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William B. Esq.
William B. Esq., Attorney
Category: Legal
Satisfied Customers: 3693
Experience:  Civil litigation attorney for individuals and businesses.
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I would like your assistance in explaining to me how to address

Resolved Question:

I would like your assistance in explaining to me how to address this situation. On October 30, 2012, a Restoration Company came to my home after Super Storm Sandy and provided mitigation services that lasted three (3) days. My insurance covered the services for $619.44. The company came to inspect on day 3 and was told to take their equipment since the service was completed and someone was home during the day during that time. I work during the day. They promised to come that night and despite calls to them, they never did pick up their drying equipment until day 12. They did not send an estimate to the insurance company for the full job at the time as requested. I just never heard from them, even though I called, so I eventually got another contractor to finish the work. I was waiting on their bill, and in January 2013, I received one for $2575.39; more than the total $2050.62 allowed for all the repair work. They state that I kept their equipment from them so I have to pay for the excess not covered by the insurance company. Of course, that is not true and they are trying to get more money by misrepresenting the facts. I have phone records that show they never called my cell phone where others reached me daily; did not call the home number; did not text, email me or come to the house during the day when someone was at home waiting on them; during the evening when I was at home or at weekends when I was at home. Now they are suing me because I told them I did not hold their equipment and can prove it and the insurance adjuster’s amount is what I can pay and that they are engaging in fraudulent behavior. Please advise if they can get away with this and what is the best course of action I can take. I believe to reward them with excess money I cannot afford is to admit I did something wrong when I did not. Also, please let me know what kind of lawsuit this will be and what type of court is likely to be applicable. Today, I received a notice from the post office that a certified letter is there for me and I believe it is a summons. I await your response.
Submitted: 1 year ago.
Category: Legal
Expert:  William B. Esq. replied 1 year ago.

William B. Esq. :

Dear Customer, thank you for choosing Just Answer. I would like to assist you with your legal issue today. I cannot give you legal advice about what to do with this situation, but I can give you information about what to expect with this type of matter, the potential issues you will face, and hopefully this information will assist you in making your next steps. I will proceed with the assumption that you did receive a summons and complaint (although it is possible that the notice is just a "prelitigation demand letter" based on what I will discuss below).

William B. Esq. :

I am sorry that you have been taken advantage of during this large natural disaster, unfortunately this is common, even in small floods and storms. The contractor's relationship with you is one of contract, so any litigation or dispute will be a "breach of contract" action. There may be related causes of action that are also included such as "conversion" but the primary issue is contract. You should check and review your contract with the cleaning company to see what your rights and obligations are as this will tell you what your dispute resolution procedures are (such as whether or not arbitration is required before litigation or court action). Another good thing to look for is an "attorney's fees clause" which will give the winning party back any attorney's fees (although it is doubtful that attorney's fees will be necessary in this action, as it most likely will fall into a small claims court action).

William B. Esq. :

If you had to go and get another contractor to finish the work that the first contractor had included in his bid, the first contractor is responsible for paying for that work. This can be asserted as a cross-complaint in the event they do bring suit. In addition to this affirmative defense, you can also show as your regular defenses the testimony that you asked them to pick up their property, that you never denied them the opportunity to pick up their property, and that the property was returned to them at their request (you may want to ask for a storage fee, but this might be going too far in a case such as this without a past commercial relationship).

William B. Esq. :

Most Courts in your jurisdiction are seeing too many claims for excess fees on post-hurricane repairs, maxing out insurance proceeds, it is unlikely the Court will look kindly on it.

Customer:

Realistically, I would like to know if this company can suceed in such a case. I have evidentiary documentation to prove they could have picked up their equipment. They used this tactic to get money under false pretenses. Day 12 when they came to pick up their equipment, they tried to get me to sign a completion form however they did not want to fill in the description of services and the 3 day period; so I did not sign. I do not know if that was the contract since that is the only document involved. I do not want to incur high lawyer costs for such a relatively small amount yet I cannot allow them to falsely accuse me of holding their stuff and charge me as well. Is this a matter I can represent myself? Can they sue me for saying they were acting fradulently? How long does such a process take?

William B. Esq. :

While I can't tell you what the outcome of your case will be (I don't have all of the facts necessary to form a full opinion, and I cannot practice law through this site), these types of cases do not often succeed. The matter is still a contract case (whether it is considered a written contract or an oral contract may be disputed, but it is still based on contract). Their version of events does not seem very plausible (and as I noted, this type of claim is not uncommon by contractors attempting to gain the full insurance payment). You can represent yourself in this matter. Small Claims matters in Maryland cover disputes up to $5,000.00 (http://www.courts.state.md.us/district/forms/civil/dccv001br.html). You can also contact your insurance company (the contractor is trying to cheat them as well).

Customer:

Can an insurance company open a case that they told me was closed and settled without informing me, the client? Can they change my original settlement for any reason? I ask this because I found out at the end of March 2013, three months after I had been told my case was closed, settled and I had paid the second contractor; that the first contractor sent the insurance company an estimate for the 2575.39 in December 2012 and I did not know about it. Would the amount from the original estimate $619.44 given to me in November still not be applicable? It seems to me that they were trying to get the insurance company to give them more money because they told them the same thing I found out - that I kept their equipment.

William B. Esq. :

The insurance company can open the case (open vs. closed is just a case management tool). They can increase the amount they pay out of settlement in most homeowner's insurance policy settlements - some other policies are often different. The estimate is applicable, but it is still just an estimate, costs may increase or decrease following the initiation of work but the contractor is expected to tell you when it becomes much more expensive (a rough standard), and there must be a good explanation for any significant increase in costs.

Customer:

Does that mean the overall amount ($2050.62) allowed in the original estimate will increase if they were to increase the original amount for mitigation (the $619.44)? After all the second contractor was paid the difference already and I should not have to pay anything out of pocket. Please clarify.

William B. Esq. :

The original contractor is entitled to be paid for his actual work (for example his original estimate was for $600.00, it might reasonably be assumed he actually performed $600.00 in services). Your second contractor also performed work. He is entitled to be paid for his work. The two contractors should get paid by the insurance company, you should not have to pay anything (unless the cost for both the $600.00 plus the cost of Contractor # XXXXX exceed the $2,000 your insurance company has set aside for your claim).

Customer:

The insurance adjuster allowed the 619.44 for 3 days of mitigation services (she used the standard industry rates etc). However, the original contractor submitted an estimate for 2575.39 for mitigation services to the insurance company which is more than the total allowance for all damage repairs ($2052.62) and this is after the job was completed in full. So, we are starting out with a higher amount from the contractor. So, how can any adjustment be made given the insurance smaller amount and is it ethical to change the amount based on the a late filed estimate of the first contractor especially since they are overcharging?

William B. Esq. :

I am sorry, I might have this wrong, but if the insurance authorized $619.44, the contractor submits an estimate for $2,575.39, and the estimate was accepted, the estimate is an offer for services and the acceptance forms a contract.


My original understanding $2,575.39 included the inflated fee for your "retaining their tools"

Customer:

You are correct in that they did send an inflated bill because they are saying I kept their equipment-it does not mean the insurance companyh accepted it. On the night they came (October), they agreed to work with the estimate of the adjuster since I could not exceed and pay out of pocket. Otherwise, I would have had to find someone else. They submitted their estimate to the insurance company in December after the full job was completed and I only found this out at the end of March. I do not think the insurance company accepted it since the first contractor is coming to me for extra money - hence my query. I just wanted to know if any changes could be made to my case which was closed and settled and money paid for services given that the first contractor's estimate is much higher than the total allowed for the job 2052.62. Can the insurance make changes even a little to their original 619.44 which was a figure derived from industry rates?

William B. Esq. :

If they send the estimate after the work is done, no, they cannot rely on it. The fact that the insurance paid their inflated bill does not prevent them from reopening the file and reevaluating what they have already paid on this case (this would not be the only file with this problem). If the insurance company is the one that approved a fraudulent bill which caused you to have to pay out of pocket for the final repairs, you may be able to talk them into helping you out (or maybe paying in full) the additional charge for that second contractor - they should cover the cost - without having to bring this matter into small claims court.

Customer:

I just wanted to state again that the insurance company did not pay the inflated bill so that is why the original contractor is coming behind me to pay more for mitigation services. Since they did not collect their equipment, they used that as the reason to come after me for more money. Thankfully, I have a lot of supporting documentation as I mentioned before. I just wanted to find out/clarify whether my case could be re-opened for whatever reason and changes made after all the repairs had been completed by another contractor and that would cost me in any way.

William B. Esq. :

From what it sounds like (with all the necessary disclaimers) - this contractor is just trying to get money fraudulently, his most likely target is your insurance company (not you). Either way, it sounds like you have plenty of information and evidence to support your position on the matter, and the legal claims we discussed at the beginning of the chat should be sufficiently supported (on your side). The idea that he is entitled to a large sum of money for failing to come pick up his equipment is not a tenable position given the facts as you have stated them.

William B. Esq. :

While cases can be "re-opened" it is only done so for a couple of reasons: the two main ones are (1) as we discussed above, the damage is greater than earlier understood and requires more work; or (2) there is a matter of fraud that requires investigation by the insurance company to recover these amounts. Any reopening in the case as you have stated it would not create additional liability for you.

Customer:

Thanks for your time and help. I think if this goes to small claims court, I will represent myself and countersue based on the circumstances. Thanks again.

William B. Esq. :

You are welcome. Best of luck with this matter (again, I am sorry to hear of this type of sharp practice). Please let me know if I can be of any further assistance. Best regards, Bill

William B. Esq., Attorney
Category: Legal
Satisfied Customers: 3693
Experience: Civil litigation attorney for individuals and businesses.
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William B. Esq.
William B. Esq.
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Civil litigation attorney for individuals and businesses.