hey guys,

Construction troubles. Need a lawyer to consult with about sub-contractor gone wrong. I have a solid case and am trying to settle up the small amount of money involved. . . (under $4000) but would like to consult with someone to make sure I'm on the right track and that I indeed have a claim, and indeed he violated 2 sections of California Business and Professions Code.

Please let me know if you are a lawyer and do this kind of little stuff. . . or if you have any good leads to someone I can talk to about it. This isn't a project buster, as I've already lined up my own crew to finish the job at a considerable savings, but it's set me back time-wise and is agrivating

thanks,
'Chung

It was discussed on the forum some time ago that you basically need a local lawyer that knows the local regulations. Hopefully someone in your area will still speak up..

Do you have a true subcontract or did you sign his proposal?

Do you have anything in writting?

Not a true sub contractor. We had contract for him to do HVAC, insulation installation only (I supply materials), steel resilient channel, and double layer drywall.

Long story short is he has been in for a total of 2 days with 1 employee for the entire project. I personally had to finish insulation w/ my worker. . . which is the only phase of the project that is finished. He's walked off the job 2x without prior or post communication. I've decided I need to move forward, and he is not able to do the job at this point (lack of employees). It takes 3 people to do this kind of sheetrock.

I gave a $6000 initial payment which was illegal of him to request.

BUSINESS AND PROFESSIONS CODE SECTION 7159(d)
If the payment schedule contained in the contract provides for
a downpayment to be paid to the contractor by the owner or the
tenant before the commencement of work, the downpayment may not
exceed two hundred dollars ($200) or 2 percent of the contract price
for swimming pools, or one thousand dollars ($1,000) or 10 percent of
the contract price for other home improvements, excluding finance
charges, whichever is less.
(e) A schedule of payments showing the amount of each payment as a
sum in dollars and cents. In no event may the payment schedule
provide for the contractor to receive, nor may the contractor
actually receive, payments in excess of 100 percent of the value of
the work performed on the project at any time, excluding finance
charges, except that the contractor may receive an initial
downpayment authorized by subdivision (d).

Currently, we are trying to settle on how much he will refund me.

He claims $4200 in expenses.

I claim no way, you've only been on the job 2 days in the entire process. I'm not going to give you $1000 profits when I've had to do all the work so far. Because I had to get my worker to come in and do the work, or do the work personally so far, I know all the labor/materials breakdowns. He is demanding to get paid premium over the top of his expenses.

I've offered him a settlement of $2500 refund, and I think that's pretty generous since it gives him an outright profit on the deal of over $800 which my wife thinks is wayyyy too generous. So, I'm waiting again for him to respond.

-'Chung

Greg Plaskett
Construction/Contract Lawyer
707-645-1455
Vallejo, Ca

KT

You paid him before he did the work and now he won't show up.

The code you quote is useless because you gave him the money. He asked for it, you gave it to him. Sorta hard to go back and say, "hey, you can't do that".

Don't get a lawyer involved. Deal with it yourself and save spending more on legal fees.

He may be wrong in what he has done but you have to blame yourself for getting into it to begin with. Sorry I can't say this is all his fault. Some things you learn the hard way.

Just for some of my back ground, I'm a senior project manager for one of the largest general contractors in the Southeast. I've been dealing with subs for 25 years. It doesn't get any easier.

Paul

Yup yup,

I'm definitely the one who got myself into this mess. People who know me know how laid back I am, and how I like to be accomodating and easy to work with. I tried to do the same for a nice guy who is just getting started with his construction business in the Bay Area and who gave a darn reasonable bid on the job.

But right now, I feel like my efforts to help him out even to the point of doing his job for him in terms of sourcing materials, actually doing his work, and getting employees is getting stomped on.

I've been negotiating in good faith. . . presenting my numbers and calculations up-front. . . leaving good allowances for profit on his end despite the abismal almost non-job performance.

I see it as an ethics issue. I pay a contractor to gain these key benefits:

1. increased speed/efficiency
2. higher quality work
3. peace of mind (no need to supply/manage except for timely payment)

I've realized none of these advantages and so feel I should not have to pay premium for them. Cover the costs. Definitely. Give a reasonable profit for the 3 days spent on the job.. .. yes. But gains over and above that. . . no way.

I'm in a position where the money isn't going to kill me even if I lose it all. Other future clients may not be in this position and would be forced to cave in, but I feel somewhat of an obligation to send a message that you can't operate your business with this type of mis-management and pawn your losses off on the client. That's unethical.

Part of me feels like I'd rather pay a lawyer to will work hard for me than to pay a contractor who ignores my phone calls, doesn't fullfill his contract, and demands to be paid for it anyways.

Either way, I'll see if he accepts my termination terms that I've been flexing his direction tonight. . . or if he gets back to me. And if he actually doesn't get back to me, I may have to go to the Licensing Board and enter into their dispute/claims/mediation system.

-'Chung <_<

File a complaint with the CSLB if he is a licensed contractor. They don't take this sort of thing lightly and could end up revoking or suspending his license.

I'm not loving subs these days either. One job I'm on, 170 million or so, the GC and there subs have not built one single cotton picking thing correctly. I'm about to go psycho in one of there front end loaders or the gradall and tear some stuff up!!

I would tell him your step is the licencing board to get him to respond.
If no response, document everything including and number of calls and dates and then take it to the board. It may take awhile but he'll hear from them.

Paul

When you call the CSLB ask about attaching his bond.

All constractors are required to have this. You may be able to hire someone else with his bond. He can't get his license back in good standing until bond is paid back.

KT

That is if he posted a performance bond. It doesnt sound like it though.

Chungman...

Its been awhile since I have dealt with this but I seem to recall that there is a California Contractors State License Law limit of 10% of the job or $1000, whichever is LESS that he can receive as a good faith deposit. The fact the he requested and received more than the $1000 says alot about your claim.

Considering the relatively small money, I would first atttempt to go to the CSLB and avoid the lawyers for the moment, but be careful to preserve all your legal rights should you need the big guns later.

There is always small claims court which generally sides with the consumer.

Some things they dont teach in architecture school eh?

Ha haa. . .

They don't teach you jack at Berkeley's architecture school undergrad. Except how to talk all funny so normal people don't understand you and you sound like you know what you're saying.

Actually, I probably could have learned a lot. I was just too busy being "artsy" and it was fun.

I noticed a couple of you guys work in construction management of one sort or another. . . thought I'd post my numbers to check and see if I'm off base.

Scope of Contracted work:

completed RC-1 23 hours
install remaining steel ~24 hours
install sheetrock ~380 hours (2 layers 5/8")
tape/mud ~24 hours
primer ~8 hours
paint (2 coats) ~16 hours
----------------------------------------------------
total ~475 hours

total hours completed:
Alberto (I hired/managed him) 22 hours steel
Rich (contractor's guy) 1 hour steel
-------------------------------------------------------
total time actally completed ~23 hours
%complete .048421



5/8" sheetrock
5271 square feet/ 32 = 164.7 pieces * $5.50 = $905.85
taping supplies $150
paint $300
fasteners $60
--------------------------------
total: $1,415.85 = materials cost (contractor pays for)

So, here is how the equation sets up.

(contract price - materials cost) * (percent of work
completed) = value of work

(12,200 - 1,415.85) * (.048421) = $522.18


So here's how I broke down money so far:

$1500 contract insulation cost (complete)
$200 fix drain (2 hours not in contract)
$522.18 value of drywall work (%4.84 complete)
$750 steel materials (contractor paid for)
---------------
$2972.18 total
- $6000 deposit
---------------
3027.82 total refund owed

I'm offering to settle at $2500 which I think is a nice gesture and lends a good profit margin given:

$522.18 total value of work
- $374 22 hours alberto (my guy actual cost)
- $20 1 hour Rich ( his guy actual cost)
-----------------
$128.18 24.5% profit margin on labor
+ $527.82
------------------
$656 profit on job his guy spent 1 hour on.



I think I'm being nice. . .and furthermore reasonable. Had he come in for 3 more days w/ 24 more total work hours, percent complete would have jumped to 10% and he would have got $1078.00 total value of work completed. . . and increasing from there if he came in. . . but, his guy came in for 1 hour. This is contracting. . . seems this is how you calculate profit margins in contracting.

Just take him to small claims court. But, just because you get a judgement against him, doesn't mean you'll collect. Better to call Judge Judy. No, I'm not kidding. If you get in front of her, and win, you're guaranteed payment. If he's licensed, you'll get your money, if not, you're screwed. It's been 10% up front for a long time dude. And I've never used a contractor for anything in my life. How does anyone nowadays not know, you never pay anyone upfront. You then give them no incentive to finish the work. If you want it done on time, you should offer him a bonus for early completion, and a penalty for late completion. You don't need a lawyer, they'll just take half of the money and do nothing you couldn't do yourself.

This sounds like a commercial job since your useing 2 layers of 5/8 for fire code if it is , is it YOUR job or are you the GC?
the reason i ask is this if it is your job then you should have had to sign a release from the contractor stating that he can file a workers lien on the property if not paid , california is only one of a handful of states that require this form of paperwork ( from the you to the contractor) if you did sign such a release you might be in for a fight ,

if you are the GC then the sub should be required to have a bond on any project that was awarded according to bid, that bonding company is in business to make sure that your project gets completed for the amount bid.
either way as much as i dislike lawyers the get paid because they get results.
you need results, you need a lawyer. sadly the money recovered probably wont be enough to pay for these resluts gotta love those billable hours.
I ve done this for 15 years , i dont want to sound preachy but ; ALWAYS HAVE A CONTRACT THAT PROTECTS YOU . SCREW THE OTHER GUY,
we always have our subs sign a contract , if they dont sign we dont need them on our site, the are a liabilty .

hope every thing works out for you .