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Can someone who owes money in a settlement take legal action on another party when they are at fault?

Denver, CO |

An interior designer is threatening to put a lien on our house for $1000 that we have not paid her. Our initial agreement was to pay her $3000 in installments for her design work. She worked with us in the beginning, but never finished. We ended up having to select most of our finishes and she never provided our General Contractor with a list of finishes, despite him asking. We spoke to another person who she "burned" and ended up settling, despite not being able to afford it. We have documents that show her agreeing to the settlement. She agreed to pay him $30000, but has yet to pay a dime several years later. Can she even threaten legal action against us, when she owes this kind of money? Especially when we have no signed documents, and only emails that she considers binding?

Attorney Answers 3

Posted

The fact that the designer owes money to someone else has absolutely nothing to do with whether or not you owe money to the designer. It is certainly possible for both things to be true at the same time and there is no requirement that the designer pay her old client before filng a mechanic's lien or suing you.

If the person who is owed $30,000 learns that you owe her $1,000, that person could come to you to collect in order to help satisfy that debt. If the person she owes $30,000 serves you with a garnishment, then you could be required to pay the $1,000 to that person instead of to the designer. However, if you actually owe the money, you will have to pay it to someone.

You can reach Harkess & Salter LLC at (303) 531-5380 or info@Harkess-Salter.com. Stephen Harkess is an attorney licensed in the state and federal courts of Colorado. This answer is for general information only and does not create an attorney client relationship between Stephen Harkess or Harkess & Salter LLC and any person. You should schedule a consultation with an attorney to discuss the specifics of your legal issues.

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Asker

Posted

Stephen- Thank you for your insightful and quick response! We figured that the two events would essentially be separate. We were just confused how someone can skip out on paying someone on a settlement like this. More to our point- Are there specifics in our email correspondences that would make or break it as a binding legal contract, as she asserts? She laid out rough terms, which we said we would need to discuss further, but agreed to the initial $1000 down payment to get the ball rolling. We also had asked for a written contract which was never provided. In her emails, she said she would provide several vague services, which she did not fully execute. It was after we had to do almost all of the work ourselves that we decided not to pay her the last thousand of the $3000 total. Should we get legal help if she actually goes through with filing the 10-day lien notice? Thank you SO much!

Stephen Clark Harkess

Stephen Clark Harkess

Posted

She will have a difficult task of establishing what she is owed if you can show that she promised services that were not delivered. A mechanics lien (such as she is proposing) expires after about 6 months, so fighting the lien is probably only important if you intend to sell or refinance the property in a short period of time. If she does not move to foreclose the lien in court within a few months the lien will expire. If the lien causes you a problem or if she seeks to take the matter to court, you should consult with an attorney. She could be held liable to you for any losses created by an unjustified and spurious lien.

Posted

I agree with Mr. Harkess' analysis and want to add a few thoughts. The fact that this person owes someone $30K is enlightening, but has nothing to do with your case and would likely be inadmissible in any lawsuit she files against you. She can threaten legal action, but you would certainly have a counterclaim.

If you do get sued, talk to an attorney right away to discuss your rights and remedies.

Best of luck to you.

Dan

In no way am I offering you legal advice, and in no way has my comment created an attorney-client relationship. You are not to rely upon my note above in any way, but insted need to sit down with counsel and share all relevant facts before receiving fully-informed legal advice. If you want to be completely sure of your rights, you must sit down with an experienced criminal defense attorney to be fully aware of your rights.

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Posted

Can she threaten? Sure. Sounds like she already is doing so, and as my colleagues have pointed out, the fact that she agreed to a settlement with another party would almost certainly be inadmissible in a legal proceeding between you and her (there are few excpetions, like if you could prove that she engaged in a pattern of fraud, getting money upfront from people and then intentionally not finishing the job, as an example).

Additionally, your emails to her can be considered binding and emails can also substantiate her position. A contract for her services can be oral (even though it may involve real estate, it does not involve one of the types of transactions that must be in writing to be binding).

Now, all that said, if she did attempt to place a lien on your property or sue you, you could (and based on the facts you presented), should, counterclaim. Sounds like you would have your general contractor as a witness and would likely prevail . . . but don't get your hopes up . . . the fact that she agreed to pay someone else $30K and he hasn't seen a dime may render any judgment you obtain worth less than the proverbial paper its printed upon.

My guess: the threats will stop, no lien will be filed, and you will learn the tough lesson that many, including myself, have had to learn the hard way -- there are incompetent and even outright dishonest crooks out there and for whatever reason a lot of them go into the construction business! Be extremely cautious. Check references, insurance, bonds and BBB ratings. Get referrals. Try to pay as little as possible until the job is done. And . . . pray.

Best of luck.

Colorado practice limited to bankruptcy, federal tax law and related laws under U.S. statutes before the United States Bankruptcy and District Courts for the District of Colorado. We are a federally designated debt relief agency and help people and companies file for bankruptcy protection under the U.S. Bankruptcy Code.

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