Home>Levelset Community>Legal Help>Hello I am in California and a property managent company hired us to do work for their customer. We are a pool repair company and we are license contractors. We have a signed estimate and emails with this company aprroving all the work. They are refusing to pay now. The job was done on 1/10/19. We did not send out a Preliminary notice. Can we still send an Intent to file? Should we file a lawsuit with the county small claims court? If so, who do we bring to court? The property management company? the owner of the house?

Hello I am in California and a property managent company hired us to do work for their customer. We are a pool repair company and we are license contractors. We have a signed estimate and emails with this company aprroving all the work. They are refusing to pay now. The job was done on 1/10/19. We did not send out a Preliminary notice. Can we still send an Intent to file? Should we file a lawsuit with the county small claims court? If so, who do we bring to court? The property management company? the owner of the house?

We are pool company in Riverside, Ca. A property management company hired us to work at one of their clients home. We have signed estimates and emails approving all the work that we did. They are refusing to pay. We started the work on 1/9/19 and finished on 1/10/19. We did not send the Preliminary notice. Please advise us of our rights? Should we go to small claims court? Who do we take to court? We have only had communication with the property management company. The house is currently up for sale.

1 reply

Feb 7, 2019

These are great questions, and I'm sorry to hear you've gone unpaid. First, I should note that I'm not able to provide you advice on how to proceed. However, I am able to provide information that should be helpful for making these determinations for yourself. If you're in search of legal advice, reaching out to a local construction attorney could be helpful - they'll be able to review your circumstances and any relevant documentation and advise on how best to proceed. With than in mind, let's look at some California specifics. First, regarding a Notice of Intent to Lien - this is not a required part of the mechanics lien process in California and it doesn't officially stake a claim against the project property. Thus, in actuality, a Notice of Intent to Lien is more like a threat of lien, and it can be used regardless of whether a mechanics lien ultimately would be filed and regardless of whether such a lien would be valid or enforceable. A property owner will typically not be willing to overlook a Notice of Intent to Lien even where the right to file a lien has not been preserved, and the extra pressure an owner may put on their project manager or contractor could help a sub-tier claimant get paid. Regarding small claims court - the small claims court option can be effective to help resolve a dispute quickly and in a cost-effective manner. Note, though, that claims in small claims court are limited to $10,000 for individuals or sole proprietors, and they're limited to only $5,000 for corporations and other entities. More info on California small claims court can be found here: CA Small Claims Court Guide. As you likely know, traditional litigation also carries expense and risk, but it's still an effective tool for recovery. zlien discusses that here: Payment Loss Litigation in Construction. Regardless of whether small claims court or traditional litigation is chosen - the party against whom action is taken will ultimately come down to the claim which is made. Typically, in nonpayment situations, a claim might be brought under some remedy that applies between the unpaid party and the party who was supposed to pay them. If a breach of contract claim were filed, then the other party to the project would need to serve as the party against whom the claim is made - after all, that's who the contract connects the claimant to. The same is true for a claim under the California prompt payment laws - the party who failed to obey the prompt payment laws is the one who might be liable. However, when a claim like unjust enrichment is filed, such a claim might also be brought against the property owner - ultimately, the property owner is the one who benefits from the improvement of their property, and a court might find that to be unjust. Ultimately, though, if a legal action will be filed, it would be wise to first consult with a local attorney and to present them with all relevant circumstances and documentation. Upon their review, they will be able to advise on what options might be best to proceed. As a final note - keep in mind that, much like the threat of a mechanics lien, merely threatening to take some legal action (such as one of the ones provided above, or others) could be effective to compel payment - especially when made via an attorney's demand letter. Owners hate liens, but they really despise lawsuits - so it's certainly possible a dispute could be resolved without the need for formal legal action.

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