222 A.3d 613
Me.2019Background
- GBT (owner/developer) contracted with Fortney & Weygandt, Inc. (F&W, general contractor) to build five retail stores; contracts tied liquidated damages to failure to reach "substantial completion" by contracted dates.
- Projects were delayed by winter weather and owner-caused events; GBT frequently issued change orders, often failed to respond to F&W schedule updates, and in some communications indicated acceptance of later completion dates.
- GBT stopped progress payments in June 2015 (payments ceased effectively in August); F&W continued work relying on owner’s conduct but suspended work August 7, 2015, when unpaid.
- F&W sued for unpaid invoices, prompt payment remedies, and liens; GBT counterclaimed for liquidated damages and defective/incomplete work. After trial, the court found (1) GBT equitably estopped (and waived) from claiming liquidated damages, (2) F&W entitled to prompt-payment penalties/interest/attorney fees, and (3) F&W entitled to contractual attorney fees; the court also found GBT had in good faith withheld ~$498,000 as asserted liquidated damages.
- On appeal the Maine Supreme Judicial Court affirmed estoppel on liquidated damages, affirmed prompt-payment remedies generally but vacated and remanded the remedies calculation to account for the amount GBT withheld in good faith, and vacated the award of attorney fees under the contract (because the contract limits fee-shifting to arbitration), leaving statutory fees under the prompt-payment law intact.
Issues
| Issue | Plaintiff's Argument (GBT) | Defendant's Argument (F&W) | Held |
|---|---|---|---|
| Whether GBT could recover liquidated damages despite its conduct and silence | GBT argued insufficient evidence of misrepresentation or estoppel; it preserved right to liquidated damages | F&W argued GBT’s statements, conduct, and silence induced reliance and estop GBT from asserting liquidated damages | Court: Affirmed — equitable estoppel (and waiver alternative) barred GBT’s liquidated-damages claims based on combined misrepresentations, reliance, and detriment |
| Whether F&W was entitled to remedies under Maine’s prompt payment statutes and whether retainage and amounts withheld in good faith should be included | GBT argued prompt-payment remedies were improper or should exclude retainage and amounts withheld in good faith as liquidated damages | F&W argued invoices (including retainage) were wrongfully withheld and statutory remedies apply | Court: Mostly affirmed entitlement to prompt-payment remedies but vacated portion of award and remanded to recalculate remedies after accounting for the amount GBT withheld in good faith (10 M.R.S. § 1118(1),(3) principles apply) |
| Whether F&W could recover attorney fees under the parties’ contract in addition to statutory fees | GBT argued contract does not permit non-arbitral fee awards; award was improper | F&W sought contractual fees as prevailing party | Court: Vacated award of contractual attorney fees — contract’s fee-shifting applies only to the contract’s specified "binding dispute resolution" (arbitration); F&W still eligible for statutory prompt-payment fees |
Key Cases Cited
- Vt. Mut. Ins. Co. v. Ben-Ami, 193 A.3d 178 (supporting standard of review for findings)
- Dep’t of Health & Human Servs. v. Pelletier, 964 A.2d 630 (equitable estoppel elements and standard)
- Blue Star Corp. v. CKF Props., LLC, 980 A.2d 1270 (misrepresentation via statements, conduct, or silence)
- Cty. Forest Prods., Inc. v. Green Mountain Agency, Inc., 758 A.2d 59 (reliance and detrimental change of position)
- Jenkins, Inc. v. Walsh Bros., Inc., 776 A.2d 1229 (purpose and remedies under Maine prompt payment statutes)
- Cellar Dwellers, Inc. v. D’Alessio, 993 A.2d 1 (application of prompt payment statutes; wrongful withholding)
- Bernier v. Merrill Air Eng’rs, 770 A.2d 97 (standard of review for prompt-payment factual findings)
- Doe v. Tierney, 189 A.3d 756 (inference of unarticulated findings when Rule 52(b) not sought)
- Kittery Point Partners, LLC v. Bayview Loan Servicing, LLC, 180 A.3d 1091 (final-judgment rule)
- Kondaur Capital Corp. v. Hankins, 25 A.3d 960 (contract interpretation de novo)