Category Archives: New Jersey Prompt Payment Act

Can a Subcontractor Collect Money it is Owed Without Providing Evidence of Why it is Owed that Sum?

When asserting damages under the New Jersey Prompt Pay Act, what evidence should be submitted to the Court? That issue was discussed in United States v. APS Contracting, Inc., CIV. 11-779-KMW, 2013 WL 530576 (D.N.J. Feb. 11, 2013).

In that case, Plaintiff, Cardinal Contracting Company, LLC, filed a motion for final judgment by default against Defendant A.C.C. Construction, LLC (“ACC”) and to amend the pleading. No opposition was filed.
Plaintiff had sued Defendants APS Contracting, Inc. Fidelity and Deposit Company of Maryland and ACC.  Plaintiff alleged that ACC entered into a subcontract with Plaintiff wherein Plaintiff was the sub-subcontractor and was to provide a portion of the labor and material required for the construction project of a Combined Maintenance Facility at the Fort Dix United States Army Installation.

Plaintiff performed under the contract and ACC failed to pay.

The Plaintiff filed suit against ACC for breach of contract and violations of the New Jersey Prompt Payment Act. Defendant ACC was properly served but failed to answer the complaint or otherwise enter an appearance in the case.  The Clerk of the Court entered default against Defendant ACC, and Plaintiff filed a motion seeking final judgment by default.

The Court noted that the New Jersey Prompt Payment Act provides that,

 “[i]f a … subsubcontractor has performed in accordance with the provisions of its contract with the … subcontractor and the work has been accepted …, and the parties have not otherwise agreed in writing, the prime contractor shall pay to its subcontractor and the subcontractor shall pay to its subsubcontractor within 10 calendar days of the receipt of each periodic payment, final payment or receipt of retainage monies, the full amount received for the work of the … subsubcontractor based on the work completed or the services rendered under the applicable contract.” N.J. Stat. Ann. § 2A:30A–2(b). “If a payment due pursuant to the provisions of this section is not made in a timely manner, the delinquent party shall be liable for the amount of money owed under the contract, plus interest at a rate equal to the prime rate plus 1%.” N.J. Stat. Ann. § 2A:30A–2(c). Further, “the prevailing party shall be awarded reasonable costs and attorney fees.” N.J. Stat. Ann. § 2A:30A–2(f).
United States v. APS Contracting, Inc., CIV. 11-779-KMW, 2013 WL 530576 (D.N.J. Feb. 11, 2013)

So far so good. The problem arose when the Plaintiff sought to prove its damages. Plaintiff proffered a very terse certification stating that Defendant failed to pay $74,002.50 and that interest was calculated pursuant to the Prompt Pay Act.  Further Plaintiff certified as to $30,808.00 in attorneys fees.

The Court found that Plaintiff was entitled to final judgment but did not enter that judgment.  It ruled that Plaintiff had submitted insufficient evidence to support its claim for damages. It required Plaintiff to provide evidence in the form of an affidavit with supporting documentation for each aspect of the damages claimed.