Back charge for failure to maintain work comp insurance?
Can a subcontractor withhold full payment from a subsub that failed to maintain work comp insurance? (in the past, the subcontractor has been audited by its comp carrier and required to pay additional premium for any subsubs that did not have required coverage—significant dollar amounts). No written contract exists, so for now am making arguments based on custom and industry standard. Any guidance or discussion appreciated.
Jared E. Smith
Board Certified in Construction Law
[cid:image087596.PNG@50c338b8.41a3a1e5]http://www.rumberger.com
Main: 813.223.4253
Email: jsmith@rumberger.com
vCardhttp://www.rumberger.com/90F6E0/assets/files/vcards/Jared%20E%20Smith.vcf
[vCard]http://www.rumberger.com/90F6E0/assets/files/vcards/Jared%20E%20Smith.vcf[LinkedIn]https://www.linkedin.com/company/rumberger-kirk-&-caldwell[Twitter]https://twitter.com/rumbergerkirk[Facebook]https://www.facebook.com/rumbergerkirkcaldwell[Tampa Office]https://goo.gl/maps/ZpASy
100 North Tampa Street | Suite 2000 | Tampa, FL 33602-5830
Mail To: P.O. Box 3390 | Tampa, FL 33601-3390
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This a great question, Jared, and one for which we need to seek clarification. I’m working on it now with the WC attorney’s I work with on Stop Work Orders and Penalty Assessments, but failure to have required WC coverage is a crime in Florida.
Fred R. Dudley, Partner
Board Certified Construction Lawyer
Dudley, Sellers, Healy & Heath, P. L.
SunTrust Financial Center, Suite 301
3522 Thomasville Road
Tallahassee, Florida 32308
Cell: (850) 294-3471
Direct: (850)692-6368
dudley@mylicenselaw.com
From: clc-discussion-bounces@lists.flabarrpptl.org [mailto:clc-discussion-bounces@lists.flabarrpptl.org] On Behalf Of Smith, Jared
Sent: Tuesday, March 15, 2016 4:29 PM
To: clc-discussion@lists.flabarrpptl.org
Subject: [CLC-Discussion] Back charge for failure to maintain work comp insurance?
Can a subcontractor withhold full payment from a subsub that failed to maintain work comp insurance? (in the past, the subcontractor has been audited by its comp carrier and required to pay additional premium for any subsubs that did not have required coverage—significant dollar amounts). No written contract exists, so for now am making arguments based on custom and industry standard. Any guidance or discussion appreciated.
Jared E. Smith
Board Certified in Construction Law
[cid:image001.png@01D17F76.DFEA7C90]http://www.rumberger.com
Main: 813.223.4253
Email: jsmith@rumberger.commailto:jsmith@rumberger.com
vCardhttp://www.rumberger.com/90F6E0/assets/files/vcards/Jared%20E%20Smith.vcf
[vCard]http://www.rumberger.com/90F6E0/assets/files/vcards/Jared%20E%20Smith.vcf[LinkedIn]https://www.linkedin.com/company/rumberger-kirk-&-caldwell[Twitter]https://twitter.com/rumbergerkirk[Facebook]https://www.facebook.com/rumbergerkirkcaldwell[Tampa Office]https://goo.gl/maps/ZpASy
100 North Tampa Street | Suite 2000 | Tampa, FL 33602-5830
Mail To: P.O. Box 3390 | Tampa, FL 33601-3390
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I have a client that has a perfected lien in Columbus Georgia that needs to be prosecuted. Does anybody know a lawyer in the area or perhaps in Auburn Alabama who crosses state lines I can refer this to? Thank you very much.
Barry B. Ansbacher
Board Certified Real Estate Attorney
Board Certified Construction Lawyer
Barry.Ansbacher@ansbacher.net
http://www.ansbacher.net/
ANSBACHER LAW
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First, the subcontractor should have obtained a certificate of insurance prior to the subsub beginning work. At this point I believe the proper action would be to withhold from the payment the estimated premium based on the total amount of payments made to the subsub. At final audit, the subcontractor will be asked to provide all payments made to subsubs and then to provide certificates of insurance for each. For the subsub at issue, there will not be a certificate so subcontractor will be charged additional premium based on the total amount of the payments made to the subsub. By deducting it now, the subcontractor will already have the money to pay the additional premium. However, letting any subcontractor on a job without first getting a certificate of insurance is a very risky, and well could be, a very expensive proposition.
From: clc-discussion-bounces@lists.flabarrpptl.org [mailto:clc-discussion-bounces@lists.flabarrpptl.org] On Behalf Of Fred Dudley
Sent: Wednesday, March 16, 2016 10:28 AM
To: Smith, Jared jsmith@rumberger.com; clc-discussion@lists.flabarrpptl.org
Subject: Re: [CLC-Discussion] Back charge for failure to maintain work comp insurance?
This a great question, Jared, and one for which we need to seek clarification. I’m working on it now with the WC attorney’s I work with on Stop Work Orders and Penalty Assessments, but failure to have required WC coverage is a crime in Florida.
Fred R. Dudley, Partner
Board Certified Construction Lawyer
Dudley, Sellers, Healy & Heath, P. L.
SunTrust Financial Center, Suite 301
3522 Thomasville Road
Tallahassee, Florida 32308
Cell: (850) 294-3471
Direct: (850)692-6368
dudley@mylicenselaw.commailto:dudley@mylicenselaw.com
From: clc-discussion-bounces@lists.flabarrpptl.orgmailto:clc-discussion-bounces@lists.flabarrpptl.org [mailto:clc-discussion-bounces@lists.flabarrpptl.org] On Behalf Of Smith, Jared
Sent: Tuesday, March 15, 2016 4:29 PM
To: clc-discussion@lists.flabarrpptl.orgmailto:clc-discussion@lists.flabarrpptl.org
Subject: [CLC-Discussion] Back charge for failure to maintain work comp insurance?
Can a subcontractor withhold full payment from a subsub that failed to maintain work comp insurance? (in the past, the subcontractor has been audited by its comp carrier and required to pay additional premium for any subsubs that did not have required coverage—significant dollar amounts). No written contract exists, so for now am making arguments based on custom and industry standard. Any guidance or discussion appreciated.
Jared E. Smith
Board Certified in Construction Law
[cid:image004.png@01D18037.01AC4A00]http://www.rumberger.com
Main: 813.223.4253
Email: jsmith@rumberger.commailto:jsmith@rumberger.com
vCardhttp://www.rumberger.com/90F6E0/assets/files/vcards/Jared%20E%20Smith.vcf
[vCard]http://www.rumberger.com/90F6E0/assets/files/vcards/Jared%20E%20Smith.vcf[LinkedIn]https://www.linkedin.com/company/rumberger-kirk-&-caldwell[Twitter]https://twitter.com/rumbergerkirk[Facebook]https://www.facebook.com/rumbergerkirkcaldwell[Tampa Office]https://goo.gl/maps/ZpASy
100 North Tampa Street | Suite 2000 | Tampa, FL 33602-5830
Mail To: P.O. Box 3390 | Tampa, FL 33601-3390
The information in this e-mail message is legally privileged and confidential information. If you have received this e-mail in error, please delete from any device/media where the message is stored.
Thanks, Brian. Great thoughts. Much appreciated. The subsub had actually produced a cert. of insurance before starting the job, but let it lapse during the pendency of the project.
Jared E. Smith
Board Certified in Construction Law
[cid:image12e93e.PNG@be5a6465.4282c7d0]http://www.rumberger.com
Main: 813.223.4253
Email: jsmith@rumberger.com
vCardhttp://www.rumberger.com/90F6E0/assets/files/vcards/Jared%20E%20Smith.vcf
[vCard]http://www.rumberger.com/90F6E0/assets/files/vcards/Jared%20E%20Smith.vcf[LinkedIn]https://www.linkedin.com/company/rumberger-kirk-&-caldwell[Twitter]https://twitter.com/rumbergerkirk[Facebook]https://www.facebook.com/rumbergerkirkcaldwell[Tampa Office]https://goo.gl/maps/ZpASy
100 North Tampa Street | Suite 2000 | Tampa, FL 33602-5830
Mail To: P.O. Box 3390 | Tampa, FL 33601-3390
The information in this e-mail message is legally privileged and confidential information. If you have received this e-mail in error, please delete from any device/media where the message is stored.
From: Brian Solomon [mailto:bsolomon@solomon-law.com]
Sent: Thursday, March 17, 2016 11:24 AM
To: Fred Dudley; Smith, Jared; clc-discussion@lists.flabarrpptl.org
Subject: RE: [CLC-Discussion] Back charge for failure to maintain work comp insurance?
First, the subcontractor should have obtained a certificate of insurance prior to the subsub beginning work. At this point I believe the proper action would be to withhold from the payment the estimated premium based on the total amount of payments made to the subsub. At final audit, the subcontractor will be asked to provide all payments made to subsubs and then to provide certificates of insurance for each. For the subsub at issue, there will not be a certificate so subcontractor will be charged additional premium based on the total amount of the payments made to the subsub. By deducting it now, the subcontractor will already have the money to pay the additional premium. However, letting any subcontractor on a job without first getting a certificate of insurance is a very risky, and well could be, a very expensive proposition.
From: clc-discussion-bounces@lists.flabarrpptl.orgmailto:clc-discussion-bounces@lists.flabarrpptl.org [mailto:clc-discussion-bounces@lists.flabarrpptl.org] On Behalf Of Fred Dudley
Sent: Wednesday, March 16, 2016 10:28 AM
To: Smith, Jared <jsmith@rumberger.commailto:jsmith@rumberger.com>; clc-discussion@lists.flabarrpptl.orgmailto:clc-discussion@lists.flabarrpptl.org
Subject: Re: [CLC-Discussion] Back charge for failure to maintain work comp insurance?
This a great question, Jared, and one for which we need to seek clarification. I’m working on it now with the WC attorney’s I work with on Stop Work Orders and Penalty Assessments, but failure to have required WC coverage is a crime in Florida.
Fred R. Dudley, Partner
Board Certified Construction Lawyer
Dudley, Sellers, Healy & Heath, P. L.
SunTrust Financial Center, Suite 301
3522 Thomasville Road
Tallahassee, Florida 32308
Cell: (850) 294-3471
Direct: (850)692-6368
dudley@mylicenselaw.commailto:dudley@mylicenselaw.com
From: clc-discussion-bounces@lists.flabarrpptl.orgmailto:clc-discussion-bounces@lists.flabarrpptl.org [mailto:clc-discussion-bounces@lists.flabarrpptl.org] On Behalf Of Smith, Jared
Sent: Tuesday, March 15, 2016 4:29 PM
To: clc-discussion@lists.flabarrpptl.orgmailto:clc-discussion@lists.flabarrpptl.org
Subject: [CLC-Discussion] Back charge for failure to maintain work comp insurance?
Can a subcontractor withhold full payment from a subsub that failed to maintain work comp insurance? (in the past, the subcontractor has been audited by its comp carrier and required to pay additional premium for any subsubs that did not have required coverage—significant dollar amounts). No written contract exists, so for now am making arguments based on custom and industry standard. Any guidance or discussion appreciated.
Jared E. Smith
Board Certified in Construction Law
[cid:image002.png@01D18042.97E020E0]http://www.rumberger.com
Main: 813.223.4253
Email: jsmith@rumberger.commailto:jsmith@rumberger.com
vCardhttp://www.rumberger.com/90F6E0/assets/files/vcards/Jared%20E%20Smith.vcf
[vCard]http://www.rumberger.com/90F6E0/assets/files/vcards/Jared%20E%20Smith.vcf[LinkedIn]https://www.linkedin.com/company/rumberger-kirk-&-caldwell[Twitter]https://twitter.com/rumbergerkirk[Facebook]https://www.facebook.com/rumbergerkirkcaldwell[Tampa Office]https://goo.gl/maps/ZpASy
100 North Tampa Street | Suite 2000 | Tampa, FL 33602-5830
Mail To: P.O. Box 3390 | Tampa, FL 33601-3390
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Wouldn’t the prime contract require all contractors carry the appropriate coverages and if the coverages are not in place, then the sub who is not carrying the coverage be in breach?
Sincerely,
Paul J. Kelly
Paul J. Kelly, P.A.
2959 First Avenue North
St. Petersburg, Florida 33713
(727) 327-3935
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From: clc-discussion-bounces@lists.flabarrpptl.org [mailto:clc-discussion-bounces@lists.flabarrpptl.org] On Behalf Of Smith, Jared
Sent: Thursday, March 17, 2016 11:46 AM
To: Brian Solomon; Fred Dudley; clc-discussion@lists.flabarrpptl.org
Subject: Re: [CLC-Discussion] Back charge for failure to maintain work comp insurance?
Thanks, Brian. Great thoughts. Much appreciated. The subsub had actually produced a cert. of insurance before starting the job, but let it lapse during the pendency of the project.
Jared E. Smith
Board Certified in Construction Law
Main: 813.223.4253
Email: jsmith@rumberger.com
vCard http://www.rumberger.com/90F6E0/assets/files/vcards/Jared%20E%20Smith.vcf
http://www.rumberger.com/90F6E0/assets/files/vcards/Jared%20E%20Smith.vcf vCard https://www.linkedin.com/company/rumberger-kirk-&-caldwell LinkedIn https://twitter.com/rumbergerkirk Twitter https://www.facebook.com/rumbergerkirkcaldwell Facebook https://goo.gl/maps/ZpASy Tampa Office
100 North Tampa Street | Suite 2000 | Tampa, FL 33602-5830
Mail To: P.O. Box 3390 | Tampa, FL 33601-3390
The information in this e-mail message is legally privileged and confidential information. If you have received this e-mail in error, please delete from any device/media where the message is stored.
From: Brian Solomon [mailto:bsolomon@solomon-law.com]
Sent: Thursday, March 17, 2016 11:24 AM
To: Fred Dudley; Smith, Jared; clc-discussion@lists.flabarrpptl.org
Subject: RE: [CLC-Discussion] Back charge for failure to maintain work comp insurance?
First, the subcontractor should have obtained a certificate of insurance prior to the subsub beginning work. At this point I believe the proper action would be to withhold from the payment the estimated premium based on the total amount of payments made to the subsub. At final audit, the subcontractor will be asked to provide all payments made to subsubs and then to provide certificates of insurance for each. For the subsub at issue, there will not be a certificate so subcontractor will be charged additional premium based on the total amount of the payments made to the subsub. By deducting it now, the subcontractor will already have the money to pay the additional premium. However, letting any subcontractor on a job without first getting a certificate of insurance is a very risky, and well could be, a very expensive proposition.
From: clc-discussion-bounces@lists.flabarrpptl.org [mailto:clc-discussion-bounces@lists.flabarrpptl.org] On Behalf Of Fred Dudley
Sent: Wednesday, March 16, 2016 10:28 AM
To: Smith, Jared jsmith@rumberger.com; clc-discussion@lists.flabarrpptl.org
Subject: Re: [CLC-Discussion] Back charge for failure to maintain work comp insurance?
This a great question, Jared, and one for which we need to seek clarification. I’m working on it now with the WC attorney’s I work with on Stop Work Orders and Penalty Assessments, but failure to have required WC coverage is a crime in Florida.
Fred R. Dudley, Partner
Board Certified Construction Lawyer
Dudley, Sellers, Healy & Heath, P. L.
SunTrust Financial Center, Suite 301
3522 Thomasville Road
Tallahassee, Florida 32308
Cell: (850) 294-3471
Direct: (850)692-6368
From: clc-discussion-bounces@lists.flabarrpptl.org [mailto:clc-discussion-bounces@lists.flabarrpptl.org] On Behalf Of Smith, Jared
Sent: Tuesday, March 15, 2016 4:29 PM
To: clc-discussion@lists.flabarrpptl.org
Subject: [CLC-Discussion] Back charge for failure to maintain work comp insurance?
Can a subcontractor withhold full payment from a subsub that failed to maintain work comp insurance? (in the past, the subcontractor has been audited by its comp carrier and required to pay additional premium for any subsubs that did not have required coverage—significant dollar amounts). No written contract exists, so for now am making arguments based on custom and industry standard. Any guidance or discussion appreciated.
Jared E. Smith
Board Certified in Construction Law
Main: 813.223.4253
Email: jsmith@rumberger.com
vCard http://www.rumberger.com/90F6E0/assets/files/vcards/Jared%20E%20Smith.vcf
http://www.rumberger.com/90F6E0/assets/files/vcards/Jared%20E%20Smith.vcf vCard https://www.linkedin.com/company/rumberger-kirk-&-caldwell LinkedIn https://twitter.com/rumbergerkirk Twitter https://www.facebook.com/rumbergerkirkcaldwell Facebook https://goo.gl/maps/ZpASy Tampa Office
100 North Tampa Street | Suite 2000 | Tampa, FL 33602-5830
Mail To: P.O. Box 3390 | Tampa, FL 33601-3390
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In the "for what it's worth" category. I don't think you are entitled to self help, unless your subcontract allows you to withhold cost to cure the insurance issue from future pay apps. I do think it is a common law material breach entitling your client to damages and excusing any further performance. But if your client allows the subsub to continue to perform after the breach, it is likely obligated itself to continue to pay the sub sub, with an action for damages flowing from the breach.
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On Mar 17, 2016, at 11:26 AM, Paul J. Kelly <pkelly@paulkellypa.commailto:pkelly@paulkellypa.com> wrote:
Wouldn’t the prime contract require all contractors carry the appropriate coverages and if the coverages are not in place, then the sub who is not carrying the coverage be in breach?
Sincerely,
Paul J. Kelly
Paul J. Kelly, P.A.
2959 First Avenue North
St. Petersburg, Florida 33713
(727) 327-3935
<image002.jpg>
CONFIDENTIALITY NOTICE: A law firm is sending this message; This e-mail message including attachments, if any, is intended only for the person or entity to which it is addressed and may contain confidential and/or privileged material. Any unauthorized review, use, disclosure or distribution or use of the contents of this information is prohibited. If you are not the intended recipient, please contact the sender by reply e-mail, destroy all copies of the original message, and do not disseminate it further. This message may not be reviewed, printed, displayed, or re-transmitted without the sender’s consent. All rights protected. There may be no further distribution or publication of this communication or its contents without the express consent of this law firm.
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To ensure compliance with requirements imposed by the IRS, we inform you that any tax advice contained in this communication, unless expressly stated otherwise, was not intended or written to be used, and cannot be used, for the purpose of (i) avoiding tax-related penalties under the Internal Revenue Code or (ii) promoting, marketing or recommending to another party any tax-related matter(s) addressed herein.
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From: clc-discussion-bounces@lists.flabarrpptl.orgmailto:clc-discussion-bounces@lists.flabarrpptl.org [mailto:clc-discussion-bounces@lists.flabarrpptl.org] On Behalf Of Smith, Jared
Sent: Thursday, March 17, 2016 11:46 AM
To: Brian Solomon; Fred Dudley; clc-discussion@lists.flabarrpptl.orgmailto:clc-discussion@lists.flabarrpptl.org
Subject: Re: [CLC-Discussion] Back charge for failure to maintain work comp insurance?
Thanks, Brian. Great thoughts. Much appreciated. The subsub had actually produced a cert. of insurance before starting the job, but let it lapse during the pendency of the project.
Jared E. Smith
Board Certified in Construction Law
<image005.png>http://www.rumberger.com
Main: 813.223.4253
Email: jsmith@rumberger.commailto:jsmith@rumberger.com
vCardhttp://www.rumberger.com/90F6E0/assets/files/vcards/Jared%20E%20Smith.vcf
<image007.png>http://www.rumberger.com/90F6E0/assets/files/vcards/Jared%20E%20Smith.vcf[LinkedIn]https://www.linkedin.com/company/rumberger-kirk-&-caldwell[Twitter]https://twitter.com/rumbergerkirk[Facebook]https://www.facebook.com/rumbergerkirkcaldwell<image008.png>https://goo.gl/maps/ZpASy
100 North Tampa Street | Suite 2000 | Tampa, FL 33602-5830
Mail To: P.O. Box 3390 | Tampa, FL 33601-3390
The information in this e-mail message is legally privileged and confidential information. If you have received this e-mail in error, please delete from any device/media where the message is stored.
From: Brian Solomon [mailto:bsolomon@solomon-law.com]
Sent: Thursday, March 17, 2016 11:24 AM
To: Fred Dudley; Smith, Jared; clc-discussion@lists.flabarrpptl.orgmailto:clc-discussion@lists.flabarrpptl.org
Subject: RE: [CLC-Discussion] Back charge for failure to maintain work comp insurance?
First, the subcontractor should have obtained a certificate of insurance prior to the subsub beginning work. At this point I believe the proper action would be to withhold from the payment the estimated premium based on the total amount of payments made to the subsub. At final audit, the subcontractor will be asked to provide all payments made to subsubs and then to provide certificates of insurance for each. For the subsub at issue, there will not be a certificate so subcontractor will be charged additional premium based on the total amount of the payments made to the subsub. By deducting it now, the subcontractor will already have the money to pay the additional premium. However, letting any subcontractor on a job without first getting a certificate of insurance is a very risky, and well could be, a very expensive proposition.
From: clc-discussion-bounces@lists.flabarrpptl.orgmailto:clc-discussion-bounces@lists.flabarrpptl.org [mailto:clc-discussion-bounces@lists.flabarrpptl.org] On Behalf Of Fred Dudley
Sent: Wednesday, March 16, 2016 10:28 AM
To: Smith, Jared <jsmith@rumberger.commailto:jsmith@rumberger.com>; clc-discussion@lists.flabarrpptl.orgmailto:clc-discussion@lists.flabarrpptl.org
Subject: Re: [CLC-Discussion] Back charge for failure to maintain work comp insurance?
This a great question, Jared, and one for which we need to seek clarification. I’m working on it now with the WC attorney’s I work with on Stop Work Orders and Penalty Assessments, but failure to have required WC coverage is a crime in Florida.
Fred R. Dudley, Partner
Board Certified Construction Lawyer
Dudley, Sellers, Healy & Heath, P. L.
SunTrust Financial Center, Suite 301
3522 Thomasville Road
Tallahassee, Florida 32308
Cell: (850) 294-3471
Direct: (850)692-6368
dudley@mylicenselaw.commailto:dudley@mylicenselaw.com
From: clc-discussion-bounces@lists.flabarrpptl.orgmailto:clc-discussion-bounces@lists.flabarrpptl.org [mailto:clc-discussion-bounces@lists.flabarrpptl.org] On Behalf Of Smith, Jared
Sent: Tuesday, March 15, 2016 4:29 PM
To: clc-discussion@lists.flabarrpptl.orgmailto:clc-discussion@lists.flabarrpptl.org
Subject: [CLC-Discussion] Back charge for failure to maintain work comp insurance?
Can a subcontractor withhold full payment from a subsub that failed to maintain work comp insurance? (in the past, the subcontractor has been audited by its comp carrier and required to pay additional premium for any subsubs that did not have required coverage—significant dollar amounts). No written contract exists, so for now am making arguments based on custom and industry standard. Any guidance or discussion appreciated.
Jared E. Smith
Board Certified in Construction Law
<image009.png>http://www.rumberger.com
Main: 813.223.4253
Email: jsmith@rumberger.commailto:jsmith@rumberger.com
vCardhttp://www.rumberger.com/90F6E0/assets/files/vcards/Jared%20E%20Smith.vcf
<image010.png>http://www.rumberger.com/90F6E0/assets/files/vcards/Jared%20E%20Smith.vcf[LinkedIn]https://www.linkedin.com/company/rumberger-kirk-&-caldwell[Twitter]https://twitter.com/rumbergerkirk[Facebook]https://www.facebook.com/rumbergerkirkcaldwell<image011.png>https://goo.gl/maps/ZpASy
100 North Tampa Street | Suite 2000 | Tampa, FL 33602-5830
Mail To: P.O. Box 3390 | Tampa, FL 33601-3390
The information in this e-mail message is legally privileged and confidential information. If you have received this e-mail in error, please delete from any device/media where the message is stored.
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Jared: What about looking outside of the construction law arena at these two concepts:
-
A contract is unenforceable where it is in furtherance of, or related to, a crime (no workers compensation insurance); or -
A statutory provision becoming an implied term of the contract, which was then breached.
I am sure you are mindful of 713.346, Fla. Stat. which could trigger attorney’s fees against your client which might not otherwise exist in the absence of a written contract.
Justin R. Zinzow
Board Certified Construction Specialist
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From: clc-discussion-bounces@lists.flabarrpptl.org [mailto:clc-discussion-bounces@lists.flabarrpptl.org] On Behalf Of George R. Truitt
Sent: Thursday, March 17, 2016 12:31 PM
To: Paul J. Kelly
Cc: clc-discussion@lists.flabarrpptl.org
Subject: Re: [CLC-Discussion] Back charge for failure to maintain work comp insurance?
In the "for what it's worth" category. I don't think you are entitled to self help, unless your subcontract allows you to withhold cost to cure the insurance issue from future pay apps. I do think it is a common law material breach entitling your client to damages and excusing any further performance. But if your client allows the subsub to continue to perform after the breach, it is likely obligated itself to continue to pay the sub sub, with an action for damages flowing from the breach.
Sent from my iPhone
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On Mar 17, 2016, at 11:26 AM, Paul J. Kelly <pkelly@paulkellypa.commailto:pkelly@paulkellypa.com> wrote:
Wouldn’t the prime contract require all contractors carry the appropriate coverages and if the coverages are not in place, then the sub who is not carrying the coverage be in breach?
Sincerely,
Paul J. Kelly
Paul J. Kelly, P.A.
2959 First Avenue North
St. Petersburg, Florida 33713
(727) 327-3935
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From: clc-discussion-bounces@lists.flabarrpptl.orgmailto:clc-discussion-bounces@lists.flabarrpptl.org [mailto:clc-discussion-bounces@lists.flabarrpptl.org] On Behalf Of Smith, Jared
Sent: Thursday, March 17, 2016 11:46 AM
To: Brian Solomon; Fred Dudley; clc-discussion@lists.flabarrpptl.orgmailto:clc-discussion@lists.flabarrpptl.org
Subject: Re: [CLC-Discussion] Back charge for failure to maintain work comp insurance?
Thanks, Brian. Great thoughts. Much appreciated. The subsub had actually produced a cert. of insurance before starting the job, but let it lapse during the pendency of the project.
Jared E. Smith
Board Certified in Construction Law
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From: Brian Solomon [mailto:bsolomon@solomon-law.com]
Sent: Thursday, March 17, 2016 11:24 AM
To: Fred Dudley; Smith, Jared; clc-discussion@lists.flabarrpptl.orgmailto:clc-discussion@lists.flabarrpptl.org
Subject: RE: [CLC-Discussion] Back charge for failure to maintain work comp insurance?
First, the subcontractor should have obtained a certificate of insurance prior to the subsub beginning work. At this point I believe the proper action would be to withhold from the payment the estimated premium based on the total amount of payments made to the subsub. At final audit, the subcontractor will be asked to provide all payments made to subsubs and then to provide certificates of insurance for each. For the subsub at issue, there will not be a certificate so subcontractor will be charged additional premium based on the total amount of the payments made to the subsub. By deducting it now, the subcontractor will already have the money to pay the additional premium. However, letting any subcontractor on a job without first getting a certificate of insurance is a very risky, and well could be, a very expensive proposition.
From: clc-discussion-bounces@lists.flabarrpptl.orgmailto:clc-discussion-bounces@lists.flabarrpptl.org [mailto:clc-discussion-bounces@lists.flabarrpptl.org] On Behalf Of Fred Dudley
Sent: Wednesday, March 16, 2016 10:28 AM
To: Smith, Jared <jsmith@rumberger.commailto:jsmith@rumberger.com>; clc-discussion@lists.flabarrpptl.orgmailto:clc-discussion@lists.flabarrpptl.org
Subject: Re: [CLC-Discussion] Back charge for failure to maintain work comp insurance?
This a great question, Jared, and one for which we need to seek clarification. I’m working on it now with the WC attorney’s I work with on Stop Work Orders and Penalty Assessments, but failure to have required WC coverage is a crime in Florida.
Fred R. Dudley, Partner
Board Certified Construction Lawyer
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From: clc-discussion-bounces@lists.flabarrpptl.orgmailto:clc-discussion-bounces@lists.flabarrpptl.org [mailto:clc-discussion-bounces@lists.flabarrpptl.org] On Behalf Of Smith, Jared
Sent: Tuesday, March 15, 2016 4:29 PM
To: clc-discussion@lists.flabarrpptl.orgmailto:clc-discussion@lists.flabarrpptl.org
Subject: [CLC-Discussion] Back charge for failure to maintain work comp insurance?
Can a subcontractor withhold full payment from a subsub that failed to maintain work comp insurance? (in the past, the subcontractor has been audited by its comp carrier and required to pay additional premium for any subsubs that did not have required coverage—significant dollar amounts). No written contract exists, so for now am making arguments based on custom and industry standard. Any guidance or discussion appreciated.
Jared E. Smith
Board Certified in Construction Law
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