Construction: Fifth District Weighs In On “United Riggers” Prompt Payment Retention Issue

 

Fifth District Agrees With East West Bank Interpretation Of The Issue.

 

 

Glass Windows. Carol M. Highsmith, photograph. May 12, 2015. St. Matthew's Episcopal Church in Wheeling, West Virginia. Library of Congress.

 

    In Atascadero Glass v. David A. Bush, Inc., Case No. F071426 (5^th Dist. Feb. 14, 2017) (unpublished), the Fifth District did weigh in on a pending construction prompt payment retention issue being considered by the California Supreme Court in United Riggers & Erectors, Inc. v. Coast Iron & Steel Co., Case No. S231549. In the Fifth District case, the issue was whether a general contractor properly withheld retention payments to the subcontractor for contractual fees general contractor might obtain against the sub for extra work issues. The Fifth District determined that such retention fees could not be withheld unless they directly related to the retention alone, joining the East West Bank's more narrow construction of prompt payment statutes. Given that the contractor was not the prevailing party, the Fifth District did understand that this case might be a "grant and hold" situation until United Riggers comes down.