Tuesday, December 29, 2009

Homeowner Loses Case Against Pool Builder Over Diving Accident

In 2008 Randy Johnson filed suit against Mission Pools of Escondido after diving into his backyard swiming pool from the diving board. Johnson hit his head on the pool floor, suffering a fracture to vertebrae in his neck with resulting medical bills of $22,400. He contended that the construction standards used by Mission Pools were improper and unsafe and that Mission was therefore liable for his injuries.
Mission Pools contended that the pool was safe for proper diving and it was not responsible for the improper use of its pools. Mission argued that Johnson ignored warnings regarding proper diving technique and that there was no evidence that the standards were unsafe.
Prior to trial, Johnson demanded $425,000; Mission offered $30,000.
Trial began on December 1, 2009 and lasted 7 days, but the jury deliberated for only 3 hours before reaching its verdict that Mission Pools was not liable for Johnson's injuries.

Wednesday, December 2, 2009

GETTING PAID: Effective Accounts Receivable Management is the Best Option


It is a common scenario: a pool service tech is owed a few hundred dollars and files suit against his customer in small claims court. The customer files a cross complaint and the pool tech is shocked when the court rules the he must pay his customer thousands of dollars for damages caused by his negligent service. It is a situation that we often see and should be anticipated before starting legal action.

Defendants are permitted to file a cross-complaint or counter-suit in all jurisdictions. It is an effective strategic move to simultaneously defend against the pool tech’s claim for unpaid service and obtain money damages for what is often normal wear and tear to plaster, tile and equipment. In some cases, the customer hires an attorney to transfer the case from small claims to superior court where the service tech must have his own legal representation and where potential recovery is much greater. The pool tech that was initially in control of the situation is now put on the defensive, fighting to preserve his reputation and avoid a judgment ordering him to pay his former customer. So how does the pool tech who is rightfully owed money avoid falling into this trap?

Rule #1: Effectively manage your accounts receivable:

Staying on top of your unpaid invoices is by far the best way to avoid the problem. A customer who can’t pay an invoice for one month’s service will generally be just as unable to pay an invoice for two or three month’s service. Your likelihood of facing a battle in court increases with the amount in dispute. Develop a set of notices for your customers with overdue invoices and send these notices regularly. When you’re not paid, advise your customer in writing of the date on which service will be terminated for non-payment. Your chance of eventually collecting on a small invoice is greater and if necessary, it’s easier to write-off an unpaid bill for one month rather than three month’s service.

Rule #2: Collection agencies can be a cheap alternative to a lawsuit:

Collection agencies are professionals at the art of collecting unpaid bills and they can save you the time and emotional turmoil of dealing with difficult customers. Transworld Services offers IPSSA members a preferential rate for its services and information is available in the Members Only section at IPSSA.com.

Rule #3: Critically evaluate your customer’s defenses before filing suit:

Swimming pools are subject to wear and tear and very few, if any pools are free of any staining, etching or delamination. Normal wear and tear and even calcium deposits on tile can support your customer’s contention that (1) you aren’t entitled to recovery due to your poor workmanship, and (2) you owe them damages. A Judge is not an expert in pool service and you need to accept this fact in determining your chance of success.

Rule #4: Your time is valuable:

Even a small lawsuit is time consuming and that is true even for a small claims court lawsuit. Your time will be occupied filling out paperwork and initially appearing in court for the hearing. Small claims court matters are often heard by commissioners, but either party can request that the case be heard by a judge, thereby delaying the hearing. In California, a defendant that loses a small claims court matter can appeal to Superior Court where the case will be re-tried. You’re neither servicing nor repairing pools when you are in court which means that you are losing money for every hour that you spend waiting for your case to be heard. Consider what your time is worth.

Rule #5: Collecting is often difficult even if you win your case:

You filed your Complaint and you successfully argued your case before the small claims court commissioner and the Superior Court judge on appeal. You are the proud recipient of a judgment but you still haven’t seen any money. Now what?
In California, a defendant has 30 days in which to satisfy the judgment; if your customer doesn’t pay you’ll need to go back court and obtain a Writ of Execution and deliver it to the sheriff who will attempt to seize funds from the customer’s account. If he has changed banks you will need to hire a private investigator and you should expect to pay $100-$200 for this service. There are other ways to obtain this information, but those require additional time in court.

In summary, the small claims court lawsuit is a poor alternative to efficient accounts receivable control given the risk of loss on your customer’s cross-complaint combined with the unprofitable time spent in court. IPSSA members considering legal action against their customers are advised to evaluate the strengths and weaknesses of their cases before beginning a process over which they may lose control.