August 15, 2009 (Original publish date) • By Dennis Beaver
If you’ve ever hired a contractor for a kitchen remodel, room addition, or to build a custom home, then you know there will always be unexpected surprises.
Readers George Sheram and his wife, Van, expected a few rough spots when they hired Ed Small of Sierra Construction to build their retirement home in Gypsum, Colo. “But Ed did a great job — it was smooth sailing,” the retired Occidental Petroleum engineer told me.
However, the same could not be said for the landscaper, Hollywood Services Inc., of Vail, Colo., whose bid was “$14,000, which did, however, include a one-year tree replacement warranty,” George added.
Now, hang on for a truly rough ride through the tortured reasoning of a landscaper and his wife whose lack of fairness and basic common sense will leave you shaking your head in disbelief.
As you’ll see, what happened to George and his wife was incredibly frustrating, completely illogical, and simply should never have occurred — and when we ran the facts by a number of lawyers, a collective “You’ve got to be kidding — this can’t be for real!” echoed back.
But it was all too real and unmasked business owners who would have made Tony Soprano proud indeed. But first, let’s take a look at one aspect of contract law which every homeowner needs to know.
When you hire a general contractor, it’s likely that sub-contractors will do part of the job.
They and the “general” are responsible to the homeowner for the quality of their work, and sub-contractors must stand behind any warranties provided. If all goes well, you pay the “general” directly, and from those funds, subs and all material suppliers are paid. But there is a risk in a homeowner simply paying all the money owed to the general contractor.
He could simply skip town, or not pay subs and material suppliers in full. In that event, these folks have a powerful remedy; filing a mechanics lien against the property, which could lead to it being sold to satisfy their claims.
There are three ways to avoid that problem: (1) Require the general contractor to provide you with lien releases from all of the subs and material providers and verify that you have received authentic documents, (2) pay them yourself, again, obtaining lien releases, or, (3) by using a bank construction escrow account.
In July 2008, after Hollywood Services had completed their landscaping, George wrote them a check for $14,639, which represented the full amount of the invoice they had sent to his contractor, Sierra Construction.
“Both Ed and I were satisfied with their work at our property. He referred Hollywood to Cotton Ranch, a major new golf course development which needed landscaping, and suggested they put in a bid.”
There’s an old saying about being careful for what you wish for. Hollywood was awarded the contract, did a good job, and then without warning, Cotton Ranch went out of business. Hollywood was never paid.
“One of the Spruce trees they planted did not live through the winter. It cost $710. I have spoken with the owners, David and Vanessa Lambert, who admit the tree has a one-year warranty, but they are refusing to replace it,” George said.
Now, would anyone like to take a wild guess at just why not?
Here’s what a sarcastic Vanessa told me when I spoke with her on July 17: “We got burned on the Cotton Ranch job, and won’t do a thing for any customer of Ed Small until he gets us paid. Besides, we only had a contract with Ed, not George.”
“Wait a minute! Are you saying there was some connection between Cotton Ranch and George?” I asked. Vanessa admitted there was none at all. “Then why are you holding him hostage for something he’s got absolutely nothing to do with?”
“He is our leverage over Ed Small. If Ed gets us paid, we will replace the tree.” she smugly replied.
To keep this matter out of small claims court, knowing that George and his wife would return to Colorado in a few days, I offered Vanessa this suggestion: “I like happy endings to my articles. Wouldn’t it be nice if when they pull up into their drive way, they’re looking at a new, healthy tree?” She agreed to think it over.
When George and Van arrived home on July 29 they found that, “The dead tree was not miraculously resurrected or replaced. We are disappointed, but not surprised.”
Dennis Beaver practices law in Bakersfield and enjoys hearing from his readers. Contact Dennis Beaver.