Owner not liable to pay subcontractor absent “assent”

The Suffolk County Supreme Court recently issued a decision affirming long established concept in construction law that says a subcontractor may not maintain an unjust enrichment claim directly against an owner unless the owner has “assented” to the obligation to pay the subcontractor.

In the case (County Wide Flooring Corp. v. Town of Huntington) the unfortunate subcontractor appears to have missed its deadline to file a complaint directly against the GC and the surety that issued a payment bond.   Therefore, the only remaining issue before the Court was whether the subcontractor could maintain a claim for unjust enrichment directly against the owner (the Town of Huntington).   The court held that where

“there is an express contract between the general contractor and the subcontractor, the owner of the subject premises may not be held directly liable to the subcontractor on a theory of implied or quasi-contract unless the owner has, in fact, assented to such and obligation”

The court dismissed the subcontractor’s claims finding that there was no privity between the subcontractor and the Town and that the Town had not expressed a willingness to pay the subcontractor for the work that it performed (thus there was no assent to pay).  One other interesting note from this case is that the Court mentioned that General Municipal Law Section 106-b does not create any private cause of action that would permit a subcontractor to sue a Town (or any other municipality) directly for violation of Section 106-b.

A tough lesson for this subcontractor to learn but hopefully in the future it will pursue its claims against the contractor and the surety that issued the bond before the claims expire.   Subcontractors have to beware of contractual provisions that limit the time to sue a contractor and of payment bond provisions that limit the time to bring a claim against the bond.  When in doubt, don’t wait!

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