First, I have to state that I am not an attorney. Anything you read here is not to be considered legal advice as I am only speaking from my own personal experience. I cannot say that this article would even apply to other countries, let alone individual states within the U.S. I hope that this article can provide you with some ideas as to options you can take in case you ever encounter a similar situation of non-payment or refusal to pay.
I’ve been a member of various art-related forums for over eight years now. I’ve seen other fellow artists post on bulletin boards and forums over and over again that they occasionally run into issues of non-payment from their clients. For the most part, if you’re an employee of a company – you generally don’t have much to worry about as the letter of the law is very strict when it comes to employers. However, if you are a freelancer, contractor, or sole-proprietor, than this article may be of use to you as you are technically all on your own. I never expected this to happen to me in all of the years working, but unfortunately it did.
I feel that it is necessary for me to write about this incident. Artists as a whole are very vulnerable to injustice. A simple comparison might be:
If you were to walk into an electronics store such as Best Buy, grab a small television, and walk out without paying for it – you’d probably get arrested. However, if create an image for somebody and they accept it via email without paying, do you think they would get arrested? Absolutely not.
This is just one small example of what artists have to face when it comes to the digital age of instant communication. We are not attorneys, and we often look to each other in our forums in order to determine what, if any, appropriate steps fellow artists can take in-case we are clearly taken advantage of. Believe it or not, this happens quite frequently – I suppose I’ve just been lucky up until now.
I recently encountered my first situation of a refusal to pay back in January of 2010. This is the first time in over eight years of working with some very large and at times, famous clients (The Federal Reserve, Blue Cross Blue Shield, Pepsi, Coca Cola – so on and so forth) that I’ve ever encountered this problem. My contracts are fairly “iron-clad” and I thought nobody would ever try to argue it. I never expected this to happen. I didn’t think another company would conduct themselves so unprofessionally as to jeopardize their own business. I was completely wrong and left dumbfounded by their actions.
I was contracted to create 3D renderings for Coffee Cart Biz (also doing business under the name of Advanced Fabrication.) The intent was for them to sell their coffee shop manufacturing and instructional services to their clients by partially using my artwork to show clients a “vision” of their products before it was actually built. As per written and signed contract, I met my obligations to them and actually went over and beyond my obligations to try to help them out – an estimated two weeks of free work to be exact. As their demands for changes became abusive, I informed them that they went over the contract allowance and that I would cease work until I received payment for the work completed. The owner of Coffee Cart Biz, Tim wrote back demanding even further changes. He offered up an unacceptable $100 for an extra days worth of work (which he incorrectly assumed to only take two hours – perhaps in his own little world but he’s not a 3D artist…):
“Make the changes and get paid or don’t and continue to send unprofessional e-mails and you will not be paid because the project is not complete. As of right now with your last e-mail two things are certain, you will not get paid without these corrections and you lost a customer with a pipeline of upcoming business with no intention from you of making things right.”
I realized at this point that this client was being unreasonable and there was a high probability that I wasn’t going to receive payment. I wasn’t about to be “bullied” or “threatened” into performing additional free work for this company. I had my limits as well as obligations to other clients to meet. So, that was the situation surrounding my case. I could get into all the mechanics of my contract and our emails, but for the sake of brevity I’ll spare the reader all of the details (5 pages of contract and legalese to be precise.)
I’d like to bring up an analogy here:
Let’s say you are a professional painter that works on home exteriors. Someone approaches you and asks for you to paint their home a certain color. You agree on a price and time and set about painting their house. A week later, the owner takes a look at the home and decides he doesn’t like the color. He mentions that he has additional work for you later on, but wants the color changed for now. So out of courtesy, you paint the house all over again the new colors he selected. Now he comes back and starts demanding changes three more times – complaining about the reflections, the gloss, the tint when dried, etc.At a certain point, you stop and say, “woah, wait a minute. This is taking a lot of unreasonable time now. I need to get paid because this has gone way over our time or we can rework our agreement.”
Now how many times do you think is enough? Most painters wouldn’t even change the first round for free. On the other hand, I offered two rounds of changes out of courtesy beforehand. But to be asked five times in total and threatened to be withheld payment is completely unacceptable.
Mind you, all of these requests are documented in archived emails (30+ pages – average of 2 emails per page to be exact) and proven by the test renderings I produced.
Actions to Take
With all the facts and emails in place, I had a few options:
Write an email or place a phone call and explain what you intend to do as a result of their refusal. Point to your contract. This may include hiring attorneys (expensive), filing to a small claims court (inexpensive), or sending their information off to a collection agency (roughly 1/3rd of the amount owed.) You may also write about what transpired, but you have to be honest and you have to realize any potential legal problems you may run into. Freedom of speech is covered under the US Constitution but be wary at which tone you convey your message. You hope at this point your message gets across and that you and your client would come to some sort of agreement to prevent this from transpiring. If this works out, then this is the best scenario. The client walks away and pays you the amount owed or at least (at the very minimum) partial payment for the services rendered. Both companies cease communications after this point.
File in small claims court. This is one of the most inexpensive options for coming to a resolution if the first method doesn’t work. Keep in mind that there are limits which vary from state to state. In Massachusetts, the limits for small claims court judgments is $2,000 maximum except under certain specific conditions. In California, the last I checked it was $5,000 maximum. Filing costs in Massachusetts is $40 for under $500, and $50 for $500-$2,000. You need to just show up to the court’s small claim office and fill out a piece of paper with your name and address as well as that of the defendants. You write the office a check, and within 10 days they deliver a certified letter to the defendants doorstep.
After filing in small claims, then try to mediate by attempting to use your filing as leverage to make your case.
File in a higher court. Chances are that you will need to hire an attorney which is going to be fairly expensive ($400/hour.) You may be able to get an attorney that works on contingency or on a pro bono basis, but that is rather unlikely. It’s only really worth it if the amount and damages owed exceed a substantial sum of money. Any additional fees incurred by the attorneys (assuming that you win) can be made billable to the defendant. Obviously, in the case of something that’s only worth $1,000-$2,000 (even up to $5,000), then hiring an attorney is probably not justified.
Hire a collections agency. Obviously, there’s probably a chance that if it got this far in the first place, then you would never ever want to work for that type of person or company again. You could hire a collections agency off of the web to basically hunt down the money owed. They do this type of work for a living. They’re cold and hard people that know how to argue their way to get the desired results. This also comes at a cost or roughly 30% for some places. You have to weigh the positive and negatives. Is spending 30% better than receiving nothing at all?
I immediately picked up the phone and tried calling. No response. I also shot over an email outlining some of my intentions with the hopes of coming to a conclusion. It probably wasn’t the best phrased – I was rather upset at the time. But that still doesn’t change any facts. He replied:
If I see an attachment I will open up your next e-mail, otherwise I will save them in your folder without reading for an attorney to review.
Again, he is trying the bullying tactic. He wants an additional round of changes on top of the free ones already provided. It was becoming increasingly obvious that he wasn’t willing to mediate, but at least I tried.
I eventual talked with four different attorneys. One was a friend and she helped me out with a little bit of email correspondence. We hadn’t talked in a long time, and I didn’t want to take bother her much with the details. She kindly some of the methods of approaching the court in small claims. The other three attorneys happened after my filing, and I’ll discuss that in a little bit.
The next step was to file for small claims. After filing, I followed it up by writing him again and CCing his employee (from a different email address so that it didn’t get trashed) with an email stating what I had done. I was giving him one last opportunity to mediate before trial. As typical, there was no response.
Assembling the Offense
During the next few days, I spent time to collect all of the emails and written correspondences we had. I established a time-frame in which the events had folded as well as making sure to document all the prior requests for changes. I also printed out all of the artwork which I had done including their stages (close to 25 pieces in total.) I also outlined the inconvenience he caused in order to receive damages for time lost. The more evidence I had, the better my case. Unfortunately with small claims, it is a very quick process so you have to condense all the major points in your argument down to a few pages. Don’t expect the judge to read 30 pages of email, but it is best to have them handy just in case.
Catching Them Red-Handed – Copyright Infringement
The court appearance was to happen a month later to this very day of writing. In the meantime, I decided to visit their website to see if they had posted any of my images. They did.
Now, you can’t just take someone’s artwork and post it to your website without paying – that’s actually copyright infringement – a form of theft. In most typical situations with a good client, I wouldn’t have minded at all if they did that. But the situation was far from typical. It also invalidates any claim that the defendant might have in stating that he “didn’t like” or “didn’t approve of the results.”
I took a screenshot and also had one of my friends take one as backup evidence in case that came into question.
The copyright infringement, while-related, is a completely separate offense. It’s one thing to have someone not pay you. It’s totally another to have someone steal from you on top of it all.
It doesn’t only have to be posting your work without permission – if the client uses your image in the interim to help “sell” his idea on a $50 million dollar building (and in some cases several billion) without paying, you should and would rightfully be entitled to a portion of those damages.
As time was of the essence, I marched straight down to an attorney around the corner from me. I wanted my screen capture of his website to be notarized. I described my situation and he said that as I had the screenshot, then the notarization wasn’t necessary (I think this is debatable.) He also put me in touch with his brother out in California who happened to specialize in copyright infringement and trademark issues.
I headed home and in another email using a different email address, I sent a short letter off to the defendant informing them of their infringement.
The Copyright Attorneys
Almost two weeks later, my image was pulled down from their website. I got into touch with two attorneys that specialized in copyright issues. One worked on a pro bono basis. He basically said that copyright damages are awarded based on how much damage the court thinks the offender has done. In this case, the cost of my images were deemed minimal. The attorney said that unless it was a very large client, that it probably wasn’t worth his while as he would normally bill out $400/hour for his services and that the image itself cost far less than that. If they also agreed to pull down the image in a short amount of time, then any reward for damages would be small. He recommended small claims court.
The second attorney who was the brother of the very first guy I met more or less said the same thing. He recommended small claims as well. His first step in this situation would have been to ask for the image to be removed from their website which they had already done. I brought up the other case of non-payment to him, and he said that it probably wasn’t worth any attorney’s time as the costs would exceed the benefits.
In our conversation, I brought up the point that I didn’t think this was going to send any message regardless. Even if the defendant ends up paying maximum damages in the court, it’s such a small amount that this wouldn’t even probably give him pause for further reflection. The attorney brought up a few more additional points.
Going Beyond Small Claims Court
If you are rewarded the judgment, there’s a few more options you have at your disposal. The court will make their ruling public in association with the docket number you were originally provided. At this point, you should be able to (again, I am not an attorney so follow this writing at your own risk – these are not recommendations…):
Submit the ruling to the Better Business Bureau for the state the defendant resides in. The BBB doesn’t want to get involved in financial disputes between two parties, however if you have a ruling than all is said and done.
Inform the bank officers of the ruling. This information can be trickier to find out, and may require a court request for a writ of execution to be served up by a constable.
Contact one of the three major credit reporting bureaus – Experian, Transunion, and Equifax. A mark on someone’s record should make things such as obtaining loans and even conducting business a bit more difficult. Information can be found throughout the Internet about this process. Here is one link that partially explains this option.
You can write about the incident. Be truthful. This falls under the First Amendment – Freedom of Speech. Be very cautious to make sure this doesn’t fall under the grounds of libel and defamation although that is often very difficult to prove. The definition varies from country to country and state to state.
My Day in Court
I was to appear almost a month later from the time of filing in front of the judge. This was scheduled for 8:30 in the morning. It’s best to show up early. This is one date you do not want to miss. If you do miss it, the defendant can be awarded the case and vice-versa. In my situation, the defendant was located in California. Special rules apply as they are considered to be “out of state.” A letter had been delivered to his doorsteps with the option to make a written statement if he couldn’t attend the hearing.
He had written a reply, and I was sent a copy of his 3-page letter to the court. Earlier, I had taken the time to dissect his writing, and effectively counter every one of his claims with either my emails or my contract. So I had been prepared to counter every one of his arguments.
I showed up early in the morning, dressed in a suit and tie with all of my materials, portfolio (if asked), and letters of recommendation by my side. I passed through a metal detector and was then shuffled through a general court room with others before a clerk.
At the scheduled time, the clerk starts to read off names. You reply by stating that you are “present” when your case comes up. Probably more than half of the names are “defaulted” due to someone (or even both parties) not showing up – either one party is awarded in this situation, or the case is thrown out. The name calling moves rather fast and the court room quickly thins out.
When my name came up, I said “present.” The clerk told me that the case was defaulted to me, and that I was allowed to leave. However, the clerk had made a mistake. I happened to leave and go downstairs and mentioned this to some people working in the office that this was out of state and that the defendant had written a letter in his absence. I was told to go back upstairs and also present any additional information that I had.
So I went back into the general courtroom and waited as the rest of the names were read off. At the end, the clerk stands to one side of the room, and anyone with questions can approach her. I stood aside and mentioned that the defendant wrote a letter in his absence as he was located out in California. She admitted to making a mistake of announcing the default and took the paperwork off of me. She said the court would probably get back to me within 10 days.
I thought this was over with so I headed back downstairs to finish filling out the separate complaint, this time for copyright infringement. About 5-minutes later, I unexpectedly heard my name mentioned over the intercom and I was told to appear in a separate court room. I scrambled to get back up there. Good thing I didn’t leave because it appears that even the court system doesn’t even have their act always together. That was twice in one morning that I was told erroneous information as to what to do.
I showed up in front of the judge in what seemed to be an informal setting. The best way to describe this was a “cram session.” The judge quickly asked a series of forceful questions and you have to be prepared to answer them with facts backing yourself up. I kept pointing to all of the paperwork he was handed, and he seemed to want to ignore it. In his own words, he quickly (and when I say quick, probably less than 5 minutes) came to a decision that the defendant was lying. He was ready to come to a judgment in my favor. Where my proceeding got held up was in the details – the judge was trying to determine if I was entitled to any extra damages for time lost. He asked if I had anything else to say, and I pointed to the papers once again and said that “it’s all in the paperwork.” The judge looked up at me and replied, “well, it looks like I have some reading to do.” And that was that.
I’m confident that I received a positive judgment for the work I had done. As to any extra damages, I will have to wait about another week before I find out.
Assuming that nothing “short of freakish” occurs in the interim, I will receive judgment in my favor. As to any extra damages – that is a complete guess at this point. I can’t get inside a judge’s head. At the very least, I should recover payment for the work done as well as my filing fees.
As to whether or not the defendant actually decides to pay or pay promptly is also a best guess. The chances are a little bit better as he is a business owner. I could have additionally obtained (for an additional fee) what the courts call a writ of execution to help make certain that the defendant would follow-up on the judgment by holding some of his assets in check (mind you, this is not a lien on a home – that is costly and usually requires an attorney.) As soon as I receive the final resolution from the court, I will approach the defendant one more time and make it known that I will follow through on items 1-4 of two sections above, entitled “Going Beyond Small Claims Court.” I will also be certain to bring up the topic of copyright infringement as well. If that final email fails to satisfy the judgment in a timely fashion, then I may turn the ruling over to a collections agency.
I’ve been taught a few important lessons here:
First and foremost, if a potential client is going to be “cheap” with the work requested, then there’s a good chance you don’t want to work with them. If you can avoid it, great.
Do not hand over your images without watermarks on them. You can blend the opacity or screen enough so that the details are still visible. Only remove the watermark upon receipt of payment. It will also make your business operations run a lot more smoothly overall.
Make certain your contracts are very well thought out. If you don’t have one, try to find artist contracts online. You could probably cobble one together to meet most situations. Take the time and make certain that it tries to cover all situations.
Don’t agree to make changes (aside from your own errors) without charging. You can ultimately use your own discretion in this matter (I really don’t recommend this unless it takes a few minutes of your time), but as the saying goes – “you give an inch and they take a mile.” It’s in your best interest to be upfront with your client. You can either build charges for changes into your quote (not recommended), or itemize the costs on an hourly basis afterwards.