Sam E. Baker, a partner with the law firm of Smith Currie & Oles, reported a recent success on behalf of a subcontractor who was not paid for undisputed change order work on the Washington State Convention Center project. Sam’s client received an award of both prejudgment interest (12%) and Prompt Payment Act interest (12%) for a combined 24% interest on monies that were wrongfully withheld. In our blog article (July 25, 2022 “Contractors May Be Entitled to both Prompt Payment Act Relief and Prejudgment Interest for Accumulative 24%!”), we hypothesized that because the purpose of prejudgment interest is to compensate the plaintiff for the use value of money, whereas the purpose of the Prompt Payment Act is as a deterrent of wrongful withholding of payment, the two statutes have different purposes, it follows that contractors should be entitled to a cumulative 24% interest if not paid undisputed amounts on public works projects. Sam convinced a trial court judge of the merit of this logic and was kind enough to share his success with us. This decision should help general contractors who are owed undisputed amounts on public works jobs and galvanize prompt payment considering 24% interest is a major incentive to pay undisputed amounts owed.
As an aside, congratulations to Oles Morrison Rinker & Baker PLLC (“OMRB”) for its recent merger with the well-respected Atlanta-based construction law firm of Smith Currie Hancock PLLC. OMRB’s roots in the Seattle legal community date back over 120 years. In the 1930s, OMRB lawyers began to focus on government construction contract law led by partner Gerry DeGarmo, who became a prominent construction lawyer on the West Coast, succeeded by Stuart Oles (his sons Doug and Karl are highly regarded construction lawyers in the Seattle construction law community). Today the OMRB firm is led by Sam E. Baker.
To demonstrate how small our construction community is, this author can “trace his roots” back to DeGarmo Oles & Baker as well. In the 1980s, I joined the construction legal group of Barokas Martin PLLC (later to become Barokas Martin Ahlers & Tomlinson PLLC). Dale Martin, a founding partner of the firm, as a young lawyer joined Oles Morrison when Gerry DeGarmo was an active partner. Dale often spoke of the many insights he gained while working with Gerry. Later, Dale left to start his own firm with his law school friend Larry Barokas (Barokas and Martin). Dale became my mentor for over 20 years – thus my indirect connection with OMRB.
When I interviewed Stuart Oles a few years ago (for a construction law history project I had in the works), he had retired and was in his 90s. Stuart told me of all the lawyers he had worked with in his career, he regretted the departure of Dale Martin the most (quite a complement to Dale, now retired, but who left his mark on construction law in Washington). As a young construction engineer on a bridge project in Alaska, I was a witness during Sam Baker’s first construction trial many years ago. Sam won the case and we have been friends ever since. The accomplished OMRB lawyers have had a profound influence on construction law in the Pacific Northwest and Alaska, and they face a promising future with this recent merger.