Small Claims Court for breach of contract with a contractor

83 Replies

Long story short.

Bought house, needed work, hired contractor with an agreement on price for work. Started work in first of November and told it would be end of the month before it was done. Now we are in the middle of January and I get an email from contractor and he told me he will not be coming back because he under bid and doesn't want to complete the project. We have a contract and he willingly is breaching it. Plus he has the full contract amount in his possession because ''he cut us a deal if we paid up front in full.''  Coincidently this is also the time manpower diminished and the project came to a crawl. This is my fault, lesson learned, not happening again.

The work performed is in better terms half assed and some of it will have to be removed and corrected. (Installing door with the EXISTING light switch behind the new door, paint peeling, paint spilled all over the floor) I have a two page punch list of things that need fixed or remedied. Pictures of everything...

I'm waiting on a bid from another contractor as part of the amount owed in small claims court and also will be factoring in lost rent due to by his own admission that he did not have man power on site or if he did it was insufficient for the tasks which is resulting in the job taking so long. 

With all that said, does it sound like I have a good case? Small claims in Texas is maximum $10,000 which what he has left I do not believe is in the full amount. He now also has two reviews on Facebook claiming the same thing against him but they have not really pursued legal action against him.

I don't think any lawyer will do case assessment on a public forum like this.  There's certainly more to the situation than what can really be conveyed here anyway.  But let me ask a question: If you sue and win, what are the chances of getting paid a judgement?

Originally posted by @Jerel Ehlert :

I don't think any lawyer will do case assessment on a public forum like this.  There's certainly more to the situation than what can really be conveyed here anyway.  But let me ask a question: If you sue and win, what are the chances of getting paid a judgement?

I can certainly go into great detail but I'm sure it would be information overload and make this a ''to long didn't read'' thread.

At the very least do an abstract of judgment making it public knowledge and then a writ of garnishment. He is working directly across the street from another property I have and with the writ of garnishment I can get money upon completion of the job or I know where he banks so according to Texasbar.com, allows me to force the bank to remove the judgment amount from his account per court order.

Is none of this correct? 

What's the point of having contracts with anyone if they can not be held to the contract and can steal money?

The cost to go to Small Claims(JP) will be $150 or so he cost is minimal.  Have you sent a demand letter for the work to be done or money refunded ? I would do that giving him 10 days to perform.  Hopefully, you can get him served while he is still working across the street

Now the reality.  The chances you collect the Judgement are very very slim.  Garnishing a bank account is difficult with an individual as they can just change banks of have a different business acct or acct under a spouse's name.  Additionally, in Texas the list of exempt property is extensive and his homestead is also exempt

Originally posted by @Greg H. :

The cost to go to Small Claims(JP) will be $150 or so he cost is minimal.  Have you sent a demand letter for the work to be done or money refunded ? I would do that giving him 10 days to perform.  Hopefully, you can get him served while he is still working across the street

Now the reality.  The chances you collect the Judgement are very very slim.  Garnishing a bank account is difficult with an individual as they can just change banks of have a different business acct or acct under a spouse's name.  Additionally, in Texas the list of exempt property is extensive and his homestead is also exempt

 Yes sir I sent him a professional letter asking for a refund for the line items on my punch list not complete or installed incorrectly. Who mounts an exterior stove plug to an inside wall and does not inset it into the wall? The stove will stick 5in into the kitchen and look horrible!

Worse case scenario is I don't get a dime out of him but social media could prove to be a much large hit to his pocket than the judgment. 

How is it that a judge can order you to pay for theft or stealing but not enforce it? What is the point in small claims court if you win and then nothing happens and he walks with my money I paid him to complete a job?

So I'm guessing from the lack of responses that either 1) people don't succeed in this and 2) its a waste of time? 

@Justin K.

I assume you have heard the phrase "you can't bleed a turnip" ?  The vast majority of people in Texas are noncollectable meaning they do not have non exempt assets to go after

Texas laws and Homestead laws provide us protections that many states do not offer.  The flip side to that is the difficulty to collect

I would pursue the judgement as the cost is low.  However, I would chalk this up to a learning experience and never ever ever pay a contractor up front

@Justin K.

Your probably put of luck. Me personally I would not pursue it civilly for a few reasons. The amount of time your going to spend to go to court and frustration is going to be close enough or more than the judgement. More importantly is this person going to be collectable? If he works for himself probably not.

You may be better off just reaching out to the contractor's board for possible criminal remedies. In some areas there is a maximum initial amount a contractor can request.

Social media... Doesn't mean a damn thing. He could change his name or business page name anytime and poof all the reviews are gone. Facebook gives businesses an opportunity to verify their legitamecy but most small businesses don't bother. Even if they did most people don't know the difference that little check mark means.

Well I'm glad I just got $15,000 stolen from me. 

Originally posted by @Justin K. :

So I'm guessing from the lack of responses that either 1) people don't succeed in this and 2) its a waste of time? 

 I'll chime in your behalf. I've listened to probably 30, 50? of property owners who were ripped off in similar situations. I tell them it will cost $5-6,000 to get to garnishment on a single bank (which as others pointed out, individual can close accounts and switch to cash, etc).

That said, I have had clients pay me my hourly, collect a judgment, garnish a couple bank accounts and collect. 100% in full plus some interest (no attorney fees sadly). So he was owed about $20,000, paid me $5k up front and he collected $15k plus the satisfaction of following through on his threats and public knowledge, justice, etc. Other people pay and collect a few thousand less than attorney fees, most people get nothing.

This is one case paid in full out of maybe 10 that I've taken, the rest do not collect. 

"past performance not indicative of future results, I am a lawyer in Texas, I am not your lawyer."

Originally posted by @Douglas Christensen :

@Justin K.

Your probably put of luck. Me personally I would not pursue it civilly for a few reasons. The amount of time your going to spend to go to court and frustration is going to be close enough or more than the judgement. More importantly is this person going to be collectable? If he works for himself probably not.

You may be better off just reaching out to the contractor's board for possible criminal remedies. In some areas there is a maximum initial amount a contractor can request.

Social media... Doesn't mean a damn thing. He could change his name or business page name anytime and poof all the reviews are gone. Facebook gives businesses an opportunity to verify their legitamecy but most small businesses don't bother. Even if they did most people don't know the difference that little check mark means.

 General contractors are not licensed in Texas. You can seek criminal complaint, but it really depends on DA, location, amount, types of acts (check kiting, fraud, etc.)

@Ronald Rohde

I knew there were jurisdictions where licensing for GC's wasn't required but I'm surprised that Texas is one of them considering its size. Learn something new everyday.

I can't imagine a legal system would let a homeowner be taken advantage of for over $10,000 with no adventageous recourse. With that being said maybe I did speak out a line and it would make sense civilly to pursue.

I would hope there is something more than tough luck to badage this wound.

@Justin K.

I suppose I may disagree with most. I have one now I am in the process of doing a small claims court. It's only 2,000 though. Small claims court is not full blown court in my area so yours may very. Also I would trust in a lawyer in your area. With a small claims (Gave money, then radio silent 3 weeks later) for 4 months. File the claim, have your receipts and all text messages. Judge says "You are awarded $x). Take judgement and contact credit report companies. It may take years but at some point they will want to buy a house, get a loan or something and your judgement is on there. Hopefully at some point in the future they will see an interest in making it right. If not there will be a year where writing off that bad debt makes tax sense (So close to a different bracket and you exhausted everything but still 2,000 off the lower tax rate). Bam write that debt off.

So vs the minimum time required to get it in small claims I would do it.

@Justin K. I'm currently doing a job where the last "contractor" did a very bad job. The owner tried everything including the police. He was arrested finally but only for possession of drugs. I had to literally tear down the gazebo and rebuild it.  

The new bids you get make sure you vet all aspects of character. There are many smooth talking wanna be's that do enough to get drugs and leave you hanging. If they dont want their background checked that is a red flag. Look at the quality of the tools. If its cheap Walmart stuff they are not in it for the long haul. 

Best of luck.

Originally posted by @Mike Reynolds :

@Justin K. I'm currently doing a job where the last "contractor" did a very bad job. The owner tried everything including the police. He was arrested finally but only for possession of drugs. I had to literally tear down the gazebo and rebuild it.  

The new bids you get make sure you vet all aspects of character. There are many smooth talking wanna be's that do enough to get drugs and leave you hanging. If they dont want their background checked that is a red flag. Look at the quality of the tools. If its cheap Walmart stuff they are not in it for the long haul. 

Best of luck.

My contractor came from the recommendation of two very large REI individuals who use him exclusively. I have personally seen some of his work and it's good but I think he under bid and wrote a check with his mouth that his *** can't cash. He then had a few guys quit on him leaving him even more in a bind so because he had most of my money up front he decided to bail on my project.

I know he's working on a project across from another one of my properties and I would love to take every penny of profit from that job but from what every says here, it might be impossible. 

@Justin K.

You can break it down quickly to get a clear path. First you’ve already sent written demands, and he has chose to walk. Court is the only option, but before you do that educate the vendor on what that means, but go big.

Explain to him how your going to take him to court, he will owe you tens of thousand in legal fees, court cost, plus money owed, you will put a lean on his assets and freeze all his accounts, and vanish all his income, including any IRS returns.

To him it looks like he gets short term pain or long term pain, short term is to complete the job as agreed, long term is getting whipping around the legal system.

Spell it out to him, add it up into dollar amounts so he understand the cost vs him finishing what he agreed.

Originally posted by @Levi T. :

@Justin K.

Explain to him how your going to take him to court, he will owe you tens of thousand in legal fees, court cost, plus money owed, you will put a lean on his assets and freeze all his accounts, and vanish all his income, including any IRS returns.

 None of those options for collection are available in Texas.  Our laws do not allow liens to be put on non-exempt property which includes:

Homestead- One can own a $1 million dollar home free and clear and it cannot be touch

12 Cattle, 2 Horses and 120 chickens- LOL but true

Belongings and furnishings- Can't be touch up to $30,000(Not positive)

Guns- Don't even try to go after someone's gun in Texas

Bible

Farm equipment

One car per family member and so on

Wages cannot be garnished as well.  So, my guess is 95% of all people do not even have non-exempt property to begin with.  

Originally posted by @Greg H. :
Originally posted by @Levi T.:

@Justin K.

Explain to him how your going to take him to court, he will owe you tens of thousand in legal fees, court cost, plus money owed, you will put a lean on his assets and freeze all his accounts, and vanish all his income, including any IRS returns.

 None of those options for collection are available in Texas.  Our laws do not allow liens to be put on non-exempt property which includes:

Homestead- One can own a $1 million dollar home free and clear and it cannot be touch

12 Cattle, 2 Horses and 120 chickens- LOL but true

Belongings and furnishings- Can't be touch up to $30,000(Not positive)

Guns- Don't even try to go after someone's gun in Texas

Bible

Farm equipment

One car per family member and so on

My guess is 95% of all people do not even have non-exempt property to begin with.  

That don't matter, your playing poker.. Most people are ignorant of the laws on what you can, or can't do. They do know you can take them to court, they may know you can garnish their accounts or not to some level, and they may assume to infinity that you can inflict all sorts of financial pain, if you spell it out to them. It's about if he wants to lose a little money today, or lose a lot of money tomorrow.. His choice, get it to the finish line, or visit the court room. 

@Justin K. I’m not a fan of these stories! What you did goes against everything the BP community warns against; not paying a contractor in full before work. The contractor should finish the work, or if he literally can’t, you should be able to reason together about progress made and damages done. If you can’t get to this point, then help us consider your situation. The contractor has been “working” on the project since November and just quit mid January for $15000? No body could afford to hire guys and contract a job for that price. Did he buy materials too? How much positive construction did you get done? I know you said some of it needs to be redone, but do you think you got close to $15000 worth of labor and material out of this guy? That’s not very much money if they did some positive work over the last couple months. What specific work did he contractor complete? NO REAL CONTRACTOR SHOULD ASK FOR ALL MONEY UP FRONT. Sorry to hear about your situation. Very disappointing if that’s what you budgeted for.

I don't think it matters where you are investing, outside of reasonable deposits, you don't pay contractors upfront.  I've been burned as well.  When I hire now, I make sure they accept credit cards, have a professional office somewhere, a website of sorts and have been in business for 5 years.  It just minimizes the risks.  Using a credit card gives you the power of a charge back and that happens with a phone call - no lawyer and no wasted time.  I bet the people who referred you to this clown never paid him upfront or you thought you were stealing the deal.  I always try to be fair with people - kharma is a bugger!  Here, you've learned a lot for $15k grand but I wouldn't waste a minute chasing him - that train has already left the station and you won't get a dime from him.  Sorry!

Originally posted by @Levi T. :
Originally posted by @Greg H.:
Originally posted by @Levi T.:

@Justin K.

Explain to him how your going to take him to court, he will owe you tens of thousand in legal fees, court cost, plus money owed, you will put a lean on his assets and freeze all his accounts, and vanish all his income, including any IRS returns.

 None of those options for collection are available in Texas.  Our laws do not allow liens to be put on non-exempt property which includes:

Homestead- One can own a $1 million dollar home free and clear and it cannot be touch

12 Cattle, 2 Horses and 120 chickens- LOL but true

Belongings and furnishings- Can't be touch up to $30,000(Not positive)

Guns- Don't even try to go after someone's gun in Texas

Bible

Farm equipment

One car per family member and so on

My guess is 95% of all people do not even have non-exempt property to begin with.  

That don't matter, your playing poker.. Most people are ignorant of the laws on what you can, or can't do. They do know you can take them to court, they may know you can garnish their accounts or not to some level, and they may assume to infinity that you can inflict all sorts of financial pain, if you spell it out to them. It's about if he wants to lose a little money today, or lose a lot of money tomorrow.. His choice, get it to the finish line, or visit the court room. 

 You actually think a contractor who is screwing over clients does not know he cannot be touched ?

Originally posted by @Greg H. :
Originally posted by @Levi T.:
Originally posted by @Greg H.:
Originally posted by @Levi T.:

@Justin K.

Explain to him how your going to take him to court, he will owe you tens of thousand in legal fees, court cost, plus money owed, you will put a lean on his assets and freeze all his accounts, and vanish all his income, including any IRS returns.

 None of those options for collection are available in Texas.  Our laws do not allow liens to be put on non-exempt property which includes:

Homestead- One can own a $1 million dollar home free and clear and it cannot be touch

12 Cattle, 2 Horses and 120 chickens- LOL but true

Belongings and furnishings- Can't be touch up to $30,000(Not positive)

Guns- Don't even try to go after someone's gun in Texas

Bible

Farm equipment

One car per family member and so on

My guess is 95% of all people do not even have non-exempt property to begin with.  

That don't matter, your playing poker.. Most people are ignorant of the laws on what you can, or can't do. They do know you can take them to court, they may know you can garnish their accounts or not to some level, and they may assume to infinity that you can inflict all sorts of financial pain, if you spell it out to them. It's about if he wants to lose a little money today, or lose a lot of money tomorrow.. His choice, get it to the finish line, or visit the court room. 

 You actually think a contractor who is screwing over clients does not know he cannot be touched ?

 Ummm yes. I spend around $60,000 each month in vendors doing work for me. I’m no small landlord, and the game never changes. Just last week I had someone in AZ think they would pull that stunt on me.  One short call later, where I spelled out what I was going to do to them in a court room, fix the problem like abracadabra. When your at the end of the road where court, or do nothing is left, these things work.

Originally posted by @Levi T. :
Originally posted by @Greg H.:
Originally posted by @Levi T.:
Originally posted by @Greg H.:
Originally posted by @Levi T.:

@Justin K.

Explain to him how your going to take him to court, he will owe you tens of thousand in legal fees, court cost, plus money owed, you will put a lean on his assets and freeze all his accounts, and vanish all his income, including any IRS returns.

 None of those options for collection are available in Texas.  Our laws do not allow liens to be put on non-exempt property which includes:

Homestead- One can own a $1 million dollar home free and clear and it cannot be touch

12 Cattle, 2 Horses and 120 chickens- LOL but true

Belongings and furnishings- Can't be touch up to $30,000(Not positive)

Guns- Don't even try to go after someone's gun in Texas

Bible

Farm equipment

One car per family member and so on

My guess is 95% of all people do not even have non-exempt property to begin with.  

That don't matter, your playing poker.. Most people are ignorant of the laws on what you can, or can't do. They do know you can take them to court, they may know you can garnish their accounts or not to some level, and they may assume to infinity that you can inflict all sorts of financial pain, if you spell it out to them. It's about if he wants to lose a little money today, or lose a lot of money tomorrow.. His choice, get it to the finish line, or visit the court room. 

 You actually think a contractor who is screwing over clients does not know he cannot be touched ?

 Ummm yes. I spend around $60,000 each month in vendors doing work for me. I’m no small landlord, and the game never changes. Just last week I had someone in AZ think they would pull that stunt on me.  One short call later, where I spelled out what I was going to do to them in a court room, fix the problem like abracadabra. When your at the end of the road where court, or do nothing is left, these things work.

 LOL.  Ok . I spend a few dollars as well and live in Texas and I am familiar with the law in Texas.  You can yell, scream, stomp you feet all you want.  You can even spend "thousands in legal fees and pass them on to the defendant" if throwing good money after bad is your thing.  However, the result in Texas will be the same as the threats have no teeth as upwards of 95% of judgments remain uncollected for the reason I outlined above

I am probably one of the few that have collected on a judgement.  A soldier skipped out on me but he was a member of the military deposit waiver program and was unable to clear post without paying me.  Otherwise, I would have never sniffed that money

Originally posted by @Justin K. :

Well I'm glad I just got $15,000 stolen from me. 

 Something similar once happened to me.  I was mad, as you are.  I think the contractor to be total scum, as you do.  In the end, I realized I did not have money "stolen" from me, but that I made a foolish decision and practically gave the money away.

I know, and you know, in this business, you never pay anyone in full up front, especially when you don't really know them.  If you break that rule and don't get burned, you should go buy a lottery ticket because you must be riding one hell of a hot streak.  I broke it, you broke it, and we both got burned.

Yes, the guy is 100% responsible.  But you (and I, in my case) are 100% responsible.  The guy could not have run away with your money if you had not paid his fee up front.  That's sometimes a tough thing to admit.

As far as suing him, that's really up to you and how much time and more money you want to allow this guy to cost you.  You may get a judgement against him, but the chances are slim that you will ever collect.  Guys doing half-assed work and walking off jobs don't usually have 5-figure savings accounts waiting to compensate you.  And they will always find more suckers who will pay them upfront and who don't bother checking court records and BBB reviews.  You won't actually do him much real harm.

But, I say pursue it.  Over the next few years, you may save a small number of people the horror of having to deal with him.

Sorry you gave your money away to a thief,

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