If you’re a homeowner in the Bluegrass State, you may want to conduct a small-scale renovation on part of your home. You might hire a contractor to paint your garage, for example, or put new carpeting in your living room, or install a pool in your yard.
These sorts of small improvements might cost only a couple thousand dollars, but they can increase your quality of life as well as the value of your Kentucky home. Most of the time, contractors will perform the project you’ve agreed upon. But occasionally, these little projects can result in big contractor disputes. For example, what do you do if your contractor stops showing up after you’ve paid him part of the cost? Because such disputes are often over relatively small amounts of money, hiring a lawyer might cost most than you could possibly recover. Fortunately,Kentucky's Small Claims Court is an efficient solution to this problem. In small claims court, you can sue your contractor without an attorney for money damages of $2,500 or less.
Unlike in some states, Kentucky permits you to have an attorney represent you in small claims court. That said, it is more common to represent yourself and indeed, Kentucky's small claims court is set up so that average citizens can navigate the procedure without too much trouble.
While disputes with home contractors can be extraordinarily frustrating, the dollar value (less than $2,500) is often too small to justify hiring an attorney for hundreds of dollars an hour. Nevertheless, it might make sense to consult with an attorney briefly before filing your lawsuit. The attorney would be able to hear your case and give you a neutral assessment. He or she could also give you some pointers for drafting your lawsuit and speaking in court. This attorney need not be a construction law expert to give this sort of advice. A short session like this would cost only a couple hundred dollars, and might go a long way towards improving your chances of success.
Kentucky has a wonderful court system, but you don’t necessarily want to run there the moment a dispute develops. Consider alternative tactics such as negotiation and mediation.
Negotiation just means that you attempt to discuss the situation with your contractor. If you can negotiate an arrangement with your contractor without proceeding to litigation, you will both save time and money. Remind the contractor what was promised, and inquire as to the problem – are materials more expensive than originally thought? Is the job more complex? What would the contractor need in order to complete the project as originally intended? As a small business owner, your contractor probably has a major incentive to avoid the hassle of a lawsuit. Use this incentive to encourage the contractor to negotiate.
To light a fire under your contractor, demand letters are an effective strategy. Businesses often view letters with more gravity than an oral complaint, particularly if you note that you are “reserving all legal rights should a resolution not be worked out.” Letters can also later be used as evidence that you did your best to avoid going to court, and gave your contractor a reasonable chance to fix the error, or refund your money, rather than burden the court system. (This will carry weight in court; judges don't favor people who rush to litigation.)
Finally, consider mediation. Kentucky is a leader in court-annexed mediation programs and alternative dispute resolution. As soon as you file your lawsuit, the court will encourage you to use no-cost mediators. These are trained individuals, typically attorneys, who will sit down with you and your contractor to attempt to work out a settlement. These settlements can be more creative than the result from a trial. At trial, a judge would only award (or not award) money. In mediation, you could devise an agreement where, for example, your contractor agrees to provide certain additional or alternative materials and services.
If negotiation and mediation do not succeed, you may need to proceed to litigation. One of the first factors to consider is the statute of limitations; these statutes limit the amount of time a plaintiff has to file a claim. The most common legal causes of action against a contractor are breach of contract (“He said he would install new red carpets, and he installed blue carpets!”) and property damage (“She flooded my kitchen!”).
Kentucky has a 15-year limit under Ky. Rev. Stat. § 413.090 for breach of contract as well as a two-year limit under Ky. Rev. Stat. § 413.125 for property damage. Be mindful of these parameters; the 15-year limit for breach of contract might seem like a long time, but the two-year property damage limit can eliminate important parts of your legal claim.
After that consideration, you’ll need to go through the full filing procedure. The Kentucky Court System website offers a useful handbook and checklist. First, you must sue the defendant contractor either in the county court where its offices are located, or where the event that is the basis for the lawsuit occurred – in other words, your home, where the contractor was supposed to do the work. Most plaintiffs prefer to sue in their home county, since this is more convenient and provides a certain degree of “home court advantage.”
The county clerk will charge fees when you file your lawsuit. These are subject to change, and vary from one county to another, but are generally less than $100. In Jefferson County, for example, the petition (as of 2015) costs $33.25 to file with an additional cost of $40 for service on each defendant. Note that you will need to pay additional fees if you want to subpoena witnesses, or sue additional defendants (like your architect or a subcontractor).
Next, you’ll file a Small Claims Complaint with the clerk. You can fill out that form in person or download it and bring the completed version to court. (A typed version will look more professional and will also make it easier for the judge to read). You’ll need to provide names, addresses, and phone numbers for both yourself and the defendant contractor (or his business entity name). You’ll then need to describe your claim.
Finally, you’ll indicate the amount of money you believe you are owed. Don’t exaggerate the amount of damage claimed, since judges will require you to prove the full extent of those damages.
Many plaintiffs make the mistake of filling their complaints with legalese and Internet research. This is a mistake. Rather, judges will be more convinced by a clear exposition of the facts of your case. It is their role to know the details of the law.
Once this paperwork is filed, the clerk will send a copy to the contractor along with a notice to appear in court on a specified date. That will be the date when you each orally present your case to a judge. You must file with the court an affidavit of service, proving that the defendant was served. He will also have an opportunity to send a Small Claims Answer to the court before the trial, which will be similar to the Statement you wrote, except from the contractor's perspective. The contractor will likely deny, or recharacterize, the story that you’ve written.
You should come to court knowing your case backwards and forwards – the date of every email, the amount of every invoice, and the day-to-day events that resulted in the breakdown of your relationship with your contractor.
Practice what you will say in your one to two minutes when speaking to the judge by rehearsing in front of a friend or family member. Keep it simple, like a story. Remember, judges have large caseloads and see dozens of litigants every single day. Avoid irrelevant facts or speculation about things like the contractor's motives.
You should also bring physical evidence to court. In home-improvement litigation with a contractor, the most important evidence normally includes: 1) any written contracts between you and the contractor outlining the work he promised to perform, the timeline for performance, and the payment agreed upon; 2) any proof of payments from you to the contractor, showing how much money you’ve already paid; 3) any emails, letters, or other correspondence you’ve sent to the contractor outlining your dispute; and 4) photographs of your home before and after the construction work, especially photos that show shoddy or inadequate workmanship.
In some circumstances, you might also bring witnesses with you to court to describe elements of the story to the judge.
“Winning” for you could mean that the judge awards you 100% of the damages you asked for, or it could mean that the judge awards you a portion of those damages. Either way, you’ll receive a judgment, which is essentially an order that the defendant contractor pay what the judge determined he owes you.
Kentucky is a small state. Business owners tend to pay judgments readily, in part because they fear negative relationships with banks and lenders, and bad press in the community. However, your contractor might not be so forthcoming.
If the contractor fails to pay you within ten days, you’ll need to return to court and fill out more paperwork in order to request a post-judgment collections hearing. This will allow you to “attach” (collect upon) assets held by the contractor in bank accounts, to the extent that the contractor has any. Note that you will need to hire a private collection agency for this process. You will need to make a financial decision about whether the money is worth pursuing, if your judgment amount is relatively low.