Posted by Hugh Nations Signing Agents of Austin on 10/9/10 5:52pm
Msg #356085

Suing and collecting from out-of-state companies

In another thread, a poster noted about an out-of-state company: "they know that it's not financially feasible for me to sue them from California ...."

Even if a company that owes you money is not in your state, you may not be entirely out of luck in obtaining a judgment against them (note that I said "obtaining a judgment," not "collecting").

Generally speaking, if a business is doing business in a state, even though it is located in another state, it can be sued where it operates. The key is whether it has established sufficient points of contact with the state to be held to be doing business there so that venue can be established in your home state.

So, if...

1. You are owed *enough* to make it worth your while to invest the time and money in a small claims court collection lawsuit; and

2. You can establish that the company has done a number of closings in your state and/or local jurisdiction; and

3. You can find a collection agency in the state where the debtor is located that is willing to take the collection and perhaps even domesticate the judgment (make it also the judgment of the debtor's home state),

then you may be justified in continuing to pursue collection through a small claims action where you live. Just remember that obtaining a judgment is not even half the battle; collecting the judgment is the most important part.

Reply by LKT/CA on 10/9/10 8:21pm
Msg #356107

An attorney told me that the jurisdiction (where to file the claim) is where the contract is performed. Doesn't matter where the hiring party is located. Is that correct or incorrect?

Even if a person sues and does not collect....staining the deadbeat's public record with a "judgment" can be just as satisfying, if not more satisfying than the money itself. I believe it is a mistake to just write off bad loan signing debt. If nothing more, mar the deadbeat's public record. I also believe it is the Notary's responsibility to contact to the Title company. At some point the TC will get sick and tired of Notary complaints and will refrain from working with deadbeat SSs.

Reply by Hugh Nations Signing Agents of Austin on 10/9/10 9:21pm
Msg #356110

***An attorney told me that the jurisdiction (where to file the claim) is where the contract is performed. Is that correct?***

I think there has to be sufficient activity to establish that a company is doing business in the jurisdiction. If, for example, you do a closing for a Virginia couple who just happen to be vacationing in California, and that's the only contact the hiring party has with California, I suspect that would not be adequate.

However, you fail to get paid for four closings by an out-of-state company, I suspect the fact that they owe you for four transactions is alone prima facie evidence they are doing business in California.

Reply by Glenn Strickler on 10/9/10 10:11pm
Msg #356114

Thanks for the info, Hugh .... Also you can call collection agencies from the same state that the non-paying company is in. If they have not paid you, they have not paid others. In some cases, they can piggy-back your claim with others. But they do keep a large percentage of your claim. But some is better than none.