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Client Who Won't Pay

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zdas04

Mechanical
Jun 25, 2002
10,274
I recently did some work as an expert witness. The lawyer hired a search firm that found me. I signed a contract with the search firm that said in effect I would submit invoices and they would pay them within 60 days of the invoice date. The contract says NOTHING about the law firm paying the search firm or the defendant (in this case) paying the law firm. Just that the search firm would pay me. I have two invoices that have both gone over 90 days old. I (long since) contacted the search firm and was told "we know that your contract does not specify that you have to wait until we get paid, but we don't have the money to pay you so forget it." The snotty, cavalier response set me off, but I decided to wait until the first of December (when one invoice will be 150 days and the other will be 120 days old) before doing anything like visiting my lawyer (which I'd rather avoid paying for).

I've been in business for 12 years and this is the very very first time that I've ever had an invoice pass 90 days unpaid. I know, I have been outrageously lucky (or really good at not working for deadbeats). The norm seems to be some percentage of invoices that never get paid. How do you guys go after deadbeat clients? Combined, these guys are into me for nearly $100k so small claims is out of the question. I have written very strongly worded e-mails to all of the officers of the company. All I can think of remaining is to sue them, but I'm in New Mexico and the contract says that the court of jurisdiction is New York so suing them gets pricey (although the contract does allow prevailing party to collect legal fees, it may be a while before I see any of it and I don't want to be out of pocket any more than I already am).

David Simpson, PE
MuleShoe Engineering

In questions of science, the authority of a thousand is not worth the humble reasoning of a single individual. Galileo Galilei, Italian Physicist
 
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It is, I'm working on timing and logistics.

David Simpson, PE
MuleShoe Engineering

In questions of science, the authority of a thousand is not worth the humble reasoning of a single individual. Galileo Galilei, Italian Physicist
 
If they're in New York, call up Guido. He'll take care of it for you.

Hydrology, Drainage Analysis, Flood Studies, and Complex Stormwater Litigation for Atlanta and the South East -
 
Well there was a twist in yesterday's mail. Of the $100 k about $7.4k was out of pocket expenses. I got a check yesterday from the search firm for the out of pocket amount. Not going to cash it until I talk to my lawyer, but I'm really curious about whether this puts me in a stronger position (the counterfoil showed the full amount pending and was clearly marked "partial pay" not "paid in full") because of their acknowledgement of the total amount on a check counterfoil. Or if it puts me in a weaker position since they made an effort to partially pay the bill.

David Simpson, PE
MuleShoe Engineering

In questions of science, the authority of a thousand is not worth the humble reasoning of a single individual. Galileo Galilei, Italian Physicist
 
I agree about not depositing anything until you've talked to a lawyer. Pending doesn't mean much from a client who refused to pay previously. You also want interest payments on the amount due beyond the 60 day period, or you've given them an interest free loan they weren't willing to extend to others.
 
Not a lawyer, but I would deposit the check. Keep a copy.
 
A side story about depositing the check (and why it shouldn't be done before consulting your attorney).

A long time ago, in a galaxy far, far away... I dated a rental property manager for several years. You tend to pick up a few things over such a time period. One of those things was "Do not accept a partial payment for funds owed. It's full payment or nothing." If a renter was being evicted for failure to pay, they had 90 days to (make good faith attempts to) pay their debt. Of course, even a single penny was considered a good faith attempt, so if the penny was accepted, the 90-day clock started fresh. That clock was reset on more than one account because the rental agent didn't look up from their desk before accepting a $10 check.

Talk to that lawyer...

Dan - Owner
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Dan,
That story is true, but it is based on contract language and rental law. The local government has an interest in people not being evicted, so they tend to write in that good-faith stuff in regulations about renting. They don't have that interest in business to business contracts.

When I was with Amoco, their policy was that every single penny that came in was immediately deposited. It didn't matter if it was an over-payment, an under-payment, or a payment in dispute (we would often get letters saying "by accepting the enclosed check, you are agreeing to ...", and we would deposit the check and when the party tried to enforce what they claimed we were agreeing to we would just say "the only mechanism we have to handle checks is to deposit them, we deposit them without prejudice or committment") and it held up in court every time).

I'm not going to cash the check until I confirm with a lawyer, but I'm pretty sure that this is just an excess of caution.

David Simpson, PE
MuleShoe Engineering

In questions of science, the authority of a thousand is not worth the humble reasoning of a single individual. Galileo Galilei, Italian Physicist
 
zdas04: we have a similar policy, and have never had an issue either- but lawyers are of course necessary for advice on legal issues like this.
 
David ,
I do not know what the law is in your state, but in some states, if you have a bill due and payable for services rendered, and you accept partial payment, you have just extended credit to that person or entity.
B.E.

You are judged not by what you know, but by what you can do.
 
Pleasant surprise in yesterday's mail--payment in full. 90 days past due, is better than forever past due. I have an appointment with my lawyer for right after the new year, payment changes that discussion (now I just want to know how to void the contract so I can still work with the lawyer without going through the search firm). Definitely not ever working through that firm again.

David Simpson, PE
MuleShoe Engineering

In questions of science, the authority of a thousand is not worth the humble reasoning of a single individual. Galileo Galilei, Italian Physicist
 
Nice Christmas present! Congrats!

See if the terms of the contract address late payment. One would hope and think that late payment constitutes breach of contract.
 
Not explicitly. That's why I'm keeping the appointment with my Lawyer.

David Simpson, PE
MuleShoe Engineering

In questions of science, the authority of a thousand is not worth the humble reasoning of a single individual. Galileo Galilei, Italian Physicist
 
Wonderful news- though I was looking forward to you tearing those idiots a new one!
 
David:

If you are able to legally, without jeopardizing your position, can you let us know the name of the search firm?

Mike McCann, PE, SE (WA)


 
I'm pretty sure that my insurance company would have kittens if I did that. While I'm a fan of kittens, I'm not a fan of getting canceled.

David Simpson, PE
MuleShoe Engineering

In questions of science, the authority of a thousand is not worth the humble reasoning of a single individual. Galileo Galilei, Italian Physicist
 
Congratulations on getting your money David. The question now, is would it have come anyway, if you had done nothing?
B.E.

You are judged not by what you know, but by what you can do.
 
I really will never know. When I refused to spend the time required to destroy confidential data for the Lawyer, my e-mail was forwarded to the Lawyer's client and they paid the search firm within a week. I am starting to believe that the search firm was going to pay me when they got paid (and that they resented my assertion to the lawyer [with a copy to the search firm's entire board of directors] that they said they had no intention of ever paying), but there is no way to know now. Shining a very bright light on the problem by withholding something the Plaintiff was obligated by the court to do seemed to get thing moving nicely.

David Simpson, PE
MuleShoe Engineering

In questions of science, the authority of a thousand is not worth the humble reasoning of a single individual. Galileo Galilei, Italian Physicist
 
Yes the quid pro co. seems to have been the trick.
Congratulations again.
B.E.

You are judged not by what you know, but by what you can do.
 
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