Plumber Paul Price learned an expensive, legal lesson Thursday that a day’s work leads to a day’s pay only if he asks the right questions beforehand.
Price, the owner of Waukesha-based Best Price Plumbing Inc., spent four years tussling with Pennsylvania-based Erie Insurance Exchange in front of Wisconsin judges before the state Supreme Court ended the discussion.
Price will not get paid the $8,897 he said he is owed for a 2008 plumbing job.
Erie hired Best that year to replace frozen pipes in a Milwaukee residential rental property owned by now-defunct Willtrim Group LLC, Menomonee Falls. But Price never formalized a payment arrangement with Erie, assuming, he said, his company would be paid directly for its six weeks of work.
“I’ve been in business for 32 years and don’t know any other way to do it,” Price said. “All I know is that when Erie signed the purchase orders, with your name on the top, you expect they will send the check to you.”
He was wrong. Erie gave Willtrim a two-party check, requiring endorsement from Willtrim and Best. Price said he never saw that check.
Best sued Erie in 2008 in Waukesha County Circuit Court for breach of contract. The plumbing company couldn’t sue Willtrim because it didn’t hire Best and had no financial obligation to pay.
A judge awarded Best $14,650.31 in damages.
But an appellate court overturned the ruling and, on Thursday, the Wisconsin Supreme Court upheld that decision because, technically, Erie paid.
Price said it was the first, and probably last, time he worked for an insurance company.
“In hindsight, knowing how insurance companies pay, No. 1, I would not work for one again,” Price said, “and No. 2, I would find out how payment is going to be made and to who.”
Erie attorney Elissa Bowlin, of Jacobson Legal Group SC, Brookfield, has said it is standard practice for insurance companies to issue two-party checks for contractors and the insured to sign for work.
Best had worked for Willtrim once before on a downtown Milwaukee condominium and directly was paid for the work, Price said. But for the 2008 job, Price said, he was told Erie would be responsible for payment because the cost of work would come out of the insurance claim.
According to court documents, Willtrim employee Trevor Trimble testified that he gave the check to a handyman named Abdul and instructed the worker to get an endorsement from a Best Price employee.
The check was endorsed by both Best and Willtrim, although Price testified that nobody from his company signed the check.
“Somebody endorsed my name on the check and after that point it was gone,” Price said.
A working number for Trimble could not be found. According to Bowlin, Willtrim disbanded after the filing of the 2008 lawsuit.
According to Justice Annette Ziegler’s dissenting Supreme Court decision, the decision should serve as a cautionary tale for businesses to do their due diligence.
“In the end, Best Price is not the only one to lose as a result of the majority’s decision,” according to Ziegler’s opinion. “After today, similar small businesses all over the state should be wary of a client’s mere word or handshake, lest their services will go unpaid for.”
Price said he learned his lesson.
“I didn’t have anything in writing that said how they would pay me,” he said, “but I assumed they would send a check to Best Price Plumbing and not to a Quick Trip gas station.”