictly construed the act. It held that an owner (and its agent) who failed to promptly advise the project’s general contractor of specific factual and legal reasons why it was withholding payment, coupled with a failure to certify that funds were being withheld in good faith, violated the law—making the contractor liable for the unpaid funds.
But Tocci left unanswered the question of whether a payor who innocently fails to comply with the act also loses its right to later argue that the payee is not entitled to the funds it seeks because, among other reasons, it performed defective work. These questions are also important to design professionals who, while performing construction phase services for an owner, may fail to strictly comply with the act’s requirements.
Massachusetts’ highest tribunal, the Supreme Judicial Court, answered that question this past June in Business Interiors Floor Covering Business Trust v. Graycor Construction Co. Inc., et.al.”
The Court’s analysis credited the amicus brief I wrote on behalf of my client and the act’s original author, the Associated Subcontractors of Massachusetts, Inc. Read the article.