When Troy Cannaday of Cannaday Construction had clients who refused to pay him the last $12,000 they owed for a whole-house remodel, he knew he had to take some sort of action. The couple claimed they had reasons for not paying — including a long punch list. (That punch list included damage their children had done to the project.) After eight months of talks and negotiating, Cannaday decided to take them to court and filed suit.
The Albuquerque remodeler attended the initial hearing with a judge who assigned the case to court-appointed arbitration. He spent a difficult day sitting in a room with the clients. Luckily, his stucco contractor was able to refute the claim of the homeowners that Cannaday chose a stucco color that did not fit the homeowner's association guidelines. The arbitrator awarded Cannaday half of the $12,000 balance.
However, the remodeler had already spent $8,000 in lawyer fees on top of the $6,000 he ended up losing on the job.
Cannaday says from now on, he will only file suit if he is owed more than $20,000. “It would have to be more significant to think about going to court again,” he says.
Cannaday changed his policy so his customers owe him 3% to 5% at the end of a job vs. the 10% he used to collect. He also changed his contract to state that if a dispute goes to arbitration and he wins, the client owes him for court and legal fees.