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What steps do I need to take to get paid?

My small business sub contracted a job from a large company in McAllen, TX to build and install counter tops for the US Customs and Borer Patrol building in San Angelo, Texas. Our contract was signed and dated December 28, 2017. We finished the job before the end date in January 2018. After submitting the paperwork to be paid, we have not been paid. I have tried to get an answer but am always put off another 30 days. They never give an excuse. It is now over 7 months ago. What steps can I take to collect this debt of $6525.00 from this Texas registered Engineering and surveying firm? If I must hire a lawyer, can I file for them to pay for that filing plus interest (in what amount) on the amount owed? Is it likely that I would get this extra amount for my trouble? Sincerely, Karen Banks, S&S Cabinet Shop, Inc (San Angelo, TX)

1 reply

Sep 13, 2018

Generally, the ability to secure the amounts due for work on a federal project is through the requirements of the Miller Act. Since mechanics liens are not allowed to encumber public property, on public projects the GC is generally required to post a payment bond to serve as security for sub-tier parties. Rights under the Miller Act extend to the following parties:
Subcontractors: First tier subcontractors (those who contract with the prime contractor) and second tier subcontractors (those who contract with a first tier subcontractor) have rights under the US Miller Act. Anyone lower than a second tier subcontractor does not have rights.
Suppliers: Only those who supply materials to the general contractor or to a first tier subcontractor has Miller Act rights.

Anyone with Miller Act rights must file a lawsuit to enforce their rights within 1 year from their last furnishing of labor or materials to the construction project. However, many parties have an earlier deadline when a formal notice of claim – or “Miller Act Claim” – is required. For these parties – 2nd tier subcontractors and suppliers to the first tier – the claim is due within 90 days of last furnishing labor or materials to the project. Nevertheless, it’s a good practice for anyone with a claim to file the Miller Act Claim as soon as practical as this initiates the bond claim process and may result in payment without the need for further litigation.

Regarding extra amounts, the Miller Act Claim itself is restricted to the principal amount of your claim only. However, attorneys' fees may be recoverable against the prime contractor and the surety only if you had a provision within your contract with the party who hired you providing you with the right to recover attorney fees.

To the extent that the deadlines have passed, or a Miller Act claim is otherwise not appropriate, a lawsuit could likely be filed against the contracting party for breach of contract (or pursuant to another cause of action). A judgment generally includes interest from the date the amount should have been paid, and attorneys' fees may be awarded pursuant to the terms of the contract between the parties.

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