Can you sue subcontractor

33 Replies

I have an issue with a GC on a remodeling job. He has abandoned the job unfinished and refuses to answer phone calls, txt or emails for over a month now. I sent him certified mail terminating contract for default. I have also filed a claim in small claims court to recover what I have paid him already. Likelihood of recovery is very low. I hear GC has three other jobs in a similar abandoned state as mine.

I have tracked down the subcontractors independent of GC. The plumber is owed funds by the GC. After negotiations he has agreed to complete the job if I agreed to cover what he is owed by GC. The plumber and I now have a new contract. I will pay what he is owed by GC plus add on to fix what GC has done. GC cut waterlines in the slab so we need to run all new lines.

I also tracked down the electrician. Turns out electrician is a relative of the GC. At first he denied he was connected to the job. Then I pointed out he is listed on the building permit that was part of the original contract. That refreshed his memory. He now admits the GC owes him money too. The electrical is roughed in and passed inspection. We updated electrical device and he needs to bring power in from the pole to the new panel and wire outlets, switches etc. I made him the same offer as the plumber. Finish the job and I will pay what is owed by GC. He is refusing to finish and not cooperating.

My question is can I sue the subcontractor in Texas small claims court? He has more at stake than GC. He is an established business, state licensed and Google and Yelp Business profiles.

@Pete Harper . YES! The old adage of you can sue anyone at any time applies. Small Claims (JP Court) is limited to $10,000. Put in a penny over and JP could toss the whole thing out or let you modify to reduce to below $10,000. 

In JP Court you can represent yourself, and cost of filing in JP Court is low. 

Good Luck!

@Pete Harper Can you sue him? Yes, you can sue anyone. Will you win? Probably not, the judge will want to see a contract between you and the electrician and when you can't provide one, the judge will likely rule in his favor. HOWEVER, if the electrician fails to respond to the complaint and/or doesn't show up in court, you could win by default. There's a chance that the GC could face criminal charges if he knowingly took on job that he couldn't/wouldn't finish, this is scheming to defraud. It wouldn't hurt to file a police report and let them investigate. 

@Pete Harper

In my opinion this is going to be extremely difficult.  Why it is true you can sue anyone, can you ascertain that you and the electrician had an agreement on the scope of work and the price?  My guess is you cannot.  So what is the electrician states he was just doing the rough in and was not contracted to do the rest?

@Braden C.

The electrician signed the building permit listing his license #. The GC also signed the permit. Can I use the signed building permit plus the signed contract with scope of work as proof? I would make the electrician a co-defendant.

@Pete Harper I thought of another angle. The GC has insurance. I asked for a copy when we signed to original contract. Can I make a claim against the GC’s insurance? I called the agent and they are emailing me a claims packet.

Sue them for what exactly? Turning down a job?   You cant force someone to work for you, they can turn down any job they want to.

@Pete Harper

Try a different strategy with both your electrician and GC. Notify both of them that you are contacting their insurance company to file a claim. For the GC you should be able to file a claim against their GL (general liability) insurance.

Also notify them that you will be filing a dispute against their license with the city/state, basically whoever issues licenses in TX.

Once you get their insurance companies involved it is a whole different level of discomfort for the contractors and they may be forced to respond.

Best of luck to you!

@Dave E.

I called the insurance agent and she sent me a claims form with the GC on copy. I will go ahead and make a claim against his insurance. Even if the claim is rejected his policy will be dinged.

Originally posted by @Pete Harper :

@Pete Harper I thought of another angle. The GC has insurance. I asked for a copy when we signed to original contract. Can I make a claim against the GC’s insurance? I called the agent and they are emailing me a claims packet.

 Insurance is for liability of the contractor and generally doesn't cover the job completion or quality. Bonding will cover the job itself and that would be a way to recoup your money. Always make sure your contractor is bonded and insured.  

@Joe Splitrock

Most contractors don’t pull bonds for projects unless they are spectacles to do so. It is extremely rare in a residential setting. They also cost money which is passed on to the owner, who typically doesn’t want to pay for it.

Getting the insurance company involved probably won’t result in a payment, but it certainly puts another layer of pressure on the contractor to respond.

Originally posted by @Pete Harper :

@Russell Brazil

Breach of contract. They have taken funds and not completed the work per the contract.

You are not a party to the contract, so have no standing to sue for breach of contract.  Nor does it sound like they were paid in full for the contract that that subcontractor is a party to.

 

Originally posted by @Dave E. :

@Joe Splitrock

Most contractors don’t pull bonds for projects unless they are spectacles to do so. It is extremely rare in a residential setting. They also cost money which is passed on to the owner, who typically doesn’t want to pay for it.

Getting the insurance company involved probably won’t result in a payment, but it certainly puts another layer of pressure on the contractor to respond.

 Most the big residential contractors in my market are bonded and insured. I have built two houses and both were bonded. It is best to only work with licensed, insured and bonded contractors. Make sure they pull permits. All these things cost money, but dealing with problems like this is more expensive. If you do hire someone who isn't bonded, only pay for work as it is completed, because you are taking all the risk. 

@Joe Splitrock

I agree that you should use contractors that are “bonded and insured”.

The problem is that it has become a marketing tool, and no one really understands what it means.

Just because a contractor has a bonding company, or is “bonded” or “bondable” doesn’t mean that they actually pay for and pull a bond for every project. Bonds are only typically used on larger commercial projects. Residential owners and small projects rarely require that the bond actually gets pulled.

@Joe Splitrock

One caveat to that. Some areas require some sort of license bond be issued. If the governing authority requires a license bond, then that is something the contractor needs to maintain on a regular basis that is not project specific in order to renew his license.

It is not alway requirement though.

Originally posted by @Dave E. :

@Joe Splitrock

One caveat to that. Some areas require some sort of license bond be issued. If the governing authority requires a license bond, then that is something the contractor needs to maintain on a regular basis that is not project specific in order to renew his license.

It is not alway requirement though.

 In my city contractors are required to be licensed, bonded and insured. The bonding is not specific to a project, so would cover any project. The minimum amount here is $20,000 but you could have more. You can request proof of insurance and bonding, which states the bond amount. It is best to call and make sure it is current. I suspect my city has mandated this to prevent bad actors from taking advantage of people. 

@Pete Harper The electrician has absolutely no obligation to you at all....his contract was with the GC....only the gc could take action against him. The electrician has every right to cease work due to non payment, but again, you have no say in that. And if the electrician Did breach his subcontract with the GC, again, you have no standing in that. 
Either contractor’s insurance is a dead end....GL only covers damages to your property, not contractual obligations or job completion. 
The sooner you accept these facts, the sooner you can concentrate on a viable solution.  

@Wayne Brooks

Got it, the subcontractor law suit is a dead end.

I still have a case for insurance claim. The GC caused damage to my property. He cut the water supply line in the slab when the inspector said not to. As a result I will now have to run new water lines in from the meters. This is a duplex so everything is 2X. I also have a case for unnecessary damage to the slab.

There is a possibility that the electrician could sue you for the work that was done and not paid for by the GC . 

Originally posted by @Pete Harper :

@Wayne Brooks

Got it, the subcontractor law suit is a dead end.

I still have a case for insurance claim. The GC caused damage to my property. He cut the water supply line in the slab when the inspector said not to. As a result I will now have to run new water lines in from the meters. This is a duplex so everything is 2X. I also have a case for unnecessary damage to the slab.

On the damages, maybe....sounds like cutting the water line was an intentional act/contractor means and methods...may or may not be covered, worth a try.