Threatened to sue.

[Joe Diaz]

This is a new one. Get this. A client is refusing to pay the final payment for artwork they hired us to create, they want us to transfer ownership to them (which we refuse to do until fully paid as stated in our contract with them) Once ownership has been transferred they are now telling us they will then be "willing" to pay us half of the remaining balance, however they feel that what they had paid upfront so far was the actual worth of of the artwork and that they were unhappy with what we created. Not only that, but they then threatened to sue because they claim they have lost $30,000 (more than what we are charging for the design) due to the design work not being in their ownership while we waited for payment. They claim we are holding their design hostage and that is hurting their business. They are a decent size company, larger than ours, but they have absolutely no case, our contract is ironclad in this case. They think that the simple threat of going to court and the resulting court costs is the best way to get us to lower the bill. They have an in-house lawyer you know.

Some people.

Anyone else have some funny stories about people who don't like to pay.

 

[John Butto]

Being threaten by a lawyer is high on my list of things I despise. Lawyers are a nasty group of people. Good luck with getting what was agreed upon in your contract.

 

[Hicalibersigns]

We just had a similar incident. We applied frosted vinyl to the windows of their conference room and also produced a halo lit channel letter lobby sign for them. They then decided that they did not like the lobby sign (which we tried in every way to talk them out of in favor of a different design), and told us that they weren't going to pay us anything further. We then told them ok, we will be out on Monday to take the sign out and collect payment for the balance of the vinyl work (which they liked very much). They then told us "No, no, you can't take it out, we are just not going to pay for it." Holy Guacamole, Batman! Some folks have some really bizarre ideas about business.

 

[Joe Diaz]

Three things could happen in this case. 1. They pay the final payment in full, they get the artwork. 2. They don't pay the final payment in full and don't get the artwork. 3.They sue us, in which case they probably won't win, and it costs us both. (Only the lawyers win in scenario 3) That's kind of messed up isn't it?

 

[Gino]

Is you part of the contract finished ??

In other words.... is there an actual finished product which they have, but they don't have any files or separations from which to work ??

OR​

Are you still working towards the end product waiting on final payment ??


Screw their lawyer. Take it to a District Justice, file for non-payment and all court costs in & out of court if they don't meet your initial agreed amount signed for on the contract. This gives them 30 days to figure out what to do or like we just recently had with our shop.

We sued someone back in August for a final payment, not on logo work, but actual sign work and they refused to pay and their new sign guy told me it was in the bag for them and threatened me by telling me I was gonna lose big time and he'd enjoy bragging he brought me down. Our day in court was met with us having papers, signed agreements, paperwork and photos for evidence and after about 8 or 9 minutes, the judge threw the other sign guy out of his courtroom. When the guy started mumbling, the judge threatened him with something else and he then promptly left. It took all but 15 minutes for us to be win the case in it's entirety and he told them they had 30 more days to appeal. we got the check last week. Payment in full.

Ours wasn't much money-wise, but the principle of the deal. We have enough people working here, if I'm gone for a few hours.... no problem, so I thrive on this kinda stuff.

Create an iron-clad paper trail of all events, let them know of your intentions to collect with a receipt return letter and you'll win, if everything was done by the book.

Good Luck...............
​

 

[peavey123]

In instance #3. Since they obviously don' t have a case. Maybe you could counter sue for court costs?

 

[Joe Diaz]

In instance #3. Since they obviously don' t have a case. Maybe you could counter sue for court costs?

Maybe but it costs us money when we aren't at the office/shop working and are in court instead, so I'm unsure if we could counter sue for that or all the time this has wasted. Maybe we can. Haven't talked to our layer yet, since they haven't actually sued and probably wont. They are just trying to intimidate us.

 

[Pat Whatley]

I have a construction guy I do work for who has told me on more than one occasion that he's sued large suppliers just to put off paying them. If a project has delays and he's not going to be able to pay for six months he'll sue so that it's tied up waiting on a court date for months which buys him the time he needs to get the money in to pay them. He talks about it like it's the normal way of doing business.

 

[HDvinyl]

Tell your client they're lucky they aren't the State of Colorado.

 

[HulkSmash]

Three things could happen in this case. 1. They pay the final payment in full, they get the artwork. 2. They don't pay the final payment in full and don't get the artwork. 3.They sue us, in which case they probably won't win, and it costs us both. (Only the lawyers win in scenario 3) That's kind of messed up isn't it?

If they lose, you can make them pay for your court, and lawyer fees.
it will never make it to court. Is it a large balance owed?

 

[Joe Diaz]

Is you part of the contract finished ??

In other words.... is there an actual finished product which they have, but they don't have any files or separations from which to work ??

OR​

Are you still working towards the end product waiting on final payment ??

The design work is done and it is unusable to them. (watermarks etc.)

Ours wasn't much money-wise, but the principle of the deal. We have enough people working here, if I'm gone for a few hours.... no problem, so I thrive on this kinda stuff.

Create an iron-clad paper trail of all events, let them know of your intentions to collect with a receipt return letter and you'll win, if everything was done by the book.

Good Luck...............
​

Thanks,
We have our ducks in a row. I'm not too worried. The funny thing is we weren't even considering taking this to court yet so that WE could collect, it hasn't been past due long enough to concider that option and they don't have the usable artwork at this point in time. 99.99999% of the time people pay if they want the product. That is why we are set up that way. but in this case THEY threatened to take us to court. LOL

 

[Joe Diaz]

If they lose, you can make them pay for your court, and lawyer fees.
it will never make it to court. Is it a large balance owed?

Yeah I realize that, but I'm still not jumping up an down with excitement to go to court. Even if they do pay court and layer fees, its still will costs us some. We will and have taken people to court but it is a last resort.

 

[Joe Diaz]

I just thought of this too. If they claim we harmed their business to the tune of $30,000, would it go to small claims? I'm wondering if that number he pulled out of his you know what was that amount for a reason???

 

[qmr55]

I just thought of this too. If they claim we harmed their business to the tune of $30,000, would it go to small claims? I'm wondering if that number he pulled out of his you know what was that amount for a reason???

Depends on your state, but most states small claims court are limited to $10,000 or less.

 

[WildWestDesigns]

I just thought of this too. If they claim we harmed their business to the tune of $30,000, would it go to small claims? I'm wondering if that number he pulled out of his you know what was that amount for a reason???

I haven't ever seen a small claims amount over 10k. Just depends on the jurisdiction that the claim is filed in. I've seen some as low as 2k for that jurisdiction max limit in small claims.

 

[bikecomedy]

Joe... first of all thanks for all your posts and thoughtful replies here.

Secondly, sure you will handle this in great way.

Thirdly, if you have not ever seen or read this book it is full of ideas about these kinds of people and how to handle them: http://www.amazon.com/Bullies-Tyrants-Impossible-People-Without/dp/140005012X

Fourthly, would need more information about the scenario to give you or anyone a possible action plan about this. You might ask them why they did not pay and then sue for a correction as is normal practice as to their claim for damages on non-ownership of copyright. Is it because they know they can not win? Are they hoping you are a legal ignoramus? Any first year law student will tell you that the claiming damages for performance of a contract with performance subject to consideration as part of the contract is voidable and not actionable when one party refuses to perform agreed terms of said contract. You are in fact entitled to file an action for performance of said contract and interest damages. Which you would likely win.

You could ask for and would likely receive a summary judgement and never spend a day in court should they foolishly file a claim. However, should you file a claim for damages they would be forced to pay you. Wonder how they would enjoy the local authority doing a till tap? Or public records of their business practices? This story makes me wonder if the in-house attorney is trying to justify his or her existence. Again, would need more info to have some idea of what is going on here. Something smells fishy alright!

Fifthly, Perhaps finding the person who is making this determination and their personal motivation is impossible but certainly a possible way to find a resolution without having to measure power against one another. Seems like there is always a way to make both parties look good and here I suspect someone is getting heat and throwing blame to save corporate face. If you know what it is that they are getting heat about you might be able to come up with a solution that let's them and you win.

All the best in this, know it won't help much but willing to bet most of us have had similar circumstances. Usually get at least one a year and always learn from the experience.

 

[Gino]

I just thought of this too. If they claim we harmed their business to the tune of $30,000, would it go to small claims? I'm wondering if that number he pulled out of his you know what was that amount for a reason???

It's a new world and for sure.... new times.

Anything is possible. People sue for all kinds of things and the judicial system seems to always take the side of whomever pays them the best. No, not really, but it sure seems that way sometimes.

The method in which they convince a judge, arbitration committee or jury can be quite interesting in these rather creative means of describing situations. For me, how can something be hurting you, especially in the pocketbook, if you haven't even used it yet ?? If they waited too long to have your company develop this project for them and took into consideration of their playing games with payment, thus delaying their own game-plan, doesn't that reflect clearly on how THEY didn't see far enough ahead to thwart their own getting in their own way ?? It's clear as mud.

You see your honor, the sign people have not given us our files becasue we have not paid for them. Therefore, we are losing revenue due to our not paying our vendor for said files thus creating a short coming from our own clients who refuse to pay us and now we are losing money because we haven't fulfilled our end of the signed and agreed upon contract. We want $30,000 for our stoopidness. Thank you your Honor. I'm sure you will rule in our favor.

Yeah, if I rule in your favor, then I have to agree with your 21st century method of doing business. :Oops:
​

 

[OldPaint]

i had a franchise sign company call me one day and threatened to sue me unless i stopped using SIGNS HERE & NOW as the name of my company. i have a brother in law who is a lawyer, called him and he told me to tell them to proceed, he would like to take some of their money))))) and i was told to tell this guy THAT..........and that my lawyer fees would be pro bono.....and that SIGNS HERE AND NOW was not the name of my business.....BUT A TAG LINE............. never heard from them again))))))

 

[Pat Whatley]

they then threatened to sue because they claim they have lost $30,000 (more than what we are charging for the design) due to the design work not being in their ownership while we waited for payment. They claim we are holding their design hostage and that is hurting their business.

That would be about the same as me suing Multicam because I'm not making money with the CNC router I can't afford to buy from them right now.

 

[TammieH]

Tell your client they're lucky they aren't the State of Colorado.

Haha:ROFLMAO:!!!!