We all want to avoid problems on construction projects, especially when they can lead us to the courtroom. Defective work claims are one of the top issues among contractors across the country—the kind that are best avoided if possible. However, it is not always possible to prevent a defective work claim. Occasionally, even if you have done everything you can to mitigate conflict in this realm, you may still find yourself working for a high-maintenance homeowner who will file a claim anyway. In these instances, it is important to be prepared with a response. Going to court is never ideal, but if it is inevitable there are lessons to be learned from those who have been in your shoes and how to (and how not to) best handle the situation. In this blog, we’ll dive into what to do if you’re getting sued for defective work as a residential contractor.
Sued for Defective Work: Real-Life Lessons Learned
We once had a client who was a masonry contractor working on the exterior of a house. The homeowner he was working for was eager to find a problem, and quickly began micromanaging the work. Because the product our client was using was natural, there was some color variety, which kickstarted the homeowner’s hunt for problem areas. On the project, many small, remaining issues were left for our client to double back and fix at the end of the work, from small scratches and dings in the wall to missing masonry in other small patches.
Because the homeowner did not understand that these were punch list items, and our client intended to fix each one at the end of the project, the homeowner kicked him off the job, terminated his contract, and hired someone else to complete the work. As a result, he was ultimately sued for defective work. We went to trial, did everything we could, and still lost.
Unfortunately, this outcome is all too common. Contractors getting sued for defective work happens all the time, and here’s why. The jury took the homeowner’s side despite our claims of close-out procedure and explanations of how the process was meant to go. It was not that our client’s work was poor in quality, but that he had not finished working—so his unfinished product was under judgment as if it was a final product.
Juries are just comprised of normal people, many of whom are usually homeowners. When sitting in a jury box and seeing scrapes and dings and incomplete work without understanding construction, it is easy for jury members to be shocked that a contractor could leave a project in that state. The jury does not inherently understand that it would have been fixed at the end, so they usually empathize with and vie for the homeowner. That being the case, the contractor is always at a disadvantage in the courtroom, especially with a residential construction lawsuit. Sometimes, their conviction can be so resolute that it does not matter what you mentioned in your contract if the damage looks severe enough to warrant distress.
This is a cautionary tale that shows the efforts on the front end but does not put us in the best position on the litigation side. Even with enough warning and encouragement to settle, the client insisted on taking it all the way to trial, which cost them more than $40,000. This client’s sticky situation could have been prevented, though. Had our client scheduled a sit-down discussion with the homeowner on the front end, we doubt we would have ended up fighting the case in front of a jury. A discussion would have allowed them to go over how the process would play out, what a punch list is, and provide written responses and solutions line by line each time the homeowner brought up an issue.
The contractor also could have improved his situation by clearly communicating that the product the homeowner selected was natural and, therefore, would have a color variety. As the contractor, he could not be held responsible for that natural color variation. If only he had responded effectively, timely, and clearly, he could have saved a lot of time, energy, and money.
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What to Do if You’re Sued for Defective Work
Generally, the issue we see the most that sends our clients into litigation is a lack of response when the homeowner sees that there are issues. This is why we continue to emphasize the importance of responding to the claim as soon as possible! Without a response from the contractor, the homeowner is left to their own devices to figure out the situation and can jump to the conclusion of negligence far more easily.
If you respond and own up to the issues and detail how you plan to address them—or if you respond to let them know that the issues are moot, a response is significantly better than radio silence. Starting a dialogue about it will allow you the space to negotiate and prevent the issue from progressing to court. Even if you need to spend more than you planned to address the issue in question, spending a bit more is better than spending tens of thousands of dollars on an attorney only to lose your case and pay the homeowner anyway.
Put Everything in Writing
Additionally, be sure your response to the claim, whether you decide it is or is not an issue, is in writing! If you respond verbally, follow up with an email or text detailing what you discussed. If it continues to court after your response, this is your best shot at covering your a$$. Make sure you can show where it is mentioned in your contract, as well as your correspondence regarding the issue after the homeowner made a claim. If it is not an issue, make sure you can show your explanation as to why it is not an issue and can support it with the breakdown of your responsibilities listed in your residential construction contract. If it is an issue, be sure you can provide written evidence of your response offering to fix the issue and a reminder of your close-out process that was agreed to in your contract. Establishing a paper trail that your contract can support is the best way to fortify your case. Do your part and prepare.
Getting sued for defective work sucks, and we work hard to avoid ending up in the courtroom as best we can. In some instances, it happens regardless of how hard you try to prevent it, and, in those cases, you must do all you can to prepare and support your position. Having a capable construction attorney like those on our team at The Cromeens Law Firm is a massive asset to prepare for and face litigation. When you work with a construction lawyer to solidify your processes and fortify your construction contract, you have a better shot of walking away on top from conflicts such as a claim for defective work. Make the first move and connect with a construction attorney today.
This article is intended as a general educational overview of the subject matter and is not intended to be a comprehensive survey of recent jurisprudence, nor a substitute for legal advice for a specific legal matter. If you have a legal issue, consult an attorney.