Legal Question in Construction Law in California

Refusal to pay balance on contract

In a remodel situation, the remodel good through three of four draws. The job was done, the owner seemed happy, and moved in and changed the locks. A small punch list was generated. Then out of the blue the owner is refusing to pay the balance of the contract. $35,000. The reason given was she was unhappy with the work performed, and in a letter opted to sever the relationship and part ways. Still refusing to pay. What are our options, other than a lien.

Asked on 6/26/09, 11:20 pm

2 Answers from Attorneys

Thomas W. Newton Tims & Newton

Re: Refusal to pay balance on contract

I'm working from the premise that you are licensed, the contract complied with Bus & Prof Code Sec 7159, 7159.5, you pulled all necessary permits and passed all inspections

The answer really depends on 1) the nature of her complaints, 2) whether you can afford to compromise, and to what extent and 3) whether or not she's simply trying to get something for free. Further, the question seems to be more about the art of negotiation than about what the law says.

The law part is simple - if you fully performed the contract, then she is obligated to pay. If some aspect of your performance was faulty, then she is entitled to either have the faulty performance cured or claim damages. She can not legally withhold more than what is required to cure any actual defects or substandard work.

The real question is how to educate her on what the law says, and then get some dialogue going about what's actually wrong (if anything) and about your interest in resolving any legitimate - emphasis on the word legitimate - concerns, and then getting paid what you are owed. How you do depend on numerous factors outside the scope of this response.

If she simply refuses to discuss the matter, you'll probably need to contact an attorney experienced in construction litigation. Possibly a demand letter will suffice, at the very least to open contact. If not, you may have no option but to record a lien claim and then file suit within the statutory 90 days.

I realize I haven't described any specific options. Unfortunately, there is no silver bullet that works universally for this type of dilemma. Resolving this dispute will likely turn out to be as much about personalities as about permits. However, experienced counsel can help gather all the facts that will suggest ways to approach the problem and suggest solutions short of litigation.

Best of luck,

Tom Newton

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Answered on 6/27/09, 11:53 am
Terry A. Nelson Nelson & Lawless

Re: Refusal to pay balance on contract

Lien and sue if you've got a valid claim. If this is in SoCal, and your're serious about getting counsel to help you do it right, feel free to contact me.

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Answered on 6/29/09, 1:13 pm

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