Small Claims or Get a Lawyer?

August 11, 2011 2:28 PM

Should I take my issue to small claims court - or do I need a lawyer?

I am considering a venture into small claims court. I know you are not my lawyer - but I would appreciate your input.

I am contractor in Florida. I am fully licensed, insured, and bonded. I can (and often do) pull construction permits in the jurisdiction where this occurred.

I did some work for a local restaurant / bar. They still owe me $4,823.00. I can easily prove that we had a contract, that they know they owe me, and that they were fully satisfied with my work. I can also break-down and justify the out-standing invoice. And, I show that they are being arrogant jerks who believe they just don't have to pay. I have lots of documentation (texts, phone messages, emails, other paper-work, and of course, the contract).

Being a Florida contractor, I also have some free time right now. (My industry is currently going through some tough times, but I am surviving.) I know I could hire a lawyer. I know I have a case. But I might try small claims court.

But, there is a problem - the work was done without a permit. The penalty for this is a fine of several hundred dollars. Plus, it is damaging to the relationship that I have with the building department in that jurisdiction.

The involvement of the building department would hurt the restaurant worse than me. We corrected a lot of problems for them, but not all of them. Even though I saw lots of construction code violations, I only did the work they were willing to pay me to do. If the building department knew what I know, they would shut the restaurant down. (Which, I know, is the very reason a licensed contractor is supposed to pull permits in the first place.)

Much of the work was service and repair (which does not need a permit) - but admittedly, about a third of the invoice is new installation (which does require a permit). The owners of the restaurant / bar specifically asked for no permit, but I have no record of that, and I am supposed to know better anyway.

I am definitely persuing my claim against the restaurant. I will pay a lawyer, and let the lawyer keep all the money, before I walk away from this one. There has just been too much bad blood to let it go.

But I would rather keep all the money, and not hire a lawyer. The restuarant will not raise the permit issue in court, it hurts them worse. I will not raise the issue either. What does it even matter to the existing completed contract?

So, the question is: Should I get a lawyer, or try small claims?
Is this the right case for my first venture into small claims? Or, is the permit issue more serious than I think?
What other issues should be thinking of?


Bonus: Does the lack of a permit impact their duty to pay after I completed the contract? I do not think so, right?

Thank you in advance for your input.

posted by anonymous to law & government (15 answers total)

The permit issue depends on the city where the work was done. You know that your industry is hurting, that means that fewer permits are being pulled. First, because less work is being done, but also because contractors are doing whatever they can to get bids. Including unpermitted work. This means fewer inspections, and as a result of that, some cities are having to lay off inspectors because of decreased fees. Some departments are more angry about this than others.

I'm not a lawyer, but you need one. And/or find out if you can pull the permit now for a lower penalty. (Since you have the contract, that might be possible. But, the business agent/owner may be required to sign the permit app. Which.....eh. Laywer.)

Let me say it again. Really, you need a lawyer because each city is different, and you don't want your behind out in the wind if it doesn't need to be.
posted by bilabial at 2:41 PM on August 11, 2011

INYL, TINLA. But you already knew that.

In some states, small claims denotes a particular jurisdiction. Courts of greater jurisdiction are often unavailable for disputes involving small sums of money. Hence, small claims court. You may not have a choice.

But you should still see a lawyer. First, for a small fee, the lawyer can tell you whether you might be entitled to more money. A lawyer familiar with this area can also tell you if the permit thing will bar recovery or, worse, lead to some form of discipline that might affect your license or bond. Last, if you're willing to pay for it, the lawyer may be able to assist you at some stages by helping you prepare your suit.

My limited experience with contractors has been that whenever a customer asks the contractor to cut a legal or ethical corner, the contractor ends up getting screwed. In the future, I would seriously consider either convincing the client to do it right or not accepting the work. After such a request, I'd also consider charging more since you're at greater risk of loss for a client you already know is shady--they're always a payment risk.
posted by Hylas at 2:53 PM on August 11, 2011 [2 favorites]

bilabel is totally 300% right.

If this were me, tho, and I had that much documentation that the work was done and done right (plus you do take before and after pics - right??) I would simply go to small claims. I would not mention the permits and hope/bet no one else does, either.

That's it. Small claims.

I hope that when you serve the restaurant, they pay you before you get to court.

I understand relationships with building departments and what your professional responsibilities are. If you do get caught out, just be prepared to pay the fines and be super apologetic and professional.

(If you wanted to really screw these guys, I would be search out lawyers and be prepared to pay one a retainer if need be. I would be prepared not to see any money out of this and pay whatever fines come up. Then I would pull the proper permits after the fact and wait for the building dept to shut their restaurant down. But that's me.

When it was all over, I would still go to small claims, and with so much documentation, I would win. Then I would file the right paperwork with the sheriff to have their bank account garnished -or- I would sell their judgement to the nastiest collection agency I could find.

If your contract is with a company or LLC, this might not be that satisfying. If your contract is with the restauranteurs directly... Very very satisfying.

I'm taking off my Evil Cape now and going back to the side of Good....)
posted by jbenben at 2:59 PM on August 11, 2011 [1 favorite]

But I would rather keep all the money, and not hire a lawyer. The restuarant will not raise the permit issue in court, it hurts them worse. I will not raise the issue either. What does it even matter to the existing completed contract?

The lack of a permit strikes me as irrelevant to your contract dispute. The court will not be concerned with that.
posted by jayder at 3:09 PM on August 11, 2011

If it were me, for that much money (almost $5,000) I would probably talk to a lawyer just to be sure you are going to run the small claims case correctly.

I probably wouldn't waste time in filing the lawsuit though—who knows how long the restaurant will stay in business.
posted by grouse at 3:21 PM on August 11, 2011 [1 favorite]

IAL but not in FL.

1) Make SURE you check with the licensing board that having done COMMERCIAL work without a permit will not impair your license. In some jurisdictions it's a much bigger problem than the fine that BDS will impose for unpermitted work

2) BEFORE suing correspond with restaurant to, with politely framed questions, get them to admit that the lack of permit was at their request. Might be useful.

3) Even if you intend to go to small claims court go see a lawyer who handles construction defect and contractor's lien work and buy an hour of time to find out all the mines in the field in which you are dancing. THAT information will most likely point to one course over the other.

4) Check your state statutes - in many states (including one of the ones I practice in) disputes below a certain dollar threshold can carry attorney fee shifting, even if the underlying contract or dispute wouldn't normally allow the winner to collect fees from the loser.

Good luck
posted by BrooksCooper at 3:32 PM on August 11, 2011 [1 favorite]

There has just been too much bad blood to let it go

Never a good reason to engage in litigation.

I am a lawyer. I am not a lawyer in your jurisdiction, nor am I your lawyer, nor is this legal advice.
posted by Ironmouth at 3:40 PM on August 11, 2011

Does the contract provide for attorney's fees in the event of a breach? Some do. Also, state law/statutes might even provide for attorney's fees for a breach of contract. (Texas does.) If so, you could get an attorney to take the case knowing that his fees would be covered by the restaurant (not out of your 4k or whatever) so long as you win. I did some quick searching and couldn't find anything. Best of luck.
posted by resurrexit at 4:22 PM on August 11, 2011

3) Even if you intend to go to small claims court go see a lawyer who handles construction defect and contractor's lien work and buy an hour of time to find out all the mines in the field in which you are dancing. THAT information will most likely point to one course over the other.

I've heard an absolute ton of good legal advice here, but this is my new favorite.

IANAL but I'm related to several, and one thing they've told me repeatedly is that while you might watch a shitload of Law and Order, you don't know the law.

One hour of a professional legal opinion on whatever legal issue you might be facing is such a massive bargain that I can't even begin to quantify it. You don't know enough to know that you don't know enough.
posted by Sphinx at 4:27 PM on August 11, 2011

Just nthing here that I think this question deserves a consultation with a lawyer who practices construction law in your jurisdiction. It also sounds as though you could use an ongoing relationship with someone like that.

Do talk to this lawyer about the permit issue. IANYL, but be aware that this kind of transaction can in some jurisdictions be viewed as "against public policy" and hence a basis to deny legal relief to either side.
posted by bearwife at 5:13 PM on August 11, 2011

Any lawyer who will render, in one hour, an opinion about a contract dispute with a documentary record and involving noncompliance with permitting, is probably not someone on whom you should rely, nor is the advice going to be dependable. Expect to spend more time and money.

To reduce your billing time:

-- Identify clearly what you want and why, including how much money you need to clear from the claim to make it worth your while.

-- Pull together a clear and succinct timeline, and bring the most salient documents with you.

-- To the extent you can, use AskMe and other resources to identify key issues.

IANYL, but my suspicion is that the lack of a permit may play a greater role in small claims court.
posted by Clyde Mnestra at 5:44 PM on August 11, 2011

Go to mediation. You will get to retain decision-making control. Permitting will not matter. The resolution will be binding, if you want it to be. It can be free, if you find a community mediation organization in your area, or you can pay a fee for a private mediator. The mediator can help you contact the other party and persuade them to attend the session. Feel free to mefimail me for more info.
posted by equipoise at 5:52 PM on August 11, 2011

IANAL but I did get sued by a (shady contract-breaking) contractor and hired a lawyer to fight him.

One reason you probably need a lawyer is because this no-permit issue could come up in a variety of ways, and they could think through those possibilities. (E.g., even if it didn't come up in court, would they threaten to file a license complaint against you?) A consultation with a lawyer is a good idea to understand these risks. But one of the things that was frustrating for me is that so much remains unknown, as lawyers can't see the future and won't be able to say what will happen.

The other thing is that a lawyer is going to burn through your $4800 in about two or three months of actively working on your case. The jaded view is that the end game here is about is cajoling, inspiring, requiring, and penalizing them to pay. If they are lawless enough to flout you, what is it going to take to compel them to pay? Is there an easier way to get to that endpoint?
posted by slidell at 9:04 PM on August 11, 2011

Keep in mind the harm to your business for the no permit thing can potentially be worse then losing the money. I know if i wouldnt go to a contractor who did not get permits for work. even if i asked him to.

So think about the future before pursuing this.
posted by majortom1981 at 8:00 AM on August 12, 2011

I probably wouldn't waste time in filing the lawsuit though—who knows how long the restaurant will stay in business.

Worth repeating. You may, however, wish to look into the question of mechanic's liens and (business) bankruptcy. Apparently if you have such a lien you need to perfect it if the client files.

Businesses that are slow-pay and no-pay on big items may not be long for this world. It's a sure sign they are struggling to stay afloat.

But you probably need a lawyer regardless.
posted by dhartung at 3:54 PM on August 13, 2011