Legal Question in Construction Law in California

Re: Pool construction abandonment

Your situation is quite common. The legislature has afforded you statutory protections, and you have two main paths to follow.

First, you could file a Complaint with the Contractors State License Board, who will likely propose using their binding arbitration programs.

Second, you could hire an attorney to file a lawsuit in Superior Court. There are many legal theories on which your attorney may rely, including breach of contract, breach of warranty, and numerous statutory violations that undergird claims for unfair business practices.

I prefer the lawsuit over the arbitration because the scope of recovery can be wider, and there's less chance that the decision-maker will want to select some figure in the middle and be done with it.

Legal fees. When I bring these lawsuits, I do so on contingency, which means that I take a percentage of what I get back for my client. I usually ask the court to award attorney fees in addition to the damages my clients have suffered, but that only works in certain circumstances (which is why I take a percentage). When they are awarded, they offset that percentage that I take. However, in your case, there is a specific law (B&P 7168) that provides for attorney fees to the prevailing party in a lawsuit over a swimming pool contract.

You've sent one letter. If the contractor hasn't taken it seriously, why do you think a second will get his attention? Perhaps you should have an attorney draft the lawsuit and include that in a letter before filing, but my preferred tactic is just to file the suit. There's something sobering about being served with a Summons.

That said, please check to see whether your contractor has a license bond posted with CSLB. You can do so on their website. If your contractor is broke, you can still recover on the bond if you've been harmed by violations of the license law, but the minimum bond (this year) is only in the amount of $12,500, which can be diluted quickly if there are many claimants.

Best of luck!

Re: Pool construction abandonment

The provision of Business and Professions Code 7168 for prevailing-party attorney fees in a suit over construction of a swimming pool is a kind of double-or-nothing proposition and should make both parties think twice about bringing (or failing promptly to settle) or causing the other to bring a lawsuit. Before bringing suit, be real sure the contractor has no valid defenses and your chances of prevailing are good.

Also, keep in mind that even if you prevail, but the contractor has no assets or has filed bankruptcy, you probably won't collect enough damages to make it worth your time and risk.

Re: Pool construction abandonment

I thank attorney Whipple for his input and would like to address his two points briefly.

In consumer protection statutes like this, the "prevailing party" concept applies to prevailing plaintiffs. For prevailing defendants to be awarded attorneys fees, they must show that the plaintiff's action was TOTALLY without merit. See Stephens v. Coldwell Banker Commercial Group, Inc. 199 C.3d 1394 (1988); Cummings v. Benco 11 C.4th 1383 (1992). In the facts presented, it seems there is a good faith basis for bringing the lawsuit. An attorney would have to conduct an investigation to be sure.

As to the possibility of recovery when there is a bankrupt contractor, I made mention (perhaps too subtly) in my first answer of the legislature's recognition of this problem in enacting the license bond law. Every contractor, to be licensed, must post a license bond in the amount of $12,500.00 for the benefit of anyone the contractor harms by way of a violation of the license law. Like I mentioned, however, the bond is distributed pro rata among all claimants, so if there are numerous claimants, the recovery of each could be miniscule. Still, I name the surety as a defendant in all of my lawsuits against contractors.

I do not disagree with the substance of attorney Whipple's answer, but I do want to offer my two-cents on the issues he raises.