Professionally handling a business-to-business dispute

I have dealt with plenty of consumer to business disputes before but never a serious business-to-business dispute.

Situation: Can't go into a lot of detail for privacy, but we contracted with our landscaper last fall to winterize an irrigation system, which wasn't done properly. The system is in a failed state today. We will be spending approximately $5,000 or so to repair the system and hand water plants until our system has been repaired. I have detailed e-mails of the request to winterize the system as well as responses from the vendor agreeing to do the work.

The vendor, through their customer service person, denies that they failed to winterize the system properly, and claim that the irrigation system magically failed sometime after spring startup. They claim that it worked just fine when they first turned the system on in the spring.

So, I am wondering what is the best way to proceed? Our association clearly wants the vendor to cover the cost for hand watering and all irrigation repairs that are a result of the system freezing last winter.

I have written, but not yet sent, an 8 page letter detailing all of the reasons why we believe the system was not winterized and froze last winter.

Options being considered:

a) Requesting a face to face meeting with the general manager / company owner. Since he, though this customer service person, has already denied responsibility, I am not sure this would be productive.
b) Send the letter via FedEx and give the company 30 days to write us a check.
c) Go straight to small claims court.

I have consulted with the assocation attorney, but they would be expensive ($3,000 to $5,000) plus they need to work off of a contract with detailed contract language. We didn't sign a contract with the vendor to winterize the system, it was just communicated via e-mail.

Your thoughts are appreciated.

I can't go into more detail, but I can say that we would not have needed repairs if it was done properly (or even attempted). It is clear that they missed winterizing this particular component.

When you say I have no legal standing, I am confused. Doesn't the fact that they agreed to do the work, but failed to do so, make them liable for damages?

-- It depends.

-- You say it's clear they did something wrong. They say otherwise. I might be able to give more informed input if you were willing to explain more. I understand you are not comfortable doing so. I am not comfortable giving more advice without more information. Lots of laypeople have little clue about irrigation systems; engineering; that sometimes; things are not an exact science. And so on.

-- I agree with CathyA3's observations.

JackJ9, sure, I will take a look. augustin1919[at]gmail et cetera.

I guess my question is - are there any alternatives that I should pursue prior to the legal system? I only have discussed this with the customer service rep over the cell phone. Is a meeting with the owner more appropriate, or just sending my 8 page letter along with a demand to pay back? Clearly the conversation doesn't end with a single cell phone call, but I'm not sure of the best next steps for a business to business dispute such as this.

Not knowing all the details it does smell more like a miscommunication issue. #1 the HOA not being familiar with what winterizing entails and what they detailed with the contractor. The contractor's definition of "winterize" can defer but does not make it wrong. They did what was requested or in the contact to do. If it's not the right thing to have done, then that's not on them. That is on the HOA for lacking details.

At this point, is just best to move on with a new contactor and lick your wounds. Best to get a better understanding of the scope of the job next time.

I agree with the others, but if you'd like to try and come up with an alternative approach, start with point A. When you schedule the meeting, assuming the owner agrees, you may want to have another contractor to review the damage with both of you there and give his/her opinion on what could have hapoened. Maybe you end up splitting repair costs.

Don't over think this - there's not a lot of difference in handling a business/business complaint, other than you may need a little more expertise. You can also try alternative dispute resolution, where an independent party years both sides and negotiates a settlement. You might also agree in advance to split the costs of arbitration and agree in advance to comply with the decision - the losing side might be compelled to reimburse the other side for its costs. It's not as formal as going to court and you'll get results quicker.

You may be asked additional questions by the owner and contractor and if your answers indicate that your board didn't do its homework, you'll have to suck it up, pay for the repairs and next time ask questions if you're about to contract work where you don't complete understand what's involved. You don't have to be an expert, but you should have a general idea of what the problem is and the best way to resolve it. This is also why it's a good idea to get two or three quotes and the the contractor's reputation for quality of work before you make your selection and then haggle over price.

There's also the matter of whether this irrigation system had been properly maintained in the past - if you don't know or its NEVER been winterized, you may be looking at the result of neglect - and now the association will have to pay the price of deferred maintenance.

No, it was not verbal. I communicated with the vendor via e-mail, and they agreed to the work via e-mail. I specified exactly what we needed done and the reason why, and received a confirmation from the vendor that they would accomplish the work and would let me know if they ran into any problems or had any questions. There is no disagreement about them receiving the instructions or the clarity of the instructions. Rather the vendor claims they did the work when the condition of the irrigation system indicates that they did not.

We didn't have a legally signed contract that the attorneys would like to see, but the amount of work is small (about $300) and the vendor is the established landscaping company that we use for landscape maintenance, so I didn't see a need to have a separate legally binding contract for this work. Clearly, this type of work and the risk involved if not done properly means that a signed, legally binding agreement would be worthwhile. With that said, I am sure that many other board members authorize work by e-mail rather than signed contracts.

I am going to pursue this one. We'll see how it goes. I will try to remember this thread and provide an update when all is done.

The exchange is quite short. The vendor's response is on the vague side. Neither side appears to have followed up. In my opinion, but with the benefit of specific experience with what was requested, both sides should have followed up. Drip drip from an irrigation component in a thaw in January is a bad sign, but not necessarily that a vendor did not properly winterize.Noted.I disagree. Based in experience with very similar situations regarding winterizing of irrigation systems, to me it's largely a guess as to what caused the damage. The vendor may have done the work exactly as requested, and the damage could still have occurred.

Winterizing irrigation components exposed to the elements or to deep freezes does not guarantee that those components will be free of water all winter long; will not freeze; will not have ice expanding in them; and will not rupture.

Maybe this vendor did the work. Maybe the vendor did not.

The HOA did not follow up last Autumn. I tend to think some of any fault here belongs to the HOA.

I do feel that what the HOA wanted, regarding winterizing, should have been more formalized. Because the destruction of certain irrigation components, on account of water getting into them, freezing and expanding, is darned expensive.

At present, JackJ9 intends to go ask this vendor to pay for the damaged part. If he rages at the vendor, then I think he's out of line. If he asks nicely, then this might be appropriate. It's a fair question to ask, "So where's the invoice for the work you claim you did?"

Still, like SheliaH, and after reading the letter, I too feel that some overthinking seems to be going on.

As long as the board designates the director as some kind of liaison with the authority to spend x amount of money without Board approval, sure.

Somehow I wish I could soften this post more. Because I have had feelings about the winterization crew at a certain HOA and felt they were inept the first year (with expensive components bursting) I observed them. It took a few years watching how things worked to realize the vendor was about as good as any other; the irrigation system lacked certain features that would have helped ensure the main components lasted longer (and would be less likely to burst in winter); and so on.

I think folks who are responding here do have the main gist, such that their comments should be considered.

Bottom line, you are in a we say, they say situation.

Unless you have proof that the work wasn't done, it can be a hard sell.

I would also suggest that the HOA only ask for the system to be repaired vs. the additional cost of hand watering.

Lessons learned:

Written contracts - use them.
Trust but verify - have someone with the contractor when they at least start the work and check with them off an on.