Should I sue my contractor individually, or just his business?

When a self-employed handyperson messes up your home repair, do you sue the person, or look for a business name to sue?

Question

I hired a contractor to fix the pipes in my bathroom. My contractor, Bob, is a well-known handyman around my county. He works out of a small garage, and has a truck with the title “Bob the Contractor” on the side. On this particular job, he badly messed up. Not only did he use sub-par pipes, but the pipes burst soon after he left and my bathroom was flooded. This caused extensive damage.

I want to sue Bob -- probably in small claims court, since we're only talking a few thousand dollars for the job and the damage -- but I’m unsure whether I should sue Bob individually or whether I should find out if he's also an LLC or something, and sue that entity. What should I do?

Answer

A homeowner who hires a contractor to perform a large-scale home renovation would almost always enter into a contractual relationship with that contractor's company, usually a corporation or an LLC. You would likely have signed a written contract with that entity, and see the company name on its equipment and documents.

But for homeowners hiring handypersons to perform smaller-scale projects – fixing a window, painting a garage, or replacing a pipe – the relationship can be more ambiguous. Sometimes it is unclear whether you are forming a contract with a specific person (“Bob”) or a company (“Bob the Contractor, LLC”).

More often than not, if all goes well and nobody needs to sue, it doesn’t really matter. The contractor performs a service, and you give him cash or write a check.

But when something goes wrong and you want to sue, the name of the defendant suddenly matters a great deal. All courts, small claims and otherwise, will require that you provide the specific name and address of the defendant individual or the defendant business that you are suing.

In this situation, you have some specific evidence that you were dealing with a business called “Bob the Contractor,” based on the writing on his truck. Also have a look at any written contracts or correspondence between you two and check his website, if he has one. But it’s not always clear, and Bob may have just been puffing a bit on his auto paint job.

To determine whether your contractor actually has a business entity registered with the state, you can search your state’s Secretary of State website for his name. (Most state’s offer such information online.)

If you cannot find any business entity that seems reasonably related to your contractor, then you should probably sue him personally. He will then need to try to dismiss the lawsuit by pointing you towards his real business entity, which you can then sue in his place.

As a general rule, you cannot sue someone individually if you really only had a contract with his or her business. But there are exceptions to this. Sometimes, business entities will be essentially empty shells with no assets; sometimes you never actually will sign a contract indicating a relationship to a business entity. In such cases, you would have a good faith basis to sue the contractor as an individual.

If you believe that your contractor is trying to evade lawsuits by hiding behind empty LLCs or corporations, name him personally in the litigation. This may force his hand into settling the matter with you outside of court. After all, he would not want any judgments against him personally, since that would impact his credit rating beyond simply the business.

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