Can I take a contractor to small claims court if I signed a contract which included an arbitration agreement? Rockford

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Customer: can I take a contractor to small claims court if I signed a contract which included an arbitration agreement?
JA: The Lawyer can help you determine if you have a case. Where are you located? These laws vary by state.
Customer: Rockford MI, is there a charge for this service?
JA: Is there anything else the Lawyer should know before I connect you? Rest assured that they'll be able to help you.
Customer: No I dont think so except that it is for breach of contract and faulty work from an unlicensed contractor. I sthere a charge for this service?
Answered by AttyArnie in 3 mins 5 months ago
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AttyArnie
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AttyArnie, Expert

Hello my name is***** have been selected to help you with your question. Keep in mind this does not form an attorney client relationship. It is strictly for information and educational purposes only. I have been a lawyer for over 25 years.
Customer
Thank you
Customer
hello are you there?
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AttyArnie, Expert

OK so if you signed a contract with an arbitration clause, and you later determined that the contractor that you hired was not licensed to perform the work that he perform, then the contract is illegal in void. And therefore if the contract is illegal, then any clauses in the contract are illegal and void. If you file a small claims court action against him, and he raises the defense that the court lacks jurisdiction because you agreed to an arbitration in the agreement, then you can file a motion to strike his defenses, because the contract that he entered with you, is illegal and void and therefore the arbitration clause would be void. You would need to produce evidence at some hearing during the case, that he is Not legally authorized to perform the work that you hired him for and the work that you hired him to perform must have a license pursuant to state law. This would have to be established by the department of business and professions, which would give you some kind of statute or language and some regulation that you could show the judge that ONLY people that have licenses can perform this work and ONLY people who have licenses have the authority to perform the work that you hired him for.

Customer
Ok, I filed my own building permit and found out after I signed contract the reason he asked me to file permit was because he was not licensed.
Customer
In Michigan an unliscensed contractor can only charge up to $600 and I paid him close to $19,000 to convert a carport to a garage.
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AttyArnie, Expert

OK so if you have the statute and or case law to support your position,  then you would cite that in some your MOTION TO STRIKE his defenses (re lack of jurisdiction b/c of an arbitration clause) to your small claims case. Again, your motion to strike would be promised on the fact that because the contract is illegal based on state law, and the arbitration clause is illegal, and therefore small claims court is the appropriate jurisdiction if you so decide to bring it in that court. Keep in mind that if you file in small claims court you can only sue up to the jurisdictional limits of the small claims department. So if you are seeking the return of your money, in the jurisdictional limits let’s say for example only go to $7500, and that is all the money you can collect. You waived anything over that amount all the way up until the $19,000 that you want to sue for
Customer
When I called him to repair the garage door opener he said since I submitted for the building permit then I am the contractor
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AttyArnie, Expert

OK so the issue before the court would be resolved based on the case or statutory authority that you would discover from the department of business and professional regulations or whatever department is similarly recognized in your state that issues licenses to general contractors. There may be some kind of legal authority in your state that suggests that any person that is doing the actual work cannot get or rely on a contractors license by the person that is hiring them. So this issue would be fought in court to determine whether that is even possible or legally recognized in your state. Are you yourself sir are a general contractor?
Customer
Ms and No I am not a general contractor
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AttyArnie, Expert

OK so since you are not a general contractor, and you still were allowed to pull a permit, then someone still Hass to be a licensed to do the work, and therefore it is not a legal defense by the other party that you pulled a permit, and therefore he is excused from being licensed to do the work that you hired him to do. He is bluffing, and no judge is going to allow this contract to be enforceable. So that being said, you can sue him In court, as opposed to going to arbitration, and get a ruling by the judge that the contract is not valid, and then you have to decide whether you want to pursue a small claims case because if you do that then you are waiving a lot of recovery because you can only show up to the jurisdictional limits in your state.
Customer
it sounds as if I can take him to small claims court and they will determine if contract was legally recognized? Is this correct?
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AttyArnie, Expert

Yes you can do that, but you can only recover an amount of money up to the jurisdictional limits in your state. If you have a claim for $19,000, and you win the case you were going to leave a lot of money on the table. Additionally, just because you get a paper judgment if you win the case, you still have to collect it and that also is not that easy.

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AttyArnie, Expert

What state did this occur in?

Customer
Michigan
Customer
He technically finished the job just not to code so I now have to hire a roofer, electrician and garage door company to fix his faulty work.
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AttyArnie, Expert

OK just based on a very quick Google search, it appears that the jurisdictional limit in Michigan small claims court is $6500. No I did not look further or no further than just a quick Google search, so I could be wrong but this appears to be what the number is. You should confirm this with Counsel in your state. I am coming up on my time on this question so I have to close it out. But I hope that I have been of some help. You may be able to go into a full regular quart room, to file to recover your $19,000, if there is an attorneys fees clause in the agreement, then you may be able to recover that on top of the $19,000. But then if the agreement is void in the attorneys fees clause would also be void. So then you’re back to square one.

Customer
Thank you for your help!
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AttyArnie, Expert

Well just because he is not licensed, does not mean that you are excused from paying him for his work. Under principles of contract law, anytime a contract is not enforceable, the party who performs is entitled to receive the benefit that he conferred on you. So if he substantially performed or performed to a degree which benefited you, you Would still be obligated to Pay him for the benefit that he conferred and you excepted. What that number is ***** be dependent on an expert witness who can provide a report to the court of what the value of his workmanship is.

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AttyArnie, Expert

You’re welcome.

Customer
I am only looking to recclaim the costs to repair what he has done and get it to code.
Customer
I am getting estimates now so I can file a claim.
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AttyArnie, Expert

OK so if you have acceptedhis work or at least are marginally satisfied with that work, but only want to bring it up to code, then what you are doing makes total sense if to bring it to code would cost less than $6500. But I caution you to check the amount of small claims jurisdictional limits in the state of Michigan.
Customer
I think it is only $3000, I'm hoping the estimates will not come in higher. Thank you so much for your help! Have a great evening.
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AttyArnie, Expert

You do the same.
Customer
Thank you!
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