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Old 12-31-2007, 07:20 PM   #1
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Default Anyone ever been to small claims court before?

Why not ask a turbo forum for legal advice <G>...

I am suing someone and our court date is on the 7th of Jan. I'm guessing that I just need show up with a copy of my contract (Promissory Note in particular) and what I have as a record of payments made to me. Anyone have any advice for me?


Details of the case:

In Feb '99 I (Carolina Chat, Inc.) sold my Dial-Up internet business to Carolina Internet, Inc. "Jim" paid me half down and I financed the other half for 8 years. I received payments from Jim until Aug '04 (5.5 years) at which time he told me he was completely broke and the business was failing. At that point he still owed me $80K (including interest). With Jim's cooperation we sold the business in March '05 (note the 9 month time frame with no payments) to a guy who was working with him. "Larry" of Carolina Internet Systems, LLC bought the business for $50K and again I financed it, this time for 3 years. Larry made payments to me of around $10K (about 0.5 years) and then stopped - Dialup internet is as dead as it can be. I tried to work with Larry on the payments and such but there was just not enough money coming in. So, I told Larry I was taking him to small claims for $7500 (the max in South Carolina) for the payments missed (4/05 thru 1/06) and as soon as I won that case I was going to take him back again for the next set of missed payments. I would repeat this until I had all the money due me. Here is a link to the Promissory note. I believe that page 4 is especially interesting in that it states "The Undersigned consents to the assignment and understands that the personal guarantee of this debt shall be enforceable against him by Carolina Chat, Inc and its successors and assigns." Larry signed it above a line that said "Larry R. Garner, Individually". His lawyer has already stated that Larry doesn't owe any money, it is his LLC that owes the money but I don't think that will stand up in court.

FWIW, I had two lawyers look at this and they agreed but said that even if I won, the chances that I actually get paid is slim. So, paying a lawyer $3500 to represent me would probably net me less than $0.

http://www.lightweightmiata.com/misc/contract1.jpg
http://www.lightweightmiata.com/misc/contract2.jpg
http://www.lightweightmiata.com/misc/contract3.jpg
http://www.lightweightmiata.com/misc/contract4.jpg
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Old 12-31-2007, 07:51 PM   #2
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I went several years back and represented myself; judgement was made in my favor.

You just need to present the facts in a clear, cognizent manner. Bring all of the documentation you can find and use it to support your oral argument. I am not versed in SC law, but I believe you will need to enter any piece of documentation into evidence, so bring copies for the respondent and court.

Do not let your emotions get the best of you. Just state the facts as clearly and convincingly as you can. Dress nice too.

If judgement is found in your favor you have several options for forcing repayment. Wage garnishment, asset seizure, leins, etc. For the time being concentrate on getting that judgement; worry about collecting later with the assistance of the state.

Hope this helps.
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Old 12-31-2007, 08:34 PM   #3
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i went to small claims once. won and never got my money. I knew a guy in SC that used to buy and sell ISP's. Cant remember his name though. Paul...something I think it was.
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Old 12-31-2007, 09:46 PM   #4
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who did you sell the company to? to that guy personally or to his llc? if it was sold to his llc then you might be in trouble getting your money...
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Old 12-31-2007, 10:18 PM   #5
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Quote:
Originally Posted by UrbanSoot View Post
who did you sell the company to? to that guy personally or to his llc? if it was sold to his llc then you might be in trouble getting your money...
My thoughts are if I sell you a Miata but your neighbor signs a promise to personally make the payments that should be good enough. The page 4 quote deals with the $$$. It shouldn't matter who I sold it to (his LLC). Am I wrong?
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Old 12-31-2007, 10:52 PM   #6
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if legal owner is llc then llc is reponsible for payments, not owner of llc or whoever signed the contract. these are the rules with corporations and llcs as far as i know but dont quote me on this since i might be wrong
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Old 12-31-2007, 11:52 PM   #7
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assuming he is actually a LLC or Corp in the eyes of the IRS.

BUt yes, unless hes tied his personal finances to the company, in which case he should be in luck. But verify that.
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Old 01-01-2008, 01:03 AM   #8
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Quote:
Originally Posted by UrbanSoot View Post
if legal owner is llc then llc is reponsible for payments, not owner of llc or whoever signed the contract. these are the rules with corporations and llcs as far as i know but dont quote me on this since i might be wrong
"understands that the personal guarantee of this debt shall be enforceable against him"
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