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Just won in small claims :-)

Discussion in 'Business Fundamentals' started by MSsnowplowing, Oct 30, 2015.

  1. MSsnowplowing

    MSsnowplowing Senior Member
    Messages: 761

    Well, had a client that refused to pay for additional services last winter.

    Skid steer work, extra storm costs -(3 foot blizzard in January.) and two requested applications of sand/salt.

    They were pissed at me because I suspended service and refused to plow the last storm in march due to non-payment.

    They thought they could pay me anytime they wanted and were always late.
    Sent them a invoice in Jan 2015 they didn't pay till March 10th 2015 and that was only the seasonal rate and not the additional work which was $1,700.00

    So March 1st I gave them a warning if I was not paid within a few days I was suspending service per the contract. By March 4th no payment and I called and suspended service, March 5th came and we got a 6 inch storm. I didn't plow.

    March 10th got the seasonal payment from Jan. But no other payment, tried to get payment thru april and may they kept putting me off and finally told me they were not paying me.

    Sued them in Small claims, presented my contract, pictures of work done, etc...

    It all boiled down to my contract where it states I have the right to suspend service if payments become more than 7 days late.

    Judge ruled in my favor, the client ended up paying over $2,000.00 dollars for late fee's and court costs.

    The client tried counter suing me for $1,600.00 saying that is what they paid another company to plow the storm I didn't.

    Dismissed by the judge.

    Funny thing is before you see the judge, he had us talk to each other and show any evidence we would present and try to settle.

    I tried to settle for the amount plus court costs, about $500 less than what I won.

    Client refused stating, I don't think so, I'm counter suing you and I'm going to win.

    I was strong and knew it but still tried to settle it.

    I got the last laugh.

    Lesson learned from this.

    I will from now on, suspend all service if it gets more than 1 week overdue regardless of how long I have been plowing said client.
  2. k1768

    k1768 Senior Member
    from NJ
    Messages: 556

    Good job. Good luck getting them to actually pay up.
  3. MSsnowplowing

    MSsnowplowing Senior Member
    Messages: 761

    Hotel that just switched to a major name.

    If they don't pay, i am going to their corporate office over their heads.

    They will pay or suffer a news story about them stiffing a hard working man trying to put his kids thru college by plowing.

    And the best part, it's true.

    My oldest is in college now, my youngest is graduating this year and starting college.

    Don't think they want any of that type of news.
  4. LapeerLandscape

    LapeerLandscape 2000 Club Member
    Messages: 2,247

    Glad to see the good guy win for a change, its just too bad it had to come to that.
  5. k1768

    k1768 Senior Member
    from NJ
    Messages: 556

    It's good that it's a big corporation. Now that you have a judgement in your favor, the judge can issue an order forcing their bank to give you the money.
    When the big chain took them over, they may have a clause that they are not responsible for any debt under previous ownership though.
    My wife won a judgement on a dead beat and it took forever to get just some of the money as it was a judgement against an individual. She closed up her bank accounts, so we couldn't do that.

    Hope it works out in your favor.

    The usual I am not a lawyer, laws may vary in your state/county.
  6. JD Dave

    JD Dave PlowSite Fanatic
    Messages: 11,194

    I'm glad you won but suspending service after being late 1 week is a little much.
  7. MSsnowplowing

    MSsnowplowing Senior Member
    Messages: 761

    bill is sent on the 1st, they have a due date by the 8th.

    If they have not paid by the 15th, service is suspended.

    Do you rent?
    Rent is due on the 1st, if not paid by the 10th, eviction process starts.

    Same premises, why should I or you continue plowing if they have not paid.

    I tried working with them as I do with everyone,
    but burn me once, shame on you,
    burn me twice shame on me.

    I like to learn from experience and no more nice guy.

    I am not paying out of my pocket to plow someone else's property.

    This is business and if you don't treat like that then you will be out of business.
  8. John_DeereGreen

    John_DeereGreen 2000 Club Member
    Messages: 2,909


    We suspend service once it gets past 30 days.
  9. MSsnowplowing

    MSsnowplowing Senior Member
    Messages: 761

    The problem is you can be plowing that account at least 5-15 times within 30 days and now they owe you even more.

    I used to have it in my contracts as 30 days but switched to the 7 day after the due date, which roughly is 15 days.
    Sent on the 1st due by the 8th and suspended on the 15th.

    Oh and I send everything via email the last week of the month due on the 1st of the month.

    Thankfully this is the first time a client has outright refused to pay for additional services.
    And hopefully the last time.

    And the kicker is, we don't do it unless the client requests it -(yes they did).
  10. cet

    cet PlowSite Fanatic
    Messages: 7,257

    I'm happy to hear you won. You must work for some pretty small companies. It would take longer for the invoice to be received, processed, sent to accounting and have a cheque issued in 7 days from the companies I work for. I begin to sweat at 90 days and I've never not been paid.

    Good customers are hard to find, I wouldn't blow 1 off that fast.
  11. MSsnowplowing

    MSsnowplowing Senior Member
    Messages: 761

    If you not being payed in a timely manner then they are not that good of a customer.

    Do they not pay their electric, their gas, their water, their rent, etc... bills on time.

    Snow Plowing is no different.

    I plow local commercial business and try to stay away from the national chains if I can.

    And even the few ones I have plowed for have paid within 30 days.

    I have one, I give them invoices on the 1st and I get a check within 2 weeks and this is a large tire/brake/muffler shop all over CT and in other states.

    My other one just pays the entire season in November -(over 5k)

    And your confusing the time, it is just not 7 days and boom your suspended.

    Billing is sent the last week of the previous month, billing for the 1st.

    Invoice is payable within 7 or 14 days -(a few of them are like this)

    If payment has not been received by the 7th day, a second notice is sent.

    If payment has not been received by the 14th day, Suspension of Service is sent.

    I have only had to do this twice -(the client I sued) and another one that had a check in hand that night for full payment after I sent them notice service was suspended.
  12. cet

    cet PlowSite Fanatic
    Messages: 7,257

    As I said I'm happy you won. We all run our business differently.
    You brought up gas hydro water rent. My bills of that nature (there is nothing I rent) all have longer then 7 days due and none would cut you off if you missed the due date by 7 more days.
    Here you can't start eviction until rent is missed for 90 days.
  13. LapeerLandscape

    LapeerLandscape 2000 Club Member
    Messages: 2,247

    Whats funny about this is that it was a Hotel right? You dont see any of their customers going past due by 7-15-30 or 60 days, they get paid before you get your room key.
  14. Ben C

    Ben C Junior Member
    Messages: 9

    It's good to hear that you managed to win, and will hopefully get paid the judgement amount in a reasonable time frame. I'm working out the math and if I'm doing it right you're giving them up to about 21 or 28 days to pay. ~7 from billing date to 1st, due by 7th (another 7 days so 14 so far, second notice after that due by 14th (another 7 days= 21 days total) then notice of suspending service on the 15th? or on the 21st? Either way, 21/28 days to pay doesn't always work in every circumstance. We stay completely away from national maintenance companies, but still have national chain clients.

    We have some commercial clients that if I get them a bill by Wed I have a check on Friday. We also have others that it's 45 days at very best, sometimes 90 to get paid. It's not that they're bad clients at all, matter of fact some of those are my very best clients that I've done 100's of thousands of dollars worth of work with over the years. It's just that some, especially the larger corporations, have systems that just take time.

    Example: One apartment complex we do a lot of work for that has multiple properties nation wide: I submit bill to local manager, who sends it to her manager, who turns it into accounts payable. Then, 2-4 people in 2 different office locations have to approve it depending on the dollar amount. Then it gets kicked back to accounting to cut a check, which they only do 2x a month. While this whole process could be accomplished in a matter of hours if they were so inclined, that's just not the way it works considering I'm one of hundreds of vendors they have to pay. They always pay. it's just a matter of how long it takes to get it. Now, I know this going in and plan for it, which is my choice.

    That said, trying to lump vendor payments into the same category of utility/rent payments for these companies isn't always as cut and dried as you'd think.

    Often times payments for utility bills don't require the separate approval process that is usually required for vendors.

    Sorry for the long post
  15. MSsnowplowing

    MSsnowplowing Senior Member
    Messages: 761

    90 days wow, we can start eviction on the 11th day if rent has not been paid.
    I would be getting a 3 month security deposit if I owed property there
  16. MSsnowplowing

    MSsnowplowing Senior Member
    Messages: 761

    Lol yes you are correct and some hotels put a 100 dollar hold in your credit card
  17. MSsnowplowing

    MSsnowplowing Senior Member
    Messages: 761

    Np I like reading long posts.
    I know I used to plow for Friendlys and it was a about a 35 day delay in payment.
    This was not the case, 4th year plowing them, owner cut the checks.
    It all depends on who it is for a client.
    Some are not worth it no matter how much money you are making.
  18. Ben C

    Ben C Junior Member
    Messages: 9

    That hits the nail on the head.

    Probably the most important underlying issue here is that your situation highlights the need for a good written contract, backed up with proper documentation.
  19. Ben C

    Ben C Junior Member
    Messages: 9

    Textbook example of how it should be done.

    I'm new to posting on this forum, been reading since last year, but I've been in business for myself one way or another for pushing 20 years. I'm a general contractor, who for some unknown reason I still haven't figured out, decided to get back into plowing last year after getting out several years ago.

    Two of the biggest things I harp on for new(er) contractors (not trying to imply you are at all) is using a good contract and fair pricing. A good contract protects you and gets you paid. Fair pricing keeps us all working. Undercutting everyone will only loose you money in the long run.
  20. Brian Young

    Brian Young PlowSite Veteran
    Messages: 3,394

    Hopefully they pay, I sued a customer and heard every excuse as to why they are late etc. I finally took them to small claims court, they never showed, I won but still haven't collected any money and it's been a year. I'm just going to super glue all the key holes so they can't get in lol then bury them in snow