Legal Question in Construction Law in California

I am a general contractor. Approx. a year ago I began talking to a potential client regarding a commercial remodel project. Keep in mind we never signed a contract, however I helped him with preliminary design and drawings, engineering & permit process, by plan check fees, for which he was billed (by me) & paid. During my inquiry to county building office, problems arose, presenting the questionable feasability of this project, due to county requirments and cost. The owner, understandably becoming impatient, began screaming & threatening me. At that time I decided that I could not to the project. I notified the owner that I was sorry I would not be able to help him, and withdrew my name from the permit, (Owner & County office were notified in writing). He had paid me for drafting services, blue prints & county plan check, (which included, services & fees, plus overhead & profit) & also reimbursed me for plumbing engineer's fee. All for under $4000.00. The owner has recently filed a claim against my bond for "abandonment & breech of contract". At this point it is being investigated by my insurance carrier. I have full documentation of all correspondences with the owner, however, if the insurance company denies his claim, can I be sued?


Asked on 8/26/09, 8:10 pm

1 Answer from Attorneys
Bryan Whipple Bryan R. R. Whipple, Attorney at Law

Well, yes; it's all too easy and cheap to drag someone into Small Claims. However, whether he will win anything is another matter entirely. You could win, and the only cost to you would be your time to prepare and appear in court, and the associated hassle.

Hopefully, your bonding company will deny the claim. You might ask your agent for advice, and whether they will provide defense assistance in the event of a suit (probably not).

I think if you have any vulnerability, it is whether the $4,000 was fair or excessive, and whether a contract was required for any aspect of what you did for the $4,000. If the potential client got fair value, you should win, even if technically you should have had a written contract for the services provided.

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Answered on 8/26/09, 9:01 pm


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