Our contractor refused to do any work unless we provided him with more money. We had given him 80% of payment per the contract in the span of 3 months for the renovation of a 980sq apt. After all that time he only did demo work or about 25% of the job. He refused to continue working unless we gave him more money. When we refused, he decided to walk off the job. We had to hire someone else to finish the work. The new contractor found that several fixtures for installation were missing parts which caused us to have to repurchase. From what i've written here, do we have a chance in recouping all the costs that we accrued in his breach of contract?
I guess I operate in a different world than my colleague, but from my experience contractors walk off jobs all of the time without valid reason. Often the contractor is not licensed, and had no intention of completing the contract. On other occasions, a disreputable contractor will use advance payments on one job to fund other jobs, where he got in to deep. Still on other occasions, the job becomes to large for the contractor. In a case such as this one, you got too far ahead in payments and lost all leverage over the contractor. Whether you have the ability to recover depends of whether the defaulting contractor has assets, whether you have good photos and records, and whether the new contractor will testify against the other. Do you have a written contract with the contract? That will generally control the forum and venue where you have to proceed.
Contractors do not often walk off jobs---they usually want to get paid in full. Further, New York City is a small world, and contractors are very worried about their reputations. A bad review on-line from a client such as you can be devastating to a contractor. Thus, my instant reaction to this situation is that there is probably a lot more to this story than is contained in your question. There are two sides to every story, and my hunch is that you have not set forth all of the relevant details in your question.
Nonetheless, I fully understand that working with contractors can be frustrating, particularly in New York City, and if the contractor violates its contract, often the best approach is to retain counsel to invoke legal remedies against the contractor. I have frequently been called upon to litigate and/or attempt to settle claims against contractors---and while I have often been successful I must say that this can be a difficult road to travel. This is particularly so if you did not engage counsel to draft your original contract with the contractor---if the contract was either oral and/or if you signed forms prepared by the contractor without retaining counsel to represent your interests, you might have a very difficult time pursuing your claims. In this connectionit is far from clear to me that you had the right to refuse the contractor's request for more money---it is quite possible that the contractor's request was entirely reasonable under the language of the contract and/or the ordinary course of dealing in comparable situations. Remember--contractors ordinarily give estimates as to cost--and estimates are not enforceable---they are estimates. Contractors are not bound by estimates--because it is inevitable that the scope of work changes during a project such as this.
Before advising you further, I would need to see the contract and all other written documentation concerning the project, including plans, budgets, agreements, correspondence and e-mails. As you may already have figured out, the contractor may claim that you approved changes to the scope of the work that require more time and money. Further, you should be wary of the findings of the new contractor--it is in the interest of the new contractor to criticize the first contractor. Can you recoup "all the costs"? Doubtful. Can you recoup some? Perhaps but these tend to be difficult cases, particularly because the amount of money involved is often relatively modest compared to the legal costs associated with pursuing a claim.
My guess is that there may be a fundamental misunderstanding between you and the original contractor both as to the scope of work and the amount you would have to pay for it. Did you and the contractor agree on a firm price for the work? Or did the contractor provide you with a mere estimate, subject to change and modification based on scope of work. And was the scope of work modified during the three months? If so, you have a difficult problem on your hands.
Certainly, if you want to pursue this matter, you need to retain legal counsel. And you should have realistic expectations here--even if you obtain a judgment against the contractor after litigating the matter in court, you have to enforce the judgment. Contractors can be very slippery and enforcing judgments against them can be difficult. You need to balance the cost of paying legal counsel to pursue this matter for you against the likely return, and then make a judgment about whether it is worth pursuing.
One thing is clear---you should not be handling this on your own. You need to retain experienced counsel to represent you in this matter.
Based on the facts presented, you have legal standing to to bring a suit against the contractor. The issue is how difficult recovering any judgment will be.
My guess is that the contractor was having cash flow problems and could not pay his workers and subs and pay for material. Thus the demand for money. However, as long as you are paying per the contract, it is not your problem that the contractor does not have cash to finish the job.
Leaving the job is typically breach of the contract. It is best to give notice in writing to the contractor that unless he comes back and finishes the work, you will terminate him for cause. After this, you can hire another contractor to complete the project (and fix the shoddy work) and you can recover these additional costs for the contractor who walked off the job.
