How to Survive Your First Construction Lawsuit

Speaker A: M.

Speaker B: Are you in the construction industry and you're owed money? I'm Carolyn Cromings and this is Construction Legal Made Easy. We talk about all the ways, the tips and tricks to help you collect your money. Now let's get started. Hey, guys, it's Carolyn. And welcome back to the podcast. And today we're going to talk about all things lawsuits, everybody's worst fear. Imagine you're a contractor. You're out there working, running your jobs, trying to make sure you make money. You come back to the office from your job site visits and the stranger walks in and asks you what your name is and you say, that's your name. And they hand you a very official looking piece of paper that is a lawsuit. And your heart sinks and you think you're going to die. Very common response to being sued for the first, um, time. And so today we're going to kind of walk through some key points of how not to panic and what the next steps look like, right? So you get served with a lawsuit, you think everything is over, your business is over. It's really not that bad if you ignore it, it can be that bad, right? So the first step is when you get the lawsuit, don't ignore it. Right? Ah, so your first battle isn't to prove you're right. Your first battle is to make sure you make the deadline to get into court, right? So you've been served with this lawsuit. Um, in Texas, it's the Monday after 20 days when you've been served. Most states have something similar between 20 and 30 days when you have to answer a lawsuit, right. What happens if you don't answer the lawsuit? The other side wins by default, what they call. So if you don't, you get served with this piece of paper. And sometimes it might come male, sometimes it might, you know, come different methods. Once you get served with this piece of paper, that's a lawsuit. You have to make an appearance in court. And it can be just as simple as a general denial saying, hey, I'm here. We're going to deal with this lawsuit, right? If you don't, you lose by default, meaning the other side will file what's called a default judgment, and they will get everything that they're asking for just because you didn't show up. So the first thing is to make sure you get it, mark the date and time. You can write on it that you were served, because that's what one of the first. The attorney's going to want to know, when did you get this? Because your answer Deadline is going to be calculated from the time you received it. So make sure you don't ignore it. Get everything together. Um, so the next thing is, don't panic. Get organized. And you probably want to do this before you call an attorney. This can take a couple of days, but to get together everything you have on the file, change orders, contracts, emails, pictures. I mean, if you have a CRM where you have all that stuff kept, it should be there, which is great. Photographs, videos, documentation that happened during the course of the project and not after, when there's a dispute is hugely valuable because it's true evidence that nobody created of what was actually going on the projects. Like, if you do daily reports that show the progress and what you're doing every day. Uh, you know, I tell my clients, if there is an issue with the client that you have a meeting, address it, follow up with an email about what the issue was, how you, how you solved it. Right? Writing is so important. Anything, uh, in writing, uh, you know, having that contract is essential. In construction, memories fade, but documents don't. And it, you know, someone could sit on a breach contract for four years, right? So you could be done with a project for two, three years and barely remember it. All of a sudden you get a lawsuit, right? So having good records for at least four years, you know, having something online that's digital. But even better, instead of going through boxes of paperwork, the next thing you do, do not delete evidence. Do not delete emails. Do not delete text. It looks terrible. Trust me, whatever it is, we can deal with it. But deleting, uh, will make it look worse. And the court can actually issue penalties if you delete stuff and they can prove you deleted it, right. They could penalize your hand and in court. So, um, it can create a much serious problem than what the document actually is. So keep everything, don't delete anything. So I know I talked about insurance in a previous episode, but at this point in time, you might also look and think about filing on your insurance, right? Any good construction lawyer is going to sue you with a claim for negligence, which would bring up insurance coverage, right? So the first place you might start is turning the lawsuit over to your insurance company. I would talk to an attorney first, figure out when your deadline is, then maybe they can help you deal with your insurance company, because at all costs, you don't want to miss that answer deadline. Um, but some things to note, you turn it over to your insurance company, they're going to assign you counsel. You don't get to Pick. And the other thing is, it doesn't matter if you're right. They will probably pay the other side and, uh, your premiums will go up. It doesn't matter if you can prove that you're right all day long. Insurance companies are in the business of managing risk. And it's a lot less risk to write a check now than to go to trial and risk losing. So some things to, to know, yes, you can file insurance and yes, we'll cover, but you're not going to have a whole lot of say in how the case ends or which way it goes. So winning isn't the insurance company's goal. Managing risk is. And they're going to, they're going to write the check. You can give them all the information you have, and they may use that to reduce the amount. But it's not their end. It's not their end goal like it is yours. Now, let's take a break from a word from our sponsor. The CROW means law firm not getting

Speaker A: paid on a job you already completed. Well, that's where we come in. At the CROW means law firm, our lean collection department helps you get paid fast and the right way you did the work, you deserve to get paid. We help you take the right legal steps by filing liens and collecting the money that's owed. Contact us at, uh, 713-715-7334 or you can visit our website at, uh, www.thecromingslawfirm.com.

Speaker B: also, meeting with the attorney, a counterclaim is great leverage. So what possible claims, if any, could you have against the owner? Right. Did they still owe you money? Um, did they, did they cause delays? Were there trust fund violations? Did they, they breach contract first. All of these things would give you a counterclaim, which would make you like a counter plaintiff. Right. Um, if you just get sued and we really don't have a counterclaim, there's no claim really, to get your attorney's fees back or your time or anything. The best you can hope for is not to pay them. Right. So if there's any counterclaims we need to value, evaluate the case and look at that and see what we can bring possibly to. So you can have an affirmative claim for breach of contract money. Ow. Which would then entitled you to get some of your attorneys back if you're successful. Right. So make sure that you, you know, your attorney reviews everything to see if that's a possibility. One of the scariest parts of being sued, besides going through the whole discovery process and opening your records Is how much is this going to cost? Right. I'm being sued. And that's the thing, is that you can't just end a case when you're being sued. You're along for the ride. Right. So here at the Cronies law firm, especially for contractors who are being sued, we have developed subscription pricing starting at $3,000 a month. I cannot usually litigation. I can't tell you how much it's going to cost, and I can't tell you how long it's going to take. Lease with a subscription pricing, I can tell you how much it's going to cost. I still can't tell you how long it's going to take because I don't know. Right. Um, and any attorney who tells you that they know how long is not being honest. Um, because we never know how the other side is going to react or what they're going to do or what the plan is. And there's some things that we can do to try to end the case early. All of that takes time and money. Right. And so we have subscription pricing starting at $3,000 a month. So you get the same bill, no matter how much attorney time is on the case, uh, every month until it's over. Right. So it really takes out some of the huge risk of, you know, getting a $20,000 bill per month, depending on what the other side does or what you have to do. You know, litigation can be unpredictable. We don't know there's going to be discovery, which is they're going to send us documents. We're going to have to respond to and produce things. There's probably going to be depositions when you have to go sit in front of a room full of attorneys and they get to ask you a bunch of questions on camera. Uh, m. And so this process takes time. I mean, right now, if you're in district court, you're looking at at least a year to go to trial. So unless you settle beforehand, it's going to take at least a year. Arbitration's probably a year as well. Um, better odds of arbitration getting done, six to nine months. Um, but a year at best. And so court is going to take at least a year. There are things we can do to try to end it early. It's really hard when you're the defendant, um, to try to end a case early because there's always fact questions. Uh, there's always things that a court's going to have to decide. Um, so really knowing. The best I can do is tell you how much it's going to cost. I can't tell you how long it's going to take. I want to tell you I'm going to do my best to end it as early and as effectively as possible. But when you're the defendant, we don't have a whole lot of control. Right. When you're being sued, uh, the main thing is it'll be worse if you ignore it. Like I said, if you don't answer in time, they'll take a default judgment against you and then they'll just start collecting. So, um, when you get a lawsuit, don't freak out. We got time to answer it, time to get your stuff all together. The litigation process doesn't move fast unless you ignore it. It will take, like I said, it'll take at least a year to get to trial. You might settle before that immediation, but if you ignore it, it'll move a lot faster. Right. Within 30 to 60 days after your answer is due, they could already have a judgment against you. So don't ignore it. Don't panic. Let's come up with a plan, guys. If you have any questions, feel free. Reach out at cromingslawfirm.com or 713-715-7334. Thank you. I hope you enjoyed this episode. I just wanted to point out the legalese that is required. This is not specific leg purely for educational purposes. Please reach out to a qualified attorney if you need specific legal advice. If you want to call and ask me a question, you can go to our website, thecromanclawfirm.com or our phone number is 713-715-7334. We work nationwide. We're here to help everyone. Give us a call if you have any questions.

Speaker A: Thank you.