Contractor delays final payment

[sako]

The general contractor who signed the contract for a topo in February refuses to pay the final payment. The contract clearly states the final payment is due upon delivery of topo map (in February). I have called him several times, he says he is waiting for the payment of the insurance Company who is supposed to pay for the damages a driver has done to a property.
I have heard if you hire a contractor to remodel your house and the guy doesn't pay for the material he bought from Home Depot, you as property owner could be liable for the payment. If this is true can I contact the property owner and ask him for the payment. (The property owner doesn't have any written contract with me)

[pls7809]

Hmmm. Good question, but I'm not sure about the answer. Maybe raising the issue with the property owner will prompt him to talk to the contractor?

Is there a complaint process with the Contractor's board?

[Stephen Johnson]

Why did you deliver in February without receipt of the final payment? The contract did stipulate C.O.D., didn't it?

Construction lesson NUMBER ONE: NEVER trust a contractor.

[sako]

Originally Posted by Stephen Johnson

Why did you deliver in February without receipt of the final payment? The contract did stipulate C.O.D., didn't it?

Construction lesson NUMBER ONE: NEVER trust a contractor.

This is the first time it happens to me. I allways get the check either at the time of delivery, or max 30 day after.

[sako]

Originally Posted by pls7809

Hmmm. Good question, but I'm not sure about the answer. Maybe raising the issue with the property owner will prompt him to talk to the contractor?

Is there a complaint process with the Contractor's board?

I havn't filed any complain with the contractor's board, but I will if I have to.

[land butcher]

You have numerous options.

First I would send a certified letter of demand to the contractor and cc the property owner also certified. State that if not paid with 15 business days a lien will be placed on the property followed by a small claims suit naming both parties.

Small claims might be less than you are owed but civil suits for more money can take 5 years to get to trial.

File a complaint with the State contractors board but don't expect much from them.

[E_Page]

Our homeowner's road association filed a complaint against a contractor who did not fully perform the agreed work and refused to do so. We had tried working directly with the contractor for several weeks to no avail. We filed a complaint with the State Contractor's Board and he promptly came out and finished the job properly. We then wrote a letter to the Board stating that he had satisfactorily completed the work (stating the date of the work), and that we wished to drop the complaint based on that.

I don't know whether it was that the Board was pursuing the matter, or that the contractor was just reacting to the letter from the Board informing him that a complaint was made. Either way, the issue was resolved to our satisfaction very shortly after filing the complaint.

That Board is apparently quite effective with respect to consumer complaints. I don't know if they would be quite as effective with a complaint from a service provider, but it would be worth a try.

The threat of filing a lien will probably be your most effective tool. The landowner may have no idea that the contractor has not paid you, and will probably very unpleasantly surprised to find out that the lien to secure that payment will attach to his property. Either it will prompt him to pay the contractor or get the insurance company moving to pay, or it will prompt him to put pressure on the contractor to pay you.


I was stiffed by a contractor a few years back. Because of the exception under §8759, and because we were both from a the same small community, I made the mistake of not having a signed contract with him. I naively expected that reputation in the small community would be important to him. After he stiffed me, I asked the questions of other local surveyors that I should have asked before taking the job. Came to find out that he had done the same thing, or attempted to do the same thing to several of my colleagues. I was just the new guy on the block who hadn't learned that particular lesson yet.

[DWoolley]

Below is a list of the Prompt Payment Statutes. They are all contained in the California Civil Code:

Section 3260 - Retention - Private Works Project.

Section 3260.1 - Progress Payment - Private Works Project.

Section 3262.5 - Payments on Public Works.

All three sections award interest at 2 percent per month and attorneys fees. Only exception is "good faith dispute".

Also, the California Supreme Court case that held that "pay if paid" clauses are unenforceable is R. Clarke Corp. v. Safeco Ins. Co. of America, 15 Cal.
4th 882 (1997).

DWoolley

[sako]

Thanks guys for your helpful posts. I called the contractor today and reminded him of his contract with me and his obligation to pay me, he then hung up on me. I called the owner and told him the story, he was surprised and promised me to contact the contractor. I will give it a week, then I will send the threatening letter to the contractor (CCed to the owner) via certified mail.

[Stephen Johnson]

Originally Posted by sako

Thanks guys for your helpful posts. I called the contractor today and reminded him of his contract with me and his obligation to pay me, he then hung up on me. I called the owner and told him the story, he was surprised and promised me to contact the contractor. I will give it a week, then I will send the threatening letter to the contractor (CCed to the owner) via certified mail.

Don't give him a day. If he hung up on you he has no intention of paying you. Get your legal ducks in a row and go after him with a vengeance. As much as I dislike the sub species, it is lawyer time. Make sure it is a bull dog.

[Jim Frame]

"State that if not paid with 15 business days a lien will be placed on the property followed by a small claims suit naming both parties."

If the survey was delivered more than 20 days ago and a 20-day Preliminary Lien Notice wasn't filed, the surveyor's lien rights have expired. Go for the small claims action.

.

[DWoolley]

If the final invoice is less than $7500 file a small claims case (presuming you have not filed any other cases this year). Once you get the judgment you can contact the contractor’s board and the judgment will be noted on his license. It is a simple process.

Once he decided it was appropriate to hang up on you like an 8th grade girl (no offense to 8th grade girls), I would file this week. I would not waste time with a threatening letter. What are you going to threaten him with? Just do it.

I can have someone from my office walk you through the process, if need be. Be prepared with the County the business is located in, dollar amount, contract (hopefully CLSA) and any other information you think is pertinent.

I would encourage you not to settle, it makes it tougher on the rest of the survey community. Email me if we may be of assistance.

DWoolley

[E_Page]

Dave,

Good info (post #8) and good advice.

[jcoffey]

Excellent advice from Dave and I'd advise taking him up on his gracious offer to assist if you don't know the ropes of filing a case. Sounds like a slam dunk to be awarded a judgment.

If the plaintiff (you) are a business (Corp, LLC), the limit if $5,000. $7,500 for individuals.

If it goes that far, and you get a judgment, and the contractor still doesn't pay (very possible) after the stipulated time period, then file a complaint with the State Contractor's Board. They have to suspend his license under B+P Code 7071.17 for unpaid judgment by court.

John S. Coffey, PE, PLS
San Diego, CA

[Ian Wilson]

Sako:

I agree with you waiting a week.

Gentlemen:

Re-read post #9. Sako called the owner after the contractor hung up on him. Out of respect for the owner, Sako is properly waiting for the owner to force the issue with the client.

If, after a week, the owner has been unsuccessful, Sako with ramp up his efforts.

Sako: in my opinion, you have handled, and continue to handle this situation with the utmost of professionalism. Well done, Grasshopper! Well done! And Thank You...

[Jim Langone]

This info is probably out of date but....(as my per usual "back in the day") the Mechanics lien route might be a mute point. It used to be, that if you were not working directly for the owner, you had to file a "preliminary lien" within 20 days of either the "contract date" or actually starting the work (I can't remember which). The lien was attached to the "parcel" you were working on, thus making the "owner" liable...not the contractor you were working for. If the contractor has already been paid by HIS client, he may careless, as the "owner" of the parcel would have to take action against him (on your behalf) to collect what he owes you.

[jcoffey]

Ian makes a good point. Whatever move is the most efficient (your time) to collect your rightful fee is the best move to make. Try working it out with the owner's assistance. Do you have a clause in your contract to assess a service charge every month for non-payment? If so, assess the charge, and send the contractor a statement showing the additional costs he's racking up every month for not paying. These actions may help as evidence in your small claims case (that you've tried to collect and intend to collect service charges). Even the first purpose of filing the case is not to go to court - it's to get him to come to his senses and pay before you waste your time showing up in court.

John S. Coffey, PE, PLS
San Diego, CA

[land butcher]

I filed a lien beyond the 20 days and without the prelim. the county recorder filed it.
When the property owner found out the contractor could not get me a check fast enough.
Made him pay with a cashiers check and he had to bring a notary with him to my office for me to sign off to release the prelim.

[bryanmundia]

Originally Posted by land butcher

I filed a lien beyond the 20 days and without the prelim. the county recorder filed it.
When the property owner found out the contractor could not get me a check fast enough.
Made him pay with a cashiers check and he had to bring a notary with him to my office for me to sign off to release the prelim.

Butcher, just because the county recorder does in fact record the document does not make it valid and/or legal. There are quite a few documents floating around which have been recorded in numerous jurisdictions throughout the US that if contested in court, would not even be valuable enough to use as toilet paper.

[land butcher]

Originally Posted by bryanmundia

Butcher, just because the county recorder does in fact record the document does not make it valid and/or legal. There are quite a few documents floating around which have been recorded in numerous jurisdictions throughout the US that if contested in court, would not even be valuable enough to use as toilet paper.

True, but it got me my money so what difference does it make.

[sako]

I'm stuck in the small claim filing, because apparently the contactor has moved from his last address to near by City, without his address I can't file the case. The architect who got my topo, and also is not paid yet, told me the guy has vacated his office.

[land butcher]

Yep he's on the run.

Even with a address you can file but he just refuses the certified letter and then you have to hire a service to serve - another group of people you really don't want to deal with.

Find all of his subs you can locate and I'm sure someone will rat him out.

I once had a issue with a nonlicensed guy that did some yard work and left a mess. I tracked him down to another job and showed up there and got in his face in front of his new customer. That got my problem fixed.

[Jim Frame]

"then you have to hire a service to serve - another group of people you really don't want to deal with."

Hiring a process server adds another nominal cost to the matter, but it saves a lot of time and trouble. I've only hired a process server once, but found it to be an easy and -- all things considered -- cheap way of moving the ball down the court.

.

[sako]

I went through the County Recorder's online service and with help of his name I was able to find his residence, then I checked his signiture on the deed of his property agianst the signature on my prposal/ contract, it was identical. then I added his home address to the claim. The county offers to send the letter via certified mail for $10. I requested that the letter to be sent to his residence since the busuiness location is closed. Now i have printed all nessessary documents and will go to the County Court to file the claim.

[sako]

Originally Posted by land butcher

Yep he's on the run.

Even with a address you can file but he just refuses the certified letter and then you have to hire a service to serve - another group of people you really don't want to deal with.

Find all of his subs you can locate and I'm sure someone will rat him out.

I once had a issue with a nonlicensed guy that did some yard work and left a mess. I tracked him down to another job and showed up there and got in his face in front of his new customer. That got my problem fixed.

I was thinking he is capable of doing what you said. Does anybody have any experinece with serving companies?