May 22, 2020
by Debra Newby, Newby Law
I am a small business owner who has a written contract with a certain vendor to purchase my products (which were shipped before this pandemic). The vendor is now saying they can’t afford to pay me what they owe (about $8,500) and of course they are blaming the pandemic for their delinquent payment. I understand they are having a tough time, but so am I! What are my legal options?
Sorry to hear that you must chase a bad debt. I suspect before this pandemic is over, other accounts may go uncollected? We can certainly offer compassion and understanding to those who are having a tough time. Yet, most small business owners do not have an unlimited stream of funds, so the bottom line must be protected.
Obviously, the first course of action is to open a line of communication with your vendor, preferably in writing. Quote the terms of the contract and ask for payment by a certain deadline. You may also recognize in your written communication, as a matter of courtesy, that you understand that this pandemic has toppled many other businesses and individuals, but at the same time, perhaps suggest to your debtor that other options are available to them to pay the debt. Off the top of my head, the debtor could pursue a line of credit or other relief to help pay the debt. The thought here is that you are drawing a clear line in the sand, that pandemic or not, you hold them accountable for the debt.
If your debtor balks or is non-responsive, you may have to upgrade your anti-Covid-19-rubber-gloves for boxing gloves, and enter a legal arena. One viable option that is often overlooked or misunderstood is Sonoma County Small Claims Court. It is a very effective solution that is cheaper and quicker than hiring a private attorney.
Below is a short checklist of some of the features of small claims court, so you can determine if you qualify:
√ The damages you seek must be $10,000 or less.
√ You should make sure that your complaint is timely filed, meaning that you have complied with the statute of limitations. If your contract is oral, you must file within two years from the date the other party broke the contract. If you have a written contract, you must file within four years of the breach of contract.
√ You should file the action in the county where the defendant (i.e. the Vendor) resides or in the county where the alleged injury/damages occurred.
√ NO ATTORNEYS are allowed in small claims court, so be prepared. Bring copies of any key documents to prove that you have been wronged and that damages/monies are due.
Your matter will be heard by a Judge or trained attorney. The hearings are very quick—15 to 20 minutes. Preparation is key. The process can be intimidating but have no fear. We are lucky to have aFree Small Claims Clinic staffed by 3rd and 4th year law students at Empire College School of Law. The law students are supervised by a licensed attorney and are well versed in the small claims process, what forms you will need, how much the filing fee is, how to serve the defendant, how to prepare for your hearing, etc. Check out their link atwww.empcol.edu/small-claims-advice.
With this global pandemic, I suspect The Small Claims Clinic is not open for walk-in hours (which used to be Mondays and Wednesdays from 3:15-6:00 pm). Call (707) 521-6534 for more information.
Small claims court is a viable alternative for disputes that are valued at $10,000 or less. The process is a lot cheaper and quicker than a full-blown lawsuit. Often the dispute is resolved within 2-6 months after filing your small claims action. Hang in there…and good luck.
The Sonoma County Small Claims Advisory Clinic provides free procedural and legal information to Small Claims litigants regarding their rights and responsibilities under California Law.
In December 2005, Empire College School of Law took on the advisory role for the Sonoma County Small Claims Court. The free service, mandated by the county for users of the court, is provided by Empire Law Students overseen by the Dean of the Law School, Brian J. Purtill, and practicing attorney Murray Cockerill.
Any Small Claims participant or potential participant is welcome to seek help from the clinic – even those who are not residents of Sonoma County.
Debra A. Newby is a resident of West Sonoma County and has practiced law for 38 years. She is a member of the California, Texas and Sonoma County Bar Associations and currently maintains a law office in Santa Rosa which emphasizes personal injury law (bicycle/motorcycle/motor vehicle accidents, dog bites, trip and falls, etc.). Debra can be reached via email (email@example.com ) or fax (707) 865-5179.
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