ABC SEMI Issue 3 2019

Southeast Michigan Contractors  Issue 3 2019 11 During the construction work we were dealing with two of the owners, who were always very nice and cooperative, but once we entered into legal proceedings we were told that the project was being taken over by their “other” two partners and we would have to deal with them to get paid. Two more weeks pass with no headway on payment when one of the original partners contacts us for a face-to-face meeting to settle the issue. At our meeting he tells us the job is great, everyone did a great job, however, we were a month late. We started a month late due to their booked events but completed work within the same time frame agreed to. Then we were told that there were accounting problems, again we were never provided anything to explain their claims. But now he offered us $350,000 and told we should take it, or it would be a long legal process for us to collect. After speaking with our attorney, we seriously considered foreclosure, but it would cost us at least $20,000 or more in legal fees and then we could quite possibly have to defend a lawsuit from the mall owner, and our customer would probably counter-sue and we would need to defend another case. In the end, we would probably win our case, but would we recover the legal fees? Also, they could ask for time to pay off the balance and we cannot finance this work. We agreed to settle for less money, and they get $60,000 of tax-free money, legally by getting the contract amount reduced through a settlement agreement. We believe this was premeditated and criminal, and it needs to be fixed. Perhaps a law that requires the local municipality to get a “contractor paid notice” before a Certificate of Occupancy is issued. This is why liens in general do not work for contractors and there needs to be serious consideration to changing the state law to prevent further abuse and exploiting of the current law. A contract is only as good as a person’s word. Know who you are dealing with. Do your own due diligence on them, as they surly will do on you.