Replies

1. 
   Bob_Walker | Mar 16, 2002 07:41am | #1

   *
   1. Depends on the type of bond.

   2. Read it.

1. 
   Greg_Brown | Mar 16, 2002 07:37pm | #2

   *I believe it is to cover the cost of finishing a project that contractor bailed on.

1. 
   Bob_Walker | Mar 16, 2002 10:22pm | #3

   *That would be a performance or completeion bond.There are many types of bond agreements, just as there are many types of lumber. This question is kind of like asking what is lumber and what roll does it play in a structure.(I used to work extensively with the banking equivalent of bonds, standby letters of credit, and know a bit about the field.)

1. 
   Greg_Brown | Mar 16, 2002 10:47pm | #4

   *That is the type of bond the cal. board of contractors requires

1. 
   Greg_Warren | Mar 17, 2002 12:24am | #5

   *Greg, You are right in regards to the bond that you and I have in California. Bob could be in a state that requires no contractors license at all, therefore no bonding. I asked the question because a cabinet maker I hired and gave a 1300.00 deposit or half down for a entertainment center has been unreachable in the last 5 days. I do not even know if he has obtained materials to produce it. I won't know until he calls me. I went by his small shop in town and two other shop owners next to his said that he was having marital problems recently and that they haven't seen him in a few days. They said he was an honest guy and not to worry. One of the guys said that he saw a Maple cabinet in his shop the other day, so that could be mine. I was curious if I could attach his bond if he does not deliver and I need to get someone else to do the job, assuming that he does not return my deposit. I wonder if one needs to have a court judgement before a bonding company will allow you to move forward with an attachment? GW

2. 
   Rich_ | Mar 17, 2002 07:44am | #6

   *Greg,The quickest and surest way is for you to contact the private company which issued the bond. Either the guy with your deposit provides you with this contact information or the CSLB will. A sure fire method for getting a response from the guy is your very next phone call. Be very polite but firm. Say you will be taking legal action (within X days) against his business including making a complaint with the CSLB as well as his bond company. And, no, you don't need a court judgement to attatch his bond. However, if you do go after his bond and you cannot substantiate your claim--whether it was a big misunderstanding or you jumped the gun--you better run for cover because he would be legally justified in coming after you to collect for damages. For starters, his bond capacity would probably slip a notch. Depending on who underwrote the bond, his credit may show a black mark as well.But don't you think you are jumping to conclusions? Consider this: $1,300 is not alot of money to a guy with a shop; five days is not alot of time to do the work you have mentioned; the fact he has not returned your attempts to contact him could mean anything. (Not making an excuse for not returning phone calls, but there are extenuating circumstances.) That you question whether he has even purchased materials causes me to think you are more apprehensive then need be at this point. You didn't say, but if it's been a month or longer and that doesn't jibe with the estimated time he gave you up front then there is cause for concern. But you seem to say you are thinking that perhaps he used your deposit for something unrelated to your project. That would be be illegal disbursement of funds which is a misdemeanor. Just cool your jets for the time being and first find out what happened to him before you go after him.Sure, you want your work completed in a timely manner and $1,300 is a good sum of money, but I suggest you dig a little bit deeper in finding out what happened to him before you go after his bond.

3. 
   Greg_Brown | Mar 17, 2002 11:37am | #7

   *shoulda had me do it!hehehehe

4. 
   Bob_Walker | Mar 17, 2002 01:25pm | #8

   *Rich:"However, if you do go after his bond and you cannot substantiate your claim--whether it was a big misunderstanding or you jumped the gun--you better run for cover because he would be legally justified in coming after you to collect for damages."Are you sure about that? The bond company has the right to invoke any defenses available to the bonded entity, but I don't think (but don't know for sure) whether there is a right of action simply for filing a claim, so long as there is some a reasonable argument that a claim is valid.(Similarly, clients and their lawyers can be sanctioned for bring frivolous claims, but such sanctions are rarely invoked; our society has a policy of ensuring access to the justice system and for that reason wants to avoid appearing to exclude potential claims.This of course gives various disgruntled curmudgeons a chance to bitch and moan about our screwy system whenever their own particular ox is gored I don't know who bears the cost of filing and defending a claim; that would typicslly be covered by the bond itself, with the particular state's statutes providing "default" rules for where the bond doesn't specify.FWIW, bonds are simply a specialty area of contract law, falling into a niche of "three party" contracts, like guaranty and suretyship, third party beneficiary law, some insurance law, and letters of credit.

5. 
   Greg_Warren | Mar 17, 2002 05:57pm | #9

   *Rich, My first contact with this guy was in October of 2001. Final drawings were accepted 1-25-2002. Deposit made and reciept returned to me by fax 1-29-02. That deposit was made at that time so he could complete the cabinet, send it to the finisher and store it, ready for my escrow close so it could be installed in a two week period before moving in the house. The contract says that the cabinet will be delivered and installed by the end of March. It's Sunday and I still have not heard from him in 5 days, with three calls to his work answer machine the first two days and a call to his wife at home. Thanks for the bonding input. GW

6. 
   Bill_Hartmann | Mar 17, 2002 08:56pm | #10

   *GregOver in the JLC forum there Dick post in both the business and building science section. He is on the contractors review board or something like that and seems to know the ins and outs of CA contracting law.

7. 
   Scooter_ | Mar 18, 2002 06:16am | #11

   *Here in SoCal, it is to cover a Judgment against you arising out of your work as a contractor.

8. 
   Rich_ | Mar 18, 2002 08:01am | #12

   *RE: Post #9.Greg, the rules change when it's been this long. However, that was part of your contract ("end of March") so you need to wait that long. Again, simply not returning your phone call is not in itself enough of a reason to get up in arms. Forgive me for saying so, but perhaps he thinks you are a jerk and doesn't want to be bothered. Perhaps he's bipolar but does excellent work. Perhaps he's gonna go postal (didn't you mention marriage problems?) if he hears from...one...more...irate...customer. Who knows? Just wait a bit more until the end of your contract period.But in the meantime standby to standby. Make yourself ready for Monday, April 1st. Mail ASAP via registered mail a demand for your deposit refund. Be sure to specify a deadline date. I suggest March 31st; yes it's a Sunday, but that is when your contract runs out. If the 1st arrives and you do not have either your cabinet per contract or your refund, go for refund + damages.

9. 
   Dick_Seibert | Mar 19, 2002 06:27am | #13

   *I was invited over here to comment on this thread. Contractors' License Bonds are *not payment and performance* bonds. In California they are for $7,500, and for limited purposes, California Business and Professions Code §7071.5 is the controlling law:1) Any homeowner whose *personal residence* is damaged by a violation of the B&P Code.2) Anybody damaged by a *willful and deliberate* violation of the B&P Code.3) Any employee who is not paid wages.4) Any trust fund, like a union trust fund, that an employer failed make contributions to.The legal question here would be whether his failure to perform is a willful and deliberate violation of the contractors' license law. If you are a homeowner, and you ordered the cabinet for your personal residence, you have a violation because he can't take a deposit greater than the lesser of 10% or $1,000, so you can file a claim against his bond. If you are a contractor (and not doing something on your personal residence) I don't see a violation off hand. If you are a contractor, I think it's a civil matter; however, I would be open to considering an interpretation of the B&P Code that might be construed as a violation. Proving a willful and deliberate violation can be quite hard. We don't have debtors prisons in this country, and we don't take away a person's livelyhood because of a civil matter, except under proscribed circumstances (like the four proscribed by law above). People often confuse license bonds with payment bonds. Contractors' license bonds are not established to pay off judgments, unless that judgment specifically states a violation of the B&P Code, and whether that violation was willful and deliberate.