We have a total past due outstanding balance with this customer at $685,659 on three projects. American House ($332,328). Rooms to Go ($174,321), and Brooksville ALF ($174,321). On the Rooms to Go project, we have agreed additional repairs are needed and have agreed payment would be made after the repairs are done. The other two projects there is no reason why payment should not be made. The GC is not responding to any of our calls or collection attempts with regards to unpaid invoices. Our belief is that there may be offset language in the contract and GC is withholding payment because of the repair work need on the Rooms to Go project. This is our belief, the customer has not confirmed this to be the reason why payment is withheld. Due to lack of response on the two other projects totaling $506,690, we would like to move forward with litigation on under prompt law and breach of contact. Could the open repair issues on the other project hinder this? If there is offset language in the contract, could this prevent successful litigation (offset language meaning payment could be withheld for open work on any existing projects)? Please advise. We would like some legal perspective on this issue? Thank you!
Considering the fact that the amounts in dispute are so substantial, the complexity of reviewing multiple large claims across separate projects, and that the availability of both the breach of contract and prompt payment terms will be dependent on the contract terms - it'd be wise to consult with a Florida construction lawyer so they can review the contract and the situation. Levelset makes it easy with Legal Guard in Florida, plus it's home to the FL construction lawyer directory where you can contact lawyers: Top Florida Construction Lawyers.
If your customer has breached the contract you have with them, then pursuing a breach of contract claim (or at least threatening a claim) makes a lot of sense. I'm not sure whether your offset language would block the enforcement of prompt payment laws, and that will depend on the specific language in the contract. With that being said, Florida does seem to give a lot of deference to contract terms. So, if the contract specifically allows for withholding payment on one project regarding a dispute on another project, and if the contractor has complied with all of their other contractual requirements, it's possible that could negatively impact the chances for a successful prompt payment claim. Still - withholding under offset contracts will often require some relatively explicit form of notice before payment can be withheld.
It's worth noting that turning up the heat on these projects by threatening lien claims and legal claims could help at least break up the radio silence. They could force the owner or the contractor's hand and force them to explain the holdup and work with you on finding a resolution. So, even if you're unsure of how your legal claims might play out, presenting them to the other parties could still have value. Complaints to the Florida DBPR , negative reviews online or with the BBB, and other social pressures could go a long way, too. And, naturally, your lawyer's assistance navigating the claims could end up being invaluable.
It's simple - you need to hire a lawyer to write a demand letter. If they are withholding $174k on the RTG project, that should be more than enough to cover any repairs. So the offset language is irrelevant in that context. The GC cannot hold half a million dollars for repairs that are, what, $50k, $70K? (If that much.) You can reach me at reese.henderson@gray-robinson.com if you have any further questions.
I concur with Attorney Henderson's response and recommend you contact him without delay regarding this matter. He is board certified in construction law by the Florida Bar and would provide you with able and experienced counsel in this matter.