Legal Question in Business Law in California
We Overpaid for services and the firm won't return difference
We entered into a contract with a Los Angeles based public relations and marketing firm, in which it stated in writing that the retainer was $7,500 each month, and $1,500 would be paid by us to cover out of pocket expenses for that month. Any overage would then be carried over.
This was done for budgeting purposes, so that I could roughly plan spending $10K each month on PR and marketing.
When they billed us, they bill $10K each month PLUS the Out of Pocket Expenses. We paid it -- and then withheld some payment down stream to even out the surplus they built up. When we audited it and decided not to continue with them, we ended up with a surplus -- having overpaid.
They refuse to pay us back, and I think we need to go to court. Your thoughts?
3 Answers from Attorneys
Re: We Overpaid for services and the firm won't return difference
It would seem, on the surface, that you have a good claim for reimbursement of your monies under either 1. breach of contract, or 2. in equity, under a claim of "unjust enrichment." (I believe a claim of fraud is not really appropriate because you did not have to over-pay the bills, you could have objected at the time of any of the billings.
However, there is an issue of WAIVER which works against you, and to determine if it would in this case, one would have to check to see if there was a provision in the contract addressing what happens in the event of one party waiving its rights. In this case, your opponents might be able to claim that by not objecting to the inaccurate billings, and by your continually paying the erroneous amounts, you waived your right to object.
You specifically asked whether a lawsuit should be filed. I think, based on what you've said, you probably would prevail in court. But lawsuits are very stressful, time consuming, very expensive, and take a very long time to resolve. And, in many cases lawsuits are appealable, which only adds injustice to injury.
You might want to consider a faster, cheaper, and less painful alternative by either having the case arbitrated by a neutral arbitrator, or having a mediation.
Arbitration renders a judgment, as you would receive in court; although there are a number of serious issues that are very different in an arbitration procedure, and I would suggest you discuss them with an attorney before you decide to arbitrate.
Mediation is an attempt to settle the case to obtain a mutually acceptable compromise, using the services of a trained mediator. Mediation does not result in a judgment. However, if you come to an agreement, you may be able to get the other side to sign a stipulated judgment (which IS comparable to a court judgment,) or at the very least, some form of a settlement and release agreement.
I wish you luck in your resolution of the matter. I am a trained mediator as well as an attorney, and if I can be of service, please don't hesitate to call me at (818) 888 0533.
Re: We Overpaid for services and the firm won't return difference
It seems like the PR&M firm just wants the windfall of an inadvertent overpayment. You need to make a demand in writing along with the supporting documentation.
Be prepared for allegations that you breached the agreement or modified the agreement.
I would be happy to discuss this with you and/or write a letter on your company's behalf.
J. Caleb Donner
805-494-6557
See our site: www.donnerlaw.com
Legal Warriors.
Re: We Overpaid for services and the firm won't return difference
I would need to read the contract that you had with the company before I could be definate in my answer. However, according to the facts stated in your question you can sue them for breach of contract and possible fraud if they intentionally overcharged you and you can prove they did. You have a solid case for breach of contract which you can sue under for a full refund of the amount you over paid. If we can prove fraud you can sue for punitive damages over and above the amount already owed you. I would need to discuss the case and review the contract in question in order to suggest the next step in the case. You may be able to resolve the matter with just a few nasty letters from an attorney. If you are interested in a free, no obligation consultation please feel free to contact my office toll free at 877-546-9918. If I don't hear from you I wish you the best of luck in getting your money back.
Sincerely,
John Hayes, Esq.
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