We started drawing, on a Google image of the house, the area that the roofers would use for ingress and egress. The owner or general would have to agree that any defects found outside that area are not on us because we aren’t going into those areas. So when they find an upturned shingle or something 30 feet from where we were working, we can say, “No, we all agreed at the outset we were never going to walk over there, and we never did, and you don’t have any evidence that we did, so buzz off.”
Roofers also face unique workmanship issues. Some shingles come with instructions that say, “a nail right here and a nail right there.” Nobody does it perfectly like that – they’re almost never right on the bullseye. But then the owner’s lawyer will hire an expert to testify that the shingles weren’t nailed exactly where they should have been, and he’ll claim you voided the manufacturer’s warranty and either demand a refund or refuse to pay you for the roof.
GETTING PAID
Kent Lang:
On insurance jobs, roofers also have to deal with their customers who squander the insurance payment because they get the front-end check from the insurance company and then, when the work’s done, they get the back-end check.
Well, the homeowner’s already got their roof, so when it’s time to pay up they tell you to pound sand. Unless you’ve got it pretty explicit in your contract, it can be like pulling teeth to get that second payment.
We just had a case where the homeowner said they weren’t going to make the second payment, and we had one of our associates file a lawsuit for the second payment. We got it settled, and now the homeowner is suing her attorneys because they gave her bad advice about not having to pay the second check.
LEGAL STRATEGIES
Mike Thal:
Roofers also have to pay attention to legal strategies and the cost of winning a dispute.
How much does a roof cost? Twenty thousand bucks? Thirty thousand? There are very few half-million-dollar roof jobs, so when they’re fighting over money they’re not fighting over a ton of money, so cost effectiveness and good legal strategies might be more important to them than in some other trades.
The other day one of our roofers told me, “I got this lady, she’s already lawyered up, she’s going to make claims, but she’s just trying to cover up the fact that she hasn’t paid us.”
I said, “Well, how far are you into the project, how much are you owed, and how much do you have left now that she’s kicked you off the job, so that I know whether it’s worth it or not to sue?”
He said, “Well, she owes us 30 grand. We stood to make another 20 grand of profit off of the remainder of the work, so if we sued we’d be entitled to about 50 grand, and we have lien rights.”
I told him that’s right on the border of what I would consider to be worth running headlong into a lawsuit, and that’s where trust between a contractor and his attorney is really important. In this case, my client appreciated knowing that I’m not going to tell him to jump into a lawsuit unless I feel comfortable with it, and I’m looking at it from his perspective and not from our fee potential.
DEALING WITH THE ROC
Jamie Hanson:
For many roofing contractors, the more important legal dispute is not about payment but about workmanship, and somebody is coming after their license. A lot of times roofers get screwed because, if there’s a leak, the roofer gets blamed and the investigator can’t really figure out where the leak is coming from, so the burden is on the roofer to show that it’s not their fault.
A lot of our clients in that situation find value in our good relationships with the Registrar of Contractors – we’re familiar with the ROC, and we know the investigators and understand how they work, which means that we know how to approach these cases in a way that’s intelligent and likely to succeed. A lot of lawyers may deal with the ROC either never or once every three years, and they fight the complaint with an adversarial, litigation mentality that’s more appropriate to a lawsuit, and that just doesn’t work, whereas we understand what’s possible within the ROC world.
THE VALUE OF ARCA MEMBERSHIP
Kent Lang:
We mentioned worker safety earlier, and this is where we need to give a plug for ARCA. The companies that are part of an organization like ARCA are the companies that are already at the top of the class – they join and participate, they go to the safety meetings so they can get OSHA training and stay out of the kinds of trouble that hurts companies that are trying to do it on the cheap.
We have one roofing client – a small startup – that just got visited by OSHA. He goes, “What do I do?” and I said, “Don’t talk to me, go talk to ARCA. They’ve got OSHA training, and then the guy that does the training can call OSHA and tell them ‘we’ve got our guy in school, he’s already taking classes.’” So by belonging to ARCA, we know those kinds of things, so that even if they do something silly we can help fix it quick.
SMART USE OF YOUR LAWYER
Mike Thal: Other ways to keep your company out of trouble include making sure you have the right contractor’s license, the right corporate entity, a good operating agreement, a good contract, and a good lien-service provider. Then as soon as there’s a flare-up, call us to give you some advice on how to put it out before it turns into a forest fire.
For a lot of contractors, there’s an outsized value to having a lawyer who knows the construction business and who they can call and get some useful guidance.
We have nine construction lawyers here, of all ages and fee levels, and if one of us doesn’t have the answer, we’ll get you the answer, and if I’m not the right person, I’ll get you the person.
I think that closely held roofing companies that end up making it big, or haven’t made it big yet, really appreciate being able to pick up the phone and call us for quick legal advice.
Jamie Hanson: I think that’s right, and I think that contractors come back to us for more because they trust that we know what we’re doing and that we know ways to get contractors out of legal scrapes. They also trust us to come up with shortcuts that are against our immediate financial self-interest but are in the legitimate interests of our client.
They also appreciate that we have attorneys of different ages and therefore price ranges, and that some of the work will be done by guys who have some gray hair and a higher billing rate, and that other work will be done by younger attorneys who can do it well, at a lower cost.
Kent Lang: That brings us to a good place to wrap up this discussion. I just had two uncomfortable experiences – one was with the doctor that I’ve been going to since the mid-’80s, and the other was with the dentist I’ve been going to since the mid-’80s. They both retired, and I got a quick “By the way, here’s my replacement, I’ll see you in another lifetime.” I didn’t like that.
One of our advantages is we have some people of a certain age, like me, and then we have Mike and Jamie, and then we have younger attorneys, so we can continue to represent people over a period of many, many years, without there being a sudden, complete change in who is working with our clients.
That’s a real value for contractors who are serious about their business and are in it for the long run.
