Legal Question in Intellectual Property in California

BACKGROUND INFO: I have a basic written contract in which I provided services to a client who approached me for a specific project. I was originally pressed by them for an estimate, which I hesitated to make because I had not done a project of that type before (and made no secret of it), but I was interested in the work and even (due to respect for the person who referred them to me and their representation that it was for non-profit use) quoted a discounted hourly rate. I also expressed repeatedly, including in the agreement, that it was only an estimate and could possibly take considerably longer. Unfortunately, it turned out that my estimate was low. That was openly discussed at the milestone check-in point I included and we all agreed to continue forward. The client said they understood that the project was going to likely take much longer with commensurate cost increase (still at the discounted rate). In a show of good faith and fairness, and to maintain good will, I donated approximately 42 hours of work to the project to attempt to compensate for the inaccurate estimate.

The client originally pressured me to agree to a six-week turnaround, which I reluctantly did. After I received their initial content to start the project and pointed out they were intending to use plagiarized material, I initiated a discussion of copyright concerns, and they then realized they had to provide their own original content while I completed the design of the project. Then they proceeded to drag out the project themselves for two years now. Even though they took far more time than I was originally told they wanted for completion of the entire project, they continued to come back to me after extensive periods of long delays to do more work for them; and they paid for my services along the way at the discounted rate.

After yet more months of not hearing from them, they contacted me not long ago and asked if I was still willing to work with them to finish the project. I agreed, mainly because they agreed I would bill them twice monthly going forward for the remainder of the project and they would pay promptly. They sent me chapter 1 content to be included in the design layout and I returned it for their approval with the invoice following. Shortly after that I didn�t hear from them for a long time again, and when they contacted me they said they couldn�t afford to continue. I initiated, and we exchanged, messages about how we might work together. I suggested we brainstorm ways to get their project competed and made a couple of suggestions.

After another long delay, they decided, even though the project is still not finished, they no longer want to continue with me (claiming they can no longer afford to pay me to finish). I replied expressing that I was confident we could work it out because I wanted to finish what I started and was willing to work with them to get beyond this and finish. They did not respond. I have bent over backward to willingly work with them the entire time, have been open and forthright, have donated time and effort to their project at no charge and have helped them avoid potential copyright infringement litigation, and even sent them a list of concerns and things to watch for if they did proceed without me. I have attempted to help and benefit them through the entire process from the point they initially contacted me.

CURRENT TIME-SENSITIVE SITUATION: The client has had a pay-by-month attorney firm send what appears to be a back-dated demand letter (requiring response in 10 days from the date of the letter (03.10.15) that was postmarked two days after that date) and took a week to arrive, which should have not been the case based on where it is from�all done, I'm surmising, in order to create additional pressure. This demand letter includes:

� language and reference related to California Evidence Code � 1152 and Federal Rule of Evidence � 408

� demand of nearly a full refund (because they don't have their finished project, yet they are the ones who are deciding not to finish it with me; I am still willing to work with them

� demand that I provide them, at no charge, files they can use along with a license to use my work and the work of an illustrator I sub-contracted to provide custom images they requested and paid separately for

� demand that I compel the illustrator to also provide them not only a license to use her work, but digital hi-res files

� an accusation against me of intentionally low-balling the original estimate and dealing with them from the beginning in bad faith (literally accusing me of fraud and using a bait-and-switch tactic), which is completely false

This work is my creative intellectual property and the agreement was for a specific outcome�a completed workbook done my me. The agreement states they can use my work in no other form and even spells out the requirement for them to delete all interim work product, including proofs sent to them along the way. They can keep and use only the final version of the project. The license I obtained from the illustrator was for one-time use by me as part of my work product in this specific workbook project. She did the work at a tremendously discounted rate as a favor to me because it was for non-profit use.

NEXT STEPS: Today I will write a short letter acknowledging their demand letter and stating the dates and time of arrival of their letter, my previous commitments that prevented me from working on this until today/tomorrow and will state I will respond more fully within 10 business days. I will fax this to them and mail it return-receipt requested, hopefully today; tomorrow at the latest. Hopefully this will protect me from claims of default by non-response to their outrageous demands? I certainly hope so!

THE QUESTION: How do I proceed and protect myself? I have every email communication and detailed notes of phone conversations. I am an unpaid primary caregiver for a parent with dementia. The person who referred this client to me was trying to help me with freelance work from home so I could care for my parent and not literally face my own financial demise. I have no income to hire attorneys to help me with this. Is there any association that I might contact that would help me pro bono? Or someone I can get basic advice from? At this point I plan to respond back with the facts and cite emails and dates, but I am concerned that anything I say will then become inadmissible in a further proceeding due to these two legal citations they�ve made in their letter. I don�t understand those laws/regulations and don�t want to fully state my case in a response to them and then have nothing left to defend myself with if they take this to the next level and it�s all inadmissible. Is there anyone who would/could help or coach me through this? Thank you for taking the time to read this, and for your consideration. Best regards.

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