Legal Question in Construction Law in California

Threatened with suit

My partner and I have a Nevada Corporation, we are licensed to work in CA to do residential construction. We drew a set of driveway plans for a client, she wound up using another contractor to do the work, put the driveway in another location, county shut them down, she is blaming our drawings for the construction delay, and loss of revenue from an alpaca business she was going to run on this property. There is no wrongdoing on our part yet she demands 60k to go away or she will sue us for the 60k of ''lost'' revenue plus another 100k for her aggravation. While the suit is baseless we're stuck, lawyers tells us it will cost 40k to defend ourselves even if we're vindicated, or the judge could split the difference and we're out even more. Our liability insurance won't cover because we never commenced physical work on the property and they don't cover design or drawings. Is there any protection from being corporate officers, anyway to avoid a baseless suit, or since we are moving our business to a different state in about 6 months because work here is so slow, could we we claim the corp has no assets, it doesn't, we maintain a small checking account balance and personally own our tools and equipment, and can't pay any judgement?


Asked on 11/05/07, 8:06 pm

2 Answers from Attorneys
Michael Meyer Law Ofc. Of Michael J. Meyer

Re: Threatened with suit

While it can take well over $40k to defend a suit like this, it can also be killed fairly quickly and for far less money if a construction lawyer reviews the facts and finds that the suit is without merit.

That's a big "if," but much better, I think, than trying to avoid collection on a judgment.

Feel free to give me a call if you'd like to chat about your circumstances without charge.

Good luck.

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Answered on 11/05/07, 8:19 pm
Terry A. Nelson Nelson & Lawless

Re: Threatened with suit

If it is a baseless suit as you present, find a better lawyer willing to try to get it dismissed quickly and cheaply. You have no other option. Trying to close the corporation and run away will result in them pursuing you individually, thus getting back into paying legal fees. Do it right, do it now. If you are architects and she paid you for 'professional' services and plans, then you have a problem. If you are simply contractors that drew up some suggestions but hadn't sought permits and approvals, and she used your work without your permission, she doesn't have much of a case.

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Answered on 11/05/07, 11:32 pm


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