No Private Cause of Action for Excessive Retainage Withholding, But Subcontractor Does Have Related Contract Claim

04/03/2013

In South End Construction, Inc. v. Tom Brunton Masonry, Inc., No. 7:12cv390, Feb. 25, 2013, Judge Turk of the WDVA, Roanoke, held that a subcontractor could not assert a private cause of action for a prime contractor’s violation of the Virginia Public Procurement Act’s 5% retainage withholding limit.

There is no express private right of action, nor has a Virginia court implied one. This is similar to the conclusions in other cases addressing the prompt payment aspects of the VPPA. However, Judge Turk concluded the subcontractor was not without a remedy, and granted the subcontractor leave to amend to address the excessive withholding as a breach of contract claim; not an unexpected result. The complaint was not available in ECF so why that was not claimed initially in the complaint is unclear.

One would presume the PPA also affords a right of interest on the excessively withheld retainage; particularly given the clearness of the limitation in the VPPA. – nsl

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