Court Opinion

ID: 6787338
Source: CourtListenerOpinion
Date Created: 2022-07-21 01:04:55.123168+00
Date Added: 2024-06-11T16:02:57.951430
License: Public Domain

Lundberg Stratton, J.,
dissenting.
{¶ 24} I dissent because I believe that the Prompt-Payment Act, R.C. 4113.61, permits a contractor to withhold anticipated costs necessary to resolve any lien or claim that derives directly or indirectly from the underlying “work or labor performed or material furnished by the subcontractor or materialman.”
{¶ 25} R.C. 4113.61(A)(1) provides:
*6{¶ 26} “The contractor may reduce the amount paid by any retainage provision contained in the contract, invoice, or purchase order between the contractor and the subcontractor or materialman, and may withhold amounts that may be necessary to resolve disputed liens or claims involving the work or labor performed or material furnished by the subcontractor or materialman.” (Emphasis added.)
{¶ 27} The majority holds that the phrase “involving the work or labor performed or material furnished by the subcontractor” limits “liens or claims” to those that “concern the substantive aspects of performing the work or labor or providing any material under the contract.” (Emphasis added.) Applying this interpretation, the majority holds that because the breach of a lien-waiver clause and the breach of a forum-selection clause are “procedural in nature,” neither can result in a lien or a claim “involving the work or labor performed.” I do not believe that the General Assembly intended such a narrow interpretation of the phrase “involving the work or labor performed.”
A. A Lien or Claim Involving Work, Labor, or Materials Includes Any Lien or Claim that Derives Directly or Indirectly from the Underlying Work, Labor, or Material
{¶ 28} Words not defined in the statute must be afforded their common and ordinary meaning. Kimble v. Kimble, 97 Ohio St.3d 424, 2002-Ohio-6667, 780 N.E.2d 273, ¶ 6; R.C. 1.42. Moreover, in examining a statute, a court cannot “delete any words or insert words not used.” Lesnau v. Andate Enterprises, Inc. (2001), 93 Ohio St.3d 467, 471, 756 N.E.2d 97, citing State v. Jordan (2000), 89 Ohio St.3d 488, 492, 733 N.E.2d 601. Finally, in addition to the language of a statute, courts may glean intent by looking at its purpose. Family Medicine Found., Inc. v. Bright, 96 Ohio St.3d 183, 2002-Ohio-4034, 772 N.E.2d 1177, ¶ 9, citing R.C. 1.49.
{¶ 29} “Involve” means “to have within or as part of itself: contain, include.” Webster’s Third New International Dictionary (1961) 1191. I believe that to constitute a lien or claim “involving the work or labor performed or material furnished,” the lien or claim need only contain or include issues that pertain to the work or labor performed or materials furnished pursuant to the contract. Moreover, there is no language in R.C. 4113.61 that explicitly limits liens or claims to those that “concern the substantive aspects” of the work, labor, or material. Accordingly, we should not interject that limitation. Lesnau, 93 Ohio St.3d at 471, 756 N.E.2d 97.
{¶ 30} Clearly, one of the purposes of the Prompt-Payment Act is to ensure that contractors pay subcontractors and materialmen for their work or materials in a timely manner. However, the General Assembly intended also to protect contractors by permitting them to withhold payment, or some portion thereof, *7due the subcontractor where a dispute arises from the work performed or material provided by the subcontractor or materialman. If a contractor’s withholding is limited to the “substantive aspects of performing the work or labor or providing any material,” then much of the contractor’s protection is eroded because contractors will be unable to withhold amounts necessary to resolve actions taken by a subcontractor that ultimately derive from the underlying construction contract. Thus, I believe that the majority’s narrow interpretation of the phrase “involving the work or labor performed or material furnished” is contrary to one of the purposes of the Prompt-Payment Act.
{¶ 31} For these reasons, I would hold that a lien or claim “involving the work or labor performed or material furnished” is any lien or claim that derives directly or indirectly from the work or labor performed or material furnished under the contract. I would therefore hold that Masiongale’s breaches of the lien-waiver and forum-selection clauses involve work or labor that Masiongale performed for Construction One. Accordingly, I believe that both breaches resulted in disputed claims involving work performed under the contract within the meaning of R.C. 4113.61(A)(1).
B. Amount to Be Withheld
{¶ 32} The Prompt-Payment Act permits a contractor to “withhold amounts that may be necessary to resolve disputed liens or claims.” R.C. 4113.61(A)(1)(b). This language indicates that a contractor may withhold amounts to cover anticipated costs required to resolve a disputed lien or claim. However, the withholding must be made in good faith. Consortium Communications v. Cleveland Telecommunications, Inc. (Feb. 10, 1998), Franklin App. No. 97APG08-1090, 1998 WL 63538; see, also, Soloman v. Excel Marketing, Inc. (1996), 114 Ohio App.3d 20, 30-31, 682 N.E.2d 724.
C. Remand
{¶ 33} The underlying merits of the contract claims and counterclaims (i.e., the proper amount of the back charges, the breach of the lien-waiver clause, and the breach of forum-selection clause) are final and are not subject to this appeal. The only issues on appeal are whether Construction One complied with R.C. 4113.61(A) in withholding $29,103 of the $36,124, and the determination of any consequence as prescribed by R.C. 4113.61(B).
{¶ 34} Because I believe that Masiongale’s breaches of the lien-waiver and forum-selection clauses involve work or labor performed, the only remaining issue is whether Construction One’s withholding was proper. I would remand this case to the trial court for a determination whether Construction One acted in good faith as to its withholding and whether the amount withheld was necessary to resolve the breaches of the lien-waiver and forum-selection clauses. Based on *8that determination, the court would then determine any relief to be awarded pursuant to R.C. 4113.61(B).
F. Harrison Green Co., L.P.A., and F. Harrison Green, for appellee.
Roetzel & Andress, Michael S. Yashko, Eric S. Bravo and Kevin J. Osterkamp, for appellant.
{¶ 35} Accordingly, I respectfully dissent.
Resnick and F.E. Sweeney, JJ., concur in the foregoing dissenting opinion.