JHC Indus. Services, Inc. v. Centurion Companies, Inc.

The New Jersey Appellate Division ruled that a deadbeat contractor must pay up. Defendant Centurion Companies, Inc. subcontracted demolition work it agreed to perform for Alfred Sanzari Construction, Inc. to Plaintiff JHC Industrial Services, Inc. JHC did the job, and Sanzari paid Centurion for it. Centurion, however, did not pay JHC in full, prompting this action under N.J.S.A. 2A:30A-1 to -2, the legislation known as the Prompt Payment Act. Although JHC prevailed in the suit, the trial judge refused the company’s application for $104,670.51 in “reasonable costs and attorney fees” pursuant to N.J.S.A. 2A:30A2(f). The court read a proportionality requirement into the attorney’s fee provision of the statute and awarded a total of approximately $16k. JHC appealed, and the NJ Appellate Division reversed. First, the Court noted that the Prompt Payment Act is a fee-shifting statute that makes an award of “reasonable costs and attorney fees” mandatory to a prevailing party. The Appellate Division then held that the trial court erred in imposing a proportionality requirement where no such condition existed. Therefore, the Court vacated the award and remanded for the trial court to award reasonable costs and attorneys’ fees under the factors established in Rendine v. Pantzer.

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