Why Don't We Get Sued? Because...

Why aren't we being sued? Because...from Krubinski vs Schmutzer-"truth is a complete defense against liability for defamation, regardless of bad faith or malicious purpose."

Wednesday, December 17, 2014

What Liability Does a CID Management Company Have When They "Endorse" a Vendor's Services & Expertise?

A Licensed Contractor Has a Complaint Disclosure Listed on Their License-Should They Be Dropped Off The "Preferred Vendors List" Maintained by a Management Company?

Many CID management companies perform basic background checks of vendors who wish to provide services to CID's. A background check may include verifying a contractors license (checking that complaints don't exist), being named as an additional insured on liability policies, verifying workers compensation is in place if the vendor has employees etc.

What happens though when a management company posts a vendors name on it's website and says it "endorses their services and expertise"? In my opinion, they step into a mine field.

It's one thing to verify a vendors credentials, but it's quite another to endorse a vendor. For one, if something goes wrong with that vendor, the client will remember that you told him to use them. Secondly, your firms integrity is on the line. Third, the management company will now have to monitor the vendors reputation, if it sinks for whatever reason, clients will think that you should know that. If you don't and there is a hit on a vendors reputation, they will wonder why you didn't know that and pull that vendor from your list of endorsed vendors.

A recent case in point-The Management Trust-Goetz-Manderley maintains a list of "trusted partners" who in TMT's own words "endorses their services and expertise". Endorse meaning "declare one's public approval or support of."

One of their endorsed vendors is a general contractor/waterproofing company called DeckTech, Inc.
The Management Trust's "trusted vendors" list has one contractor with a complaint against their license.
Risky business when "endorsing" a company?
Decktech Inc has a complaint disclosure on their license listing with the CSLB that alleges serious license violations of the Business & Professional Codes governing businesses. While their license is currently active, the disclaimer reads-
DISCLAIMER: Any complaint listed is only an allegation of a probable violation. A complaint does not affect the status of the license at this time. If a complaint is referred to the Office of the Attorney General for legal action, it may result in the suspension or revocation of the license. Pursuant to 7124.6 of the Business and Professions Code, the following complaints meet the criteria for disclosure.

and then following the disclaimer, the complaints against Decktech Inc are listed.

In the words of The Management Trust "TMT only admits the very best vendors as Trusted Partners, vendors who value workmanship and professionalism above their bottom line".  What liability or exposure to risk does a management company have when a "trusted partner", has a complaint disclosure on their license and they leave them on their trusted partners listings?

CSLB only lists accusations such as this when certain criteria has been met, that being-
7124.6.  (a) The registrar shall make available to members of the
public the date, nature, and status of all complaints on file against
a licensee that do either of the following:
   (1) Have been referred for accusation.
   (2) Have been referred for investigation after a determination by
board enforcement staff that a probable violation has occurred, and
have been reviewed by a supervisor, and regard allegations that if
proven would present a risk of harm to the public and would be
appropriate for suspension or revocation of the contractor's license
or criminal prosecution.

Unless The Management Trust, in our opinion, removes Decktech Inc from their list of "trusted vendors" they open themselves to criticism, accusations of self-dealing and if something went wrong on a job being done by DeckTech, Inc, possibly being named in a suit as a cross defendant. 
If Decktech can clear their name and no complaints are listed, then certainly it would be of to reinstate them on the list, but as we see it, the stakes are too high to risk your reputation based on another firms diminished standing. 
What are your thoughts? Tell us in the comments. 

Thursday, December 11, 2014

DeckTech's Attorney's Failure To File Cross-Complaint With Answer to Lawsuit Leaves Them Scrambling to Beg Forgiveness

Either "Oversight, inadvertance, neglect, mistake or other cause" triggers need for filing of 
"Motion for Leave to File Cross Complaint"

Notably absent, but I wouldn't rule it out, "incompetence" could be another word for "other cause" in the case of a recent filing by DeckTech's attorneys in the Smith vs DeckTech Inc case currently pending in SLO Superior Court.  

 If you are being sued and you are blaming someone else for the events that led to your being sued, you will want to cross file and sue the guy who done it so to speak. 

Decktech Inc Grover Beach waterproofing contractor
Decktech Inc's attorneys have filed a 62 page pleading to cross file against others
in the suit against DeckTech. 
Court rules require filing cross-complaints to be filed with answers to a plaintiff's complaint at the same time. That wasn't done at the time DeckTech's attorneys, Von Ryan Reyes & Felicia Jafferies, of Ericksen Arbuthnot of San Jose filed their clients answer with the Court. This appears to be a big screw up, as they did try to file their cross-complaint the day after filing their answer, but Court rules require they be filed at the same time. A third year law clerk would probably think to check the filing requirements...don't know what happened here or what the thought process was, wouldn't you just file all your documents at once? 

Shouldn't the attorneys know the Court's rules at a minimum? Now they have to beg the Judge to allow this cross complaint in so they can sue DeckTech's subs (Roes 1-10) and anyone else they feel was responsible or caused a problem. Part of their original reply to the complaint was alteration of their product and misuse so it's likely they may try to sue others as well. 

As to suing "others" who performed work or altered products etc., the result might be more than what the defendant bargained for or envisioned when the thought rolled through their little head. Discovery has an evil way working both ways and leading to questions being asked a witness/defendant that some other person doesn't want asked and that leads to people who don't want to be depositioned being served to give a deposition and provide paperwork...and of course that all becomes part of open court records. Could prove to be very embarrassing and disastrous. 

Then of course you have to aksk-How much does Decktech's attorney bill an hour? I'd hate to get a bill for this work in rectifying what could and should have been done one day later...In fact, I'd tell my lawyer to pay for that work out of his pocket, wouldn't you? 

So the attorneys filed a request to come grovel before the Judge and 'splain why they should be allowed to get their cross complaint in...which basically boils down to we wanna sue the subs and get money from them. There's probably some responsibility from the subs, but the only one I really see having a problem is the tile installer. 

Here are the links to download and view the most recent pleadings 
Here DeckTech's lawyers are seeking to blame others for DeckTech's work they subbed out. The tile installer has the biggest problem from what we see. He installed it wrong and laid it out improperly. 

Here Attorney Reyes basically admits in legalese to making some mistake, oversight or inadvertance when it came to filing the cross complaint on a timely basis...

Here Attorney Reyes makes his argument for being allowed to file a cross complaint. One result if it's denied is DeckTech would be paying the whole bill if found against in the suit. The companies "Private Capital Investors" probably wouldn't like that much. 

DeckTech also faces legal trouble with the State of California Attorney General's office where CSLB has referred them to be charged with multiple Business Code violations. We are following up on that side as well. 

We are waiting and checking to see if new documents in the case are filed on a weekly basis-check back for further updates. 

Leave us a comment if you'd like.