Thursday, June 2, 2011

Big deals and small claims.

Big disputes arise in most everyone's life. When I say big, I mean big to the individual. I've been lucky but that may be because I don't enjoy fights.

When starting the business I thought the best way to stay out of court was to do a good job for a client and charge them a fair amount.  Simplistic isn't it?

In business of over 32 years there were only two clients who did not pay us.
One was a white cloth restaurant which had been in business into the third generation. They contracted with us for a job that was billed at $383.42. The bill remained unpaid after two months and I called to ask payables when it would be paid. We had not required prepayment as we had worked for one of the owners personally several times. The payables clerk told us they had not asked us to do the work and even though I sent a receipt for its acceptance, refused to pay. We discussed taking them to small claims but didn't as we knew we could make more than the total in the half day it would take for one of us to go downtown and present the case.

The restaurant went out of business three years later. This was after it had been sold to one of their former employees. That person owned it for less than a year before they went bankrupt.

The original owners had opened a second restaurant and because they had stiffed us on the first job we told them we would not take on more work for the new place. A friend in the printing business did all their printing and when the second restaurant went bankrupt they lost over $5,000. So by not collecting and thereby being asked to take on new work, we were blessed.

The second deadbeat was another restaurant, though they were really a seafood market that happened to also serve sandwiches. They had been in business five years and we did a small job that billed out at $183.98. The work was to set up a mailing list from hand written contest entry slips.

Within a month they went bankrupt. The owners went on a vacation for a couple of months. They then re-opened under a slightly different name in the same location. When asked about the money they owed us we were told "No that was the old business. This is an entirely different business." Of course having a well organized list to use in promotion helped the new business.

If you had gone into the new place the signage was the same, the food sold was the same and all the employees were the same.

This business closed this past week end. I will be on the look out for another reincarnation.

I was told after the first deadbeat game I should require all my clients to sign a contract. I never took the advice.  I saw that as a penalty to all the hundreds of good people we worked with. If I had a feeling they were rats I started requesting payment in advance.  It's amazing how that requirement kept us from working for nothing.
This subject of dead beats and small claims was prompted by a story in the New York Times about small claims courts cutting back evening hours because of budget constraints. Now instead of waiting a month and a half for a court date, it will be five months.

Have you ever had a small claim that you took to court? If you have, did you get justice?


  1. I truly miss the time when a handshake was as good as any contract. There is no honor among men anymore.

  2. An interesting commentary. You have been fortunate, I think, to have had so few problems with your business.

    We've been fortunate, also, to have avoided situations which may well have ended in court.

    But I think times are changing. Greed seems to be paramount and considered a good thing these days which is likely to lead to more conflicts for generally greed leads to the notion that the ends justify the means which further means that a person can find it relatively easy to justify being less than honest.

    I hope I'm wrong.

  3. It was suggested Chrome would be the answer to my not being able to post comments under my Google ID. It doesn't seem to be the answer and yes I've cleared my cookies. So, I'm posting anonymously on my and some other selected feeds. Sigh. Charlene

    andshakes still work but not being aware of people intent on using you is wise.

    Jacob: Yes, greed is the new cause that always existed though now days I think it's accepted more.

  4. My husband and I are in our own business as well. We have had issues only with major hotel chains. funny how that works. Not the family who saved to have this done. Not the person who you know needed this to sell their home and could not more afford it. It has always been the corporations who have not paid us or given us any grief over the last 8 years. I hope we never have to go to small claims court. I'm sorry you have had to endure this.

    One other point. How do people sleep at night? i could not more screw someone out of money they deserved by saying, "oh that's my old business" I couldn't look you in the eye and do that. I so wish people would just do the right thing. I guess I'm old fashioned like that.

  5. ahh, the donald trump business model.

  6. I never went to small claims court, but I had to be a jerk a few times to collect, and believe me I'm not a physical type of guy. I'm glad those stressful days are behind me, working for someone besides myself. I used to call myself the worse boss I ever worked for.

    I also hated how expensive jury duty was. Best to you.

  7. It almost seems to be their karma that those businesses went bankrupt. Dishonesty spreads, and I'm sure their dishonest practices contributed to their lack of business. And it sounds as if they had a dishonest lawyer who advised them to incorporate under a different name, thereby being a different entity from the first business.

    As Margaret (Peggy) says, how do these people sleep at night?

  8. Thank you for stopping by my site and joining. Very nice to meet you and I am looking forward to getting to know you.
    Knock on wood I have not dealt with small claims court but only because I thought it would be a long drawn out ordeal.
    Renting my home out now has opened my eyes to the world we live in now.

  9. I've been very fortunate Charlene. Jilda and I have had a small business for as long as we've been together (37 years), and we've never been stiffed.
    We've had to lean on people a few times, but we've been always been paid.
    You should have gone into the restaurant and superglued a half opened can of sardines under one of their tables.

  10. Words of wisdom, Charlene, as always. I hope you counted those spoons before putting them on line? You never know with some of those shifty characters you describe lurking about.

  11. In my business, I never needed to resort to court, but in my dealings with service providers for our home, I've considered it. The court systems in the US--all of them--seem utterly broken to me, but I'd hoped that small claims was ticking right along. Not so fast, huh?

    Lovely building!

  12. good job. Love your business philosophy.

  13. I never have..I just beat the shit out of them and call it a day..ydg

  14. It does sound simplistic, doesn't it? And yet, so many people don't abide by it.

    I've never had to take anyone to small claims court. I have had a few poeple who were really slow pay, but my home business is really small so I wouldn't lose more than $50 in most cases. Definitely not worth court, especially if I had to wait 5 months!

  15. The local Apple computer office stiffed my wife for $1800.

  16. just was awful....but we prevailed.

  17. Oh wow... I was hoping you had the ID/posting thing straightened out by now... :o(

    Re: CoffeePot... a hand shake, ones word, and personal integrity used to be the Rule of the Day... all one has to do is look at our politicians (either party really) and we see a great lack of all of that. It doesn't surprise me that Society lacks it as well.

    Regardless of which class I am teaching, I stress personal integrity and accountability.

    This is a very good topic.

    I hope you get your ID straightened out...



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