In a July 13 decision, a Maryland Court of Special Appeals took a step rarely
seen in any state, affirming that an individual employee was personally
responsible for not paying subcontractors on a commercial project. The case,
Walter v. Atlantic Builders, revolves around two sub-subcontractors
that were not paid by a subcontractor for work performed on a public library.
The sub-subcontractors were eventually paid by the general contractor that then
sued the subcontractor and one of its managers under the state’s trust fund law.
The 1987 law says that any monies paid to a contractor or subcontractor to pay
for work performed by a lower-tier subcontractor shall be held in trust and that
“managing agents” with direct control over the flow of money can be held
personally liable if the money is used for any purpose other than to pay for
work performed. The court awarded the general contractor damages out of the
pockets of both the subcontractor and manager. For more information, contact ASA
Director of Government Relations Freeman Smith at 703-684-3450, Ext. 1321, or email@example.com.
Source: American Subcontractors Association