02-28-2011, 10:42 PM #1
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Business Debt - Out of State Lawsuit
Jurisdiction / State: New York
Hello...We are a business in New York State. We supplied computer products and consulting services to a business in Nevada. The total invoice for this deal are just short of $ 15K. It consists on one invoice to an LLLP company for $ 7500.00 and one invoice to an LLC business for $ 7500. The same guy owns both companies. One invoice is almost a year old and the other is 6 months old. I have been promised over and over by the owner that he will be paying this debt. Obviously, this is folly. They do not want to even consider a payment plan which I am open to. Recently emails and calls have gone unanswered. So I am convinced now that they do not plan to pay.
So I am not sure what my options are. I was told by a business collections agency that going after a business in Nevada can be expensive from a legal perspective and I would need to travel there, etc...It may not be worth the time and effort needed to sue this business in Nevada.
Then I spoke to a lawyer friend of mine recently and she suggested that I sue them in my home state of New York since he choose to business across state lines with my corporation. I have emails to the effect that he wanted to order everything he purchased. My lawyer friend of mine said that this guy would need to defend himself in my state and he would likely not show up thus resulting in a judgement against him. However, I am trying to determine that the means to the end would be to get the money owed to me. How would a judgement in New York be enforced in his state of Nevada? I am really not sure what the end result would be.
Also, I would like to point out that unfortunately my invoices do not have a terms and conditions on them (my bad). I do not have purchase orders per se.. Just emails stating clearly that he wanted to purchase all the equipment delivered.
Do I have any options?
03-01-2011, 08:16 AM #2
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Your lawyer friend gave you false hope.
Sure, you could try and sue them in NY (or any other state for that matter), but your problem is very basic. Before you can sue, you'd have to serve.
A defendant must be served. That process involves notice and jurisdiction. A NY court has no jurisdiction over a Nevada defendant. A NY court has no ability to effect service in NV for a case of such small value, to attempt what you've been lead to believe is very costly.
The value of the two claims is probably in small claims territory (or just out of it). You'd have to sue two separate entities.
You could bring suit in NV, but your individual damages are still low. Even if you could prevail, you'd have to then enforce your judgments. That is even more difficult than winning two lawsuits.
Finally, if the collections agency advised you against pursuing this, take their advice. Those guys are pitbulls. . If they won't go after this deadbeat, this is easier said than done.
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