Dispute with Contractor - Advice Sought

[Jim Goebel]

Hi, thanks in advance for reading and any input.  I'm not seeking legal advice but certainly if you think a lawyer is appropriate for this one, please let me know.  I have a letter with multiple complaints drafted to the Iowa Attorney General but have not pulled the trigger on sending/initiating that yet.  I'm debating if that's the best course of action here.

At this point, I'd actually prefer to find some resolution and completely cut ties with this shop.  We have about $5000 worth of electrical work that's partially done, where they were paid in full 60% of that for the rough electrical work and no trim work has been started.

The shop is a family multi generational shop named Terpstra Heating and Cooling, that does mostly HVAC but mixes in some electrical as well.  They aren't located in Des Moines area and I don't know what court system this would go through if it gets to that point.

I think the easiest way to communicate the details is to copy in some correspondence, first my draft letter to the attorney general:

..............................................................................

AG Draft letter:

We have contracted / engaged with this company on 4 separate instances. Of these 4, two items involve complaints on our part. One contract has been completed satisfactorily, one is in process, and two have resulted in complaints. I will provide what details and context I can about the entire history of our working arrangements below.

Given the actions taken by this company my intention is to terminate our working relationship for the ongoing (in process) work at XXXX. This scope of work is at a good point to terminate, as the rough electrical work has been paid in full and successfully passed inspection, so the trim electrical portion of the contract is the portion I intend to take back to market and find another supplier for those services.

The 4 instances of engagement with this company include:

1. Electrical Scope of Work at XXX E 16th St - satisfactory work and resolved/paid in full
2. Electrical Scope of Work (in process) at XXX 7th St - Rough Electrical inspection passed/paid in full. Trim Electrical work has not proceeded. Intention is to terminate contract before proceeding given actions for two items below.
3. (Complaint Filed) Owners’ Rep Time and Plumbing Scope of Work at XXX E 16th St
4. (Complaint Filed) Plumbing Scope of Work at XXX 7th St - Contractor did not pass Rough inspection and verbally communicated no expectation for payment on any plumbing work given the circumstances.

On Date, Ben XXX and I verbally discussed expectations for time on site at XXX E 16th St. The purpose of that time primarily was to ensure that we had no leaks in the water (inlet) system, so that I could be armed with that information once the plumber started with his drain work (I had already committed the bulk of the plumbing work at that location to another plumber). If an instance arose where the water inlet system had a leak after this plumber completed work, I wanted to know for certain if that plumber caused the issue. This was communicated to Ben and I felt we both understood expectations. As part of this, given that there had been demo work done and water lines needed to be capped, my expectations were that the water lines would be capped as part of the owners’ rep time. The purpose of the owners’ rep time was to determine if there were any existing leaks in the water inlet system.

On Jan 10, Ben followed up with a detailed description of his intent for the scope of work at 1435 7th St, which included a couple lines about the owners’ rep time and hands on work.

On Jan 17, Ben completed work at XXX E 16th St in capping water lines, providing feedback that there were no leaks on the incoming water inlet system, and then completing the natural gas extension to allow for connection of a gas range.

On Jan 28 (best I can tell from my records), for work at XXX 7th St, Derrick YYY was paid for the rough electrical scope of work and successful inspection sign off. He also intended to collect for the invoiced amount of $345.91 for Ben’s work at XXX E 16th. The rough plumbing work at XXX 7th St by Ben was in process at this point and I indicated to Derrick that we were not on the same page about the invoiced amount for XXX E 16th St, compared to what was agreed to with Ben. He indicated he would let us two circle back to that, which has been my intention (to seek resolution with Ben given that we were the two parties verbally and via email coming to an agreement).

On Date Jan 31, as Ben was working towards his rough plumbing work at XXX 7th St - I attempted to initiate conversation and payment with Ben in effort to reach resolution on the work at XXX E 16th St. I was told at that time that Ben did not have the means to accept payment (their Square device) and we did not further this conversation.

Soon thereafter, on Date Feb 1, Ben YYY had his rough plumbing inspection for XXX 7th St scheduled and failed inspection (very substantially failed to a point where it was not completely clear what inspector’s expectations were for re-work). At that point he elected to abandon the work and let me know his intention to move on from the project so as not to continue pushing our schedule out. I would estimate that we lost about 1.5 weeks on the schedule because of the delays during Ben’s work (a couple instances of weather and balancing what else he had going on) and we also had the lost time of engaging another contractor, and re-work time. In a (recorded) phone conversation with Ben he indicated that his intention was not to collect any payment on that project given its outcome. At the time I communicated full intention to attempt to pay the difference between whatever Ben’s initial contract amount was, and what I got another contractor in to do the work for. I had thought I would have success in getting someone in to do the re-work for less than the $1578.48 or so Ben was getting paid. Unfortunately it didn’t work out that way, and we are under contract for $1850 with another plumber to complete the work all the way through the trim phase of the project.

With all of what was going on Ben and I did not make it a priority to circle back and resolve the item on XXX E 16th St. However, I sent Ben an email on Feb 20, which detailed my understanding of my expectations for payment regarding the work at XXX E 16th St. To my knowledge I did not get a reply.

We received an invoice again for XXX at our house that was dated DATE, when in fact it came in DATE, which we thought was strange. This amount was still in question so I had it on my to-do list to reply to Brenda YYY (office admin) in an effort to reach a good faith resolution. I sent the reply on March 6 and we received a reply on March 11, which defended the amount and markup on materials which I questioned, but also included an invoice for the other work at XXX 7th St. This felt very retaliatory and unfair.

I have sent an email on March 12 letting this company know where we stand on their two invoices and our decision to turn this over to the attorney general.

Possible Resolution:

At this point, I don’t think the trust from our end will be possible to re-establish to continue engagement with this contractor with the electrical trim work at XXX 7th St.

We would submit to the judgement of your office on this matter. I can understand certain things I could have done differently to ensure things were more clear with regards to Jeremy’s time at XXX E 16th St. Namely I could have looked at the precise wording of Ben’s email and worked to ensure expectations were clear for both parties prior to starting at E 16th. However I didn’t feel there was any ambiguity given the verbal communication that occurred in conjunction to the email Ben sent.

What I believe to be fair for the work at XXX E 16th St:

$100 for whatever time was related to investigating the water lines, which would include capping them. Without the company providing visibility into how Ben’s time broke down my thought would be to assume 1 hr on the Owner’s rep time and capping and 1 hr on the Natural Gas extension, as a breakdown of the total 2 hours of time Ben was on site. So, for labor this would be $165 total. For materials, I would have gladly done a material run for Ben if he would have actively communicated his needs (even ahead of time or as he was driving) - which would mean we would pay retail prices. It’s hard for me to say exactly what this would be but I’m guessing this would be around $60.

So, we’d think around $225 would be fair for the work at E 16th.