Patriot Construction, LLC v. VK Electrical Services, LLC

Summary

The Appellate Court of Maryland affirmed a judgment awarding VK Electrical Services $64,575.09 for unpaid additional electrical work performed for Patriot Construction. The court held that the subcontract’s written-authorization condition precedent was waived through the parties’ conduct and the apparent authority of Patriot’s project manager. It also held that, under the pay-when-paid provision and the prevention doctrine, the breach action accrued when Patriot received payment from the project owner and refused to pay VK Electrical, rather than when the work was completed.

Holdings

1. The trial court properly found that Patriot's written-authorization requirement was waived. The project manager acted with at least apparent authority to direct the additional work, and the parties' subsequent conduct established waiver of the requirement.
2. When a contract contains a pay-when-paid clause making the contractor's receipt of owner payment a condition precedent to payment of the subcontractor, the subcontractor's breach of contract claim for nonpayment does not accrue until the contractor receives the owner payment and refuses to pay.
3. Patriot waived its challenge to the admission of alleged parol evidence concerning whether the fire-alarm work was within the subcontract because the same evidence was admitted without objection at other points and was elicited by Patriot itself.
4. The trial court sufficiently complied with Maryland Rule 2-522(a) because it articulated the factual and legal basis for its decision and the damages award; the rule does not require the court to state every step of its reasoning.
5. The trial court properly denied Patriot's motion to dismiss because the complaint adequately alleged performance or waiver of conditions precedent and did not show on its face that the claim was time-barred.

Questions Presented

1. Whether the trial court erred in finding that the written-authorization condition precedent to payment had been waived through the parties' conduct and the apparent authority of Patriot's project manager.
2. Whether VK Electrical's breach of contract claim was barred by Maryland's three-year statute of limitations.
3. Whether the trial court improperly admitted parol evidence concerning the scope of the subcontract.
4. Whether the trial court sufficiently stated its factual and legal reasons under Maryland Rule 2-522(a).
5. Whether the trial court erred in denying Patriot's motion to dismiss for failure to state a claim.

Disposition

affirmed