Pond scum of the lowest kind - advice need (long story)
I run a small DVD production company and i have been dealing with some unscrupulous people of late. This was a client of 4 months. I had already finished a previous job with them to which they where still paying off over an agreed period. And they had returned to start another job with me.
Because these guys had not met deadlines in the first job which comprimised me greatly, i had everything in writen down this time and it included
* stipulating the schedule of time for design work, delivery of assets to me, and schedule of time for DVD authoring (minimum 5 Days for authoring). They agreed to these conditions, and a price.
* It included that should they fail to meet the deadlines, their own distribution would be threatened.
* Should they continue to abuse the deadlines, overtime would be required to make their deadlines and a price on overtime provided.
* Their deadline fell the 2 days before i was moving house. They where told of this and i made sure they where aware that no more work could be done after this date.
* The balance of the first job would be required 1 week prior to the hand over the second job. This was also agreed.
When it came time to have all graphics with me, they where late. I wrote to them and said that they will now have to find an additional 2 days on their own deadlines, as it is now in jeopardy. They found an extra 2 days.
It was written in an email that as the deadline had been extended 2 days, so does my production schedule.
After i had created all the graphics for the DVD, i was to have in my posession all the assets for encoding the feature. Due to the extended production, this was to now occur on a Thursdayday (7 business days before it was due). Again this did not happen. I was told that their feature had gone to an audio production company for sweetening or whatever the audio guys do. They said that the audio people had equipment had broken down and that they would be working all weekend should it be required to have it fixed. I again outlined my minimum requirements and that should they be able to deliver it to my residence on the weekend, then things may be ok.
Also i spoke with the partner financing the product as he had not yet paid the balance of the first account. he offered me a suggestion. He said that he had the money to pay the balance, but that would leave him rather tight, so he suggested that in 8 weeks, he would be paid from the sale of the first DVD that i created, he would pay it then plus a one off fee of $1500. I thought about this and talked it over with my partner and agreeg. We wrote out a contract which both parties signed. It said
* The balance of ALL accounts to be paid in 8 weeks ( a date was specified ).
* The fee for dealing the accounts
* Should the accounts not be paid in full, then a 5% administration charge will be added per week until it is paid.
* Legal action will be taken should they fail to comply with the above and any legal costs will also be receovered.
Again, this was signed by both parties on letterhead.
The audio guys where unable to fix it until Monday afternoon. My client then kept the feature and started to edit it further. Its here i should have said that i cancel the agreement. They turned up to my business on Wed, 3 days before it was due, and 4 days before i moved house. I told them that i will be unable to complete the job in the time frame they have given in order to meet their deadline. They wanted me to work overtime to try and get it finished. So i did, only to find out they had again failed to provide me with complete assets and they had incorrectly encoded the feature (wrong fields). On Thursday afternoon i told them that it would not be fully completed by friday and asked them what they wanted me to do. They said that they would like me to contiune to work on it as agreed and they would find somebody else to complete it over the weekend.
I finished late morning on Saturday and had got the master to 85% complete. Again i wrote out a "Statement of Facts" form and detailed everything that had happened (dates promised, delivered, payments, the fact that i was handing it over incomplete and it was be given to somebody else i would not be held responsible for any faults of the DVD..everything to cover my backside.) I had both the Production co-ordinator (the guy that stuffed everything up) and also the financier sign the form. Each where given a copy and also the new invoice for the secong job. I had included all graphic design work, all overtime and 85% of the authoring price. Both where pissed off at me for not completing the job, and the financier said that had he have known about me moving house then he would have paid removalists to move all my stuff (yet he wont pay his bills on time..)
They could not find any DVD author at such short notice and so the they took the incomplete files to an Audio Designer friend of theirs, who they said knows abit about video and DVD, to try and finish. He had never heard of the program that i used for authoring (DVD Lab pro). And all Saturday whilst i was moving house, i was taking calls from the Prod Coord who was sitting in with the guy, and he was asking me how to do simple things with the program. I ended up turning my phone off.
8 weeks later, i still had not been paid any money from the agreed contract for the first and second jobs. I contacted them 4 days after the deadline and said, in accordance with our agreement, i am entitled to charge 5% of the outstanding balance, however we will waive this should they put the money in our account by close of business 2 days later. I receieved no response to the email (which was sent to all relevant parties). A week later a sent another invoice for the administration fee and another letter stating our signed agreement. I also rang the financier, who said that he would not pay anything until his production coord, had written him a letter with a figure they think is approriate for my services. He said that the Audio guy had massive problems because my project was so messy, and that the program looks so child like and "Windows 3.1" that they do not believe i am worth half of it. He said that because the audio friend charged $3K, they would take that off what was owed to me, and because the program is so cheap...it can't be professional, they won't pay the full amount. I just blew my stack. its been 4 weeks now since the agreed daye and each week i send an administration invoice of 5% and threaten with legal action. Today was the last deadline i had instructed before i commenced legal action and i received an email saying that "my claims are out of proportion to the fact and he will instruct his counsel that i intend on moving on this claim".
I am so mad!
Is there anything in the above that can bring me undone? I think i have a strong claim and a very, very strong lesson to be learnt here.
Im sorry for my rant. I get a bit emotional when i relive this. The outstanding amount, prior to admin fees, was $12K, now its around $14K.
Having agreed to the conditions, can i charge the admin fee? Can i recover legal costs on something like this even if he has agreeed to cover the costs?
The only thing you may should have done was mail all your invoices and agreements by certified mail. If they did not respond to an email, they may claim that they never received it.
Other than that...I would say "SEE YA IN COURT" I'm no lawyer, but you should find out the maximum you can sue for in small claims court. You should really contact an attorney to figure out what things will cost you and what you should expect to happen. Then make your decision
Let me get this straight. These guys were 'problematic' on the previous job, and they still owed you money, & you decided to accept another job from them? Did they, by any chance, offer to sell you a bridge? In Brooklyn, perhaps?
Call a lawyer. Sue. Do not pass GO, do not collect anything short of the $14k plus additional late fees & expenses.
And most important of all, don't ever accept work from these scam artists again! Or anyone like them, for that matter.
You really need to see alawyer with this, most of us here are not qualified to give legal advice. For what it's worth, my opinion is you seem to be in the right as far as the version you told.
I also agree you should never have moved onto the second job until the first was was paid in full, but I bet you NEVER make this mistake again. Mistake number two was ever allowing his materials to leave your shop without being paid in full. You gave away your best leverage, twice.
You also fell for a variation on the oldest lie in the business:
"If you cut me a break now, we'll make it up to you later".
In my experience and observation, this statement has NEVER, EVER come true for anyone who was given that offer. My own policy is to stand up and leave the room without another word if that magic phrase ever comes up. With my hand covering my wallet.
I know how hard it is when you have bills to pay and mouths to feed, nothing much coming in, and the possibility of a payoff presents itself in the form of a guy like this. But mostly, you wind up working for minimum wage or even losing money with clients like this, especially if they keep you too busy to take on other, better clients. Not only that, they ruin your local reputation and drive better business away, while attracting more of their ilk to your door. Considering the hourly rate versus profit (or lack thereof), you would make more money spending that time on the phone cold-calling for new client business instead of working on his junk.
Now you'll be out more money and time pursuing him in the courts, distracting you from your work. Be sure your lawyer takes that into account in the damages. I had good luck suing a deadbeat client once in small claims a long time ago, but OTOH I was single, unemployed, living with my folks, and had nothing but time to make the case my "job" until it's conclusion. Your time may be more valuable spent otherwise, depends just how much you think you really can get out of the guy. Most slugs like this have their best assets stashed where the law can't find or get them.
...and it depends on where you live. In some states, you can't sue for legal fees.
Hopefully, you don't live in one of those states!! Call a lawyer! It's your best ammunition now!
Along with all the input here, I would recognize that you have unfortunately learned one of the most intense truths in business...the way a client is at first is the way they will always be.
If they pay late on the first job...they're cash-in-advance.
If they can't make deadlines...the contract doesn't have an extension...it has an immediate cash settlement for late fees before work continues.
If the payment bounces...they're credit card or cashier's check IN ADVANCE clients from here on out...
Will the client stay under such draconian measures?
...you should certainly hope not.
Creative Cow Host,
[Tim Kolb] "Will the client stay under such draconian measures?"
Draconian? It's just commonsense.
You hit the nail on the head, Tim: "...the way a client is at first is the way they will always be." (Is that Ian Hunter and Mott the Hoople I hear playing somewhere in the distance as the soundtrack to this whole thing... "Once bitten, twice shy, babe!")
Now where are my Mott the Hoople albums, Kathlyn?
Sorry, I just had my morning coffee, it's the caffeine guys.
Good advice, Tim.
The albums were taken by "all the young dudes" on "the other side of life".
Ahhh, there's caffeine at your house, also -- eh, Mark?
I used to play the hell out of those songs in my college radio days. Wore out three tape carts easy:-)