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Construction Disputes

A construction dispute is a dispute between a contractor and homeowner regarding the quality of work performed or the amounts owed to the contractor. In most instances, both of these claims will be present since if the homeowner questions the quality of the work, they won’t pay the full amount owed, and if a contractor isn’t paid, it is based on a claim regarding the quality. Therefore, these types of cases usually involve counterclaims if litigated. The possible outcomes for both parties range from receiving money to having to pay money to the other party, making it relatively high risk litigation.

How to Avoid Construction Disputes

One of the best ways for both homeowners and contractors to avoid disputes is to have detailed construction contracts. This does not mean that the contract needs to be a in fancy form or contain certain language, but rather it should clearly spell out everything that is to be done by the contractor — in as much detail as possible.

You will never provide too much detail in a construction contract, and if the contract states (for example), the exact location of the new countertops, the material to be used, the date it will be installed, and the method of installation, the odds of a dispute are much lower. This is because the expectations of both parties are documented and available for later reference.

Even the best contract cannot fully avoid litigation, but detailed contracts can significantly diminish the risk. They can also provide for things, such as requiring the losing party to pay the attorney fees of the winning party, which helps to ensure the rightful party is made whole at the end of litigation.

If you need assistance drafting a construction contract, please feel free to visit the contract drafting page of our website. If you already have a contract (perhaps provided by the other party), you can hire us to review and advise on potential issues with said contract.

What is a “Battle of the Experts”?

Most construction disputes that go to trial end up in a battle of the experts. A battle of the experts is when each side hire professionals in the field that have different views of the subject they are testifying about. The judge (or jury) must then decide which expert is more credible so as to determine the case.

The reason that construction disputes often result in a battle of experts is that experts are required to establish whether the work was or was not done properly. Despite the fact a contractor may have been working in the field for many years, the judge wants to hear from someone else that the work was done properly. Similarly, even if the work clearly looks deficient, the judge will want an expert who works in the field to testify about why the work is substandard. This is because sometimes what looks wrong to the average person, is how it had to be done because of circumstances such as issues with the subfloor or other limitations.

How Do I Find Expert Witnesses?

This can be somewhat challenging. Many times other contractors do not want to get involved in disputes or may not have the time to testify at trial. Moreover, the witness will want to be paid for his or her time spent testifying and inspecting the property.

At Rick Davis Real Estate Law, we take that burden off of your shoulders and assist with finding expert witnesses as part of the included costs of the representation. Moreover, we obtain experts early to ensure that the merits of the case are established (or dis-proven) early in the case. We begin by having an expert inspector who has experience testifying in these type cases inspect the property. If the matter proceeds through to litigation, we obtain additional experts, as is necessary, to testify about the specific standards for that trade or industry.

What is the Process for Proceeding with a Construction Dispute?

As we have seen many of these claims, we have developed a process that helps to get to the merits of the case quickly to determine the likelihood of success quickly and before too much money is invested on the dispute. This process also helps to maximize the chances of settlement quickly as the facts are “on the table” very early on in the claim.

Pre-Litigation Process

Step 1: Sign up for Guarded Pockets™

If you are not yet a member of Guarded Pockets™, the first step is to become a member. In addition to allowing us to help with your business planning, Guarded Pockets™ also provides many other benefits, including unlimited scheduled phone calls with a real estate attorney, registered agent and deed of trust trustee services, state compliance monitoring, daily REO and distressed MLS listing emails, and discounted title and real estate brokerage services. You can learn more about Guarded Pockets™ or sign up for a free trial by clicking on this link.

Step 2: Sign up for Services

Once you are a member of Guarded Pockets™, you can sign up for our services including our litigation and dispute resolution services.

Step 3: Intake Form

At this point, we will request that you complete our Litigation Intake Form.  This form will ask you questions that help us to evaluate the merits of your case and will provide you with an opportunity to upload documents that are relevant to the matter.  With this in mind, we request that you have all of the documents available prior to completing our intake form:

– The contract (including addenda and amendments)
– Any communications between you and the other party
– Any other relevant documents to the dispute

Step 4: Property Inspection

If this matter proceeds to trial, we will need experts to establish your claims or defenses.  Therefore, we have found that it is beneficial to bring in an expert early on so we can fully evaluate your claim prior to you investing money on litigation.  

At this stage in the process, we will send an independent inspector who has experience testifying about similar claims to the proerpty to inspect the damage.  This inspection is included in the monthly rate, and therefore, there will be no additional charge to you.  Moreover, we pay a set rate to this inspector – regardless of what he finds – so that he can make an independent judgment.  We may provide the inspector with photos or videos in advance, at our discretion, as we want to be sure to obtain as an objective of an opinion as possible.

Please be advised that it may take several weeks to get the inspector out to the property and the report back from the inspector based on his schedule. Moreover, if you are not the current owner of the property, we will have to request permission to inspect the property, but can usually convince the property owner by advising it is the only way you will consider meeting their demands.

Step 5: Attorney Evaluation

Once we have reviewed your documents, photos, and videos, we will make a determination of the merits of your case.  We will then discuss with you are recommendation on moving forward.  If we mutually agree not to proceed, you will receive a refund of $500 of the total costs paid for the pre-litigation package.  If we proceed, the entire fees will be earned upon the completion of the next stage.

Step 6: Draft Demand Letter

If we have made the mutual decision to proceed with your case, the next step in the process is to draft a demand letter or response to a demand letter sent to you.  This letter will provide a deadline (usually ten days) for the seller to respond.  

Please be advised that we generally provide five days after the response deadline to a demand letter before taking any action.  This is because a response may be sent via mail on the deadline date that is not received until a few days latter.  If the deadline passes and there is no response, we will reach out to you to discuss if you desire to proceed with litigation.

Step 7: Negotiations

It is unfortunately rare for someone to respond to a demand letter saying they will pay what you ask for.  The more common response is either to ignore the letter or come back with a counter-offer.  During this stage in the process, we will negotiate with the other side to try and find a resolution that works for you.  You will be notified of each and every offer received from the other side and you will have complete control over whether to accept or reject the offer, or to submit a counteroffer.

Moreover, this stage may take many weeks depending on how quickly the other side responds to our communications.

Step 8: Settlement Agreement

If an agreement is reached between the parties, we will draft a settlement agreement setting forth the terms of the settlement. This agreement will be signed by all parties and will be legally binding on all parties.

What Happens if We Go to Court?

Court can be a lengthy and expensive process. Therefore, we attempt to only resort to litigation as a last resort. A basic outline of the process is below. As with pre-litigation matters, you will have access to our case status iPhone, Android, and web app to track the status of the matter as it processes through litigation.

Litigation

Step 1: Sign up for Guarded Pockets™

If you are not yet a member of Guarded Pockets™, the first step is to become a member. In addition to allowing us to help with your business planning, Guarded Pockets™ also provides many other benefits, including unlimited scheduled phone calls with a real estate attorney, registered agent and deed of trust trustee services, state compliance monitoring, daily REO and distressed MLS listing emails, and discounted title and real estate brokerage services. You can learn more about Guarded Pockets™ or sign up for a free trial by clicking on this link.

Step 2: Sign up for Services (if we didn’t handle pre-litigation)

Once you are a member of Guarded Pockets™, you can sign up for our services including our litigation and dispute resolution services.

Step 3: Intake Form (if we didn’t handle pre-litigation)

If you did not previously provide this information as part of our pre-litigation services, we will request that you complete our Litigation Intake Form.  This form will ask you questions that help us to evaluate the merits of your case and will provide you with an opportunity to upload documents that are relevant to the matter.  With this in mind, we request that you have all of the documents available prior to completing our intake form:

– The contract (including addenda and amendments)
– Any communications between you and the other party
– Any other relevant documents to the dispute

Step 4: Property Inspection (if we didn’t handle pre-litigation)

If this matter proceeds to trial, we will need experts to establish your claims or defenses.  Therefore, we have found that it is beneficial to bring in an expert early on so we can fully evaluate your claim prior to you investing money on litigation.

At this stage in the process, we will send an independent inspector who has experience testifying about similar claims to the proerpty to inspect the damage.  This inspection is included in the monthly rate, and therefore, there will be no additional charge to you.  Moreover, we pay a set rate to this inspector – regardless of what he finds – so that he can make an independent judgment.  We may provide the inspector with photos or videos in advance, at our discretion, as we want to be sure to obtain as an objective of an opinion as possible.  

Please be advised that it may take several weeks to get the inspector out to the property and the report back from the inspector based on his schedule. Moreover, if you are not the current owner of the property, we will have to request permission to inspect the property, but can usually convince the property owner by advising it is the only way you will consider meeting their demands.

Step 5: Attorney Review

Plaintiff: We are currently investigating the case and the defendant, and we are preparing your file for litigation. Additionally, we are working on drafting the Complaint. We want to make sure we are fully prepared to move forward with litigation, and we will let you know when the Complaint is filed. If we did not already do so as part of the pre-litigation process, we will have an inspector come to look at the damage to your home during this stage. Depending on what it takes to prepare for the suit, this stage could take several weeks as we want to make sure we have put in in the best position possible prior to filing.

Defendant: During this stage, we will make an initial evaluation of the case and will discuss with you the options for proceeding.  This will include a discussion about what parts of the plaintiff’s claim are true and what parts are incorrect or misstated.  We may also discuss the possibility of filing a counterclaim.  This stage must happen fairly quickly as we generally have 21 or 30 days from when you are served the petition to file an answer (although this can often be extended).

Step 6: Complaint Filed/Answer Filed

Plaintiff: We have sent the Complaint in for filing. Upon the Complaint being filed, we have to serve the defendant and/or the insurance company.  This can be a quick process, or it may take some time if we cannot locate the defendant. As soon as the defendant is served, the defendant or his/her attorney have 30 days to file an Answer with the Court. Sometimes we allow an additional 30 days to file an Answer. This is very common in litigation, and we recommend trying to work in good faith with opposing counsel from the onset of the case. Upon the Answer being filed, we will be moving to the discovery stage. In general, Stage 2 can take between 45 days to 4 months depending on the ability to locate the defendant.

Defendant: At this point, we have filed the answer and any counterclaims, as applicable.  As is appropriate, we will continue to investigate the merits of the Plaintiff’s claims and may contact witnesses or begin seeking expert witnesses to testify on your behalf.

Step 7: Written Discovery

The discovery stage of civil litigation involves fact gathering. Both sides involved in the case are able to formally exchange information about the upcoming trial during discovery. This information includes a list of evidence and witnesses that will be presented during the trial. The discovery stage of a case helps prevent surprises during the trial and allows both sides to prepare. We will need some information from you during this stage, and we will be in touch to obtain this information. The discovery stage can take 4 to 12 months depending on the complexity of the case.

Step 8: Depositions

During the discovery process, both sides are permitted to conduct depositions. A deposition is an in-person interview under oath, and the person deposed is going to be asked questions about the facts and allegations set forth in the case. Depositions have two purposes: (1) to find out what the party/witness knows and (2) to preserve that party’s/witness’ testimony. The intent is to allow the parties to learn all of the facts before the trial, so that no one is surprised once that party/witness is on the stand. By the time a trial begins, the parties should know who all of the witnesses will be and what they will say during testimony. Depositions are an opportunity for all sides to learn where the weak spots are in their respective cases, then prepare for ways to avoid or rebut them at trial. We will notify you if the defendant’s attorney wants to depose you, and we will prepare you for your deposition. We will also discuss the depositions we plan to take in this case, and we would like for you to be present for those depositions. The deposition stage generally falls towards the end of the discovery stage. Again, the discovery stage can take 4 to 12 months depending on the complexity of the case.

Step 9: Mediation

Mediation is a method of Alternative Dispute Resolution (ADR). Mediation is essentially a negotiation facilitated by a neutral third party. Unlike the litigation process, where a neutral third party (usually a judge) imposes a decision over the matter, the parties and their mediator ordinarily control the mediation process — deciding when and where the mediation takes place, who will be present, and how the mediator will interact with the parties. The mediation process is generally considered more prompt, inexpensive, and procedurally simple than formal litigation. It allows the parties to focus on the underlying circumstances that contributed to the dispute, rather than on narrow legal issues. The mediation process does not focus on truth or fault. Questions of which party is right or wrong are generally less important than the issue of how the problem can be resolved. We are hopeful we will be able to resolve the case during this stage, but if not, we will prepare for trial. Considering there are several people and schedules involved, it takes time to coordinate a mediation date. We will let you know of the time/date/location of mediation when it is set.

Step 10: Preparation for Trial/Trial

If we were unable to resolve your case in mediation, we plan to move forward and plan for trial. Preparing for trial takes many hours, and we will let you know of anything we need from you during this time period. We are at the mercy of the Court in terms of a trial date, and we will let you know as soon as we receive a trial date. From there, we will schedule a time to meet and prepare you for trial. Although it depends on the court and its schedule, a trial is generally 12-18 months after the case is filed. Upon settling your case or trying it to to verdict, it will take a few weeks to get the check if you are awarded money. Upon receipt of the check we will contact you to come in to sign the appropriate paperwork and close your case.

How Much Does it All Cost?

Litigation can be expensive. In addition to the costs of an attorney, there are costs for experts, court costs, costs for transcripts and court reporters, mediation costs, service costs, etc. With that being said, it is the goal of our firm to provide fair, predictable, and transparent pricing to each of our clients. You can view the set monthly rate for this type of litigation by clicking on this link, which is the same link you will use to sign up for services after you are a member of Guarded Pockets™.

With that in mind, we charge our clients a set rate per month for litigation and pre-litigation matters, which includes the attorney review of all of your documents, photos, and videos; the cost of drafting and preparing the demand letter or the response to the demand letter, and any negotiation regarding a possible settlement, the drafting and filing of legal pleadings, third party costs, such as mediator fees, filing fees, and fees for inspections, and appearance in court, arbitration or mediation on your behalf.

The advantage to pricing by the month is that it provides you predictable litigation costs instead of the highs and lows of more traditional billing where one month may only be a few hundred and the next may be thousands of dollars. In other words, this pricing is most similar to when the electric company charges a set rate per month instead of charging for usage. This means that some months, the legal fees and costs incurred on your behalf will exceed the set monthly rate. Other months the total may be less. You will not receive a refund or discount in months were less work takes place as the difference accounts for the months were the works exceeds the price paid. Moreover, there is often work taking place that is not visible or noticeable and even when there is no update on the case, that doesn’t mean we haven’t done work such as reviewing the file to formulate strategies, communicating with the court or third parties, or talking with the opposing attorney. Because we are charging a flat monthly rate, we do not keep detailed time logs each month and will not be sending you an itemized invoice.

It is our sincere commitment to you that we will work hard to resolve your case as quickly as possible. That has always been a central tenant of Rick’s legal philosophy and will continue to be so in the future. We can’t always control the timelines of the courts, but we will always we looking for possible solutions from beginning to end of your case.

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