Tuesday, June 13, 2017

Is This How You Do Business?

Chris Chase runs Chase Building Movers, Inc. in Wells, Maine. Chase specializes in timber frame barn moving and restoration. In May of 2011, Chris responded to an ad Ken and Nancy Lavin placed on Craig’s List. The Lavins needed a contractor to repair a timber-frame barn behind their home. On May 5, 2011, Chris met with Nancy Lavin on site to discuss the project.

Rot was plainly visible on the barn’s north wall. Chris pulled off several rotted shingles to get a closer look. He drew a rough sketch of the barn footprint and made a note, "Replace 6” x 6” sill with p.t." and "Replace studs as needed."

Chris offered to do the work at $45 per hour, his standard rate. Nancy agreed to provide the materials. Chris didn’t say anything about a written contract but agreed to start work when the barn was cleaned out and when Nancy had a building permit. That didn’t happen for over a year.

In October 2012, Nancy went to the Wells town hall to get her permit. She described the job as: "Replace 37 linear feet of existing garage wall and sill plates to match original. Total of 370 Sq. Ft." The value of the work was pegged at $10,000.

Chris had a crew working on site from October 18 to October 26, 2012. Nancy was there nearly every day and took pictures. After work started, Chris discovered that the sill under the west wall was also rotted. According to Chris, Nancy gave her OK to repair the west wall. Again, there was no written agreement for extra work.

By the following Monday, work was substantially complete. Chris presented Nancy with a bill for $8,460 -- 188 hours of work at $45 per hour. Nancy was surprised at the size of the bill. She wrote Chris a check for $5,000 and refused to pay any more. That left $3,460 unpaid.

Lavin vs. Chase Building Movers
Ken and Nancy sued, claiming breach of contract, breach of warranty, fraud, and violation of Maine’s Home Construction Contract Act. The Act requires a written agreement with 14 separate notices and disclosures. All changes to the contract must be in writing. Chris admitted at trial that he violated Maine’s HCCA. Under Maine’s Unfair Trade Practices Act, any violation of the HCCA is prima facie evidence of fraud. That gave Ken and Nancy the right to collect damages plus attorney's fees and costs. The cost to Chris could be many thousands of dollars – all because Chris didn’t bother to get a signed contract.

The case came to trial on April 12, 2017. Expert testimony convinced judge Douglas that work on the barn was structurally sound and substantially complete. He awarded Chris $2,520 of the $3,460 Chase Building Movers claimed and denied all claims of the Lavins. Chris wasn’t charged any of the $1,000 civil penalty that comes with violation of Maine’s HCCA.

Chris got off easy. Still, it took nearly five years to collect. Chris paid attorney's fees for much of that time, including the two-day trial. In the end, Chris got paid less than 90% of what he expected. No contractor wants results like that.

If you’re still working without written contracts, understand that times have changed. Modern consumer protection law in nearly all states puts residential contractors at a disadvantage. Without a signed agreement, you’re wide open to what happened to Chase Building Movers.

With Construction Contract Writer, it’s easy to draft contracts perfectly legal in any state and for any type of construction. The trial version is free.