Steps When Customer Refuses Paying Contractor

Knowing what steps to take when a customer refuses, not paying contractor is the thesis of this article. Although an uncomfortable situation, contractors need to be informed. Below are steps taken in this particular job, yours might be different, but can utilize what, and how many you may need.

Today marks the official notice a small claims case 17S-000649 brought before Arapahoe County Court on 10/12/17 is finally closed, with no further recourse from the defendant, now knowing proper steps to take when a customer refuses to pay a painting contractor.

Bringing this up for other contractors like myself, as only a few clients you run across try to either slow pay, or pay less than the contract price. Rarely do I publish something so negative, as we strive for excellent customer service, going to every corner.

It is always ideal to have all of our clients we work with, glad they chose us for their painting needs. Most are eager to whip out payment, cash, check, or credit card, being glad everything looks nice again. We make every concerted effort for this to happen, but there is always that one bad apple in the barrel, just as there are contractors.

I had been proud up till now, all of our customers have paid us fully, and that says a lot. Having this tarnished on the record though, having one out of 1000’s refusing to pay. Where that one person so bullheaded, not wanting to pay the full contract price, nor a lesser amount agreed to, is awarding me nearly $20k for a $650.00 outstanding debt. I’ll take it any day of the week. Hopefully other paint contractors do not have to deal with this dilemma, but knowing what steps you must take if you feel it is justified.

When all else fails trying to work out discrepancies, typically over money, it’s time for a mediator, and Small Claims Court getting involved.

Steps When You Are Not Paid, Discussed Below

• Always stay professional
• Request payment options
• Offer discount, to keep out of Court
• File Mechanic's Lien
• File Summons in Small Claims Court
• Have Summons Properly Served
• Mediate, before a mediator

Steps To Take Winning Judgment, Collecting Money

• Submit Interrogatories to Court For Judge Approval
• Have Interrogatories Served To Defendant
• Sequester Bank Accounts
• File Motion And Affidavit For Citation For Contempt Of Court
• File Motion Order To Issue Citation
• File Motion Citation To Show Cause
  

If Interrogatories Are Returned, See Steps Below

• Sequester Bank Accounts
• File Writ of Garnishment and Pending Levy
• Claim of Exemption to Writ of Garnishment with Notice
• Notice to Garnishee, Application of Funds to Judgment, and Release of Funds to Judgment Creditor

If Interrogatories are Not Returned Within Time Period, See Steps Below

• Sequester Bank Accounts
• File Motion And Affidavit For Citation For Contempt Of Court
• File Motion Order To Issue Citation
• File Motion Citation To Show Cause

You’ll need to check with your local county, seeing if a mediator is mandatory, as not all are in any particular state. Deciding on mediation is determined through the local county court system. If your county requires mediation before seeing the actual judge, mediation becomes part of the legal process.

Taking each client very important, appreciating the work given, taking no money until the job is completed, and they approve. This ensures our clients are in control of the work, also demonstrating how proficient & confident we are providing such work in the first place.

Having worked with 1000’s over the years, there seems to always run into one client the hardest to work with, never able to please. Well, having a keen eye today, I can normally pick them out easily, but this one was not the case at all.

Taking A Customer To Small Claims Court

Normally this is the other way around, a customer taking a contractor to court for a inaccurate or bad work, large or small. In this instant, it was the other way around. Just as reviews for contractors are important, so are reviews for clients. Giving a one star to Ms. Tran.

Back last year in June, we contracted with Ms. Tran to repaint her vacant rental properties’ interior. Upon walking with her, figuring out the estimate, she explicitly pointed out, asking to re-texture flat spots on two walls in her living room when painting entire apartment. I said sure we can do that, needing to get a can of spray texture, which will do both areas, noting on proposal.

She liked the price, signed the contract, and we scheduled the work, getting the correct paint color, and my crew completed this within time allotted. This is when it all became difficult, seemed like we could never please her.

Upon 1st walk-through, she pointed out numerous flat spots on walls where someone else used drywall mud, patching holes from a previous time, having no texture. These flat spots were through her entire 2 bedroom apartment rental.

Demanding we re-texture all of them, or she was not going to pay us, calling us unprofessional if we did not. At this point I agreed to do anything to make her happy, and finish this job. Having to repaint 90% of apartment again, having to re-texture entire apartment, it would have cost a minimum $1500.00, but willing to take this in the shorts.

Giving Us Additional Work

You have to understand something. If someone does not like your initial work, they will not give you more! Certainly not in this case. I do not know anyone or any contractor unhappy with someone’s work, giving them more as change orders or an addendum to original contract.

Re-texturing apartment, getting rid of all flat spots, repainting entire apartment the second time, having a spot free, exemplary, vacuumed apartment for second walk-through, she asked if we could repair ceiling with new popcorn texture, where the light was being removed by an electrician currently on site, + painting a large closet not included in original estimate. Agreeing for additional work, we did that also.

Multiple Walk-through(s)

Now, finishing additional work, happy with her change orders, she still was not happy. Requesting we remove old window treatment blinds, installing newer ones she had not even bought yet. We had removed blinds during painting process, replacing them as there was no mention of new ones, cause if there was, we would have left old ones off, allowing her to bring in new ones for us to reinstall from the get-go. However, still trying to please, I personally removed all blinds, installed new ones, after the job was completed, after the fact.

Requesting another walk-through, she arrived still not ready to pay as I could tell. She pointed out dust in back corners and crevices of cabinets, dust under appliances, also top of water heater in mechanical room, where there was no painting ever taking place. She was walking around hoping to find something as to almost using an eye piece. Getting on her hands and knees, inspecting like the infamous Inspector Clouseau or Hans Moleman.

Knowing this was a hard customer to please, I went back with a wide array of house cleaners, floor waxes, and polishers. Getting down, combing every square inch, wiping, polishing floors, cleaning glass, this was impeccable and ready to move in, knowing there would not be anything else to complain about.

I was right! On the next & final walk-through the following day, she said everything looked good, and how could she pay. I was very happy to have won her approval, giving the house keys back. Telling her I could send a link over to process her credit card through PayPal, as she would not incur any additional costs related for processing transaction.

Slow Pay?

Ms. Tran never processed her card, I emailed several times, sending reminders with no response. Finally, a week later she sent a check for only a partial amount, paying 75% of the contract price, which floored me. Keeping my cool, which is very important, I stated she needed to pay the entire amount, as she agreed and accepted the work on final walk-through, giving her keys back.

Disagreeing that she claimed she had to have carpets shampooed because of us, was an outright lie, not pointing out one spec during final walk-through. But still trying to work with her, I offered to discount amount $150.00, bringing what she owed me to $650.00 would be acceptable.

I wanted every penny from this customer, bending over backwards, spending undo extra labor and time making this lady happy, I was not going to let some landlord take advantage of me like this. Approx. 2 weeks later, sent her an email requesting that amount or will take legal action, reminding her she’d be liable for much more. But only she realized, it would have saved her thousands instead of paying hundreds.

Small Claims Court Proceeding

Still nothing, I submitted a summons in Arapaho County Small Claims Court for this case, and she was served in August 2017. Having not checked it out, but mediation is required & mandatory in Arapahoe County as part of the trial. Ms. Tran filed 3 motions the week before trial, asking to move the date, bypass mediation & go directly to trial, but were later denied.

On October 12th. 2017 we both met a mediator hearing both sides. Willing to mediate with her, Ms. Tran refused to mediate, requesting a trial. Mediation is required in all small claim cases in Arapahoe County, and if you refuse, or do not bring evidence in your case before meditation, the other party will win having a default judgement against other party, which I gained that day in the amount of $3650.00.

• Try to work with client, doing extras
• Document all correspondence, keeping all texts and emails
• Let it be known Small Claims Court will be forthcoming
• Bring all information to Court appointed mediation
• File a Mechanics Lien on the property if you have not been paid
• If you win Default Judgment, does not mean you get your money that quick
• Respond to all Court instructions, follow Court rules by the book
• Final Court ruling is a Mandate

After Winning Default Judgment, File Mechanics Lien

The Judge granted me the extra texturing, additional costs I incurred trying to chase money down. Going from $650.00 to $3650.00, I was very happy, but a long time ever seeing this, having no idea. I could’ve place a lien after winning judgment, but though having it placed before mediation would give me an upper hand, which it did.

Being protected though, the Default Judgment awarded me 8% compounded monthly until Ms. Tran satisfied the judgment, which I would release the mechanics lien I have placed on her rental property.

She appealed Court’s ruling in Small Claims Court awarding me the default judgment, but was later denied.

Responding to Colorado Court of Appeals, Ms. Tran stated she was suing are you ready for this? Suing Arapahoe County Small Claims Court, District Court, and State of Colorado Court of Appeals for errors made in this case. I know if she could sue me, she would, but the the Court records clearly states a Defendant has no recourse, once a decision has been reached.

Since then, I filed a motion pleading to the District Court, sending me her Appeal Bond she had to post, having her appeal processed & heard, only to be denied. Yea! Got her appeal bond in the mail last week.

However, this is now only a smaller portion what she owes me, paying over $3500.00 to a debt collection company, 8% interest compounded monthly what she owes me, she still owes me well over $8300.00 not including mental anguish, undo harm, and additional time spent on this. The debt collection company and attorneys can easily have approved an amount well over $20k because the ball is in our court now.

Sequestered Accounts

After obtaining judgment, and while numerous appeals ongoing, sequestering bank accounts is possible. Do not let an appeal get in the way of your advancement, trying to receive what is is due. Not sure if Ms. Tran knows, but the Debt Collection Company I’ve retained has sequestered her bank accounts, locking down amounts, keeping her from withdrawing all funds, or closing them. So it’s just a matter of time, before more money starts rolling in.

File Interrogatories

Adding insult to injury, I submitted to have Interrogatories properly served to Ms. Tran last week, after Honorable Judge Kelly LaFave approved the second time, a year later. The first interrogatories got hung up in District Court, with Ms. Tran’s appeal months prior. Now again, having 14 days after she is served, getting back to the Court.

Once these are in place, the collection company will debit amount out of her accounts, giving her bank copies of judge’s approved Interrogatories for withdrawals.

Mandate

Colorado Court system crossing all the i’s and crossing all the t’s in this matter, a Mandate was just received today from the State of Colorado Court Of The Appeals dated October 16, 2018, and it reads, “Upon consideration thereof, the Court of Appeals hereby ORDERS that the APPEAL is DISMISSED” for case number 2018CA1349.

And Ms. Tran had all the opportunities to nip this in the bud, only costing $650.00 in dispute, but now costing her well over $20k. I wonder if I should thank her for the business, wishing all costumers were this profitable.

I’m sure I will not do this, adding salt to a wound, but would like to remind her she, all of this could’ve been less costly for her, with numerous opportunities to quash this unpaid balance, paying a lesser amount, than today.

Advantages Winning A Case

Besides a monetary edge, no counter suit is allowed. No negative BBB review would be allowed either, having all information in the forefront. Giving me patients, the experience what is involved, but normally not this extensive. Most Small Claim Cases are quickly resolved that day during mediation.

This is what the Court tries to do. But if your other party refuses to mediate, wishing to go before a Judge in the matter, it is quickly decided, as mediation is mandatory in Colorado.

What was so enlightening on day of mediation, Karen our mediator said to both of us we needed to go into the mediation room. Ms. Tran quickly said she would not sit in the same room with me, so Karen said she’d take the Plaintiff in first, being me.

Laying out all emails, invoices, etc. she could easily see Ms. Tran was satisfied with work, only to deduct an erroneous amount later. Karen also saw I tried with my best of intentions, tried to work it out with her. Ms. Tran never made any mention of additional costs she incurred with our work, as this must be done at least 14 days before mediation.

Then it was her turn in the mediation room. Ms. Tran laid out an estimate from Vacant Interiors, which was dated a day before mediation, claiming she paid over $10k dollars for re-texturing, repairs, and painting. This was a bald faced lie, which I later proved, speaking with owner Steve at Vacant Interiors.

We met a week later at a Wells Fargo, notarizing a short document, stating Vacant Interiors did no work, and was never paid for this $10k estimate. Karen saw this being erroneous the day of mediation, closing the book, walking out, telling me to file a motion, requesting the Judge for Default Judgment in this matter.

So giving the court a fraudulent document, where others can easily read through it, is one of the best advantages winning a case. Ms. Tran did not show dignity of the Court, submitting false documents, and was in Contempt, which I have not filed motion as of yet.

Reading lies after lies with every motion she filed, I really could not grasp how someone could twist the narrative. Funny how all of this was going on at the same time, I was able to see similarities with Christine Ford vs. Brett Kavanaugh. I had to laugh to my wits end several days, this being the smallest to the largest Court battles, during the same time period.

Small Claims Case A Real Hobby

Depending upon your Defendant, how many Appeals they file, legal battles can take a long time. Never give up, and if you feel you are in the right, let others become involved with your battles. Having learned an enormous amount in this particular case, being very entertaining to say the least. You really want to first work this out between yourselves before bringing to Court.

Two things I’ve learned through all of this. 1) You never want to tick off the Court, Clerks, and Staff and 2) Court battles can be very costly, especially if you refuse a mountain of Court Orders and denials, trying to work the legal system.

You might say, “Wow Cal, you going after $650.00?” Well, $650.00 is not something I would loose any sleep over, but given the fact, bending over backwards, feeling like Ms. Tran was trying to get something for nothing, over on someone else.

But I wanted to get this out, helping protect contractors in general. There is a lot of information out there protecting clients from contractors. Needing cases, studies, information at our disposals, not letting frivolous clients get the upper hand with us either.

Like a typical stereotype landlord, keeping security deposits, I was not going to let this person do it to me. Now, it’s only a matter of time before additional money starts rolling in, which I have not determined which charity I wish awarding, but have a few in mind.

Case Numbers Involved

Arapahoe County Small Claims Court, 17S-000649
Arapahoe County District Court, 2017CV361
State of Colorado Court Of The Appeals, 2018CA1349

Schedule of Events

Plaintiff: Cal Phillips
Defendant: Ms. Tran

On August 25, 2017 I Filed Notice, Claim, & Summons To Appear For Trial for 10/12/2017 at 11:am
On 10/02/17 Tran filed Motion to Bypass Mediation and Go Directly to Trial, Later
Denied
On 10/03/17 Tran filed Motion to Reschedule Trial Date, Later
Denied
On 10/03/17 Tran filed Motion to Reschedule Mediation Date, Later
Denied
On 10/12/17 Tran refused to mediate, a direct violation of the State of Colorado Courts
On October 12, 2017 Judge ruled, awarding Default Judgment to me, against Tran
On 11/8/2017 Tran filed Motion And Order To Set Aside Default Judgment, Later
Denied
On 12/8/2017 Tran filed Appeal in District Court
On 6/6/18 District Court Appeal denied Tran's request for Appeal
On 6/15/2018 Tran filed Motion to Stay Judgment in District Court
On 7/25/2018 Motion to Stay Judgment in District Court
Denied
On 7/23/2018 Tran filed Appeal in Colorado Court of Appeals
On 9/4/2018 Colorado Court of Appeals, dismissed Tran’s Appeal
On 9/8/2018 Tran filed Response to Colorado Appeals Court, laughable
On 9/13/2018 Filed Motion Appeal Bond to Plaintiff w/Tran's Response & Court's Dismissal
On 9/13/2018 Filed Motion And Order For Interrogatories to Tran
On 9/13/18 Judge Kelly Fafave gives Tran 10/5/18 to file objection releasing bond
On 9/14/18 All 3 Colorado Court of Appeals Judges responded to Tran's letter, continuing Dismissal
On 9/27/2018 Filed Motion And Affidavit For Citation For Contempt Of Court
On 9/27/18 Filed Motion Order To Issue Citation
On 9/27/18 Filed Motion Citation To Show Cause
10/15/18 File Motion To Release Appeal Bond, Giving To Me
On 10/16/18 Received Tran's Appeal Bond, she originally paid & posted for Appeal
On 10/16/18 Received Mandate from State of Colorado Court Of Appeals, APPEAL IS DISMISSED
On 10/17/18, Filed Second Interrogatories, Having Properly Serving Tran

Step by Step Instructions Filing A Small Claims Case

STEPS TO FILING YOUR CASE

Step 1:

Complete the Notice, Claim, and Summons to Appear for Trial (JDF 250).

Identify the names(s) and addresses of the Plaintiff(s) and Defendant(s)in the caption, see page 3.

In addition, if the Defendant(s) is/are a business or an entity go online at www.sos.state.co.us (select business section) to determine who the registered agent is to complete service on the Defendant(s).

Note:

It is important that you identify how the Defendant’s business is organized. For example, if the business is a sole proprietorship, corporation, etc. Rule 304 of the Colorado Rules of County Court Civil Procedure, identifies how service should be completed based on the type of business and this information will assist the individual who know the rules of service when they serve JDF 250.

If the Defendant is a governmental agency, you may be required to file a written notice with the Attorney General or other government representative, prior to filing your case with the Court, pursuant to §24-10-109, C.R.S.

Please answer all four questions with a Yes or No. The Court will complete the box with the scheduled Court Trial date once you file your papers. Under the Plaintiff(s) claim section please write a brief description of your claim. Include what you are claiming, the amount you are requesting, and a summary of reasons to support your claim. If you are completing JDF 250 using the WORD or PDF version, make sure that you complete all 4-parts of the form.

File your Form with the Court. Provide the Court with the Form.

If you are completing the form using the WORD or PDF version, bring all four parts (7 pages) with you to Court. If you have the NCR form, bring the four - part form.

Pay the filing fee of $31.00 or $55.00 as appropriate

The Court will complete the section that identifies the date and time for the Court Trial. The Court Trial date will vary with each Court. The Court may require mediation prior to the Court Trial date or on the Court Trial date.

Step 3:

Serve the Notice, Claim, and Summons to Appear for Trial. It is important that service be completed at least 15 days before the trial date. If not, the trial date will need to be rescheduled or your case may be dismissed.

A separate copy of the “Defendant’s copy” must be served on each Defendant. If there is more than one Defendant, make a copy of the Front and back of the “Defendant’s copy” for each Defendant. JDF 248 R7-13

INSTRUCTIONS FOR FILING A SMALL CLAIMS CASE

Personal Service:

Select either the Sheriff’s Department, a private process server, or someone you know who is 18 years or older, who is not a party to the case, and who knows the rules of service to serve each Defendant. There is a service fee that is payable to the Sheriff’s Department or Private Process Server. The fee for service is usually awarded as part of your court costs if you win your case. You can locate private process servers in the yellow pages under Process Servers. Provide the process server with one copy for each Defendant of the Notice, Claim, and Summons to Appear for Trial “Defendant’s copy” and the “Affidavit of Service” portion. The process server will return the completed Affidavit of Service portion of this form to you to bring and file with the Court before or on the day of your Court Trial. Keep a copy of the Affidavit of Service for your records.

Certified Mail by the Clerk of Court:

You can request that the Court send the notice by certified mail. Only the Court can do this. Certified mail is not the preferred form of service and could result in a delay in your Court hearing. You will be required to pay the cost of certified mail at the time you file your case. This cost varies from $5.00 to $15.00. If certified mail cannot be completed, you will still need to have a sheriff or process server serve the form.

PREPARING FOR MEDIATION

Mediation can be an effective way to resolve your dispute. In mediation, a neutral third party works with the parties in a confidential setting to help them negotiate a mutually acceptable agreement. You may be ordered by the Court to mediate, or you can choose mediation to resolve your case without going to trial. Mediation services

are available from the Colorado Office of Dispute Resolution (303-837-3672) or from private mediators (see listings in the Yellow Pages). Some areas offer no - or low - cost community mediation services.

You should bring any legal or financial documents and any other information relating to the dispute with you to the mediation.

POSSIBLE OUTCOMES FROM MEDIATION

You and the other party may reach a stipulation/agreement. Prepare a stipulation form (JDF 75) to identify the agreement. Both parties should sign the form and provide it to the Court.

The party may agree that the money is owed and payment is made. Prepare a stipulation form (JDF 75) to identify the agreement and payment made. Both parties should sign the form and provide it to the Court, so that the Court knows that the case can be dismissed. The stipulation must be signed in the presence of a court clerk or notary public.

If you and the other party do not reach a stipulation/agreement, then you will have a Court Trial.

PREPARING FOR THE COURT TRIAL

It is important that you are on time or early for your Court Trial and that you have all of your information with you. Please turn off your cell phone and respect all parties in the courtroom. You may be asked to speak to the other party before the Court Trial to determine if the claim can be settled to avoid going to trial. Below are some steps to follow:

Before your court date, ask the Clerk if you can observe a small claims court trial. This is not required, but may help you feel more comfortable in Court and prepare you for your court trial. Determine the evidence that you may need. It is best to organize and label all exhibits, if you have more than one. Examples of exhibits are documents such as photographs, charts, and receipts. Make copies JDF 248 R7-13

INSTRUCTIONS FOR FILING A SMALL CLAIMS CASE

of the exhibits for the Defendant(s) and the Court. If the Court has to make copies for you, copy fees will be assessed. Determine if you will need any witnesses. You can ask the witness to appear voluntarily, or you may need to request the Court to issue a subpoena to each witness. Instructions for Issuing a Subpoena (JDF 79) can be found on the judicial website under the General Section. The Court will accept written statements from the witnesses in most circumstances.

Before you appear in court, highlight the key issues you would like to present. When others are testifying, take notes on what they say.

POSSIBLE OUTCOMES FROM YOUR COURT TRIAL

The Magistrate or Judge will usually determine the facts, who won, and the amount of the judgment. The Magistrate or Judge also may make an award of costs (filing fee, service fee(s), and witness fee(s), if applicable) to the winning party.

The party who was awarded the judgment is responsible for collecting the money. The Court cannot do this for you. The Court may provide the person who owes the money with either a Motion & Order for Interrogatories Short Form (JDF 252A) or a Motion & Order for Interrogatories

Long Form (JDF 252B). The interrogatories are designed to help identify where the party works, money held in savings/checking accounts, and property that the debtor owns that can help with collecting the money.

Additional collection information entitled “Instructions for Collecting a Judgment and Completing a Writ of Garnishment” (JDF 82) is available on the website under Garnishments.

Self Help Forms Needed

JDF 82 R12-13

INSTRUCTIONS FOR COLLECTING A JUDGMENT AND COMPLETING A WRT OF GARNISHMENT
Page 2 of 6

©2013 Colorado Judicial Department for use in the Courts of Colorado

FEES

Fees that a party to the case my encounter are as follows:

Copy of Documents $.75 per page Service Fees Varies (Payable to Process Server) Issue Writ of Garnishment $45.00 Certification Fee $20.00 Transcript of Judgment $25.00 Execution $45.00 Satisfaction of Judgment $20.00 Hearing for Interrogatories $70.00

FORMS

To access a form online go to www.courts.state.co.us and click on the “Forms” tab. The packet/forms are available in PDF or WORD by selecting “County Civil - Garnishments” or “District Civil - Garnishments”. You may complete a form online or you may print it and type or print legibly in black ink. You may need all or some of these forms. Read these instructions carefully to determine what forms you may need.

JDF 76 General Motion JDF 77 General Order JDF 89 Notice to Garnishee, Application of Funds to Judgment and Release of Funds to Judgment Creditor JDF 105 Pattern Interrogatories Under C.R.C.P. 369(g) - Individual JDF 108 Pattern Interrogatories Under C.R.C.P. 369(g) -Business JDF 111 Satisfaction of Judgment Form 26 Writ of Continuing Garnishment Form 27 Calculation of the Amount of Exempt Earnings Form 28 Objection to Calculation of Amount of Exempt Earnings Form 29 Writ of Garnishment with Notice of Exemption and Pending Levy Form 30 Claim of Exemption to Writ of Garnishment with Notice Form 32 Writ of Garnishment - Judgment Debtor other than Natural Person

Having retained a viable collection company, knowing all the ropes, they will be paid 20% up and beyond what she owes me, including pain and suffering, mental anguish, time & money spent. If the final figure is $20k, she’ll need to cough up $24.

Recapping Steps To Take If Customer Refuses To Pay You, The Contractor

Proper Legal Steps To Take

• Follow Court rules

• Try working out discrepancies

• Do not submit false documents

• Follow all court dates, procedures

• File mechanic's lien on property

• After 7th or 8th Court denial, get the message