Subcontractor Legal Defense Fund Task Force
ASA has submitted yet another supporting brief for the Subcontractor Legal Defense Fund in New Mexico. The issue has to do with calculation of interest on prompt payment claims. New Mexico took its language “1 1/2 percent per month, or fraction thereof” from tax statutes that contain the same language for interest penalties to the government for late payment. Some other states may have in following New Mexico’s prompt payment and retainage statute used the same language. The Court of Appeals agreed that the language as drafted reads so that the interest penalty automatically accrues even if the payment is a day or two late and then continues to accrue each following month. They then decided that, despite any legislative history to support it, the interest should actually be calculated at a daily rate, rather than a monthly rate, accruing immediately when due.
ASA Attorneys’ Council Member Sean Calvert is writing the amicus brief on behalf of ASA, the Associated Builders and Contractors and the Associated General Contractors of America. The parties are trying to get the Supreme Court to review the case, so our supporting brief will encourage them to do so.