Legal Question in Construction Law in California

Re: Construction Materials

Generally transfer of materials does not occur until the materials are incorporated as a "work of improvement" into your home so that the contractor and lumberyard still "own" or possess title to the materials. However, this may well depend on your specific contract provisions and circumstances. I suggest you NOT hold the materials hostage or you will probably find yourself with a mechanics lien and or lawsuit for conversion among other things. I suggest you send notice to all the subcontractors and/or material suppliers that gave you a 20 day premininary notice that there are materials on the job which have not been incorporated into a work of improvements and you are notifying them that they need to remove the materials. I also suggest you notify the contractor to remove the items and give you the names and addresses of the material suppliers for the materials on your jobsite.

As far as "firing" the contractor. I certainly hope that you are NOt in breach of contract yourself. It did not hear any indication of a reason for the "firing" other than he didnt start right away which is probably NOT a material breach by the contractor.

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Re: Construction Materials

Since you're building a new home, I assume you're using the AIA A201 standard form contract. My first concern is whether or not you've complied with the terms of that agreement in firing your contractor. If you committed a material breach in firing him or her, the amount in controversy could be well above this $1000 insulation on your lot.

Best course now is to talk to the lawyer who advised you to fire the contractor to see what he or she thinks about the insulation.

Re: Construction Materials

You don't just "fire" a contractor as you might an at-will employee. That's why he is/was your contractor rather than your employee. Your relationship is governed by the contract. It will (or should) have a section or sections dealing with the parties' right to terminate for breach. It probably requires a material breach, and may give the breaching party a right to written notice of the breach and an opportunity to cure the breach before the contract may be terminated.

This is only a guess, of course; for all I know, your contractor may have been unlicensed and the contract was perhaps oral or nothing more than an estimate scribbled on a stationery form. By the way, if the contractor is unlicensed, he is not entitled to file a lien, but the lumberyard can.

The question as to ownership of the materials is fairly complex, and would take a little research to learn whether you, the supplier, or the contractor owns them. However, as the other attorney has pointed out, the $1,000 value of these materials pales in comparison with the prospective damages and legal fees that may change hands if the courts have to hear and rule upon the question of whether the contract was breached, and by whom.

By the way, does the contract have an arbitration clause or an attorney-fee clause? Either of these may affect your strategy.