Contractors and subs have options that do not involve hiring an attorney
If you are a materials
supplier, subcontractor or general contractor, there are simple and inexpensive
steps you can take yourself to collect your accounts receivable.
Where the amount owed is
relatively small and all you want the court to do is award to you a money
judgment, the Small Claims Division of the Arizona Justice Courts may be a
viable alterative. You can file a Small Claims complaint at the Justice Court to
collect up to $2,500. File the claim in the precinct where your defendant
resides (if an individual) or does business (if a company).
Summons and complaint forms are available from the Justice Court.
Filing fees for Small Claims are reasonable. You will also need to hire a process server to deliver the
complaint and summons to the defendant. Although the procedures are not
complicated in Small Claims court, the court clerks are not authorized to give
advice and will not help you complete the forms. If a question arises that the
clerk cannot resolve for you, talk to your attorney.
If your claim is between
$2,500 and $5,000, you can file a claim in Justice Court. As with Small Claims,
the Justice Court provides forms for these claims, and you will have to hire a
process server to serve the defendant with the summons and complaint.
The Justice Court filing
fee is a little steeper than in Small Claims, a Justice Court claim is
somewhat more complicated. It requires more
paperwork and additional court appearances, and attorneys can be involved.
Nonpayment by a licensed contractor is also grounds for disciplinary action by
the Registrar of Contractors. Contact the Registrar at
obtain a claim form.
Whether you file a claim
in the Small Claims Division or elsewhere, the burden is on you to prove your
Winning your Small Claim
or Justice Court claim is going to depend first on the quality of the proof you
can show to the court. That means beginning every project with written
contracts, keeping your records complete and organized, and documenting the
issues that arise in the field.
The attention you give to
your project file before problems arise will pay off greatly if you have to file
a claim of any kind to collect payment. Having your contract, proposals, bids,
proof of costs, purchase orders, and documented changes in good order will be
your most valuable asset when you walk through the courtroom door.
If you are not paid in
full and on time, even if the amount is small, you can take action immediately
by serving a stop notice on the owner or construction lender. Arizona's stop
notice law gives contractors, subcontractors and suppliers the ability to demand
that the owner or construction lender immediately withhold amounts of the
undisbursed construction funds to satisfy your claim.
A lawsuit to enforce the
stop notice may be filed as early as 10 days after the notice is served and
requires no title search on the real property. You can pursue a stop notice
during construction without impeding the project, and you retain your lien
rights if enforcement of the stop notice does not satisfy your claim.
In order to file a stop notice, though, you must be eligible to file a lien, and
the rights to serve a stop notice and file a lawsuit to enforce the stop notice
expire with your lien rights.
More information about stop notices and lien