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Contractor does not return excess payment, need advice.

Merced, CA |

This is in California.

We signed a contract with a contractor who claimed "licensed and bonded" for a backyard job. During the project, contractor asked us to pay directly for the cost for concrete, and we did.

Contractor finished work generally well, and we made final payment. But We forgot to deduct the material cost we already paid directly for the concrete expense.

Now we are asking the contractor to return the excess payment, but he initially agreed, and then refused to make the payment saying that "I'm losing money on this project".

We then did some research and it turns out this company only has a business license in the City, not a valid CSLB license.

So what should we do ? File complain/claim with BBB, CSLB, police, or small claim court?

Thanks

Attorney Answers 3

Posted

Under California Law, it is a misdemeanor to contract for home improvement and not have a license to do so. Further under CA law, you are entitled to recover ALL money paid, even if you knew he was not licensed. Finally, this is the case if the contractor was not fully and properly licensed at ALL stages of contracting (contract formation through completion.)

That being said, you CAN sue in Small Claims for a maximum of $10,000.00. If the contract was for less than this, Small Claims is your best avenue. If more, then you should hire an attorney and go to superior court. If you have been damaged in any way (aside from having no warranty) then you can get EVEN more money under a different statute.

In either case, you need to make a decision on how to proceed. As I see it, chances are that this contractor has violated at least 5 different statutes and you SHOULD be able to recover all monies paid to him.

Additionally, you can file a complaint with the CSLB. If you want, you CAN file a complaint with the City Attorney. If you do either or both, DO NOT advise the contractor that this is what you are doing (it COULD be construed as extortion; a felony.)

If you have additional questions, contact an attorney that knows about Small Claims. Try: www.smallclaimsappeals.com

Adam Jaffe Law Office of Adam Jay Jaffe 124 Lomas Santa Fe Dr, #204 Solana Beach, CA 92075 (619) 810-7964 www.smallclaimsappeals.com Adam@SmallClaimsAppeals.com This posting is provided for “information purposes” only and should not be relied upon as "legal advice". Nothing transmitted from this posting constitutes the establishment of an attorney-client relationship. Applicability of the legal principles discussed here may differ substantially in individual situations or in different states.

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10 comments

Asker

Posted

I do believe that he misled me and made me believe he is properly licensed. But the license # he gave to me is the Business Licence#, not CSLB license# (which I could not tell at the time). But I did tell him if he does not return my money, I will have to report to authorities and see him in small claim court. Is this "extortion"??? That's does not sound right, because I'm only asking him to return the excess amount.

Adam Jay Jaffe

Adam Jay Jaffe

Posted

Clearly, if he gave you his business license #, this is fraud; something good for a claim. If you threaten criminal prosecution, then this COULD BE SEEN as extortion and would be up to the prosecutor. Threatening to sue is not extortion. Your rights are clear; it is up to you on how you should proceed.

Asker

Posted

Thank you very much !!!

Asker

Posted

One more question. Someone says we need to send an official certified letter to the contractor asking for return of excess payment. If we do not receive response in 30 days, then we can proceed to small claim court. Because he orally refused to refund excess payment, there is no written evidence. Thanks

Adam Jay Jaffe

Adam Jay Jaffe

Posted

No, no certified letter. No need to wait. If he has declined, proceed to file suit. On Form SC-100 (used to file lawsuit; www.courts.ca.gov/documents/sc100.pdf) question 4 only asks if you have demanded money; proof is not required.

Asker

Posted

You are great !!! If it were for a larger amount, I would definitely use your service. I will contact you if I need such a service in future. Thank you !!!!

Adam Jay Jaffe

Adam Jay Jaffe

Posted

Thanks. I would be more than happy to provide a consultation, if needed/wanted. If you feel that my remarks have been helpful, please feel free to mark my comments as 'helpful' or 'best answer.'

Athina Karamanlis Powers

Athina Karamanlis Powers

Posted

Had similar issue.The judge dismissed issue in Indio for that reason.No certified letter to opponent by plaintiff requesting the return of the money.

Athina Karamanlis Powers

Athina Karamanlis Powers

Posted

As per CSLB ,A/C contractor recent case, they want to see in your complaint that you filed something somewhere (police,court,DA) not only with them.

Adam Jay Jaffe

Adam Jay Jaffe

Posted

See my comments above in your response. The facts of this case are relatively clear. Proceed to suit. Proceed with complaint to CSLB. Press charges with City attorney for the commission of a misdemeanor. Catch is, NONE of these things are desired by asker. She just wants the advance of her money for materials not purchased by non-contractor.

Posted

First go to small claims. Will have court day in 30 to 45 days. The process requires to first ask him in writing to give the money back. Make the letter certified to have proof for the court. Second file CSLB.
Report to BBB. Etc

Disclaimer: The information contained in this website is provided for informational purposes only, and should not be construed as a legal advice on any subject. No recipients of content from this site,clients or otherwise,should act or refrain from acting on the basis of any content included in the site without seeking the appropriate legal or other professional advice on the particular facts and circumstances at issue from an attorney licensed in the recipient's state. The content of this website contains general information and may not reflect current legal developments, verdicts or settlements. The Karamanlis Powers Law Offices expressly disclaims all liability in respect to actions taken or not taken based on any or all of the contents of this website, weblogs, twitter, facebook, google+.

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11 comments

Adam Jay Jaffe

Adam Jay Jaffe

Posted

I agree tht small claims is good but disagree on two aspects: 1) no requirement that a demand be made in writing (though a good idea to do) 2) should file complaint with CSLB; however, 99% certain that they will say they only regulate licensed people and will not help further. If they want to do a 'sting' operation they may,but not likely. No reason to wait until after Small Claims to make complaint.

Athina Karamanlis Powers

Athina Karamanlis Powers

Posted

Had similar issue.The judge dismissed issue in Indio for that reason.No certified letter to opponent by plaintiff requesting the return of the money.

Athina Karamanlis Powers

Athina Karamanlis Powers

Posted

As per CSLB ,A/C contractor recent case, they want to see in your complaint that you filed something somewhere (police,court,DA) not only with them.

Adam Jay Jaffe

Adam Jay Jaffe

Posted

There is NO requirement ANYWHERE in CCP 116.110, et seq that requires a demand letter by certified mail. In all of the cases in which I have been in (both courts in Santa Barbara, 5 in LA; 3 in OC, 3 in San Diego, 1 in Riverside), your example is the ONLY time I have heard of a Judge even asking for proof, let alone demanding it be by certified. I do agree, though, it is prudent. As for CSLB, I have handled around 40 cases through Small Claims and about 5 through CSLB MANDATORY arbitration, and 2 through non-mandatory arbitration. CSLB does not care one-way-or-the-other about who the complaint is filed with. Clearly, the more the better, but they cannot demand it. It is a State regulatory agency.

Asker

Posted

Thank you both for the advice. I'm not in rush, since a prudent action will make life a little easier, I will send a registered letter and give him 2 weeks to comply or respond. If I don't hear from him in 3-4 weeks, I will file my case with Small Claim Court. Thank you !!!

Nicholas Basil Spirtos

Nicholas Basil Spirtos

Posted

I agree with Mr. Jaffe. You don't need a certified demand letter before going to small claims. This case is perfect for Small Claims. The fact the contractor was unlicensed means that the owner can get all the money he paid this guy, not just the overpaid amount. Small Claims judges, even the many many bad ones know this and enforce it regularly.

Adam Jay Jaffe

Adam Jay Jaffe

Posted

You're in SM. You know 'bad' Small Claims judges??? You sure?

Nicholas Basil Spirtos

Nicholas Basil Spirtos

Posted

The real question should be "do you know any good ones?" Just kidding - sort of.

Adam Jay Jaffe

Adam Jay Jaffe

Posted

Stone is in Santa Monica now!!!

Nicholas Basil Spirtos

Nicholas Basil Spirtos

Posted

I rarely get any small claims cases. I hear horror stories from a lot of my colleagues. I try and keep my business clients out of small claims whenever possible.

Adam Jay Jaffe

Adam Jay Jaffe

Posted

Overwhelming majority of what I do. If you are a defendant in SM, your chances of prevailing at Trial or Trial De Novo are NOT good (as attorney appearing, I usually get to go last; regardless of position on docket.) For Small Business, a limited Civil Claim vs. Small Claims may NOT be economical, especially if no atty fee clause. This is where I tend to get MOST of my referrals from attorneys.

Posted

Follow Mr. Jaffe's advice. Go to small claims, demand the full $10,000 allowed. The contractor was not licensed and therefore is required to give you back every penny you paid him. You do not need to send a certified demand letter. But doing so will only strengthen your case.
Contact the CSLB, the City Attorney and/or the District Attorney to report this guy. One or all of those agencies might be willing to take some action.

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