Suing an LLC building contractor?
February 5, 2011 3:19 PM   Subscribe

Suing my contractor. Insurance companies want to enter mediation to settle, but contractor won't supply them with necessary info for them to investigate and move forward. Now what?

After three years of bullshit, expert witnesses, invasive testing, huge legal fees, my attorney has set in motion a lawsuit against the contractor who did my home remodel.

Not wanting to litigate, the contractor's insurance companies want to enter a mediation and possibly settle with my attorney. But the idiotic contractor is not giving them the material (list of subcontractors, etc.) they need to move forward. So everything is hanging in abeyance. Twice the mediation date keeps getting moved, and looks to be moved again. I'm ready to burst a brain vessel.

My question. Is this legal? And second question. Can an LLC simply dissolve itself (which I'm afraid the contractor might be doing with his company) in the middle of a pending lawsuit, that is already set on the court docket, and escape the legal system and punitive fees?
posted by zenpop to Law & Government (9 answers total) 1 user marked this as a favorite
IINAL, but I believe that even if he was to dissolve the LLC in the midst of litigation it would not affect prior actions.

have you asked your attorney these questions?
posted by edgeways at 3:23 PM on February 5, 2011

Response by poster: Thanks edgeways.

I try to avoid any email or calls to my attorney as he's 400 dollars an hour. I was just laying here, depressed, on this overcast Saturday, and the thought occured to me about the LLC ploy I wrote about -- and thought I'd see what the Meta hive mind might have to say. Of course I'll go into this with him later. But your response is encouraging.
posted by zenpop at 3:29 PM on February 5, 2011

Response by poster: Oh, the court date is set, of course it's in the next millenium (well, not really -- mid 2012). But h this fawking thing has been dragging on now for three years. Even my attorney said he was amazed that the contractor was pulling bullshit like this (with what is supposed to be his own defense team) so close to having it settled and avoiding the court appearance. I of course am not amazed as the guy is a complete asshole and sociopath.

And yes, I do that -- save up all my quesitons for each meeting -- though, as I noted, I just had the conern about the LLC angle this AM, and -- spur of the moment -- did a post here.
posted by zenpop at 3:42 PM on February 5, 2011

Fuck the mediation. It's clear they're trying to wait you out, so move the ball however you can. Time and information is all they apparently have to use and only use to slow things down, so it sounds like you have the advantage in their mind. Shit or get off the pot, don't let them make their problems your problems. Make noises about moving the court date up. These people need their hands held by someone who's time is more valuable and who will put them under oath. That's the prize you need to get to.
posted by rhizome at 5:01 PM on February 5, 2011

IAAL. In insurance defense, actually. In my firm, something north of 99.5% of cases settle before going to trial, many of them in litigation. One of our busiest partners has about 300 cases open, 10 trials scheduled, and will probably go to one or two of them. Many of these cases were filed two to three years ago--and those are just your run of the mill motor vehicle accidents. Medical malpractice, products liability, and breach of contract suits can easily run five to seven years.

You just need to call your lawyer. No two ways about it. Yes, it's expensive, but seriously, this is what you pay him to do. There isn't a damn thing you can do other than that.

Don't take litigation advice from people here, just call your lawyer on Monday. Tell him you're stick of waiting and that it's time to speed things up. Abusing the discovery process, as your opponent appears to be doing, pisses off judges. Tell your lawyer to start making noises to that effect, but seriously, let him run this show.
posted by valkyryn at 5:48 PM on February 5, 2011 [3 favorites]

Can an LLC simply dissolve itself (which I'm afraid the contractor might be doing with his company) in the middle of a pending lawsuit,

IANAL but I am in a lawsuit with a contractor. My rule of thumb is not to spend legal fees when all that's at stake are my own hypotheticals. He could go down many paths, so it is probably not worth discussing each one. (Switching metaphors.) You can cross that bridge when you come to it. I agree with valkryn that you should just talk to your lawyer about your goal of no more waiting.

Sounds like you have your own approach to limiting costs, but I had to laugh at hal_c_on's comment that "this thread should be about how you can communicate with your lawyer about your pending financial situation without worrying about how much he charges for how long." I'd love to learn that technique myself. Best of luck with the mediation.
posted by slidell at 12:34 AM on February 6, 2011

Response by poster: Thanks for the comments folks.

But I'm still curious about the ability of someone to shut down their LLC in the middle of a law suit (meaning, a court date has been set and is on the court's docket).

Also, to those advising: I should tell my lawyer to "speed things up..." Well, Christ, I'd love to. But how? I can't make the court date come any sooner. What are the options?
posted by zenpop at 2:23 PM on February 6, 2011

Best answer: I should tell my lawyer to "speed things up..." Well, Christ, I'd love to. But how? I can't make the court date come any sooner. What are the options?

Things take as long as they take, but that doesn't mean that there's nothing that can be done. IANYL, and your lawyer knows the specifics of your case better than anyone here, but you might consider mentioning what's called a "Motion to Compel," i.e. asking the court to order the other side to produce the documents in question. It sounds like you're still in discovery, and it sounds like what you're waiting on is for the other side to respond to discovery. Motions to compel are how you get people to do that.

Still, three years isn't actually all that long, unfortunately. Your attorney is presumably doing an okay job, and if he hasn't filed a motion to compel already he probably has a reason for not doing so. So mention the possibility to him but be prepared to have why that isn't appropriate explained to you. Then again, it's possible that the reason he hasn't is because he doesn't understand how much you want this to move forward. So bring it up and see what happens, but let him do his job.

I'm still curious about the ability of someone to shut down their LLC in the middle of a law suit

As far as I know you can do that, but it isn't likely to help. LLC stands for "Limited Liability Company," and the main advantages to having one are 1) taxation, and 2) limited liability. Dissolving it does make the entity go away, but that doesn't necessarily mean that claimants out of luck.

First, If the contractor dissolves his LLC, it's possible that he could be personally liable for its obligations as part of the winding-up process. If nothing else, you as a potential creditor are theoretically entitled to some part the proceeds of the liquidation.

But second, assuming that his LLC had an insurance policy--and if it didn't, I hate to say it, but you screwed up--the insurance company is still on the hook, because the occurrence presumably happened during a period when there was coverage in force. So the non-existence of the LLC won't necessarily affect your ability to recover from the carrier. Again, something to talk about with your lawyer.
posted by valkyryn at 5:20 PM on February 6, 2011

Response by poster: Thanks Valkyryn

Very helpful and specific. Even if this idiot's company remained operational, I wasn't expecting anything from them re the settlement -- he's operating near-bankruptcy level all of the time anyway. But we ARE going after the insurance carriers, so it's good to know a dissolved LLC won't affect my chances for a settlement from them.

posted by zenpop at 8:31 AM on February 7, 2011

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