Client refuses to pay for work; have signed work orders, etc

[JM007]

Hello,
My company performs IT service and we have a client (a doctors office) who refuses to pay our invoices for work that we performed and that his office signed off as complete (they signed our work orders). The total amount is about $1500. We typically have a good relationships w/ our clients, and the ones that dont pay are usually just small amounts of money, and they get sent to collections. But I dont want to lose 50% sending $1500 to collections. This is the first client that has also been so defiant and told me if I want my money, I can send him to court!

Is small claims court a viable/resonable solution to recovering all the money? Like most everyone today, I am a very busy person, and so I have to consider the amount of my time that would likely be needed from start to finish on something like this. I feel my case is very sound, with all my paperwork and records, but are there easy ways the doctor can just string me out (appeals, reschedules, escape the judgement anyway, etc?). Should I start with a nasty letter, threating him that I will sue, or are those types of letters (not from an attorney), not usually acted on by the dead beat debtor? So it boils down to: I'm new at all of this, never been through it before, and am looking for some global ideas and some specific recommendations on this situation....

Thanks in advance for all your help! JM

 

[army judge]

Small claims is always an option.
A judgment from such a court, doesn't get you a check.
You get a judgment, that you then have to collect.
Small claims costs money.
You pay up front before you collect a dime, IF you collect a dime.

Sending it to collections, also costs money.

You lose a portion of the amount in dispute.

But, it's worth nothing, until you collect something.

Small claims, also takes your time and effort.

As time is often money, a bird in the hand is worth a dozen in the bush!

I'd send it to collections, but before I did that, I'd attempt tower with the client.

I'd want to know what turned them against me.

Don't you?

I'd also want to know, what I could do to repair our broken business relationship.

Something went wrong, why not try to fix it???

 

[JM007]

Regarding working with the client; We always strive to retain clients, and when I first heard this office had issues with the invoices, I called the doctor and spoke with him for about 45 minutes about the situation, what happened, why, who authorized what, the technical reasons for his server crash, etc. At the end, he actually agreed and said he understood all the service, I then brought the conversation back around to the unpaid invoices. When he realized that I still am interested in getting the invoices paid; he became irate, said that if I wanted to get any money from him I have to take him to court! It was like I was talking to a totally different person that I just talked to for 45 mins!

He basically does not want to take responsibility for his machine physically crashing, which caused the additional work needed. Again, during the service, each step was all verbally authorized by him, and when we were done, his office staff tested the systems and signed off on our work orders, which are for the exact same amount as our invoices ($1500). I can usually work w/ a client on a middle ground, and I sincerely tried w/ this doctor, but in the end; he became irate and hung up on me. Thanks, JM

 

[JM007]

'army judge': going the route of collections, I'd lose $750 best case senario. So you are saying that going to small claims is not worth $750?

Thanks for all your input!

 

[army judge]

'army judge': going the route of collections, I'd lose $750 best case senario. So you are saying that going to small claims is not worth $750?

Thanks for all your input!

To me, no.

To me a bird in the hand is worth two in the bush.

If a collections agency pays me $750 today, I'd take that any day over a judgment on which I'd still be forced to collect!!!

If small claims is worth it to you, have it.

In regard to losing $750 from collections, what do you have now on that debt? NOTHING.

See my logic?

You're welcome.

 

[JM007]

Thanks again for all your help. I have so other 'newbie' exploratory questions:

1) If you were leaning towards submitting to collections, would you still send a demand letter stating that if they don't pay you will take them to court? The hope is that they would just pay based on the threat?

2) In moving forward with my first small claims experience; is it recommended I talk with an Attorney? If so, how do I locate the appropriate type? Is this the same as a "small claims adviser"?

3) My company is incorporated, am I required to have an attorney to represent me (my company)? (Company suing a sole proprietor)

4) If the defendant brought a witness, perhaps a competitor in my industry, that said our work was not done correctly, can that trump my signed work orders from his office?

5) Regarding question 3, I would think that any new information (his new witness saying questioning the work), that is not known to me, I would have the opportunity to refute that charge? Can the defendant present new information as a reason to not pay, or is the suit focused on my signed work orders, which means the defendant has to pay?

6) If defendant tried to say that work quality was questionable, would I be given the chance to prove otherwise. The issue here is the world of computers; as soon as we leave, we have no control over the clients systems and what they do with them. So it would seem very difficult to defend? (how do I counter if defendant brings in his 'expert' that says work was questionable. On the same token, how does an expert prove what we did or not, when the client messes with the systems themselves, its not known who messed what up?). I can only see bringing up the fact that they signed off on the systems working, they did not call us with any issues afterward, etc?

7) I feel my case is solid, and if he counter-sued us, it would be for intimidation or some other baseless reason. Is there a way to counter-counter-sue? In other words, set it up so that if he conuter-sues me and loses, he pays for my time off work, costs, etc? I would think it should be very risky/costly for him to try to sue me.

8) Related to question 6, is there a way to go into the suit adding costs (my time, based on my average billable hours from the last x months. Say if I can prove I bill an average of 4 hrs per day at $100/hr, that is $400/day. Divide that by 8 hours in a day, it means I average $50 per hour. If I spend two hours in this mess, can I add $100 to the suit?)

9) We have sent our invoices to the client in the mail, just as we normally do. Do I need to also send certified letter formally requesting payment (SC-100, item 4)? If not required, is this a good idea anyway?

10) If I lost in small claims court, can I still send the invoices to collections?

11) How is the small claims court date set? What if defendant says has out of plans or some other excuse?

12) Since we are a corporation and not operating as a sole-proprietor which uses a fictitious name, do I still have to fill out SC-103?

13) If I'm suing the defendant for $1500, since he owes me money, how can they counter-sue? What are they suing for? If they counter sue and win, I can appeal?

14) The doctor is well known and I'm a nobody and definitely do not know any judges, police, etc. Its quite possible that the doctor would/could know people directly or friends of friends of people in the local attorney/legal system. How do I protect myself against unfair rulings? Are there ways to help a person to detect if something was done unfair? Basically if I lost the case and thought there was some relationship or tie between the judge (or temp judge) and the doctor, how would I pursue that?

15) Is there a court transcript of the court session that I can request?

16) One of my employees who has serviced the same doctors office, and was involved with the situation. Should I bring him as a witness? Since this would make the situation even more costly for me, as I would be out the billable time my tech is being taken away from, would a written statement from this employee backing up the background situation, the recommendations we made to the doctor, why the invoices are valid, etc. be just as powerful/effective in court?

17) Can the defendant bring or have a lawyer? What about: findarticles[dot]com/p/articles/mi_m1318/is_5_53/ai_54432799/

18) Should I request a real judge, rather than having a 'temp judge'

19) If a small claims suit is filed, then court date set, what happens if they pay or if I want to work out some payment plan with them, how do I cancel the suit? Is there a minimum prior notice time to doing this (in other words, if a court date is set, can you not cancel it x days before that date, etc?)

20) If I cancelled the suit, then the client ends up not paying, or paying in full, can I start another suit?

Thanks, again.