We are in the business of insurance restoration. We have a client that owes us, per our contract, almost $21,000. He has paid us the total of the original claim amount, but we negotiated with the insurance company on a much larger settlement to cover all of the damages. He won’t pay the rest, stating that “we shouldn’t know the total from insurance – it’s not our business”. We have his written permission to negotiate directly with insurance for the settlement, so of course we know the amount. What do we do?

Answered 2 weeks ago

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Matt Viator

Legal Associate zlien

I'm sorry to hear you've gone unpaid. First, it might be crucial here whether the settlement agreed to was put to writing with the insurance company. If not, it might become tougher to recover unpaid settlement amounts if an owner can argue those amounts were never owed. Anyway - considering the amounts that are in play here, threatening lawsuit over the amounts owed and unpaid could be effective. In such a demand, using specific legal threats and utilizing the services of an attorney to write the demand letter helps to provide extra "umph". Further, while damages owed and settled might not give rise to lien rights, sending a threat of lien - such as a Notice of Intent to Lien - can be effective to compel payment. Considering mechanics liens are such a drastic remedy, owners will often be amenable to talking deal if a potential lien claim could be in play. Finally, with the amounts at hand, it would likely be worthwhile to consult a local attorney (or even a collections agency, potentially) to discuss recovering the debt. They will be able to review the relevant information and help advise on a route for collecting what is owed.

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