Effect of Release in Payment Application

Finally, note that the payment application may contain a release. The contractor should be careful to state on the payment application that they are also claiming delay damages so that the pay application will not be construed as releasing delay claims. As this pertains to Alabama construction law at least one case has found that a release in the application for payment can bar a delay claim. See Wayne J. Griffin Elec., Inc. v. Dunn Const. Co., 622 So. 2d 314, 317 (Ala. 1993). Another case concluded that a delay claim against a general contractor would not be released by language in a payment application because the general contractor was not named, either specifically or generally, in the text of the release. Allgood Electric Company v. Martin K. Eby Const, Co, Inc., 85 F.3d 1547, 1551-53 (11th Cir. 1996); see also, Hartford Acc. & Indem. Co. v. Cochran Plastering Co., Inc., 2006 WL 73735 (Ala. Civ. App. 2006) (court disagreed with bonding company’s argument that lien waivers and lien release signed by subcontractor barred payment of amounts of more than what was in the lien waiver) .