Same thing happened to us with the first home we built - 10 years ago. We hired an attorney (paid him $2000.00) but ended up having to pay the sub another 2,900 because they put a lien on the home. It sucked... Good luck.

First question I'd ask is if they have contractor license numbers. They can't do work in California over $500 (I think) without a license. It's a big no no and that might be your way out. You can check them and/or their company out on the California Contractor's Licensing Board. Good luck.

Their contract with the contractor generally does not bind you--that's pretty basic law (although California has done some wacky things . . . ) known as "privity of contract". Unless you're one of the parties to the contract it rarely binds you. So you do not have any obligation to have them continue to do work on the house. One exception would be if your contract with the GC and the GC's contract with them said something about the subcontractor contracts binding you as well, but I doubt there's a provision in your contract with the old GC for that.

On the other hand, if they have already done some work on the house and the general contractor did not pay them they may have a right to put a mechanic's lien on the house, and you may need to pay them for the work they did. Depending on the amounts at issue it might make sense to negotiate something with them, such as you will have them do the work at a lower price (to match the others) as long as they waive all claims for payment. Depending on how much they're owed it may not be worth pursuing a lien, so getting some of the money back this way may be a better deal.

Everyone, thanks for the info. Things have gotten interesting... I did get a response from our attorney and he basically said the same thing Heimert said above, we're not bound to the contract but they could try and file a lien. They never filed a 20 day pre-lien so they won't have much recourse.
The brothers (subs) came by the property twice yesterday. The first time our new contractor wasn't there so I asked them repeatedly to come back when the contractor would be there that afternoon (I was becoming uncomfortable with them constantly "showing up" on our property). Finally they became very agitated and I honestly couldn't understand half of what they were saying when they stormed off. The second time our contractor made sure his guys were nearby to hear the conversation and he even went as far as bring a large flashlight out and set it on the bumper of his truck. He has not liked their strong arm approach and the fact that they keep trying to seek me out when he's not around. What did come out was that they did contact our original contractor and he told them (again) that they'd been paid in full for the work they'd done (obviously they still don't agree). Despite this their approach was to tell us that we have two choices, 1) we hire them to complete the job or 2) we pay them 7,000 and then we can hire anyone we want. I had asked our contractor to review the original contract and look over the work that they'd done to date to be sure they were paid a fair amount for the work completed. He agreed that what they'd been paid was a "fair" amount for the work that was completed. I basically told them I would not be blackmailed and our contractor told them that due to the way they've handled things there was no way he would hire them to complete the job. They came back today and began to take pictures. I was not here and when the workers called the contractor he called my husband to come tell them to get off the property. We'll see where it goes from here. I think with the economy the way it is, some people are getting desperate. I actually felt some sympathy for them but not after they came on so strong and tried to strong arm me into paying them money for nothing.

Have you asked your old contractor to provide you with copies of the checks he paid them with? If the amount totals the contract price they might finally walk away.

Whateve you do don't let them do any work on the house. I wouldn't trust them and it will restart the clock for the lien. Next time they come by tell them you are calling the police to have them charged with trespass. Have your attorney send them a notice telling them they may not enter your property (state laws vary on this).

Sue36- I called our local police department this morning and am waiting for a return call. We are so exposed living in a trailer behind the property and our house is not yet secure. I'm not a nervous person (generally the opposite, a little too trusting) but these guys got so intense, they're making me nervous.

Yeah, I would definitely not let them anywhere near the property and call the police if they return. You might even want to explain the situation to the police in the meantime.

If the brothers show up again tell them that you understand that they disagree about what they are owed, but that you do not wish to employ them on the job. That you consider them to be trespassing and will call the police. Tell them that you believe they have been paid in full, but if they disagree they should have their lawyer contact your lawyer to discuss their concerns. I'm guessing that between "police" and "lawyer" they will figure out you mean business and that you plan to resolve any dispute in a proper forum--a court, not a fight on your property.

Do you have a motion detector light? You could set one up so if someone enters the driveway at night the place gets lit up. If the police don't call back go down there.

I spoke with a woman from our local police department. She said there wasn't much we could do other than tell them they're not allowed on our property and get a restraining order through the county. My husband is going to call them and tell them NOT to come on the property and basically say the same thing Heimert suggested about "lawyer" and "police" already being involved. Hopefully it will be enough to make them go away.