business related question

[ts140]

I have a business in CA and another business in another state, MI threatening to sue me for certain amount of money they claim is owed. The amount is approx $2,500. My question is, what state would they be able to sue in? Also, regardless if its CA or MI, are they restricted to the small claims venues sense that amount is under the small calims maximum? Thanks so much for any help.

 

[Michael Wechsler]

Where someone can sue is an issue of jurisdiction and venue, in legal terms. In order to sue someone in a state, at the very least the court needs to have jurisdiction over the person and the controversey. Did you do any significant business in MI? Did you sign a contract in MI or was it signed elsewhere? If you didn't do much business in MI at all, your company may not be subject to suit in MI. However, most importantly, your contract may have a "forum clause" which will state what state all controversies that arise from the contract will be the state to settle claims.

Regarding small claims court, typically you can only sue the defendant in the county or city within which the defendant is located. Additionally, small claims court is an option, not a requirement. It is used because it is more expeditious and less need for a lawyer than higher civil courts.

 

[ts140]

Well I ordered product from the business, which is in MI, and it was delivered but never got to me. The business has no office in CA and no representatives in CA. The business can't get any money from the shipping company, so he is choosing to try and threaten to come after me. We didn't have any kind of business contract between our businesses. So what I am wondering is if my business resides in CA and he is in MI if he chooses to try and take me to normal civil court, that is not small claims, then he would have to do it in CA or MI?

 

[Michael Wechsler]

My thought is that it will be incredibly difficult for him to do so, if it is possible. If this is only about a few dollars shipping charges then I cannot imagine this happening at all. Just to file a case costs a few hundred dollars. Small claims would not be an option here since you do not have an MI address.

 

[ts140]

Sense I got a solid answer in regards to the small claims part; let me readdress the civil part. Any other info would be appreciated. The amount the person is going to try and say I am liable for the full $2500, not just shipping. UPS, who shipped the package, shows it delivered to a "porch", no actual signature. I never received the package and ups cant say anything other then it was left on the porch area. At any rate, I am imaging he is having problems filing his insurance claim with them and looking to threaten me to see what I will do. At any rate, as I stated there is no signed business agreement or dealer type contract that. I don't do any business in MI, other then the business I did with this business. That business was only buying merchandise from him, a physical product. Now his business has no offices in CA where I am, and no sales people in CA either. I think there is a clause that states for a business in CA can only be sued in civil court by an out of state business only if they have offices, etc. in CA. I of course don't know that for sure. So my question would be what state would he have to file in if he tried to go forward with a civil case, and I relize that depending on what state, may dictate if that is even possible, his suing that is.


Thanks for all your time and information.

 

[Michael Wechsler]

If you have no contract with this individual then they will have a difficult time suing you in a foreign court, IMHO. Was a signature required and did the two of you agree on how it was to be shipped? Without a written agreement, it will be difficult for him to prevail... just my opinion on the limited amount of what you say.