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I am a sub contractor needing help receiving payment from a contractor

I am an electrical contractor that was hired by a contractor for work on a residence in Colorado. We submitted a formal proposal that was signed and approved by the contractor. We completed all the outlined work on the original proposal and additional changes as requested, and all services equaled the original proposal amount. Billing that was sent out was clearly outlined as to all services rendered and was the approved amount stated on the approved proposal. We have been paid approximately 50% of the proposed and billed amount. The contractor is now in legal mediation with the owners and are owed over $150,000 from the owner. The amount we are owed is $7575.44 of that $150,000. What is the best way for me to attempt to get funded for this amount? I have no direct contact with the owner or owners rep, and we are outside of 120 days to file a lien. My contractor stated they filed a lien and are having their lawyers talk. I am thinking of taking the contractor to small claims court (if I can being it is $75.44 over) however we have active jobs with this contractor and would like to keep a good business relationship.

1 reply

Jun 15, 2020

If the deadline to file a Colorado mechanics lien has passed, then claims against the owner, directly, might not be possible. But, as you mentioned above, claims against your customer should be on the table. What's more, simply threatening to bring a claim forward - by sending a payment demand letter - could be effective as well. Making a claim against your customer could certainly negatively affect the relationship there, though. Often, when there's a good relationship between the contractor and sub, the sub might work with their contractor - if the contractor can provide a written statement that you'll be paid from the proceeds of their dispute with the owner, that might be a good way to recover payment while actually strengthening that relationship. Or, simply waiting to see what happens there might be useful for deciding whether or not to make a claim against the contractor. And, obviously, going ahead and pursuing a claim regardless of the relationship is an option, too. As for small claims court - note that you're entitled to waive amounts that exceed that limitation. So, a claim could be brought in small claims court and you could be paid up to $7,500 if you're successful. So, when the disputed amount is marginally above the $7,500 limit, it might make sense to waive that marginal amount so you'd be able to bring the clam as a small claim. More info on Colorado small claims court here: Colorado Guide to Small Claims. For help deciding on how to proceed, consulting with a local Colorado construction attorney might be useful.

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