Collecting From Dead Beat Customers

[admin]

So you do a great job in a timely manner but you run across that one type of customer you get every year or so, the dead beat. No matter how good your "radar" at picking up these people, sometimes one slips through and you gotta do something to get paid.

We had a Dairy Queen in Oklahoma as a customer last year, did a main counter top out of Staron Quarry Bluff and front panels for the counter out of laminate. As always, our estimates and invoices clearly define the work to be done and the costs. We long ago dropped the paragraphs of legalese, cause really in our state, they are useless if you are dealing with a homeowner. No matter how good of a job you did or how bad the homeowner did you, the judge usually splits the baby in homeowner cases, leaving the shop with their initial deposit and the homeowner with a half price countertop. But this job got done, and low and behold, the manager wants to pay the balance out in weekly payments. Sigh.... not a lot of choice, so we go along. And the manager faithfully makes her payments for six weeks and pays off the balance.

Fast forward about six months, Janurary of this year. The Dairy Queen wants a condiment stand countertop, around 48" x 54" with cutouts for the stainless steel ketchup pumps, plastic fork holder, etc, and a couple of vanities for the restrooms. At least this time they say up front they can't pay in full at the end of the job, wanting a payment plan. Sigh... we aren't covered up in work that week, so we go for half down, $200 per week for four weeks.

Get it done, customer happy with everything, but after a week, no check in the mail. Okay, she was going to pay the next week we think. No check that week either. Call her up, any problems? We get an earfull about how the cabinet under the countertop doesn't have any laminate at the top of the cabinet. Well, did we build the cabinet? No, of course not, but the owner of the Dairy Queen thinks it is our problem since we sold him a countertop. So we remind the manager that the quote was for three countertops, absolutely no woodwork or laminate work was mentioned and that she specifically asked prior to starting the job if the scope of the work covered any part of the cabinet and was told no part of the cabinet was covered. Of course she saw the missing laminate after we removed the old top, said she would paint it black.

So she agreed to make the payments. Did so again the next week, and the next week, and the next week. Yup, no payments of any kind. Finally after a warning of a lien being filed, she says her owner wants us to make some laminate covered trim that matches the previous work we did and apply it to the cabinet sides. We give her a bid for a couple of hundred ( a small sheet of laminate, laminating costs, travel time, and installation hour or so) to do the additional work on the condition that the payments be caught up before we did any additional work, but no, her boss doesn't want to spend the money. Agrees once again to make the payments, now late Februrary or so.

Nope, no payments. What did you expect? Now the turkey won't give us her owner's information so we can go over her head and file a lien or lawsuit. Got super busy the next month, also got tired of calling every week till she picked up the phone and lied to us again. Finally things slowed down enough that I had time to chew on her tail last Friday and threaten her again with a lien on their property, this time she refused to pay, said her boss would call me on Monday. Okay, haven't talked to the boss yet, I don't even know who he is, so I say I'll hold off till Monday on filing the lien. I figure I'll at least get a phone number this way.

Had to do an top install on Monday, and another on Tuesday out of state, but the boss dude didn't call either the office or my cell as promised. Finally tired of messing with them, my wife tried to find the property owner information, but it was unclear who owned the property and who needed to be notified of the lien. So we typed up the lien leaving the notification address blank, and down to collect my money I go (an hours drive or so). On the way down, I'm thinking what approach would work best, present a bill in front of her her early lunch crowd and demand payment, possibly get thrown out and the cops called? Or just file the lien and small claims court case against them?

I did neither, instead I thought outside the box. Rather than having them call the cops for me showing up and demanding payment, I went to the cops, explained the situation and asked the police department to be present when I delivered. I'm thinking that I would at least make the impression that I was just tradesman attempting to get paid instead of a hot head. Not in a million years did I believe they would actually help, I just thought it would keep me out of trouble if the manager called the cops on me.

But they did! Cops call this a "stand by" and it is not at all that unusual. The officers said they would meet me down there, would go in and obtain the full name of the manager (for subpoena purposes) and get the name and phone number of the owner and the address that the lien and lawsuit process papers should be served to. And that is exactly what happened, those two cops walked in and got what I had tried to get from her for the past month, and handed it to me with a smile.

What a great thing, these officers keeping the peace while doing the right thing. I called the number of the "owner", who the one of the cop's said the manager had called while they were talking to her, no pick up on the call, answering machine. I left a message that I would be filing the small claims suit and the lien in a few minutes, and to call before that few minutes were up if they prefered to pay the invoice instead of dealing with a lawsuit. Filed the small claims suit, $103.00 in court costs including a uniformed deputy sheriff hand delivering the court summons during business hours, then went down to the county clerk to file the lien.

Darned, only had one check in the check book, and they don't take Visa. So the nice court clerk ladies notarize the lien, total up how much it would cost to send the lien notice out to all three owners listed on the deed, and all I have to do is mail it back with a check for $67.00 and change. Then I call the owner back, still not picking up on his phone calls, tell him to expect to be served court papers in a couple of days, that he owned me another $103.00 for court costs, and that I had the lien notarized ready to mail back with a check at 3:30 that afternoon. If he wanted to save $67.00, he can call before that time with payment arrangements.

By this time it is lunch time or so, and I went on to my template appointment at 1:00 pm. Got back to the shop and learned that the manager of the Dairy Queen had called and left a message saying she would pay half before Friday and the other half next week. So I put the lien away for a week, who knows, she might not be lying this time cause I sure got her owner's attention.

I learned that the police will also do this for residential cases, including allowing you to serve papers such as a final demand letter. Nothing beats having the law on your side and showing the dead beat customer that they either pay me now or pay me later. None of this stuff is something enjoyable, but having the crooks sweating while the law oficers ask questions is better than a shop owner stressing over not getting paid. Be sure and look up your state lien laws, have the right name of the property owner or customer (including DBA's), the nice ladies down at the local court house will help you with the rest. Above all, structure your business to where you have clear expectations and clear explanations of exactly what the customer is to recieve for his or her hard earned dollar.

Also know when it is better to just lose the money. Go into a court case with eyes wide open and very clean hands so to speak. Most courts have a "grain" to them, just like a wood panel. Any tie will automaticallygo to one party, a worker in the case of a workers compensation court, a woman in the case of a divorce court, or a homeowner in the case of a small claims court.

[admin]

Well, despite the managers promises (imagine that...) it took them a month to pay their bill. When asked to pay the court costs, they dithered, said they would let the judge decide on that one, then called the next day saying they were sending a check for the court costs.

So we got payment in full.

So it took a few hours of effort, but we got paid in full. Now all I have to do is drop the court case by sending a letter to their local court house. Bottom line, fight the bastards, don't let them get away without paying. You can't always see the crooks coming, but you can certainly use the system against them once they try to cheat you.