The Public Contract Code Can Protect You From Abuse — If You Let It

Subcontractors: The Public Contract Code Can Protect You From Abuse — If You Let It

While we may not all agree that our economy is truly in a recession, it is undeniable that there has been a dramatic downturn in available projects for subcontractors — especially in the residential market. Because of this, many subs have started showing up in the public works project arena — where the low bidder is supposed to take the work under the Public Contract Code. This code is supposed to (there’s that phrase again) level the playing field for legitimate bidders for public works projects.

In fact, the equalizing objectives of this code can be plainly seen in the specific wording that is used, some of which are: “to provide all qualified bidders with a fair opportunity to enter the bidding process” and “to eliminate favoritism, fraud and corruption in the awarding of public contracts.” So, with these objectives, why do I use the phrase “supposed to” when referring to the effect of the Public Contract Code? Because, despite this code’s noble objectives, subcontractors who don’t know their rights can be taken advantage of when bidding public works projects.

One good example of the way subcontractors can be taken advantage of has been presented to me recently by more than one subcontractor. The situation goes something like this: formally residential subcontractor decides to put its hat in the ring and bid a public works project, even though it has not done any public works projects in many years.

The subcontractor gets a list of general contractors bidding the project so that the subcontractor can offer its quote to the bidders. Many of the general contractors arealso somewhat newcomers to public works projects for the same reasons the subcontractor is new. The subcontractor also realizes that many of the general contractors are different, and perhaps larger, than the subcontractor is used to dealing with. The subcontractor builds up a little rapport with a few select generals prior to the bid opening, which results in the general with the lowest bid using the subcontractor’s number and the subcontractor is “listed” on the general’s bid form. Great news for the subcontractor — it gets the project, right? Again, that’s how it’s supposed to work.

There’s one more step in subcontractor’s road to riches — or in the current economy, just keeping its doors open — it has to sign a subcontract with the general. The general presents a subcontract with all sorts of bad terms for the subcontractor, such as overly strong indemnity provisions; higher than normal insurance requirements; unreasonably short notice provisions before default; the ability to hold a higher percentage retention than what the public entity is going to hold from the general; and a slightly larger scope of work than the subcontractor included in its bid.

The subcontractor tries to negotiate more reasonable terms with the general, but the general refuses to negotiate and threatens to use another subcontractor for the project unless the subcontractor signs the oppressive and overbroad subcontract. The subcontractor being in a somewhat desperate situation because it needs the work, agrees to the bad terms while rationalizing that it can afford the cost of the extra scope of work by taking it out of its anticipated profits. A little of something is better than a lot of nothing, wouldn’t you agree if you really needed the work?Well, the subcontractor may not have had to agree to these unfair terms just to keep the project.

What the subcontractor didn’t realize is the general can’t just decide to give the work to another subcontractor just because the subcontractor won’t sign the subcontract. To make this type of substitution, the general has to jump through some hoops that are in place to protect listed subcontractors. Because the subcontractor was listed on the general’s bid, the general can replace the subcontractor only if after having had a reasonable opportunity to do so, (the subcontractor) refuses to execute a written contract for the scope of work specified in the subcontractor’s bid and at the price specified in the subcontractor’s bid, when that written subcontract is based upon the general terms, conditions, plans and specifications for the project involved and/or the terms of that subcontractor’s written bid is presented to the subcontractor.

What this means is that the subcontractor can’t be forced to sign a subcontract that has different terms than those in the general terms and conditions of the project, or that has extra work beyond what was included in the subcontractor’s bid — nor can a general contractor beat down a subcontractor’s price after the bid opening. If the general wants to replace the subcontractor in this case, the general has to follow the procedure set forth in the Public Contract Code.

The procedure first requires that the general request the substitution. Then, the public entity must give the subcontractor written notice of the
request for substitution by certified or registered mail. After that, the subcontractor has only has five working days within which to submit written objections to the substitution. A subcontractor who fails to file these written objections is deemed to consent to the substitution. If the subcontractor files written objections, then the public entity must conduct a hearing on the substitution, and must give the subcontractor at least
five days’ notice of the hearing. Thus, in this case, the subcontractor may have held on to the work without caving in to the general’s demands.

As is usually the case, the subcontractor needs to make a business decision as to whether it wants to take the less controversial way out and lose some of it rights and profits — or, not sign the subcontract, thereby calling the general’s bluff and taking a chance on the laws that should protect it.

If you have a construction question, submit it to: info@constructionlaws. com. We cannot guarantee that we will print your question and answer, but we will make every effort to include it in a future column.

General disclaimer The information in this article is based upon California law and is for general information only. Any information or analysis presented here is intended solely to inform and educate the reader on general issues. Nothing presented or referenced to, regarding facts, documents, or applicable laws, constitutes legal advice. Before acting or relying on any information, including any information presented here, consult with a qualified attorney for your specific situation.

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Mechanics’ Liens

The California Constitution gives mechanics’ lien rights to contractors, workers and material suppliers.

Design professionals are also afforded mechanics lien rights, but only after construction begins. Prior to construction they have design professional lien rights. This is specific only to licensed architects, engineers, and landscape architects.

While recording a mechanics’ lien is a straight forward and easy process, the laws for enforcing mechanics liens are complicated and often confusing. If the lien has any possibility of being challenged, you are wise to seek the assistance of a competent attorney that understands mechanics liens before you even think about foreclosing on the lien. This could save you a significant amount of money in the long run.

By the nature of the mechanics’ lien, the property owner runs the risk of having his property sold to pay the lien, so his motivation will be to fight the lien at all costs. In order to get back what you are owed using a mechanics lien, be prepared for a challenging and technical legal battle.

On the surface, applying mechanic’s lien laws seems obvious, but case law has dissected and analyzed this to the point that mechanics’ liens are complex and often misunderstood.

The reason that we do not make it sound easy, or a quick step by step how-to, is that there are too many important factors that can affect your rights. It would be a disservice to imply that this process is a simple affair.

We have provided the forms that the CLSB has made available. Click on the 2012 information link below to go to the forms.

To understand the critical timing of the mechanic’s lien process, click here.

Click here to get the latest information on the 2012 mechanics’ lien law changes. A word of warning – if you ignore these laws you run a real risk of jeopardizing your mechanic’s lien rights.

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Statement made under penalty of perjury as part of divorce proceedings.

Local Man Who Made False Statements About Earnings Faces Jury Trial

 

A Half Moon Bay resident who falsely stated the amount he earned under penalty of perjury will face a jury trial next month, the San Mateo County District Attorney’s Office said.

As part of the proceedings for a divorce, John Fotinos, 47, wrote on a document that he was presently unemployed, had no income and had not been able to find work in the preceding 12 months. Fotinos filled out the paperwork on Dec. 23, 2010.

At the time, Fotinos was out on a felony probation for a 2007 grand theft conviction.

At a family law court hearing in April 2011, the attorney representing Fotinos’ now ex-wife showed paperwork that the defendant had earned $27,000 at a construction company in 2010. The paperwork also showed that Fotinos was employed when he made the statements, the District Attorney’s Office said.

After being confronted with this paperwork, Fotinos said he made a mistake and then asked for an attorney, the District Attorney’s Office said.

The defendant is being charged with perjury, as well as for filing a false instrument with a public office.

Fotinos’ trial will start on Aug. 23, according to the District Attorney’s Office.

He is currently out of custody on a $25,000 bail bond.

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bankruptcy and child support

Child Support Claims in Chapter 7 Bankruptcy

November 21, 2010 By James R. Felton

Child support claims in bankruptcy cases are a frequent occurrence.  Yet the unique conditions of each bankruptcy can potentially impact the outcome of such claims. Greenberg & Bass was approached by the ex-wife of a Chapter 7 debtor.   The woman had a claim for child support of several hundreds of thousands of dollars. Prior to filing his bankruptcy, the debtor had settled a state court action in an amount in excess of the child support claim.  However, two law firms that represented the debtor in the state court matter claimed fee liens against the recovery.   The debtor also believed that both firms had committed malpractice, notwithstanding the settled claim.

Assuming the attorney fee claims were valid, the ex-wife would see virtually no money on her child support claim.   The firm analyzed the fee agreements of both law firms and found that one of the agreements did not comply with Rule of Professional Conduct 3-300.   This rule specifically requires that whenever an attorney takes a lien against proceeds of a potential litigation settlement, the client must be told in writing of the option to seek independent consultation from another attorney.   In one of the two attorney fee agreements, this important language was lacking.

Pursuant to recent bankruptcy law, the lien for that firm would be deemed unsecured in the bankruptcy.  The firm was also able to get some concessions from the firm whose lien was valid.  The bankruptcy court approved a motion to compromise between the Trustee and the law firm whose claim was deemed valid.   Ultimately, approximately $189,000 was freed up to pay both administrative expenses and more than $100,000 of the child support claim.

Had the firm and the Trustee not intervened to invalidate the other law firm’s claim, which only the Trustee had the power to do, no money would have been available to pay the priority child support claim.

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Child support in California and collection

This sheet is designed to provide basic information about child support. Specific questions and requests for help with a particular case should be presented to your local support enforcement office (647-7732), your own attorney, or the Presidio of Monterey Legal Assistance Office (242-5084). An excellent, free resource for information, workshops, child support calculations, and assistance in completion of court forms is the County Family Law Facilitator. Call 755-5167 for details.
The general rule is that all children, including those whose parents were never married to each other, have a legal right to be supported by both parents. The amount of support is based on the incomes of the parents and the needs of the children. Support will be paid to the one with actual custody of the children, usually a parent, or to a public agency where welfare assistance is being paid. Unless welfare is paid, the parents are free to settle the case on their own, and are not required to use a county enforcement agency. However, any agreements should be put into the form of a court order to protect both parties in the event of a later disagreement. The time and expense of a court order are well spent if there is a dispute later.
Can I handle a child support case on my own?
Yes and there are some very good self-help books on how to do your own divorce and how to get and enforce child support orders that can provide meaningful information. However, most people should retain the services of a private attorney or let the matter be handled by the local child support enforcement agency, a “IV-D” agency, in California, the County District Attorney. In Monterey County that agency can be reached by phone at 647-7732, by mail at P.O. Box 2059, Salinas, CA 93902, and visited at 752 La Guardia near the Salinas airport.
How much is the support going to be?
Child support in California is set by an algebraic formula established by the Legislature. The basic factors in setting child support are the parties’ gross incomes and the amount of time each parent spends taking care of the children. Other factors will have a varying impact on the level of support. Union dues, mandatory retirement payments, child support paid for other children, etc. will move the guideline support level slightly. If a parent has other natural or adopted children (step-children do not count) in the home, the formula provides for a “hardship” deduction. This adjustment to the obligated parent’s (obligor’s) income is equal to the amount of support set. NOTE: No “hardship” deduction for other children in the home is available if public assistance (welfare) is being paid. All hardship adjustments to the formula are within the discretion of the court. Your attorney or the Family Law Facilitator should have the software to run the numbers for you.
Examples:
E-4 w/3 years, 1 child, other parent has minimum wage job:
20% visitation (every other weekend, 3 weeks in the summer);
Guideline support about $500/month.
Plus ½ of work-related day care.
O-4 w/8 years, 2 kids, 20% visitation,
Other parent not working: about $2200
Other parent earning $1800/month: $1060 + ½ work-related day care
Other standard terms of a child support order are: A wage assignment order will issue; each parent will provide health insurance for the children if available through employment at reasonable cost. The parties will divide equally any unreimbursed health care costs. Both parties must notify the enforcing agency of any change of residence or employment.
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What do I have to do to collect child support?
To get a court order requiring another person to pay child support, you must prove that the other person is a parent of the child and present financial information that will enable the court to make a legally proper support order.
Can I get help with my child support case?
Yes. The local “IV-D” agency can handle all aspects of a child support case. In California, child support cases are handled by the District Attorney of the county in which you live. In California, these cases are handled at no charge to the custodial parent; however, in some other states, there may be a nominal charge of up to $25 for support enforcement services.
What information should I take to my lawyer or to the District Attorney?
Required information may include the full legal name, date of birth, Social Security Number, physical description, address, and employer of the non-custodial parent; full names and dates of birth of all children; marriage license, if there is one; divorce or separation agreement or judgment, if there is one; information about income and assets of the non-custodial parent; evidence of your own financial condition, such as pay check stubs; and evidence of any special educational or medical needs of the children.
What can I do if the other parent will not pay?
Courts can issue earnings assignment orders which require the other parent’s employer to withhold child support from the other parent’s pay.
What if I am unsure of which person is the father of the children?
Parentage blood testing has reached a point where it is highly reliable and the test results can be used in court to determine parentage.
I have a newborn baby. They’re not going to stick her with a needle, are they?
Most paternity testing labs are equipped to do “buccal swabs”: a Q-tip rolled on the inside of the cheek to collect cells. This method is scientifically accepted and avoids the requirement for needles for infants and persons with religious objections. The process is somewhat more complicated to process, so it is not used unless necessary.
What if I do not know where the other parent is?
Local support enforcement agencies, such as the District Attorney, have access to a wide range of services that can be used to locate non-custodial parents.
What if I do not have much information about the other parent?
Provide such information as you have. The local support enforcement agency will use its resources to help with the identification and location of the other parent.
What if I have been wrongly named as a parent of a child?
You can always seek the services of an attorney to represent you in the matter. Since disputes about parentage are usually resolved by blood tests, you may try to work out arrangements for the tests on your own. If the County is trying to establish paternity, DNA blood testing should be available at reasonable rates. Because of volume discounts, County blood tests usually cost about $250, and the defendant only pays if he is found to be the father. Results should be available within 3 weeks of the blood testing. In a recent survey of child support enforcement agencies in California, about 30% of the DNA tests were proving that the wrong father had been sued.
What if I think the amount of child support should be changed?
If your financial circumstances, the financial condition of the other parent, or the needs of the children have changed, the amount of child support may be modified. You can file a motion for modification with the court that issued the support order or you can ask the local support enforcement agency to conduct a
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review of the support amount. California courts now have an Office of the Family Court Facilitator, which has court staff who can assist you with filling out the paperwork to get a modification.
How long will it take to get child support?
This, of course, depends on how complicated the case is. If the parties are able to agree, the matter may be resolved in a very short period of time. On the other hand, if the whereabouts of the other parent are unknown or if parentage is disputed, resolution of the case can take a substantial period of time.
Are efforts to get child support always successful?
Unfortunately, they are not. In some cases, the other parent can not be identified or located. In others, such as where the non-custodial parent is in prison, the other parent has no ability to provide the needed support.
What if the other parent makes threats after I try to get child support?
Threats should be reported to your attorney, the child support enforcement agency handling your case, or, if appropriate, to the police department.
What if the other parent has a new family?
The existence of another family may affect the amount of money available for child support. However, it does not eliminate the obligation to provide support for other children.
The “Obligor” parent has been injured on the job. Can I still get support?
The enforcing agency can file a lien against workers’ compensation benefits, and can intercept up to 25% of disability payments. Tell the District Attorney what you know about the job, the injury, etc. If the Obligor gets a lump-sum settlement of the case, the DA may be able to get a portion of that sum to pay back support.
The Obligor parent says he’s going to file bankruptcy. Will I lose my rights to the back support owed?
No, child support is not discharged in bankruptcy. The enforcement agency needs to know that he’s filed so they can file a claim.
The other parent won’t let me see the child/I don’t know where they are.
Your local District Attorney Child Abduction Unit (CAU) will assist you in locating your family and in getting you visitation or custody orders. Interference with visitation IS NOT a defense to failure to pay. If you know where to make the payments, continue and seek help from the CAU.
I’ve just been served papers naming me as the father of a child. What do I do?
First, and most importantly, seek legal advice promptly. You have less than 30 days to file an answer or otherwise respond to the suit, and if no answer is filed, a judgment can be entered against you. You can file an answer yourself, get advice from the Legal Assistance Office, go to the Family Law Facilitator at the County Courthouse (755-5167), or seek a private attorney. Private attorneys can be expensive (up to $2000 to walk you through paternity testing, 2 or 3 court appearances, setting support if necessary). However, when compared to the expense of a child support order, the amount spent on dealing with the case properly from the outset is minimal. A $500/month child support order is worth over $110,000 before the child becomes an adult. You may have an attorney file the answer, or you can do this yourself (you should have received a blank “Answer to governmental Complaint” or “Answer” when you were served). You will have to pay a filing fee (in California, about $355.00) or obtain a waiver of those fees if you cannot afford the fee. Do Not ignore the complaint, even if the mother tells you its been taken care of. Do not assume that mistakes will be corrected by the other parent or the governmental agency. After a judgment is entered naming you as the father of a child, your ability to set aside that judgment is very limited.
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The papers say that welfare was paid for the child starting three years ago. I never even knew about this
child!
If the enforcement agency isn’t able to find you promptly, they can ask for back child support. In welfare cases, the court can order “reimbursement” to the county for welfare paid out to support the child UP TO THREE YEARS back from the date of filing of the complaint. The court will consider an obligor’s earnings during that period when setting the arrears amount. It is no defense that an obligor did not know about the child. Example: An obligor earning $2000/month for the past three years gets a notice of a child from a relationship that ended several years ago. After paternity is established, the court determines ongoing support of approximately $390/month. Arrears for the period aid was paid (36 months at guideline support of $390/month = $14,040, which will accrue interest at the legal rate of 10% per year, or $115/month.
This does not apply unless welfare is paid. In non-welfare cases, child support can only be ordered back to the date the child support motion was filed, after you are served.
I have a child support order against me. What if I don’t pay?
If the obligor is in the military, once an order is established, the enforcing agency will send a wage withholding order to DFAS, and the support will come directly out of the service member’s check. It is a violation of service regulations to fail to support dependents, and members may be subject to discipline for attempts to evade an obligation.
As a result of the 1997 Welfare Reform legislation, most states have similar child support enforcement tools. This information is specifically oriented to California, but is true in most states. Some of the tools available to collect child support are:
Wage withholding orders: Wage orders are directed at the employer and require that he or she deducts the support out of an obligor’s check every pay period. A wage order is REQUIRED by law, unless payments are current and the obligee agrees to not issue the order. Employers failing to honor a wage order can be prosecuted for contempt. Employers who deduct the support from an employee’s checks, but fail to send in the money, can be charged with a crime.
New Hire Registry: Every time an employer hires a new person, he notifies the State of that person’s identity. That list is compared to the list of people who owe child support. If no payment has been made in the last 30 days, the State notifies the employer to deduct 50% of the employee’s net pay until a wage assignment order can be placed. (That’s why when an obligor gets a new job, he should call or write to the agency enforcing the obligation immediately, so that a wage assignment or other arrangement can be placed.)
Passive Intercepts: On a regular basis, a computer list is submitted to the State and Federal governments by child support enforcement agencies, listing people who owe child support. That list is automatically compared to people due tax refunds, lottery winnings, state work contracts, Social Security payments, disability payments, unemployment benefits, bank accounts, financial institution records, etc.
License Suspension: Every month, enforcement agencies send a list of people who are behind in their support payments to the State Department of Motor Vehicles. If an obligor’s license is due to be renewed, and he or she is behind in support payments, they will receive a notice that in 150 days their license will be suspended until they get a clearance from the enforcing agency. The agency is allowed to take up to 90 days to issue or deny a release, so an obligor should not wait to go to the agency until the last minute. Most releases can be done on the same day or next day, once a wage assignment is confirmed. The warning notice is sent to the last address DMV has, so an obligor should always make sure that DMV has a current address. Other licenses are subject to suspension, including professional licenses (doctors, lawyers, nurses, etc.); business licenses (auto repair shops, barbers, security guards, etc. ); and recreational licenses for hunting and fishing.
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Civil Enforcement: A child support enforcement agency can file requests for examination of financial records, cite non-paying obligors for contempt of court, file writs of execution against property or money held or controlled by a child support obligor, can divide or seize certain pension assets, record liens against real property, order assets sold, and take other civil actions through the court to collect support. Contempt citations can result in jail time or community service for non-compliance with the court order.
Criminal Enforcement: Local agencies can file criminal charges against a parent who does not support their child. These charges can be misdemeanors or felonies, and can result in jail or prison time. If a non-paying parent is in another state, the US Attorney’s Office can, in certain serious cases, file federal criminal charges against a parent.

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Child support online | child support application | collect child support

Child support online | child support application | collect child support.

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Child Support Enforcement Steps

The Child Support Enforcement (CSE) Program is a federal/state/local effort to locate parents, their employers, and/or their assets; establish paternity if necessary; and establish and enforce child support orders. State and local CSE offices provide day to day operation of the program. The federal role is to provide funding, issue policies, ensure that federal requirements are met, and interact with other federal agencies that help support the CSE program.

How and where do I apply?

In most states, CSE offices are listed under the human services agency in the local government section of the telephone directory. If there is not a separate listing, the human services agency information operator should be able to give you the number. State CSE agencies are listed at the end of this brochure; they also can provide telephone numbers for local offices.

Call your Child Support Enforcement office to learn how to apply for enforcement services and what documents (birth certificates, financial statements, etc.) you should provide.

What are the steps to collecting support?

The first step, if a child was born out of wedlock, is to establish paternity – or make a legal determination of who fathered the child. Many men will voluntarily acknowledge paternity. Either parent can request a blood test in contested paternity cases. Your caseworker will help you to establish paternity for your child.

Establishing the obligation is the next step. The fair amount of child support that the non-custodial parent should pay is determined according to state guidelines. Your CSE office will be able to tell you how support award amounts are set in your state. Your CSE office can also request medical support for your child.

The last step is enforcement of the child support order. The CSE office can help with collecting the money due no matter where the non-custodial parent lives.

At any of these steps, the CSE office may need to know where the non-custodial parent is living or where he/she is working. When a parent has disappeared, it is usually possible for the CSE office to find him/her with the help of state agencies, such as the Department of Motor Vehicles, or the Federal Parent Locator Service. Your caseworker can tell you what information is needed to find an absent parent or his/her employer.

The most successful way to collect child support is by direct withholding from the obligated parent’s paycheck. Most child support orders require the employer to withhold the money that is ordered for child support and send it to the CSE office. Your Child Support Enforcement office can tell you about this procedure.

Federal and State Income Tax refunds may be withheld to collect unpaid child support. States also have laws which allow them to use: liens on real and personal property; orders to withhold and deliver property; or seizure and sale of property with the proceeds applied to the support debt. Many states routinely report child support debts to credit bureaus and smart parents are bringing their payments current so that their credit won’t be affected.

For More Information write for the Handbook on Child Support Enforcement by contacting:

ACF OCSE National Reference Center
370 L’Enfant Promenade, S.W.
4th Floor Washington, DC 20447
(202) 401-9383 or OCSENationalReferenceCenter@acf.hhs.gov

State Child Support Enforcement Offices

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