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Dimitry K., Esq.
Dimitry K., Esq., Attorney
Category: Business Law
Satisfied Customers: 1611
Experience:  Run my own successful business/contract law practice.
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We are licensed California landscape contractors. We need

Customer Question

We are licensed California landscape contractors. We need some advice. Here is a brief rundown of the situation. 1. We performed a sizable contractual job for a client this summer and stopped work in August while waiting for another trade contractor to
complete some work on the property.We were to return to complete our work when that contractor had finished his. 2. We billed the client for expenses to date and received a response from him saying he had hired another "firm" to come in and repair/replace
our work because it was faulty - to the tune of $10K - but refused to offer proof of any kind. He said the property is owned by his LLC, a real estate holding company and, as such, does not need a contractor's license to hire subs - he can act as the general
contractor. 3. He gave us the ultimatum of either accepting that reduction to our invoice or we would have to give him a detailed accounting of what each individual task we performed cost along with a map showing the exact location of every item installed.
THEN he would decide how much of it he wanted to pay for and decide what it was worth to him. 4. We consulted with our attorney who advised us to "take the money and run" because it would likely be a long, protracted and costly litigation. Did I mention that
the client is an attorney? 5. We then learned that the "contractor" he hired to do the repairs was unlicensed and has a history of performing large jobs well above his "pay grade". We tracked him down and confirmed that he, indeed, had performed modifications
at our client's residence and charged him upwards of $10K. He also refused to give us a copy of his invoice because he's afraid we will turn him in. We are certain that much of the work he performed had nothing to do with repairing our work. 6. Now, it appears
the client is going to sue the unlicensed contractor to retrieve his $10k. If this wasn't so slimy, it would almost be clever. Our question is this...should we take the money and run? Do we have any case against this guy? Should we accept his offer and then
turn both of them in to the CSLB? I know there are gaps here, so please ask for clarification. Thanks.
Submitted: 1 year ago.
Category: Business Law
Expert:  MIAMILAW1127 replied 1 year ago.

Hello. My name is***** and I'm going to assist you with your question.

Expert:  MIAMILAW1127 replied 1 year ago.

I can understand why your attorney told you to take the money and run. At issue is approximately $10k (give or take). I'm assuming your attorney would charge you a retainer fee and bill against that in an hourly fashion.

That being said, litigation can get expensive very quickly when you have an attorney billing you hourly (say $300/hr) plus costs. I'm sure that your client is no stranger to this and probably is aware that you don't necessarily want to spend the money litigating the case because you could potentially recoup very little, if anything. He will probably take advantage of this and exploit it at every opportunity by filing needless motions and making your attorney appear in court, drowning him in discovery, etc. until the bill got to a point that you gave up. I don't think litigation is the way to go for a claim like this as the juice may not be worth the squeeze.

I would try to reach a negotiated settlement with him. Use the information you know and use the fact that you have the CSLB on your side. You also have the California State Bar on your side as well. If he has done something that can be construed as unethical, he can be in for a world of hurt. To be sure, you can contact the California State Bar to see if you have grounds for a complaint. I think these would be cost-efficient tactics to have on your side to try to negotiate fairly against someone who is not playing fair.

Customer: replied 1 year ago.
Thank you for responding. We agree that we should simply settle with this fellow. We are concerned, however, that if we try to negotiate that he will change his mind altogether and simply make us litigate. So...over a barrel so to speak. I don't really want to give him any further indication that we will be filing a complaint against him as it will likely affect his settlement offer. Man. Live and learn, huh. What would constitute unethical behavior on his part that would get the Bar Association interested? He is still licensed but not practicing.
Customer: replied 1 year ago.
We seem to be missing each other. I have a few more questions on this matter. Are you available?
Customer: replied 1 year ago.
I'm exploring the possibility that we make a claim to our general liability insurance regarding this client's claim of "damage". I guess that's the operative word. He has specified that he had to re-do much of our initial installation but does not specifically use the word "repair". He does say that there were numerous things he had replaced because they wouldn't have worked going forward and the irrigation system we installed did not provide him with adequate coverage. So, it sounds like repair that he's claiming. I spoke with our agent today and she thinks there may be grounds for a claim. It would mean, however, that he is the claimant and would receive the proceeds from the insurance. There would be no guarantee he would pay our entire invoice at that point. He may just see it as yet another way to make money on this deal. Would the insurer's involvement and subsequent payment be predicated on a requirement for him to make full payment on our invoice? I feel like I'm grasping at straws. Your opinion is appreciated.
Expert:  MIAMILAW1127 replied 1 year ago.

Well, as officers of the court we cannot engage in any type of fraud or misrepresentation in general. We especially cannot dupe or cheat people out of their money by being shady.

I think that getting the insurance company involved would not be a good decision. The reason being, if he makes a claim, he may just end up keeping the proceeds and not paying the invoice in full. He already pulled a fast one with two service providers. I think the trend would probably just continue.

The best and most reasonable outcome would be to prorate the invoice and pay a settled amount both parties can live with based on the work done and the satisfaction of the customer. However, that doesn't seem like it's much of an option with this client.