Attorneys Fees for Collecting Judgement Against Owner
Section 512 of the Contractors and Subcontractors Payment Act allows for an award of interest, penalties, and attorneys fees to a “substantially prevailing” party. When Owner did not pay him for construction work, Contractor sued Owner, won and obtained an award for the claim, plus interest, penalties and attorneys fees. Owner still didn’t pay. Contractor then filed execution proceedings and, eventually, did recover the amount of the award by attaching Owner’s bank accounts. Contractor then filed to also get interest and penalties from the time of the original award until Contractor eventually was paid, plus contractor’s attorneys fees incurred in the collection and execution process, as well as in the appeals to Superior Court. In a case of first impression, the Superior Court said, “Yup.” The trial court had denied the Contractor’s motion for interest, penalties and fees for the collection effort, but the Superior Court panel unanimously reversed. Zimmerman v. Harrisburg Fudd, PICS No. 09-1762 (Oct. 19, 2009).
The original amount owed by Owner was $10,108.70. After adding the first set of interest, penalties and attorneys fees, that number became $21,673.99. When the execution and appeals were considered, the total of the claim was almost four times the original debt – growing to $41,989.84. As explained by the Superior Court, the statute’s “underlying objective of making an unpaid contractor whole . . . can be gutted, when he is subjected to expensive litigation costs, including those incurred in the collection-of-fees phase.”
