DISCLAIMER: THE INFORMATION CONTAINED HEREIN IS SOLELY FOR EDUCATIONAL PURPOSES. IT IS NOT LEGAL ADVICE OR LEGAL AUTHORITY AND IS ONLY THE AUTHOR’S INTERPRETATION OF INSPECTIONS AND SUBPOENAS IN CONSTRUCTION LITIGATION IN NEBRASKA.
Sarpy County has consistently been one of the fastest-growing counties in Nebraska. With growth comes the need for development and construction. Inevitably, disputes arise that lead to litigation. In Part Four of this five-part series, Adams & Sullivan, P.C., L.L.O. explores the investigative process and emphasizes the importance of maintaining proper accounting and record keeping throughout litigation proceedings.
Part 4: Investigation and the Importance of Proper Accounting and Record Keeping
Throughout the discovery and investigative phase of litigation, both the plaintiff and the defendant will rely on accounting and records to gather evidence, build a timeline, and calculate or refute damages. Whether you are a property owner, contractor, or subcontractor, Adams & Sullivan, P.C., L.L.O. stresses the importance of ensuring proper accounting and record keeping of invoices, purchase receipts, bank statements, and more—even throughout litigation.
Many contractors fail to keep accurate records for each project due to the overwhelming volume of documentation. Common pitfalls include:
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Charging the wrong customer for materials from a different project
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Leaving off an invoice item at the start of the project, then adding it later—inviting scrutiny
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Failing to notify the customer that the final projected price has changed
Investigative Process
Each party investigates the documents readily available at the start of litigation. The more documentation you can provide early on, the smoother the litigation process will be. Key documents—such as invoices, receipts, and statements from lines of credit—play a major role in shaping the outcome of construction litigation. They paint the factual picture for the judge or jury.
As litigation progresses, discovery begins, and both sides gather further documents and information. According to Adams & Sullivan, P.C., L.L.O., maintaining accurate accounting and retaining all records is critical, as these will almost certainly be requested during discovery.
Invoices
Invoices are often the first document used by both sides to build a timeline and determine project progress as well as calculate damages. The more detailed the invoice, the stronger the evidence. Dates, materials, services provided, quantities, and pricing all help tell the story of the project and its disputes.
Purchase Receipts
Purchase receipts are vital to construction litigation. They prove when materials were purchased, what was bought, and at what cost. Adams & Sullivan, P.C., L.L.O. advises contractors to keep each project’s receipts separate. Co-mingling purchases across projects can create significant problems when producing receipts during litigation.
Contractor’s Line of Credit
Many contractors rely on company lines of credit (for example, at providers like Millard Lumber) to purchase materials for multiple projects. It is essential to retain all statements and receipts for purchases and returns. These documents are compared against invoices and receipts to ensure charges were accurate and tied to the correct project. Failure to do so can undermine your credibility in court.
Conclusion
Precise accounting and thorough record keeping can be the make-or-break evidence required to prevail in construction litigation. Enlisting the expertise of an experienced construction attorney is equally vital. Adams & Sullivan, P.C., L.L.O. understands the importance of detailed accounting and record keeping and can help guide you through every step of the litigation process.
About the Author
Travis M. Jacott
Adams & Sullivan, PC, LLO
Travis joined Adams & Sullivan in 2015. His practice focuses on litigation, real estate development and transactions, municipal law, and estate planning.
Over the years, Travis has supported the firm with extensive legal research and prepared briefs filed in numerous adjudicative bodies, including the U.S. District Court for the District of Nebraska and the Eighth Circuit U.S. Court of Appeals.
A Sarpy County native, Travis earned his Bachelor’s degree from the University of Nebraska–Omaha and his law degree from Creighton University School of Law. He was admitted to practice law in the State of Nebraska.