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Help! Did Work But Not Paid! Appreciate Any Feedback...

 
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Old 12-02-2009, 03:21 PM   #1
 
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Help! Did Work But Not Paid! Appreciate Any Feedback...


Hi.

I just registered after finding this site and I must say that there are some very sharp people here so I thought I'd ask for advice.

First....Thanks for taking time to read this....Now get comfy

I own a small subcontracting business doing ceiling systems, mostly commercial TI's and was hired by a GC to do some work at a TI at a space in a strip mall. After agreeing to the scope and price and signing the bid I proceeded to do the work. And I did get paid for 70% of the work as I billed in progress payments. My scope was done satisfactorily but I never received the rest of the payment.

When I spoke to the owner of the GC (sole proprietor) I was told he would not pay me because the business owner who had hired him as the GC had run out of money towards the end of the project and claimed bankruptcy, never to even open up in the location after the work was 90% completed.

Now the GC is trying to pursue his payment through the prop owners of building.

To make it even more complicated, The prop owners have re-leased the site to a different business that is getting to use the improved site which had all the new work done for the bankrupt guys....Looks like they got a sweet deal.

I'm frustrated because I had a contract with the GC so I feel he should pay me and I shouldnt have to wait for his case with the prop managers to go through litigation which could be a while.

I'm a damsel in distress over this, and I could use some perspective.

Thanks again.
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Old 12-02-2009, 03:26 PM   #2
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Re: Help! Did Work But Not Paid! Appreciate Any Feedback...


The bottom line is you'll go after the person with whom you have the contract, and the owner of the property.

I'm hoping you had a good contract that spells out penalties and damages for non-payment. I'd get your attorney to draft a letter to both, including an intent to lien.

I'm a GC, so I certainly see his side of the issue. If this is a guy who gives you a lot of work, and you hope to continue to work with him in the future--then you may have to suck it up and wait out the process while he tries to get it sorted out.

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Old 12-02-2009, 03:29 PM   #3
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Re: Help! Did Work But Not Paid! Appreciate Any Feedback...


You never filed a lien on the propertiy? If you had they could not have sold it without paying you.
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Old 12-02-2009, 03:51 PM   #4
 
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Re: Help! Did Work But Not Paid! Appreciate Any Feedback...


I know, I know...I definitely should have did the lien which I was lax on because he had no problem with the progress payments, and the job went very fast. My company is small, so I dont have my own lawyer. The amount he owes is a little over a grand, so it would probably cost more to get a lawyer than its worth.

The GC has never hired me again, and he mostly does residential and I do commercial work so we will probably not cross paths again, and he has handled this so rudely with me that I dont want to work with him again anyway.

Someone had suggested that I collect from the bond? Any thoughts?
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Old 12-02-2009, 04:53 PM   #5
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Re: Help! Did Work But Not Paid! Appreciate Any Feedback...


I am not sure how it works on a leased site but you usually have a time window to file a mechanics lien. I would check with the Town or County & find out if you still can.
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Old 12-02-2009, 09:53 PM   #6
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Re: Help! Did Work But Not Paid! Appreciate Any Feedback...


I have noticed that quite a few GCs are adding a pay when payed clause in their contracts, usually worded in lawyer-speak so you don't notice.
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Old 12-02-2009, 10:03 PM   #7
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Re: Help! Did Work But Not Paid! Appreciate Any Feedback...


There's a lot going on here.

You may not have a claim against the owner. The owner contracted with no one and probably received no value from the work. Your state laws will apply here, talk to a lawyer for 15 minutes. In any event, if you waited, you lost out here.

You have a claim against the GC IF your contract includes language that says you get paid when you complete your work. If it says you get paid when the job is finished, you're probably out of luck. If it says you get paid if or when the GC gets paid, you're probably out of luck.

Now, if you have the right contract and you decide to sue, figure on spending a bunch up front. I've done 2 lien foreclosures, one cost me $60K up front the other $30K. Both went to trial, both I won, but after my legal costs, I still wonder what exactly I won.

Figure that if you pursue this it will take 2 years. That is relatively quick, it could take four.

Now you have to ask yourself, if you sue, if you win, can you collect?
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Old 12-02-2009, 10:12 PM   #8
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Re: Help! Did Work But Not Paid! Appreciate Any Feedback...


Quote:
Originally Posted by Amac View Post
I know, I know...I definitely should have did the lien which I was lax on because he had no problem with the progress payments, and the job went very fast. My company is small, so I dont have my own lawyer. The amount he owes is a little over a grand, so it would probably cost more to get a lawyer than its worth.

The GC has never hired me again, and he mostly does residential and I do commercial work so we will probably not cross paths again, and he has handled this so rudely with me that I dont want to work with him again anyway.

Someone had suggested that I collect from the bond? Any thoughts?
If the gc had a bond on the project I would go straight away and collect on that. That is what the bond is for.
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Old 12-04-2009, 01:32 AM   #9
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Re: Help! Did Work But Not Paid! Appreciate Any Feedback...


Lien should have been your first move, but that's a lesson learned.

Now that option seems to be gone, so review your contract with the GC. If there is no language stating payment to you is contingent on the GC receiving payment, he's on the hook assuming you've fulfilled your obligations under the contract.

If, like MarcD said, he has a bond for the project you can go after that. Also, if he's clearly in breach of the contract, you can file a complaint through the registrar of contractors in your state and go after his bond held by the state for his license (Not sure if every state does this, so check).

If that fails, then your last resort is to sue the GC AND the new owner under an equity theory - that they received the benefit of your labor without paying. Depending on the amount involved, the insurance co. for either may just choose to pay you off or give you a substantial portion of it.

Good luck, and let us know how it works out.
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Old 12-04-2009, 01:51 AM   #10
 
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Re: Help! Did Work But Not Paid! Appreciate Any Feedback...


You can't just go down to the county recorders office and file a lien?

That will trump anything with clear title on the property, they will have to deal with your demands or take it to court which you always want to be the first to do that. A def is more apt to be found guilty. I feel you should always be on the offensive.

Give a Proper NOTICE

Then File the LIEN

Then File a complaint against him in an equity court of law.

Thats what I would do in New Hampshire.
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Old 12-04-2009, 02:02 AM   #11
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Re: Help! Did Work But Not Paid! Appreciate Any Feedback...


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You can't just go down to the county recorders office and file a lien?

That will trump anything with clear title on the property, they will have to deal with your demands or take it to court which you always want to be the first to do that. A def is more apt to be found guilty. I feel you should always be on the offensive.

Give a Proper NOTICE

Then File the LIEN

Then File a complaint against him in an equity court of law.

Thats what I would do in New Hampshire.
General, I think his point was that the property has already been foreclosed and a new owner has taken over. Through the foreclosure process, any existing liens would probably have been extinguished and he can't put a new lien on for work he's already done.

You're right that a lawsuit might turn out to be the only shot he has, but I'd go after the GC through the registrar of contractors first. Informal proceedings, and you can STILL sue in superior or small claims court if you're not fully reimbursed by his state bond.
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Old 12-04-2009, 02:14 AM   #12
 
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Re: Help! Did Work But Not Paid! Appreciate Any Feedback...


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General, I think his point was that the property has already been foreclosed and a new owner has taken over. Through the foreclosure process, any existing liens would probably have been extinguished and he can't put a new lien on for work he's already done.

You're right that a lawsuit might turn out to be the only shot he has, but I'd go after the GC through the registrar of contractors first. Informal proceedings, and you can STILL sue in superior or small claims court if you're not fully reimbursed by his state bond.

Well what ever you do MAKE SURE YOU KEEP COPY'S OF EVERYTHING you'll need them if you go to court and if you send him a copy or notice of anything have him sign for it and give him 3 days to respond, if you catch him in default of the 3 days the court will look in your favor if you do your do diligents... Make sure you spell everything out in a formal complaint and explain the Tort as well as his breach of Contract. Add all legal fee's in any complaint or suit against him.

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