How does a prime contractor file a claim to subcontractor owning labor/material costs in state public work project?

1 month ago

Good morning,
This is Soo from Exbon Development Inc. I have a question in regards to how to file a payment claim to one of subcontractors which is not corresponding their labor/material work despite their scope of work. We have a subcontractor which was executed subcontract agreement for CA state public work project. This sub was irresponsible to perform their work, did not correspond with us and unsuccessfully uncompleted their work. Most likely they vanished at site. Due to their incomplete performance, we had to hire another subcontractor to cover their work and process material / equipment costs. Such costs are exceeded their contract amount although we back charged in their contract amount.
Therefore, we would like to file a payment claim to them to collect the owning monies. Is there any effective claim or lien to subcontractor? If so, how are the procedures and how are they effective? Please inform me in detailed information. My email address is soo.chae@exbon.com. Please respond my question promptly. Thank you,

Additional info about this contractor
Project Role: General Contractor
Project Type: State/County
Attorney Hunt Ortmann Palffy Nieves Darling & Mah, Inc.
48 reviews

Your claim against the subcontractor would be a breach of contract claim. You would need to file a lawsuit against the subcontractor and obtain a judgment for the additional costs to complete their work p and any other damages. If they are licensed and you obtain a judgment against them they will have to either pay the judgment or go bankrupt in order to avoid suspension of their contractor’s license. But depending on their situation, there is no guaranty that you would be able to recover anything. And it may not be worth the costs to do so.

If you are interest in pursuing this claim, I am available for a free 15 minute consultation to discuss your options. You can reach me at ryan@huntortmann.com or via my cell phone at (805)377-6089.

Disclaimer: NOTE: The information presented here is general in nature and is not intended nor should be construed as legal advice for any particular case or client. The content contained herein is published online for informational purposes only, may not reflect the most current legal developments, verdicts or settlements, and does not constitute legal advice. Do not act on the information contained herein without seeking the advice of licensed counsel. This posting does not create any attorney-client relationship and is neither intended to constitute an advertisement nor a solicitation.
Guest
Anonymous

Good afternoon Mr. Ryan,
Thank you for your advice on my inquiry. So basically the prime contractor does not maintain supportive rights to file a payment/performance claim against the subcontractor owning labor/materials costs unless they did not issue the subcontract bond for the contract they made a sub agreement. Also even if we file a lawsuit, it has no guaranty to recover the costs. In regards to the lawsuit, could you inform what kind of lawsuit in such case do we consider to file? How long does it take to file and to resolve an answer? And how can it effectively be alert to the sub? Please give me some detailed information. Additionally, what if the subcontract does not respond the warranty work to the client although they submitted the warranty to them? Can the prime contractor also file a claim to the sub as not responding their warranty work? Please inform me promptly. Thank you and have a great day,

Attorney Hunt Ortmann Palffy Nieves Darling & Mah, Inc.
48 reviews

The lawsuit would most likely be for breach of contract. You would file the lawsuit and serve it on the subcontractor. They would have 30 days form the date of service to Answer. If they do not answer you would default them and then prepare a default prove-up package proving you claim to the court. If the court is satisfied, the court would then issue a judgment. You would then demand payment of the judgment and if ignored proceed with collection strategies which could include judgment debtor exams, sending notice of the judgment to the CSLB, and potentially recording abstracts in counties where the subcontractor is know to have real property.

If the subcontractor answers the complaint, then a process of formal discovery would ensue culminating in either a motion for summary judgment or a trial. This could take 1-2 years.

In most cases a subcontractor or material supplier will issue a warranty directly to the owner. And thus the owner is the one who would have a claim against the subcontractor for breach of the warranty. But you might have other claims against the subcontractor related to its refusal to honor warranties for your customers.

Disclaimer: NOTE: The information presented here is general in nature and is not intended nor should be construed as legal advice for any particular case or client. The content contained herein is published online for informational purposes only, may not reflect the most current legal developments, verdicts or settlements, and does not constitute legal advice. Do not act on the information contained herein without seeking the advice of licensed counsel. This posting does not create any attorney-client relationship and is neither intended to constitute an advertisement nor a solicitation.
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