Legal Question in Construction Law in California

Misappropriation of Funds

I signed a fixed price contract with a General Contractor to build a new home.

As part of the contract the builder received an advance from the loan of approx. $40,000. I have evidence that he used my advance on another contract he had and as a result the progress on my contract has slowed to a snails pace.

Is there a legal procedure I can follow to demand a breakdown on how my advance has been utilised?

In addition, on my contract he is using unlicensed sub contractors even though I have pointed out to him that he must only use licensed subs. He claims it's all under his license but if that was the case I believe these subs would then be his employees, and I know he does not carry workers comp.


Asked on 8/12/07, 6:18 pm

3 Answers from Attorneys
Benjamin Berger Berger-Harrison, A Professional Corporation

Re: Misappropriation of Funds

You've got some practical problems that need immediate attention. Contact our office (or ANY attorney) quickly.

I was a contractor for many years before I became an attorney and our office handles many construction cases.

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Answered on 8/13/07, 12:32 pm
Cathy Cowin Law Offices of Cathy Cowin

Re: Misappropriation of Funds

I agree that you need to have an attorney look at the contract. At this point, an attorney could help you get this project on track and make sure that you don't suffer further damages. You didn't indicate what county you are located in. My office serves Central California and we are located in Fresno, CA.

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Answered on 8/13/07, 2:31 pm
H.M. Torrey The Law Offices of H.M. Torrey

Re: Misappropriation of Funds

Yes, if you have the evidence needed, you have a very strong case against this contractor for fraud, breach of contract and/or other tortious malfeasance. You are entitled to an accounting as well of how the funds were used. If you would like prompt, aggressive assistance, contact our Law Firm directly.

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Answered on 8/12/07, 6:31 pm


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