Opinion ID: 1946081
Heading Depth: 3
Heading Rank: 1

Heading: Enhanced Interest, Retainage and Monthly Assessment Penalties

Text: [¶ 25] The court found that Walsh did not act in good faith and that Jenkins succeeded in meeting its burden on the first two elements. Specifically, the court found that Jenkins had performed the work and that UNE had made a progress payment of $170,000. The court also concluded that Walsh had violated the spirit of the statute when it refused to make any further payments after the dispute arose. [¶ 26] Given the difficulty in analyzing the evidence regarding Jenkins's invoicing, however, the court did not determine exactly what amounts had been invoiced at specific times, and therefore did not determine what was due when. Rather, it found that [w]hile disputes existed concerning how much Jenkins was owed, the evidence at trial showed that a significant portion of Jenkins' claim was valid. (Emphasis added.) During the follow up hearing held to assist the court in determining the amount due under the prompt payment statute, the court noted its difficulty in determining how to attach this invoice to that payment, and framed the question to counsel as follows: how do I, when I don't attach a delinquent payment to any particular invoice, how do I know when to start counting and when to start multiplying. [12] [¶ 27] Ultimately, although the court concluded that Jenkins was owed $200,300 in ordinary damages, it did not determine how much of that amount had been withheld in violation of the prompt payment statute. [13] Because the enhanced interest and monthly penalty remedies must be calculated with reference to the specific amounts owed and the dates by which they should have been paid, the court did not establish a baseline for calculating those remedies. [14] See id. §§ 1114(4), 1118(2). [¶ 28] Notwithstanding the absence of the necessary factual findings, however, the court went on to fashion an interest remedy not contemplated by the statute, in order to assure that some penalty was imposed as a result of Walsh's violation of the spirit of the statute. The court awarded Jenkins the prejudgment interest penalty on the full $200,300, even though it had not determined when that amount had been invoiced. Recognizing the missing information, however, the court reduced the statutorily established penalty to the ordinary prejudgment rate but ordered that it would run, not from the date of service of the complaint, but from October 1, 1996, approximately the time of the parties' impasse. [15] It also awarded the 1% monthly penalty on the full $200,300, effective October 1, 1996. See id. § 1118(2). [¶ 29] Although the court's effort to create an equitable approach to the evidentiary quagmire is understandable, it is not authorized by statute. Without a finding of the amounts due and the dates from which the penalties should run, the court could not award enhanced interest or a monthly penalty pursuant to sections 1114(4) and 1118(2). Therefore, we must vacate the court's imposition of prompt payment penalties and remand for further findings by the court to determine whether Jenkins met its burden of proof. If the court finds that Jenkins proved the amounts due and the dates from which the penalties should run, the court must award penalties in accordance with sections 1114(4) and 1118(2). If the court finds that Jenkins failed to meet its burden of proof, the court may not award any penalties under the prompt payment statute. Specifically, the portions of the judgment awarding prejudgment interest pursuant to section 1114(4) and awarding the 1% penalty pursuant to 10 M.R.S.A. § 1118(2) are vacated.