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Subcontractor Lawsuit

 
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Old 04-18-2019, 04:49 PM   #21
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Re: Subcontractor Lawsuit


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Originally Posted by cwatbay View Post
I think that KAP may be right about the one post wonder. No history, no profile, joined today to profess his sins of stealing the money and avoiding payment.

I know where this guy is, I am from a neighboring city. The city the OP hails from is, well..."low rent"..if you get my drift. There is a lot of "fly by night" unlicensed work that goes on all through that area. Not that it doesn't have some good points.....like some cheap gas stations as long as someone guards your car while you fill up.

Nonetheless, CT is not a good confessional. Admit it OP, you "f'd" up, you took money that belonged to someone else, and you avoided them when they tried to contact you to get answers or work it out. I would hate to think that this is your normal business model.

Easter Sunday is coming up. Go to church, confess your sins (like stealing and lying), then call the guy up and work out a plan.
I sure hope that you also confess your sins on easter, friend...making a lot of assumptions here... none of which true.. if you knew the city you claim to know about you'd know that it has both good and bad areas, as every city.
Why do you assume I lied? Why do you assume I stole? You are telling me you have never held off on paying a sub in order to finish another job thinking you'd pay him promptly? Let he who has never done that here cast the second stone.
I have NOT lied to him, have not avoided him, have not stolen from him as it was a genuine mistake based on the word of a project manager, which did not come true. If my invoices were paid today, I'd pay him tomorrow.
So, please back off, take a breath, stop judging, please and answer my specific question
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Old 04-18-2019, 05:15 PM   #22
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Re: Subcontractor Lawsuit


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Ok, So I will take back what I said about Seaside, unlicensed hacks and so forth. And, I'll tone down what I said about stealing and lying.

Based on your continued posts, it looks more like you gambled and lost. By what you have said, you anticipated getting paid at a certain time, and, you diverted money that should have been paid, to other projects.

However, your bet that you would get paid by a specific time didn't happen. Based on my experience, it never happens. Regardless of any contract, hand shake promise, notarized docs, whatever, it doesn't happen. Don't count on your payment being the exception to the rule.

As others have said, call them up, meet face to face, admit you don't have the money, work out payments .....and interest if necessary.

The fact that the other party has taken the time and expense to file a lawsuit means that this has not been a sudden, overnight issue.
Appreciate the last post, CWATBAY. Please ignore my reply to your earlier post.
Exactly, I gambled and i lost. it is hard to say no to a job, especially when we are promised the payment is coming promptly. It rarely goes that way but hope and optimism makes fools of many of us. The sub knows exactly what I am waiting for. They reached out recently asking me to give them the email of the person to contact in order for them to get paid for a job they also did for that company.
At this point it is not about payment plans for them, it is about how to protect their interest IN CASE i declare bankruptcy., which I understand. So this lawsuit is pretty straightforward, which is why I don't feel I need a lawyer. Judge: how do you plead? guilty.
Now what? I plan to pay them, best I can do is a payment plan.
But now they are on record as first claimant in case I go bankrupt, which i plan not to
SO my issues at this point is that I don't want to take a lawyer and have to pay him if I don't need to, nor do i want the surety company to get me one which I would have to pay for if I don't need to.
And, the second issue is that the contract specifically specified mediation, then arbitration then lawsuit, which seems then I have a good case for
1= walking back the lawsuit to mediation
2= not being forced to hire a lawyer
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Old 04-18-2019, 07:57 PM   #23
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Re: Subcontractor Lawsuit


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I did not ignore him. WE spoke at least every week. I kept him aware of what was coming, or not, relating to the money i was owed. Our relationship was very civil, not contentious at all as I have always been upfront with him. I am sure he knows I am good for it, but he says their inner structure requires him to file a lawsuit IN ORDER TO PROTECT their interest. I told him I understand and can no longer ethically ask him to wait. I am sure once I start making big payments, the lawsuit might go away but as for now, I need to know how to handle the lawyer issue.
Welcome back...

We usually get threads/posts started by new posters who post and then disappear... glad you stuck around...

$30K is a big nut... for BOTH of you... in your case though, with a better understanding of your situation from the latest posts, you have leverage to an extent. He wants you to honor the contract, as you should, so he is under the same obligation despite his reservations. And that includes the mediation/arbitration clause.

Assuming you don't have the capital/credit for a short term loan? While I loath financing, in this situation, if you were able, it would end up saving you a lot of other costs (i.e. - lawyer, court costs, collections, etc.) mitigating the loss. If you could, it would also give you more control over the situation.

That said, a face to face WITH A SUBSTANTIAL WRITTEN PLAN is in order... I say written, because it demonstrates commitment than verbal...


I don't know your state laws, so look into a Pre-Paid Legal Services plan... they have them for businesses as well. This way, for a small monthly fee, you can get free advice from an attorney in your state, on the legality of him skipping the mediation/arbitration phase of the contract.
1. Come up with a check that is four-figures (I'm going to suggest $2500, which is $30K / 12).

2. Since he already knows your apologetic about the situation, explain to him that going to court costs you both money, and that your contract calls for mediation/arbitration before that even happens. But the good news is that only one of those steps are necessary (i.e. mediation, which is where you're at), and the only thing arbitration would be good for is to settle the debt and going to court to confirm he's owed the debt. But neither of you needs to waste money on a lawyer to do establish that fact. You fully admit you owe him the money, and want to pay him. The hard fact of the matter is you just don't have $30K to hand to him to satisfy the debt. But he wants to be assured he's going to be paid without you declaring bankruptcy on him, and the fact is, you WANT to pay him.

3. Pull out your written plan (the numbers you will change based on your actual circumstance) along with your check. Place the check to the side. Tell him you are ware he's concerned about you going bankrupt and you don't blame him. What you are going to commit to in writing (and you both sign), is a minimum of $2500/month for one year or until the debt is paid in full (dealing in the numbers you are dealing in, $2500/month should not be a problem). If you get the invoices paid that allow you to pay him sooner, you will, but he can count on the minimum each month until it's paid. To back this up, upon getting written confirmation that the lawsuit has been dropped in lieu of this arrangement, you'll not only be giving him that check you pulled out earlier, that represents your first payment, but you also be providing him a personal guarantee in writing that he will be paid to remove his concern about your business going into bankruptcy. If the lawsuit isn't pulled, you'll be forced to give that check to a lawyer instead for a retainer to settle this in court, which could take even more time to even get to that point than what you're offering, and even longer to collect. Be sure he understands that should you not follow through on this written arrangement that he could always refile his lawsuit. The fact that you made this offer PRIOR to going to court goes in your favor, whether in actual mediation/arbitration or court, and may potentially get your court costs covered (talk the the lawyer). Be sure to re-emphasize that your only goal here is to get him paid. That's his goal as well... so finding a win/win is in both your interests...

This all assumes you are sincere about wanting to pay him... Best of Luck... 8^)
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Old 04-18-2019, 08:02 PM   #24
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Re: Subcontractor Lawsuit


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Originally Posted by KAP View Post
Welcome back...

We usually get threads/posts started by new posters who post and then disappear... glad you stuck around...

$30K is a big nut... for BOTH of you... in your case though, with a better understanding of your situation from the latest posts, you have leverage to an extent. He wants you to honor the contract, as you should, so he is under the same obligation despite his reservations. And that includes the mediation/arbitration clause.

Assuming you don't have the capital/credit for a short term loan? While I loath financing, in this situation, if you were able, it would end up saving you a lot of other costs (i.e. - lawyer, court costs, collections, etc.) mitigating the loss. If you could, it would also give you more control over the situation.

That said, a face to face WITH A SUBSTANTIAL WRITTEN PLAN is in order... I say written, because it demonstrates commitment than verbal...


I don't know your state laws, so look into a Pre-Paid Legal Services plan... they have them for businesses as well. This way, for a small monthly fee, you can get free advice from an attorney in your state, on the legality of him skipping the mediation/arbitration phase of the contract.
1. Come up with a check that is four-figures (I'm going to suggest $2500, which is $30K / 12).

2. Since he already knows your apologetic about the situation, explain to him that going to court costs you both money, and that your contract calls for mediation/arbitration before that even happens. But the good news is that only one of those steps are necessary (i.e. mediation, which is where you're at), and the only thing arbitration would be good for is to settle the debt and going to court to confirm he's owed the debt. But neither of you needs to waste money on a lawyer to do establish that fact. You fully admit you owe him the money, and want to pay him. The hard fact of the matter is you just don't have $30K to hand to him to satisfy the debt. But he wants to be assured he's going to be paid without you declaring bankruptcy on him, and the fact is, you WANT to pay him.

3. Pull out your written plan (the numbers you will change based on your actual circumstance) along with your check. Place the check to the side. Tell him you are ware he's concerned about you going bankrupt and you don't blame him. What you are going to commit to in writing (and you both sign), is a minimum of $2500/month for one year or until the debt is paid in full (dealing in the numbers you are dealing in, $2500/month should not be a problem). If you get the invoices paid that allow you to pay him sooner, you will, but he can count on the minimum each month until it's paid. To back this up, upon getting written confirmation that the lawsuit has been dropped in lieu of this arrangement, you'll not only be giving him that check you pulled out earlier, that represents your first payment, but you also be providing him a personal guarantee in writing that he will be paid to remove his concern about your business going into bankruptcy. If the lawsuit isn't pulled, you'll be forced to give that check to a lawyer instead for a retainer to settle this in court, which could take even more time to even get to that point than what you're offering, and even longer to collect. Be sure he understands that should you not follow through on this written arrangement that he could always refile his lawsuit. The fact that you made this offer PRIOR to going to court goes in your favor, whether in actual mediation/arbitration or court, and may potentially get your court costs covered (talk the the lawyer). Be sure to re-emphasize that your only goal here is to get him paid. That's his goal as well... so finding a win/win is in both your interests...

This all assumes you are sincere about wanting to pay him... Best of Luck... 8^)
Thanks for this KAP...very comprehensive and insightful. Will do.
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Old 05-04-2019, 02:24 PM   #25
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Re: Subcontractor Lawsuit


So you forced your roofing sub into the banking business? Ace Roofing and Loan? Not cool.
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Old 05-07-2019, 04:21 PM   #26
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Re: Subcontractor Lawsuit


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I sure hope that you also confess your sins on easter, friend...making a lot of assumptions here... none of which true.. if you knew the city you claim to know about you'd know that it has both good and bad areas, as every city.

Why do you assume I lied? Why do you assume I stole? You are telling me you have never held off on paying a sub in order to finish another job thinking you'd pay him promptly? Let he who has never done that here cast the second stone.

I have NOT lied to him, have not avoided him, have not stolen from him as it was a genuine mistake based on the word of a project manager, which did not come true. If my invoices were paid today, I'd pay him tomorrow.

So, please back off, take a breath, stop judging, please and answer my specific question
He's not assuming you stole. You did, hoss. I just got paid for an invoice, marked up my mason, electrician, plumber and spray foam contractor. Now say I didn't give that money to the mason (no worries there I paid before I went an invoice to my client) and used that money to buy materials to start a deck project, I would be stealing.

You said you used their money to start another job. That's also co mingling funds and could be a felony.

No sympathy, you shouldn't be in business dude. No capital. Pay the man and his lawyer. Sell your truck or something

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Old 05-07-2019, 04:27 PM   #27
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Re: Subcontractor Lawsuit


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He's not assuming you stole. You did, hoss. I just got paid for an invoice, marked up my mason, electrician, plumber and spray foam contractor. Now say I didn't give that money to the mason (no worries there I paid before I went an invoice to my client) and used that money to buy materials to start a deck project, I would be stealing.

You said you used their money to start another job. That's also co mingling funds and could be a felony.

No sympathy, you shouldn't be in business dude. No capital. Pay the man and his lawyer. Sell your truck or something

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in other words, jaws, you have no answer to my query and just want to feel good making a moral judgement instead? Since you have never similarly sinned, I accept your stone throwing... go ahead... enjoy...
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Old 05-07-2019, 04:31 PM   #28
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Re: Subcontractor Lawsuit


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in other words, jaws, you have no answer to my query and just want to feel good making a moral judgement instead? Since you have never similarly sinned, I accept your stone throwing... go ahead... enjoy...
I don't need to enjoy your misery- just my disdain for competing against your type my entire career while honest guys did things the right way.

Your quandary is pay the lawyer, pay the roofer. If it was me your be paying my interest as well, sir.

Hope you learn well from the mistake and go get some operating capital together before continuing in contracting. Hope your roofer was in an ok spot to take a 30k hit.

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Old 05-07-2019, 04:56 PM   #29
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Re: Subcontractor Lawsuit


Long ago, I was the sub on the receiving end of a similar 10k hit. Luckily, I had a decent amount of capital prior to starting my business, so that such a hit wasn't "business ending". It has always amazed me how so many GC types sign these mega dollar contracts, and yet have less business capital than most of their subs.
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Old 05-07-2019, 05:06 PM   #30
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Re: Subcontractor Lawsuit


my point exactly... jaws, of course you, saint john, have never made a mistake, right? You have never waited to pay a bill thinking you would be able to pay it before it is due? You, saint john, have never taken a shortcut in your career, whether it comes back to bite you in the but or not?
if so, you, saint john, are the exception, not the rule, a privileged one indeed. so brace yourself, friend, one of the interesting things about throwing stones, making overwhelming moral judgments, is that they often bounce back, they often become a challenge to the universe that we will never be challenged similarly, or would pass such challenge every time... start looking behind your back, those wheels are in motion... When they do, I will remember to be more gentle...
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Old 05-07-2019, 05:14 PM   #31
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Re: Subcontractor Lawsuit


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my point exactly... jaws, of course you, saint john, have never made a mistake, right? You have never waited to pay a bill thinking you would be able to pay it before it is due? You, saint john, have never taken a shortcut in your career, whether it comes back to bite you in the but or not?
if so, you, saint john, are the exception, not the rule, a privileged one indeed. so brace yourself, friend, one of the interesting things about throwing stones, making overwhelming moral judgments, is that they often bounce back, they often become a challenge to the universe that we will never be challenged similarly, or would pass such challenge every time... start looking behind your back, those wheels are in motion... When they do, I will remember to be more gentle...
Don't get your panties in a bunch and start getting sassy because you don't like it when honest men tell you you made a bad mistake. You came on here and ask for advice. You're getting it.

Ive made plenty of mistakes buddy, and will make many many more, but getting paid for somebody's labor and not paying them for it is definitely not one of them. You can start finger wagging at me all you want, but it is not something you learn as an adult, it's something you learn as a boy. When you shake a man's hand or sign a contract you do what it says. You do not spend money that is not yours, you pay your bills before you play.

You took a Gamble and lost, and you lost somebody else's money. It would be different if he was in on it with you but he was not. He's not a partner he's a man who's working for you. Don't get pissy with me because my ass is chapped because you burned your roofer. Take your lumps like a man and go get the money.

Btw no I have never not paid a sub. I believe I have that reputation. I have spent my whole career building operating capital and I'm still doing it. I have discussed it on this for many many times. I preach operating Capital to new businesses all the time. I also preach paying your subs on Friday if you get a bill that week. Not waiting to get your check or robbing Peter to pay Paul. Simple stuff You can look back at some of my posts from 2011 and see me discussing not having enough Capital to do some of the projects I wanted to do. Because I could not pay my subcontractors and vendors if I did not get paid.

Not really the exception, plenty of good contractors out there. Just not as many as there should be.

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Old 05-07-2019, 05:23 PM   #32
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Re: Subcontractor Lawsuit


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Don't get your panties in a bunch and start getting sassy because you don't like it when honest men tell you you made a bad mistake. You came on here and ask for advice. You're getting it.

Ive made plenty of mistakes buddy, and will make many many more, but getting paid for somebody's labor and not paying them for it is definitely not one of them. You can start finger wagging at me all you want, but it is not something you learn as an adult, it's something you learn as a boy. When you shake a man's hand or sign a contract you do what it says. You do not spend money that is not yours, you pay your bills before you play.

You took a Gamble and lost, and you lost somebody else's money. It would be different if he was in on it with you but he was not. He's not a partner he's a man who's working for you. Don't get pissy with me because my ass is chapped because you burned your roofer. Take your lumps like a man and go get the money.

Btw no I have never not paid a sub. I believe I have that reputation. I have spent my whole career building operating capital and I'm still doing it. I have discussed it on this for many many times. I preach operating Capital to new businesses all the time. I also preach paying your subs on Friday if you get a bill that week. Not waiting to get your check or robbing Peter to pay Paul. Simple stuff You can look back at some of my posts from 2011 and see me discussing not having enough Capital to do some of the projects I wanted to do. Because I could not pay my subcontractors and vendors if I did not get paid.

Not really the exception, plenty of good contractors out there. Just not as many as there should be.

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hahaha...yep, getting sassy indeed... panties in a bunch.... you have given no advice, friend, that is the issue. I asked a specific strategic question, which you overlooked in exchange for much moralizing... you can keep that, you are preaching to the choir, nowhere have i denied my obligations, responsibilities and fault in this, I know that already.
But that is not what matters to you, the beating up and stoning is what gives you your kicks. fair enough. Indulge... glad to be of service
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Old 05-07-2019, 05:28 PM   #33
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Re: Subcontractor Lawsuit


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hahaha...yep, getting sassy indeed... panties in a bunch.... you have given no advice, friend, that is the issue. I asked a specific strategic question, which you overlooked in exchange for much moralizing... you can keep that, you are preaching to the choir, nowhere have i denied my obligations, responsibilities and fault in this, I know that already.

But that is not what matters to you, the beating up and stoning is what gives you your kicks. fair enough. Indulge... glad to be of service
Like my niece says, whatever bro. I do not beat people up to feel better about myself. I feel fine, my bills are paid and the till is not empty. LOL..

Anyone who's been on here for any length of time will tell you this is by far the easiest way to put a burr under my saddle. Not paying people for the work that they've done. I wouldn't piss in the face of a man who owes me $320 from when I was 18 years old, if he was on fire. One of our own members, in fact a roofer is going through this same trouble right now because of someone not paying him.

I did give you advice. Pay the man, dude. I don't have any further advice to give you because I'm not acquainted with this particular issue, I guess k a p gave the best advice I see in that payment plan. Although I would probably not accept it I might if I needed the money bad enough and thought you would get me paid.

I hope you are able to get this straightened out and learn from your mistakes and fly the straight path going forward. One can certainly learn from their mistakes. Good luck to you, and your roofer.



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Old 05-07-2019, 05:37 PM   #34
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Is this commercial, multifamily or residential? How far past due is it? I tell you what I'll text my lawyer (construction) and give you the $5 version of what he says he would do. Anything past that the dude will send me a bill. Lol

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Old 05-07-2019, 05:42 PM   #35
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Re: Subcontractor Lawsuit


Amazing...you were paid, failed to pay the sub, and now want some way out....if you did that to me, I would have already filed liens on the project so the owner could pay me. I don't know how you get out of this mess, but if I were you, I would think about what separates general contractors from everyone else......it is simple: We are expected to manage the responsibilities, including payments due to subs and suppliers, with client money. Now I don't know if what you have done is illegal, as in co-mingling funds...that would be up to you to find out....but it is a fact that you have committed fraud, just like if you were to kite a check. It may work out a thousand times, but there are laws against it.

Getting upset for a frank appraisal of your failure here tells all of us that you have no real regret, but expect to make your sub suffer for your poor judgement. This isn't about if we have ever made mistakes....we all have....but I would guess Jaws and I and the other contractors here have never deliberately burned a sub on payment. Think about it this way also: You hired the sub, he did his job, and now he isn't getting paid, and I would guess his profit is in the final payment. Tough for him.

I hope you do the right thing...and get to a bank and borrow the money to pay your sub...if you don't have the credit, then you need to find another gig, and before you bail, go to the owner of the project and tell that what happened.....you owe it to them.
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Old 05-07-2019, 05:49 PM   #36
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Re: Subcontractor Lawsuit


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Is this commercial, multifamily or residential? How far past due is it? I tell you what I'll text my lawyer (construction) and give you the $5 version of what he says he would do. Anything past that the dude will send me a bill. Lol

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much appreciated, Jaws. It is hospital work...paid him over $140, 000 already, remaining around $30,000. Was a 30000sf roof job.
I have reached out for a payment plan spread over one year, with caveat that I would pay it in full as soon as I am paid.
Past 4 months... the bill was sent over 6 months ago though they had to come back to tighten up several times.
But new denouement is that surety bond company is now suing me for the 15000 they paid them. I told them I was not gonna challenge the lawsuit on merit grounds because it is warranted. But still hope to, when we get to court, the judge will bring back the contract I signed, theirs, in which mediation then arbitration are required first steps.
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Old 05-07-2019, 05:52 PM   #37
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Amazing...you were paid, failed to pay the sub, and now want some way out....if you did that to me, I would have already filed liens on the project so the owner could pay me. I don't know how you get out of this mess, but if I were you, I would think about what separates general contractors from everyone else......it is simple: We are expected to manage the responsibilities, including payments due to subs and suppliers, with client money. Now I don't know if what you have done is illegal, as in co-mingling funds...that would be up to you to find out....but it is a fact that you have committed fraud, just like if you were to kite a check. It may work out a thousand times, but there are laws against it.

Getting upset for a frank appraisal of your failure here tells all of us that you have no real regret, but expect to make your sub suffer for your poor judgement. This isn't about if we have ever made mistakes....we all have....but I would guess Jaws and I and the other contractors here have never deliberately burned a sub on payment. Think about it this way also: You hired the sub, he did his job, and now he isn't getting paid, and I would guess his profit is in the final payment. Tough for him.

I hope you do the right thing...and get to a bank and borrow the money to pay your sub...if you don't have the credit, then you need to find another gig, and before you bail, go to the owner of the project and tell that what happened.....you owe it to them.
God, joasis, really... please have the decency to at least follow the thread before you open your big mouth... you are regurgitating tropes and assumptions I have already addressed above..come on man... sure hope you are not as ill prepared in your trade...
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Old 05-07-2019, 06:11 PM   #38
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Re: Subcontractor Lawsuit


Chill out, folks. He's already admitted multiple times that he screwed up. Give him a chance to learn from it before you burn him at the stake.

Maodo, best I can make out from all the back & forth is that your prime question is whether you have to hire an attorney. The answer is that no, you don't have to. Would it be wise to do so? Hell yes.

This thing gets into the court system, you could be facing punitive damages in addition to what you already fairly owe the sub. Lawyers know what to expect and defend against in that respect; you and I... probably not. I don't envy your predicament.
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Old 05-07-2019, 06:11 PM   #39
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Re: Subcontractor Lawsuit


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Originally Posted by maodo View Post
much appreciated, Jaws. It is hospital work...paid him over $140, 000 already, remaining around $30,000. Was a 30000sf roof job.

I have reached out for a payment plan spread over one year, with caveat that I would pay it in full as soon as I am paid.

Past 4 months... the bill was sent over 6 months ago though they had to come back to tighten up several times.

But new denouement is that surety bond company is now suing me for the 15000 they paid them. I told them I was not gonna challenge the lawsuit on merit grounds because it is warranted. But still hope to, when we get to court, the judge will bring back the contract I signed, theirs, in which mediation then arbitration are required first steps.
Lawyer is on vacation. Of course.

This is a close friend who is a self made commercial GC, typing from his big house overlooking the lake, I've learned a lot about contracting from him. Dude knows his stuff inside and out with commerical contract law

Why will the hospital not pay?

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Last edited by Jaws; 05-07-2019 at 06:14 PM.
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Old 05-07-2019, 06:13 PM   #40
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Re: Subcontractor Lawsuit


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Originally Posted by Tinstaafl View Post
Chill out, folks. He's already admitted multiple times that he screwed up. Give him a chance to learn from it before you burn him at the stake.

Maodo, best I can make out from all the back & forth is that your prime question is whether you have to hire an attorney. The answer is that no, you don't have to. Would it be wise to do so? Hell yes.

This thing gets into the court system, you could be facing punitive damages in addition to what you already fairly owe the sub. Lawyers know what to expect and defend against in that respect; you and I... probably not. I don't envy your predicament.
Lol he walked into a hen house and said he just killed a hen knowingly.

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