Have you ever found yourself wondering what sort of issues bring people to court? There’s the usual run of the mill stuff… unpaid loans, property disputes, evictions – and all that. But every now and then a case comes along that just goes to show that sometimes there’s nothing mundane about civil disputes.
Consider the following case, where Janet Lawrence responded to an advertisement at a local tattoo parlor for a cosmetic procedure. Ms. Lawrence had long been thinking about permanent eyebrow application, which is generally done via tattoo. Initially, all went well and Ms. Lawrence was very satisfied with the results. A few days later told a different story, however, as an infection had set in. The consequences were, let us say… less than attractive. It also caused permanent disfigurement and scarring. According to Janet’s doctor, this type of infection was usually caused from exposure to dirty or poorly sterilized equipment.
After unsuccessfully seeking reimbursement from the tattoo parlor for the cost of the initial procedure and her medical bills, Ms. Lawrence took the tattoo parlor to court and was awarded a $2,400.00 judgment.
Some general statistics about this case: By the time it had been assigned to me, the judgment was 8 years old. In this state, judgments are enforceable for a period of 10 years, and can be renewed indefinitely. Interest was also accruing at the legal rate of 10%, so by this time the actual amount due was approximately $3,600 (and change), and accruing interest at the rate of $0.65 per day.
The first order of business was to find out if the tattoo parlor was still up and running. After a quick check with the city’s business licensing department, it was no surprise to learn that the business had gone under years ago. Not too shocking, considering their methods of operation left a lot to be desired. It wasn’t a total loss, though, because I was able to determine that the business was structured as a sole proprietorship – or ‘D/B/A’ – rather than an LLC, a corporation, or other separately structured entity.
A little background information will help you understand the critical differences when it comes to how businesses are structured. A sole proprietorship (D/B/A) is simply an individual person operating under an assumed business name – legally it’s just an extension of the person. This is important because it means that even if the business is not still operating, the individual person is still responsible for the debts incurred under the business name. The same is not true of an LLC or other incorporated entity. That type of business is considered a completely separate entity – like a whole other ‘person’ – in which case, the officer(s) of the LLC or corporation would not be responsible for the debts incurred by the business.
Why is this important? It means that even though the business failed, I can still enforce the judgment against the owner, Jake Morris. And that’s exactly what I proceeded to do. But wait – it gets better!
I started with my usual due diligence, which is generally always the same. If you missed that in last week’s case study, you can read about it here: http://www.recoverycourse.com/blog/?p=94
While researching the debtor, Jake Morris, I learned that he’d set up shop again a couple of years ago, across town in a new location. Again I checked on the business status, and yes – another sole proprietorship. This was excellent news, because it meant that now I could not only proceed with the seizure of any assets owned by Jake Morris, but also his new tattoo parlor.
There are many ways I could have gone with this case. I could have spent time and resources finding property, bank account(s), and other personal assets belonging to Morris, but rather than waste valuable time and expense, I decided to go right for the jugular: the new business.
Surely having had to cope with a lingering bad rap from his last tattoo parlor, I anticipated the fastest way to make Morris pay would be to use some heavy-duty legal intimidation. I could have seized business equipment or bank accounts – because technically they all were Jake Morris’ property – but instead I went for the most sure-fire way to make him pay.
After having the court issue a writ of execution, I delivered my specific instructions to the County Sheriff’s levying officer. The County Sheriff’s office has a civil department that is dedicated specifically to acting on the instructions of judgment creditors to seize assets.
On Friday (which I assumed would be one of the tattoo parlor’s busier days), soon after opening, a Sheriff’s Deputy strolled through the door in full uniform. He served Morris with a copy of his official paperwork, notifying him that anything in his cash register was being taken to satisfy the judgment. Then the Deputy proceeded to take up station behind the register, and prepared to remain there for the next eight hours, intercepting any payments that customers would be making that day. This is referred to as a ‘Keeper.’
Although I wasn’t there to personally witness, I’m told by the deputy that Morris had a check in hand for the full amount of the judgment in less than five minutes. Have a nice day, sir.
Next week I’ll send the third installment of this series; a case study involving a company that sued another company, and the details that led to not only a great resolution, but an ongoing business relationship that’s still active today.
As usual, I welcome any comments or questions.
Please note: I am not an attorney, nor do I aspire to be one. If you need legal advice, please consult qualified legal counsel.