Almost sounds like the beginning of one of those bad jokes: A man walks into a bar, and... Anyway, you're having a good day...lots of deliveries going out...no rain, the check "that was in the mail"...actually came in!! And no employee crisis...doesn't get any better than that! And then, your secretary brings in this one-inch thick white envelope (weighs about three pounds!). It arrived in the post "Certified Mail," and in the upper left hand corner, you see this long name, Scleagle, Beagle, Meagle, and Farmsworth, P.A., etc. Yep! Sure enough it’s a team of attorneys...with shaking hands and a quickened heart you open the damn thing. You first scan and then finally take time to read the cover letter. It turns out one of the builders you've done business with is being sued by a past customer…re: the "Pacciono" job (all the above almost fictitious!). Turns out the house is "leaking like a sieve," mold and mildew (and mushrooms) are occurring all over this monstrosity...You kind of remember the house and might even remember some horror stories about it.
Now what? Your first phone call is to your Credit Manager, to learn that "nothing is owed"…all statements have been paid. Whew! First sigh of relief. You read further, and find that the suit does not name you as a supplier--just lots and lots of wordage on how this whole house is "failing." You go back and re-read this "document" again. The attorney for the builder is "demanding" that you responded within 30 days by sending all the information re: your insurance carrier, plus a fresh set of N.O.A.s on everything you sold to this customer. You make your second call, to the salesperson to get his/her "recollection" of the job....Once you learn that we did in fact sell "Windows, Doors, Trusses, Lumber", etc., (heart rate soaring again!!) you ask that next loaded question to your salesperson..."Did we sell any of this Installed?" Heart rate goes down when you learn that we did bid windows, doors, and more "Installed" but we were too high...Way too high!! Second sigh of relief.
When a lawsuit is involved, even if you aren’t named as the party being sued, the red caution flag stays up—held by a firm pole of restraint. The next question is obvious: "So, Mr. Salesperson, what do you remember about this job?" For the next ten minutes I’m told about how this builder, who had been in a pretty good niche of building half-million type homes, took on this six-million dollar monstrosity...and yes, he was "The low bidder"...apparently by a bunch. The salesperson "remembers" all kinds of "mistakes" that seemed to be made as the house was being constructed. It sounded (more and more) like the builder was now trying to muddle through this thing and get to the end before running out of money. According to the salesperson, the builder did actually finish it after apparently a lot of fighting with the customer. Then the fun really began...Product failure all over the place. So, we've been paid, the job long since closed, we sold nothing "Installed"...etc., why should we sweat anything? Wrong…Once again, now, "The fun begins."
I deem this too long to tell "the rest of the story," so in the next newsletter, I think it is important not to tell you how to stay away from these situations, because if you've been in this business any length of time, it's gonna happen...Bet on it. What I'll talk about instead is Protocol...our Modus-operandi if you will, and how to hopefully stay away from writing an endless stream of checks to attorneys in a situation where you "Did no wrong.” Stay tuned.