AI Generated Opinion Summaries

This summary was computer-generated without any editorial revision. It is not official, has not been checked for accuracy, and is NOT citable.

Facts

• A dispute arose between Ashcraft Mechanical, Inc., a subcontractor, and Makwa Builders, LLC, the general contractor, regarding payment for work performed on a construction project for New Mexico Highlands University. Ashcraft submitted a payment application for work completed, which Makwa adjusted and approved but failed to pay. Subsequently, NMHU terminated Makwa's contract, leading Ashcraft to sue Makwa and Great American Insurance Company for breach of contract and violations of the Prompt Payment Act and the Little Miller Act. Makwa counterclaimed, seeking declaratory relief and an order for Ashcraft to indemnify and defend it against a claim from Hays Plumbing & Heating, another subcontractor (paras 2-4).

Procedural History

• [Not applicable or not found]

Parties' Submissions

• Plaintiff/Counterdefendant-Appellee (Ashcraft Mechanical, Inc.): Argued that Makwa Builders, LLC failed to pay for work completed as per the subcontract agreement, constituting a breach of contract and violations of the Prompt Payment Act and the Little Miller Act.
• Defendant/Counterclaimant-Appellant (Makwa Builders, LLC): Contended that Ashcraft was not entitled to payment due to failure to submit lien waivers from its subcontractors, which was claimed as a contractual condition precedent to payment. Additionally, Makwa sought offsets for various costs and an order requiring Ashcraft to indemnify and defend it against Hays’s claim.

Legal Issues

• Whether the failure to submit lien waivers from subcontractors was a condition precedent to Makwa’s obligation to offer payment to Ashcraft.
• Whether Makwa Builders, LLC is entitled to offsets for water hauling costs, attorney fees, and a refund of bond premium.
• Whether Makwa’s failure to pay Ashcraft violated the Prompt Payment Act.

Disposition

• The Court of Appeals affirmed the district court’s judgment in favor of Ashcraft on all matters.

Reasons

• Per MEGAN P. DUFFY, Judge (M. MONICA ZAMORA, Chief Judge, and KRISTINA BOGARDUS, Judge concurring):
  Regarding lien waivers: The court concluded that Ashcraft’s duty to submit unconditional lien waivers was a condition precedent to Makwa’s duty to release payment, not to offer payment. Thus, Makwa had a duty to offer payment before Ashcraft’s duty to produce the unconditional waivers arose (paras 6-10).
  Regarding offsets:

  For water hauling costs: The court found that Makwa was obligated to provide water services at the project site and denied Makwa’s claim for an offset for water transportation costs (paras 11-13).

  For attorney fees: The court determined that Makwa’s claim for attorney fees incurred to defend against a bond claim by Hays was not supported, as Ashcraft’s contractual duty to defend was not triggered under the circumstances presented (paras 14-15).

  For refund of bond premium: The court found no evidence that Ashcraft received a refund of any bond premium and thus denied Makwa’s claim for an offset (para 16).
  Regarding the Prompt Payment Act: The court held that the amount due to Ashcraft was undisputed and due, making Makwa subject to the interest and attorney fee provisions of the PPA (paras 17-18).