Re: Sub Contractor Change Order

You need to secure a credible estimate from what the law would consider an expert in the field (whether you or someone else provides it) as to the value/worth of the materials/labor provided by the terminated subcontractor. Then offer to give him that estimated amount which will certainly be far less than the $140,000 for which he is asking. If the sub refuses your offer,

and decides to sue or record a mechanics lien, you will have a basis

to defend your position in the estimate which you offered in settlement of the matter but which was refused by the subcontractor.

Re: Sub Contractor Change Order

I do a fair amount of construction litigation. You need to head this off properly or you will wind up with that sub sending your customer lien notices. Is this a Maryland job? I have a bunch of questions? What precisely was wrong with this guy's other work? how much did it cost you to fix his other work if anything? did his actual contract call for grading, sod and/or fill? Is he claiming $140k is for the services of doing the grading, hauling the defective fill, laying sod etc. or is he actually trying now to get a change order for the fill iteslf? How have you documented this stuff? What is the total GC price? Do you have other jobs with this sub?

Can you tell that I have a lot of questions? The issue here (alluded to by the other lawyer who responded) is that even with no written contract, there's an outside chance that under a theory of quantum meruit (loosely meaning "value of the work") that your sub could make out a claim. (i.e. that's why you would want at some point to find out if there is any "value" to the work that he did).

However, personally I couldn't advise you to actually offer this sub money NOW as did the other responder until all of the other factors above (and others as well) are fully evaluated. You want to evaluate your his claim fully. That means figuring out the value of any services and/or goods that he may have provided (you probably can estimate that roughly yourself - if not you are definately in the wrong business), then measure that against the other facts that may support a claim for him, and set all of that against the harm that he caused by poor workmanship (did he cause delays, did he put delay-damages at risk in your own contract?). Then you need to evaluate all of that against the costs of litigation, customer relations issues that may flow from your sub filing mech lien notices, bonding costs if interlocutory liens are granted, etc. and decide if an offer makes sense at this point.

The key here is that you do have a $140k possible exposure. If you haven't called a real construction lawyer yet, you should do that now and get your ducks in a row now!!!

Re: Sub Contractor Change Order

It will probably cost $1000 or more to review the contract documents and research the law to give you any sort of informed answer. You could wait to see if the GC brings suit or arbitration against you (or seeks to backcharge you for his losses) before incurring any expense.

However, with $140,000 in damages I would not expect this to "go away". Give me a call if you would like us to investigate this on your behalf....

Re: Sub Contractor Change Order

I must disagree with attorney Holzman

in his concluding assertion that "you have a possible $140K exposure" in this matter. Based upon the facts which you've described thus far, your possible "exposure", meaning legal liability in this matter is almost certainly far less than the $140K to which Holzman has alluded and which the subcontractor apparently is quixotically demanding.