Death of construction company owner and how to move forward

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jaylectricity

jaylectricity

Senior Member
Location
Massachusetts
Occupation
licensed journeyman electrician
On Sunday the owner of one of my biggest customers passed away suddenly. He was in his mid-30's. I don't have the details yet, whether it was an accident or a major health event. The wife shared the news by saying the company would be closing because her husband had passed away.

We have numerous open jobs, and employees willing to work. Personally, the company owes me about $2000 for finished projects. If we can at least finish the other jobs that are contracted and receive payments from those customers, how do I ensure that I get paid? The wife had a small hand in running the business, so she's not a total stranger to the business. But of course, she's in no condition to think about this right now.

Even if the company just dissolves and everybody moves on, is there a way to get paid for the three invoices I have currently submitted? I've been doing jobs with these guys for 10 years, never had a problem getting paid, but now I fear that the wife who is now left alone with three children will take this opportunity to keep as much money as she can. I believe she has an official title within the company, possibly co-owner and/or vice president.

Any advice or info from anybody who knows what to expect would be greatly appreciated.
 
Personal service contracts that depend on someone's personal service to perform the work, typically a doctor, legal work, accounting, photography ... that contract terminates with the death of the owner. Contracts that do not depend on that person personally to perform the work, that contract may continue after the owner's death. Which case applies here I do not know, that's the general theory.

Chances are if she has the money to pay, the wife will not want to remain involved in long running legal issues and try to settle everyone quickly. I would say a lot depends on her mindset or point of view. People have a compulsion in both directions, for honesty, integrity, and for deceit.

For going forward with current jobs, it sounds like she wants out so you would have to recontract for the work with the property owner or his agent. For the unpaid invoices, submit them for payment.
 
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jaylectricity said:
On Sunday the owner of one of my biggest customers passed away suddenly. He was in his mid-30's. I don't have the details yet, whether it was an accident or a major health event. The wife shared the news by saying the company would be closing because her husband had passed away.

We have numerous open jobs, and employees willing to work. Personally, the company owes me about $2000 for finished projects. If we can at least finish the other jobs that are contracted and receive payments from those customers, how do I ensure that I get paid? The wife had a small hand in running the business, so she's not a total stranger to the business. But of course, she's in no condition to think about this right now.

Even if the company just dissolves and everybody moves on, is there a way to get paid for the three invoices I have currently submitted? I've been doing jobs with these guys for 10 years, never had a problem getting paid, but now I fear that the wife who is now left alone with three children will take this opportunity to keep as much money as she can. I believe she has an official title within the company, possibly co-owner and/or vice president.

Any advice or info from anybody who knows what to expect would be greatly appreciated.
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Give the bereaved some time (at least a couple of months or more)- then bring it up or not- is a couple of grand going to make or break you? Get familiar with the probate laws in Massachusetts. If you really want to pursue it, and she won't pay you, you probably could file a claim against/with his estate once its probated- whether you get paid/how quickly you get paid may depend on how your classification as a creditor- some (any medical, funeral exp's, etc) get priority over others.
 
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it is somewhat surprising that she is going to close the business down as opposed to selling it. that may be a major clue.

if you want to get paid start filing liens on work already done but not paid for.

you might also want to consider talking with your lawyer about it and maybe he can contact the other company's lawyer and come to some kind of arrangement.

if there is work in progress, someone is going to end up taking it over. might as well be you.
 
Florida has a law which stipulates what happens upon death of a contractor. Mass may have similar. You'll need to do some research. You can also call other subs and see if they have consulted legal counsel.
 
readydave8 said:
That long?
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Cow said:
That was my thoughts as well. You can be sure the lumber yard the construction company buys their materials from isn't going to hold their invoices for two months. Why should you?
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In the ops situation over a couple thousand, that's not too bad imo. Give the widow some time to get her head clear (though if she is already looking to sell the business........I missed that part of the ops post). I definitely don't believe the amount of time given should be interminable or much beyond what I posted.

Of course, otoh, he had a responsibility (like having insurance) to look after his family in the event something happened to him, and ultimately (and rightfully) his company (or estate) is responsible for debts incurred while he was alive.
 
I do not need the $2000 right away, I could wait a year for it without any trouble. I don't want to wait until it's too late to file the necessary paperwork, but I also don't want to appear too aggressive about it. She may just cut a check for me and the employees, then let the lawyers figure out everything with the other creditors. She is authorized to sign checks for the company.

I think her initial reaction of shutting down the company rather than selling it was probably while she was still in shock over what had just happened.

They mean a little more to me than the professional relationship, so I'd like to at least keep the personal relationship intact. Hopefully that will be helpful in making a smooth transition whichever direction we go.

Thanks for the ideas, they are helpful. I didn't really know where to start.
 
user 100 said:
(like having insurance)
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Yeah, this is a good point, and he likely is covered in some way for that. She was always the stickler about having things covered properly and legally. We used to fly by the seat of our pants when we first started together, but over time things became more streamlined and official.
 
I would think that trying to resolve this asap is in your best interest. That she is saying she's going to close the company rather than sell it or run it makes me believe there may be cash problems/insolvent. I do not know your legal recourses here, but I wouldnt hesitate to push forward with liens or legal action if she coming across as never going to pay you.

Even if you have legal options, the amount due may not be worth pursuing by the time you figure your time, lawyers fees, court costs, etc. If she/the company is truly broke, bartering/setling for goods/items from the business maybe the best you can do.

In any event, I would wait for the funeral to pursue payment. Coming across insensitive or crass too soon could garner far more bad word of mouth publicity (or notoriety) than that 2k would ever be worth. Best of luck, and please let us know how things turn out.
 
jaylectricity said:
On Sunday the owner of one of my biggest customers passed away suddenly.

We have numerous open jobs, and employees willing to work. Personally, the company owes me about $2000 for finished projects.
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If the guy was a contractor has his company been paid for these finished projects?

You will file your lien against the property that you were working on (not against the contractor). I would contact the owner of the property and find out where these jobs stand.

Don't sign any lien waivers until you get paid.

Think of the contractor as a middleman and now that the contractor is no longer around you deal directly with the property owner.
 
He hasn't been paid for one of the larger jobs he owes me for, I know because I didn't sign any lien release forms for the last phase of work I did. And I know one of the bathrooms was waiting on a countertop or special cabinet or something so he hasn't been paid for that one either. I also haven't gotten the final inspection on that one, so I have some leverage with that homeowner.

I've been talking to one of his employees who usually runs whichever project he's assigned to and told him to get his CSL, so he's planning on doing that. If he can at least take over the big warehouse job we're doing, that'll smooth things out on that end.

And the early word is, that it was a suicide.
 
jaylectricity said:
He hasn't been paid for one of the larger jobs he owes me for, I know because I didn't sign any lien release forms for the last phase of work I did. And I know one of the bathrooms was waiting on a countertop or special cabinet or something so he hasn't been paid for that one either. I also haven't gotten the final inspection on that one, so I have some leverage with that homeowner.

I've been talking to one of his employees who usually runs whichever project he's assigned to and told him to get his CSL, so he's planning on doing that. If he can at least take over the big warehouse job we're doing, that'll smooth things out on that end.

And the early word is, that it was a suicide.
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If the widow is an officer in the corporation or a partner in the business then she may be able to complete any jobs that have been permitted and are in progess. I would guess that the local inspectors may know the rules about this as different states have different rules where death is concerned.

I would send flowers and nice note of condolence and after the funeral (couple days after) I would talk to the widow about the financial situation. She will probably have a lot more to gain or lose than you do and just closeing up shop may not be in her best interest.

Folks women often deal with death much better than men do. They may cry at the funeral but 24 hours later they are collecting the insurance.
 
I'd mail a statement and just let it play out. If the company has the money, you'll get paid. Let the attorney or accountant deal with it. For only $2K, I'd be sensitive to the wife's situation. I'm guessing that in the 10 years you've worked with the contractor you developed some kind of a personal relationship. And I'm sure the customers of the ongoing jobs will contact you directly, in which case you can collect what is already owed, most likely.
 
Going to the wake tonight. I may go to the funeral on Sunday as well.

The other day she asked me to help round up the guys for the services. That everybody that helped build their house will always be welcome in it.

I think this shows that she's amenable to trying to smooth everything out.
 
growler said:
If the widow is an officer in the corporation or a partner in the business then she may be able to complete any jobs that have been permitted and are in progess. I would guess that the local inspectors may know the rules about this as different states have different rules where death is concerned.

I would send flowers and nice note of condolence and after the funeral (couple days after) I would talk to the widow about the financial situation. She will probably have a lot more to gain or lose than you do and just closeing up shop may not be in her best interest.

Folks women often deal with death much better than men do. They may cry at the funeral but 24 hours later they are collecting the insurance.
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NJ allows 6 months.
 
So I found out that the wife has no official position in the company. I guess at some point she wanted out. I don't know how long ago, like if she saw something coming.

Her father is an attorney and so at the wake he's chatting up all of the employees and subs talking about finishing the open jobs and collecting payments. But he said something that I have to wonder if he's serious. "It's going to be tough, and we'll probably have to do some stuff and not get paid for it."

I tuned him out right then. A couple of the carpenters are going to go take the CSL test so they can hopefully take over some of the jobs. The plumber wants me to go with him to the one job that I'm owed the most money for and see if we can get him to pay us directly. I don't really trust this plumber that much. On the other hand the plumber is the one that thinks this whole situation is fishy.

So apparently the owner, let's call him Chris so I can keep things straight, just lost a couple of court cases with customers. I believe he took them to court for non-payment. I know both the jobs and on one of them the HVAC guys really screwed us. I say us because I had issues hooking the air conditioning because I would get there to work in tandem with them and they wouldn't be there. When they did hook up the lines, they were just basically dangling in free air coming out of the attic down the side of the house to the condenser.

The other job the homeowners were brutal...B-R-U-T-A-L. Every little thing had to be perfect or it was unacceptable. It was a job where the contract was read and reviewed at least once a week. I never had much problem with her. My only two things were I stupidly used a leviton 4-way switch in one hallway because I had it and I just wanted to be done, but I had used P&S everywhere else, so of course it looked big and clunky. The other thing was I used Ariadni dimmers in one of the rooms early on, but the rest of the house was Maestro. But contractually I believe they had to agree to the extra because that wasn't noted in the contract.

Furthermore on that job we had to build on one permit while waiting for the Conservation Department to approve the mudroom. The entire second floor was rebuilt including what used to be a detached garage, the bedroom was extended over the patio between the house and the garage, but we couldn't build the mudroom for months after the job started. Meanwhile she insisted we don't walk through the house so we're climbing ladders and entering through second story windows. It was a nightmare.

Sorry to write so much, just figured I'd give you some background.

Anyway, he had lost enough court cases that the state was going to pull his license. This came as a surprise to me, but I do know that when business took off it was harder for him to keep all the jobs straight. But I really thought he was going to pull through it. I mean, he started and had been running this company since he was 22.

So last Sunday I guess he was drinking heavily going crazy trying to figure out a way to save everything. There was a lot of pressure on him as he was supporting multiple families, and of course trying to keep his guys employed. I don't know if he took some pills or did some other drugs, but as far as I gather he either dropped dead, or went to sleep and never woke up. The plumber I mentioned earlier thinks that maybe the wife poisoned him.

No autopsy done, he's been cremated. Which is kind of weird. A 33 year old man dies and they don't even bother with an autopsy? And I guess Chris went to jail in March for violating a restraining order. He violated it simply by going home to his wife like he had done every day prior and every day since. Not sure if he and the wife got into an argument and she called the cops or if some other random thing happened that allowed the police to run a check on them. The restraining order had been her response to another argument. Now he's not a violent guy, I KNOW she was never in harm's way. But she knows how to use the laws to her benefit, and now that I find out her dad is an attorney it makes sense. Especially the slimy kind of attorney he appears to be.

I've never had a problem with her. I've heard stories, but I take people at face value until they personally do something to me.

So that's the update so far. I expect to get more updates on the professional side some time this week.
 
I am aware of three, possibly more, suicides or suspected, contractors I knew and worked with over the years. Two were scraping along working their best but got in some track that threw their life upside down (marrying and separating from a golddiger who wanted only the house) and were left with debt they could never repay. One guy was a worker bee craftsman welder boilers pipefitter but got psychotic in the last year at 44. He drove off the highway in NYS with three kids in the car, they survived. He left the wife millions positive in distressed run down real estate.

There was no middle ground, debts they could never repay or millionaires.

There are some clues to more information. If the FiL lawyer had drawn up the initial contracts, he was probably collecting on them and even possibly financing the operation, sinking his money in on paper. That would make him more than an attorney, a silent partner or investor. That would be a key piece of information, if he drew the original contract forms the SiL was using with the customers. The rest could be assumed without trying to ask directly (what they would not want to discuss).

With me, I do free work for people, you could be homeless, as long as there is honesty, knowing we agree I give this work for free. If you can afford to pay I expect to be treated fairly. Even a retarded but honest person knows he has to pay for work. Must be honest, then I decide what I give for free and what step I take to protect myself

Once trust is broken, the door is always open for (you) to do the work that rebuilds trust. But until you do that work that rebuilds trust, you are a non person. Do not call me, speak to me, say my name, or talk about me. I do not want you in my life, even the time to think about it.

At this point for the business questions, I would be tempted to gently test the system and measure their response. I would be curious to know if it was that attorney's custom contracts they were using and that would tell me he is deeply connected to the business operations.

Next I would want to know if the attorney feels the existing contracts (especially yours, the subs) are now legally terminated, some grey area where they would voluntarily try to continue as before, or if he feels the contracts exist strongly binding as before and he intends to perform, including claims for damages.

Your contract was with that GC. You need to know if you will be held to those obligations (voluntarily at your discretion, or by the prior existing legal force, or the contract is now terminated). The attorney FiL should already know this answer.

A really important rule or method to know and use is not throwing good money after bad. Not feeling attached or invested in what you have put in (your $2000 it is peanuts, not enough to sink you or change your life).

Gathering information from the other subs, the plumber, is good, but it does not sound like he is that sharp a tool.

If they owe me money, I would be looking for some good faith payment before increasing the outstanding balance. That's where know the status of your contract comes in, if you are obligated now or if it's terminated and available to renegotiate (with the property owner for more money to cover your additional time and expenses).

If it comes time in discussion with the FiL attorney and you somehow let slip that you would maybe prefer to finish the jobs contracting directly with the property owners and he has a bad reaction, that's a tell you cannot ignore and I would be looking to exit on that sign. If on the other hand, he is good at what he does running the job, talking regularly to the owners (the owners like him and his work) his presence on the job could be beneficial to you.

That question I would be looking to test and measure.

If you want to exit with them, as suggested earlier in the thread, trading with them for tools or material they have as payment could work. Take the staging, pump jacks, aluminum plank, bobcat, backhoe, if they want to lighten up.
 
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