Opinion
No. CV 07-5009771
October 30, 2007
MEMORANDUM OF DECISION ON MOTIONS FOR SUMMARY JUDGMENT
These are two actions to collect retainages due the plaintiffs, Connecticut Mason Contractors, Inc. ("Mason") and Titan Mechanical Contractors, Inc. ("Titan") from Klewin Building Company, Inc. ("Klewin") with whom the plaintiffs had subcontractor contracts for the Trumbull Centre project in Hartford, and United States Fidelity and Guaranty Co. ("USF G"), Klewin's bonding company. Klewin claims that as "construction manager" it has not been paid for the retainages by the owner of the project "Trumbull on the Park, LLC," ("Trumbull") and because each subcontract contains a "pay if paid" clause, the plaintiff subcontractors are not due payment at this time.
On June 6, 2002. Klewin filed motions for summary judgment against Mason and Titan.
On July 20, 2007, Mason filed a motion for summary judgment against Klewin and USFG. On July 23, 2007, Titan filed a motion for summary judgment against Klewin and USFG.
The controlling issue in these four motions is the interpretation of the provision in Article 13.7 of each subcontract, entitling each plaintiff to payment from Klewin only when Klewin has received payment from the owner.
That Article reads as follows:
13.7 Subcontractor expressly agrees that payments by Owner to General Contractor for Work performed by Subcontractor is an express condition precedent to any payment by General Contractor to Subcontractor and that General Contractor is under no obligation to make any partial, final or retainage payments to Subcontractor, as provided in this Article 13, until and unless General Contractor has been paid by Owner. Subcontractor agrees to accept the risk that it will not be paid for Work performed by it in the event General Contractor, for whatever reason, is not paid by Owner for such Work. Subcontractor further agrees that the liability of the surety on General Contractor's payment bond, if any, for payment to Subcontractor is subject to this same and other conditions precedent as are applicable to General Contractor's liability for payment to Subcontractor.
The opposing memoranda of law devote much attention to whether this article should be interpreted as a "pay if paid" provision or a "pay when paid" provision, generally agreeing that if it is interpreted as "pay when paid" payment might be required "within a reasonable time" Because the language in the article is somewhat ambiguous, and the contested payments involve retainages in a private rather than a public contract, it is concluded that the language in the article should be characterized as a "pay when paid" type of provision.
Accordingly, under this interpretation payment would be required within a reasonable time even if Klewin were not paid.
Whether a reasonable time has elapsed is a question of fact, particularly since it is asserted, without opposition, that Klewin has applied for arbitration of its claims for withheld retainages and delay damages from Trumbull.
Since this material question of fact must be resolved by the pending arbitration or some other evidentiary hearing, all these motions for summary judgment are denied at this time, without prejudice.