Chasing Money

Trent Cotney, PA, FRSA LEGAL COUNSEL

At some point in your roofing careers, you will face the inevitable problem of a customer not paying you. Depending on the amount owed, it may warrant filing suit and ultimately obtaining a judgment against a customer that owes you money, whether it is an owner or a contractor. Sometimes, roofers do not understand that obtaining the judgment is only the first part of the battle. Collecting the money after the judgment becomes the primary focus. Prior to engaging in any kind of dispute proceedings, the contractor needs to assess the collectability of a judgment. If at the end of the day, the roofer has a piece of paper but nothing to show for spending
money on attorney’s fees and costs, then the roofer threw good money after bad.

Once the judgment is obtained, there are a variety of “rifle-shot” collection activities that can be performed. First and foremost, with every judgment, the debtor is required to execute a Fact Information Sheet that identifies many of the debtor’s assets. This information can be used for collection purposes. For example, you may be able to identify assets held in a bank account.

To collect from a bank account, you first need to perform a bank account search through a third-party service that identifies open bank accounts. They may also identify the dollar amount present at the time of the search. Once the bank account is identified, a writ of garnishment can be issued which will garnish any of the amounts in that account up to the amount of the judgment on the date that it was served. If you serve the garnishment on a date where there is nothing in the account, then you will get nothing. Alternatively, if your timing is right, you may be able to attach a significant amount if it is served the day before payroll is due.

The great thing about pursing bank accounts is that notice is not required to other potential debtors – although you may face having to disgorge amounts down the road if you are an inferior debtor. However, as we know, possession is nine-tenths of the law, and I would much rather have money in hand than be chasing it.

Another technique that is commonly used is filing an administrative licensing complaint against the qualifier because of the judgment that is related to the practice of construction. Under the licensing statutes, if a judgment is entered against a licensed contractor then the qualifier may have violated the applicable statutes because of the judgment. Often, the filing of an administrative licensing complaint does not result in increasing your chances of collection, but it can help assure that your contractor customer will not repeat
its failure to pay others down the road. With anything involving dispute resolution, it is important to look at all of the facts and focus collection efforts on what is most cost effective. This may include depositions or attaching physical or real property. Regardless, a roofer should assess its ability to collect against a customer before wasting money on attorney’s fees and costs.

FRM

Author’s note: The information contained in this article is for general educational information only. This information does not
constitute legal advice, is not intended to constitute legal advice, nor should it be relied upon as legal advice for your specific factual
pattern or situation.

Trent Cotney is Florida Bar Certified in Construction Law, General Counsel and a director of the Florida Roofing and Sheet Metal Contractors Association (FRSA), a director of the West Coast Roofing Contractors Association (WCRCA), and a member of the National Roofing Contractors Association (NRCA), Midwest Roofing Contractors Association (MRCA) and several other FRSA affiliates.

For more information, contact the author at 813-579-3278 or go to www.trentcotney.com.