Small Claim - GC takes $, no contract happens, GC keeps $...
May 11, 2015 1:38 PM   Subscribe

Small Claim - GC takes $, no contract happens, GC keeps $... Legal assistance please.

(1) I was planning on doing a home renovation by hiring a contractor to do some work. Delays due to funding/etc on my end delayed the start, and the contractor requested funds in anticipation of doing the work. As we continued to work towards a contract for the work, we grew further apart on details until finally I decided not to use him. We didn't conclude a contract, I didn't sign anything (besides the check). He kept the initial funds. He didn't do any work. He refuses to communicate further.


(2) Here's a rough time line:
April 20, "John" recommended to me from another contractor
April 29, "John" performs a number of small improvements for $1,300, work quality is good
May 5, The beginning of our communication on the larger job
May 11, I talk about the scope of the project, the need for financing and ask for how it will take to do the work
May 12, "John" responds with estimates for the job
June 1, I tell him we won’t have financing for the project
June 20, We get more promising finance options and I let "John" know we’re back on
June 24, "John" sends a construction schedule (at this point we’re still trying to rush to finish by Sept)
June 25, I respond with requests for more details
June 27, "John" responds with more detailed scope
July 1, Finance is still tenuous, "John" gives a revised scope for a bathroom and asks for down payment to retain him and allow him to keep his schedule clear in August. We give him a check for $6,500. We give tenants notice.
July, Throughout month "John" and I email back and forth about scope
August 1, Tenants fail to leave by appointed date.
August, Throughout month "John" and I email back and forth about scope
September 1, Tenants move out
September 6, "John" sends updated scope & budget
September 10, Phone conversation from "John" and my conversations with Inspectors require more design work up front to proceed. Ie we can't go forward with any work until another big step is completed and "John" didn't inform me about this requirement.

I tell "John" we won't be working together on this project.

(3) Without further input from "John", I file a small claim for the $6,500

(4) The week before the claim appointment, "John" leaves messages and emails with stories of woe and a plan to pay back the money in installments.


What's the play here?
- Do I even call him back? Do I risk not cooperating by ignoring him?
- Would I ever consider a arbitration either with him or the court? What if he can produce funds in advance of the claim appointment, should I inquire?

Thank you.
posted by Reasonably Everything Happens to Law & Government (12 answers total) 1 user marked this as a favorite
 
Assuming you are in the US, I'd just go through with the small claims proceedings. Worst case he has to pay some additional court costs but then you'd have a judgement against him in case he's slow paying up. Realistically, as you know, you can't get money where there isn't any. I'd just say "See you in court" and bring all your documentation. IANAL but I have sued (and won( contractors in small claims court. That said, they never paid and I eventually had to write the $$ off my taxes.

I can't speak at all towards what is likely to happen with small claims court, but this is how I'd play the existing scenario.
posted by jessamyn at 1:48 PM on May 11, 2015 [1 favorite]


I would knock off $500.00 for the delays caused by your financing/tenants/etc and tell him he has 10 working days to pay in full or you will file/proceed in small claims court. If he has not satisfied your request in full then immediately go to small claims.
posted by rmhsinc at 2:21 PM on May 11, 2015


July 1, "John" gives a revised scope for a bathroom and asks for down payment to retain him and allow him to keep his schedule clear in August. We give him a check for $6,500.

August 1, Tenants fail to leave by appointed date.


I don't know about this. On July 1st your GC asked you to give him a retainer specifically to enable him to keep his August schedule clear for you. A month's notice sounds reasonable to me, and what could he do on August 1st, tell his guys to go hungry for a month because your tenants failed to leave? What if the shoe was on the other foot - wouldn't you be upset if your tenants did leave on August 1st but your GC said, sorry I found another client? It sucks that you lost $6k but am really don't see how the contractor is at fault here.
posted by rada at 2:46 PM on May 11, 2015 [6 favorites]


On review I think "rada" has a point which might require some forthright negotiations between the parties or in court. It does seem the G C has a partial claim on the advanced funds.
posted by rmhsinc at 2:56 PM on May 11, 2015


But per the "September 10" entry he was never actually ready during August to do anything even though he'd accepted payment to be ready during that month.
posted by XMLicious at 2:58 PM on May 11, 2015


Response by poster: So to clarify a little,

(1) I'm looking to prepare and clarify my argument in preparation for the small claim appointment (eg, yes, the proposed work was moot because the GC gave incorrect information about how to proceed on the work). Also, my understanding at this point is that without a contract, he should return ANY funds in the event that no work was done (maybe a mefi lawyer can verify this?).

(2) Is there any reason I should talk to him in advance of the hearing?
posted by Reasonably Everything Happens at 3:29 PM on May 11, 2015


"reasonably"--given the information you provided I am not at all sure things are as clear as you suggest. Only you know exactly what was verbally agreed and what each party's responsibilities were. Securing permits,planning approval. having premises available, etc. Given the sum of money involved are you sure you do not want to secure direct legal counsel.
posted by rmhsinc at 3:43 PM on May 11, 2015


Best answer: When you go to trial, it's always dicey and anything can happen. You could get a bad judge and have to appeal. It might be that there were aspects to the case that you hadn't considered, and you lose.

It can be a slow and painful process, hardly worth even the money you mention, if the other side drags its heels (repeated delays, non-response, procedures to enforce judgement, etc.) It can take years.

You did have a contract, it just wasn't a written one. Perhaps he'll say you two agreed it was a non-refundable deposit to reserve August. Are you 100% confident the judge will accept your version?

At least in my jurisdiction, the court forces the parties to go through a settlement attempt before trial anyway.

Why not accept his offer of settlement and payment in installments? If you have him sign an acknowledgement that he owes you the money and will pay it in installments, now you've essentially got him to admit his "guilt". If he doesn't pay, it's a much easier court battle as he already signed away that he agrees he owes the money. It's then just a matter of having the court force him to pay those installments.

Go sit in small court and watch some other cases. You'll see cases that have been going on for years because the other side is good at stalling. You'll see "victorious" plaintiffs tortured to tears at the glacial place and endless paperwork. You'll see "judges" who don't know the law very well.

You've got an opponent who's willing to work this out with you. Why would you want to get anywhere near court?
posted by kevinsp8 at 5:24 PM on May 11, 2015 [2 favorites]


There are links to free and low-cost legal assistance resources available at the MeFi Wiki Get a lawyer page. Your jurisdiction may also have a lawyer referral service that offers a low-cost consultation. It sounds like a consultation with an attorney in your jurisdiction will be helpful for protecting your legal and financial interests in the small claims court/mediation/settlement process.
posted by Little Dawn at 6:05 PM on May 11, 2015


As a former GC who has been a witness for homeowners in construction arbitration, I would just like to point out several serious problems with your time line that might make this less of a sure thing than you think it is.

"July 1, Finance is still tenuous, "John" gives a revised scope for a bathroom and asks for down payment to retain him and allow him to keep his schedule clear in August. We give him a check for $6,500. We give tenants notice.
July, Throughout month "John" and I email back and forth about scope
August 1, Tenants fail to leave by appointed date."


You reserved his month and you failed to make happen what needed to happen for the reserved month to produce work. This is exactly the kind of thing that "flakey" clients do all the time. This is why contractors take deposits and retainers.

Do you know what kind of documentation (emails, etc.) he has regarding other work he turned down because of your promise to remove your tenants so the project could proceed? In arbitration (and probably small claims)the value of this can be considered. It is the flip side to homeowners making claims for indirect expenses incurred from shoddy work or broken schedules

For me the real question is this:

"September 10, Phone conversation from "John" and my conversations with Inspectors require more design work up front to proceed. Ie we can't go forward with any work until another big step is completed and "John" didn't inform me about this requirement."

What are the details here? Did he design something that couldn't be built? Propose something that wouldn't meet code? Or was it that an existing and perhaps un-forseen condition in your property (bad foundation, substandard existing framing, etc) that made the project more complicated or expensive? Hidden condition clauses are universal in residential contracting. So much so that I would expect that it would hold even in a verbal contract.

"I tell "John" we won't be working together on this project."

You cancelled the project after giving a retainer, which by the way, perhaps paid for hours of design, consultation, bid writing, subcontractor meetings, materials sourcing, etc. When I was a GC I would have considered it non-refundable but I would have been happy to have returned the balance after expenses on my own time table.
posted by ijustwantyourhalf at 9:37 PM on May 11, 2015 [2 favorites]


Response by poster: September 10...
What are the details here?


We were working from the premise (from his supposed conversation with inspectors at the city) that we could do the work without the floor plan. When I talked to the City myself they said this kind of work absolutely needs a floor plan. Therefore, all the intentions behind the rest of the work were completely moot because of this mistake/incorrect information.

It could be that he got conflicting information from the city, but given how he's acted since he got the check, I tend to doubt it.
posted by Reasonably Everything Happens at 4:26 AM on May 12, 2015


Response by poster: Update/resolved...

We ended up attending small claims court. However, they have a pre-trial approach where they invite mediation, which we pursued. We ended up agreeing to a judgment for 2/3 of the amount to be paid back in installments.

(1) we took to heart the warnings about the uncertainty of a hearing process
(2) the contractor showed up, gave his side during mediation and appeared to be participating in good faith. as mentioned above, he had grievances from his own perspective too
(3) the result of the mediation is an enforceable judgment which gave us confidence


So far the contractor has made good on the first two payments.
posted by Reasonably Everything Happens at 12:16 AM on August 1, 2015 [2 favorites]


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