Legal Question in Construction Law in California

Re: Contractor took the money and abondoned job

You need to sue him. Now.

It is good that you have already filed a claim with the CSLB. The CSLB, you will find, generally moves slowly. There are ways to get them to move faster, and typically, if the contractor's conduct is particularly horrific, they will qualify the claim for extra special attention.

Generally, if you file a civil lawsuit for damages, the CSLB considers (and often does) closing the claim. It will simply depend upon how bad the contractor's conduct was.

The bond angle is generally worthless. The bond is in a face amount that is typically far, far less than the amount of damage at issue. Moreover, the bond is not a performance bond, and it is not insurance. It is a surety bond. That means that just because the contractor doesn't finish does not automatically mean you get the bond money.

At any rate, what you need to do is sue the contractor for all the monies you have spent on him PLUS the money that it will cost to finish the job. Whether the contractor is structured as a corporation, partnership, or other business entity, will determine how the action is styled as well as how many defendants you pursue.

You may also want to pursue the contractor for fraud as well as gross misconduct, both of which open the door for punitive damages. This is important, because many contractors will simply file bankruptcy to avoid a large compensatory award. Punitive damages, as a general rule, cannot be discharged in bankruptcy.

Lots of issues, and you need to move fast. And there is never a guarantee that even with a judgment that you will collect. Find yourself a good collection attorney who understands construction law.

We are collection litigators with extensive experience suing contractors for these types of damages. If you would like a no charge consult, please feel free to call or email.

Good luck.

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Re: Contractor took the money and abondoned job

I'm afraid that you've hit what I call a "Pick Up" contractor. Their only asset tends to be a pick up truck and all they do is pick up checks, but they rarely pick up a tool.

These deadbeats have learned that they can get big checks from people. Once they have the money, they understand how difficult it is to get it back, so they largely just ignore the people who gave them the check.

The real problem with these people is that they usually live from check to check. They often have substance abuse problems and that's where a lot of the money goes. You can do everything that Mr. Guerrini suggests, but I would be concerned that there will be nothing there after you've spent $20,000 in legal fees getting a judgment.

I suggest seeing if you can get your local district attorney involved with this guy. Start by filing a police report. At some point, what he has done has crossed the line from civil to criminal. Because your dad is quadriplegic, they may be more apt to look into this as some form of abuse (perhaps elder abuse). If the DA pursues this guy for criminal charges, you can probably convince the judge to enter a restitution order. These are even better than judgments because the incentive to pay off a restitution order is much greater. If they don't pay off the restitution order, it results in a greater punishment to the offender.

I agree with Mr. Guerrini on just about everything he says, but if the deadbeat has a decent lawyer, he'll probably be able to defeat the punitive damages claim (most cases hold that you can't get punitive damages in a contract action) and then you're back to having your judgment discharged in bankruptcy. If you get a restitution order, though, this may be much harder to get discharged. You'd have to check with a bankruptcy attorney if and when this happens.

Re: Contractor took the money and abondoned job

After making a bond claim, your only other viable civil remedy is to sue the contractor. Your problem is that he sounds like a flake that may disappear before you can collect anything from him. But, IF he has an ongoing business and address, you may be able to succeed in this. You should also try to get the police to bring fraud/theft charges against him, but don't hold your breathe about their cooperation in doing that. I would be happy to help, with the goal of you spending the least amount necessary. If there is no hope of collecting, don't spend money trying. Contact me if interested.

Re: Contractor took the money and abondoned job

Let me add a bit to the sound words from Mr. Redenbacher and Mr. Guerrini. It sounds like the contractor was licensed. However, if not, in a lawsuit, you would be entitled to a judgment that includes all moneys he paid you, under Business & Professions Code Sec. 7131. (B&P Code in the following)

Since this was a “home improvement project”, the contractor violated B&P Code Sec 7159 in numerous respects. He could only legally demand $1,000.00 to start a $92K project. Further, he violated 7159 by getting paid up front for work not yet completed.

Also, the scenario suggests this contractor is in trouble on other jobs. Sometimes contractors use money earmarked for one project to pay expenses on a separate and unrelated project. That's called diversion of funds, and if proved, is grounds for discipline under the Bus. & Prof. Code. Also, it’s a violation of Cal. Penal Code Sec 484b. If you decide to contact the district attorney, the possibility of a 484b count might increase their interest.

On recovery in a civil action, the general measure of your damages will be the lessor of 1) the cost to correct or 2) the diminution in fair market value of the home. To determine the cost to correct (in this case correct and complete), construction professionals should be hired to determine the scope of work necessary to deliver the project per contract, and then estimate the cost to perform that scope. Determining diminution in value will normally require an appraisal.

On other issues, unless the contract includes a provision granting attorney's fees to the prevailing party in a lawsuit, you won’t recover attorney’s fee.

Punitive damages awards are governed by Civil Code Sec 3294. To recover “punies” in addition to actual damages you must prove, by clear and convincing evidence that the contractor is guilty of oppression, fraud, or malice. “Malice” is conduct intended to cause injury to you and your father, or despicable conduct carried on with a willful and conscious disregard of the rights or safety of others. "Oppression" is despicable conduct subjecting one to cruel and unjust hardship in conscious disregard of one’s rights. "Fraud" means an intentional misrepresentation, deceit, or concealment of a material fact made or done with intent to deprive one of property or legal rights or which otherwise causes injury. As noted by my colleagues, punies are not recovered in a contract action. You would have to allege tortious conduct, such as negligence per se, gross negligence and/or fraud.

I wish you all success in your endeavors to recover from the contractor. Sadly, as Mr. Guerrini and Mr. Redenbacher have stated, recovering anything from this individual will likely be a long and difficult process. Please let me know if you have any additional questions.