Connell Foley Wins Appeal on Behalf of Utility Contractor Client

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New Jersey’s Appellate Division has affirmed a summary judgment award of 100% of the claimed damages, enhanced interest, and attorneys’ fees in favor of Connell Foley client Jo-Med Contracting Corp., a New Jersey-based utility contractor. The suit alleged that the City of Linden owed Jo-Med for work performed in addition to what was contemplated in Jo-Med’s original proposal.

Among the claims that Connell Foley included in the complaint was a violation of New Jersey’s Prompt Payment Act (“PPA”), legislation that has in recent years become an important tool in claims against public and private owners that fail to timely pay amounts due. The PPA requires owners to pay contractors within 30 days—and subcontractors within 10 days—of the billing date for work performed.

In this instance, the Appellate Division rejected the City of Linden’s argument that the PPA did not apply to its contract with Connell Foley’s client, upholding the Superior Court’s interpretation of the PPA’s definitions of, among other terms, “improvement,” “real property,” and “structure.”

The Appellate Division further noted that “under the Prompt Payment Act, Linden was required to object to Jo-Med's invoice within twenty days after receipt, which it failed to do.” This holding is consistent with a recent New Jersey Appellate Division opinion emphasizing strict compliance with the PPA’s “written statement requirement,” which provides that billings are deemed approved and certified within 20 days after receipt by the owner unless the owner provides the contractor with a written statement of the amounts the owner is withholding and the reason for that withholding within 20 days of the receipt of a bill.

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