What Is a Judgment Debtor Examination?

judgment debtor examinationIf you’re wondering what a judgment debtor examination is, then I’m guessing either you are trying to chase down money that is owed to you, or perhaps you owe someone money and you already have a judgment against you.

For your sake, I hope it’s the former.  (If you are the debtor, you might want to check out What to Do If You Get Sued: Your 8 Step Plan.)

In either case, a judgment debtor examination is basically a tool which allows a creditor to ask a debtor questions to help them collect on their judgment. At a judgment debtor exam, the judgment creditor, or their attorney, is allowed to ask the judgment debtor questions about their finances under the court’s supervision while the debtor is under oath.

 

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Top 10 Rules for Finding the Right Small Business Lawyer for You

small business lawyerIf you are a small business owner, you probably need a small business lawyer on your speed dial. Or better yet in your iPhone.There are so many legal requirements of running a business these days that it’s not easy to keep track of them all. Although the internet has created new ways to save money off legal fees, we still live in a litigious society where legal fees are sometimes the cost of doing business.To assist you in deciding how to choose a small business lawyer, here are our Top 10 Rules for finding the right small business lawyer for you:

10.  Ask Trusted Friends and Colleagues for a Recommendation.

If you have friends who have a small business in the same industry, you should see who they use or have used. Even if this initial search doesn’t result in any good small business lawyer recommendations, you can call attorneys who are recommended to you but who practice in other areas and see if they have anyone to recommend.

9.  Ask About Legal Fees and Costs.

If you are a small business owner, then chances are cost is going to make a difference. Ask the lawyer what their hourly rate is and what billing increment they use – most hourly lawyers will use 1/10th of an hour increments.  If a lawyer works in a downtown high rise with a fancy lobby and 100 lawyers on their floor, you are going to pay more. If a lawyer has a small law office away from high-rent downtown properties, their rates will be lower but they may not have as much experience.

8.  Find Out About Alternative Billing Arrangement.

One popular trend is for small business lawyers to offer alternative billing arrangements, such as flat fees for discrete projects, or a monthly retainer fee for unlimited phone or email consultations. It can’t hurt to task any attorney you are interviewing if they do offer such alternative arrangements.

7. Check on Industry Groups and Affiliations.

You may want to contact relevant industry groups or associations and see if they have recommendations.  You may also want to find out if any attorneys you are interviewing belong to such industry groups, or if they regularly read journals, newsletters or blogs covering your industry.

6.  Contact Local Bar Associations.

Another option is to contact the local bar association, which may have an attorney referral service. Often you can call up the local bar and describe what kind of attorney you are looking for and they will give you a number of attorneys to call.  However, the local bar association may give you a number of attorneys to check out so you will definitely have to do further due diligence.

5.  Check the web.

There are numerous resources available online for attorney recommendations. You may try LinkedIn.com to see if there are any attorneys in your network or friends and colleagues’ networks. You may also check out attorney ratings at Avvo.com.  If you have any prospects at this point, you should also poke around on their firm’s website to learn more about them and how they can help you.

4.  Check out Attorney Blogs.

I included this “rule” in a separate category from the previous rule to emphasize how important, and potentially helpful, attorney blogs can be. Many attorneys have embraced blogging as a way to share their knowledge and find prospective clients.  If you need help with a very narrow issue, you may try a search using Google’s Blog search function and see if you uncover any blog postings from an attorney on that particular topic. At a minimum, if the attorney has a blog, you can read over a few posts to see what areas of law the attorney writes about and learn a little bit about how they think and analyze issues.

3.  During the Initial Interview, Ask a Lot of Questions.

Once you have finally gotten to the point of interviewing attorneys, you should come prepared with a list of questions to ask the attorney. You may want to ask how many similar matters they have handled, what was the result in those matters, which lawyer in the firm will be working on your case, and how they plan to keep you informed.Also, be aware that some attorneys charge for the initial consultation. You shouldn’t be offended by this, as it may mean the attorney’s time is in demand. Also, you will likely get valuable advice or recommendations even during the initial meeting so you will probably get your money’s worth. Many attorneys charge for an initial meeting as a way of avoiding prospective clients who try to get free advice during the initial meeting, with no intention of hiring the lawyer.Nevertheless, you may want to ask if the attorney will credit the initial meeting towards your bill if you become a client.

2. Negotiate Over the Legal Services Agreement.

You may also want to see if any of the aspects of the legal services agreement can be changed, such as lowering the retainer or reducing the hourly rate. If you have confidence in the attorney you met with but don’t want any other attorneys working on your case, you may also want to indicate in the agreement which attorneys will work on your case.

1.  Be Willing to Fire Your Old Attorney and Hire a New Attorney.

If at any point you are not happy with your attorney’s performance or their communication style (or lack thereof), you should be willing to walk away. You are in charge in the attorney-client relationship and you should not remain with a lawyer if you have lost confidence in him or her. However, be aware that if you need to hire a new lawyer it is going to cost more for that lawyer to come up to speed.

 

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Photo credit: Flickr/ Deputado Bruno Covas

How to Collect Debt in a Business Dispute Without Spending Big Bucks on Lawyers

Would you consider $10,000 a lot of money?  Most people do, but it also depends on your perspective.

A few years ago, a disagreement between two small businesses where $10,000 was at stake may not have gone anywhere. With profits up and business booming, businesses didn’t have the time and didn’t want to jeopardize existing business relationships to file an expensive lawsuit over the relatively “small” sum of $10,000.

Today, with the economy in its third year of recession or extremely slow growth, a lot of small businesses are not going to give up on $10,000 without a fight.

As a result, disputes between small businesses over relatively smaller sums have gone up as the economy has gone down. More of these disputes have ended up in court.

What do I mean by “smaller sums”?  It depends on where you are in the country.

In a medium-sized city where lawyers are *relatively* affordable, and your business is prospering, then $10,000 might be considered a smaller sum.  If you’re in a large city where attorneys may charge over $500per hour, then a smaller sum could be $50,000.

That is, it might not be worth the time, energy, and money required for a business to chase $50,000 if they have no guarantee of collecting.  They could easily spend as much as $25,000 or $30,000 in the process.

The problem with expensive legal fees is it makes disputes over the smaller sums nearly impossible to pursue. The amount at issue is too little for the parties to come to an agreement, but the amount is not large enough to justify spending a couple of hundred dollars per hour to pay a lawyer to file a lawsuit.

As a result, small business owners are left to their own devices.

If you have a business that is at odds with another business or individual over anywhere between $5,000 and $50,000 — again, depending on where you’re located — you may be stuck with this predicament.

Does it make sense to hire a lawyer to file a lawsuit, knowing that there’s a chance you will end up empty handed with additional legal bills, or is the amount at issue not large enough that it’s worth spending the extra money, time and energy pursuing the disputed claim in court?

And are there any other options?

It turns out there are other options. Let’s run through them.

OPTION #1: File a Small Claims Lawsuit On Your Own

The first option is to go after the debt yourself by filing a small claims suit. Thousands of people do it every year. The advantages are you save money by not hiring a lawyer and you get streamlined, quicker access to justice. The disadvantage is claims are limited to $7,500 in California and the small claims court — which often hears dozens of cases per day — may not devote adequate time to evaluating your claim.

Also, you cannot appeal a small claims court judgment if you were the plaintiff and you lost.

It turns out a lot can go wrong when you represent yourself, including your Defendant could file a cross-claim against you and you could end up with a judgment up to $7,500 against you.  Although I often think it’s still worth pursuing in spite of the risks, you should just be aware of the risks of representing yourself in court.

Although lawyers can’t appear in small claims court, you could hire a lawyer for a limited representation to advise and strategize with you before you show up for your small claims trial.

I would say if the debt is between $7,500 and $15,000, you may want to think about just demanding $7,500 so that you can fit under the jurisdictional limits of small claims court, save yourself the cost of hiring a lawyer and get a decision far quicker.

OPTION #2: Send a Demand Letter on Law Firm Stationery

If the previous option won’t work, then you might want to try hiring a lawyer for the express purpose of sending a threatening demand letter.  Your lawyer would draft up a demand letter complete with backup evidence such as contracts, bills, emails, etc.  He or she sends off the demand letter and then you wait.

You can also try the less expensive option of having your lawyer pick up the phone and call the person, but I have rarely seen that work.

OPTION #3: Sell the Debt to a Collection Agency

If your debt is significant enough, you may be able to sell it off to a collection agency. Although you would only get a small amount for selling the right to pursue the debt, at least you would have some money in your pocket, compared to pursuing the debt yourself, in which case there are no guarantees.

OPTION #4: See If You Can Hire An Attorney on Contingency, Flat Fee, or “Capped” Fee

Finally, you can see if you can find an attorney who will be willing to take the representation on a non-hourly, alternative fee arrangement. The most common of these types of arrangements are contingency, flat fee, or “capped” fee, or some hybrid of the three.

If the amount of the debt is significant enough, and the attorney thinks there is a good chance of recovering something, then you may have a good chance with this approach.

Of course, most lawyers won’t take on these types of arrangements unless they’re (A) desperate, or (B) fairly certain they have a good chance of recovering something.  Lawyers, like most people, don’t like working for free. So they’re probably only going to take your case if they think it has merit and there’s a good chance of recovering (i.e. if the Defendant owns property or has a stable job).

One advantage to this approach is it limits your costs and your lawyer may be more invested because it is in their best interests to recovery some amount, compared to an hourly-fee lawyer who gets paid whether there is success or not.

One disadvantage is you may give up a big chunk of the potential recovery (i.e. 33-40% in case of contingency) and you may have trouble locating a competent lawyer who is willing to take on the representation using an alternative fee arrangement.

Unfortunately, there is no magic wand that we can wave to make your money come back. However, with a little luck and some creativity, you may have a decent chance of seeing some of those funds again.

Do you have any better suggestions for techniques to get money back from a business dispute?  Leave suggestions and stories in the comments below.

Like this entry? Sign up to receive the latest updates via RSS feed or email. Or check out the “Best of” California Law Report.

 

John Corcoran is an attorney with Plastiras & Terrizzi in San Rafael, California (Marin County).  He advises clients about real estate/land use, general civil litigation, and small business matters.  He can be reached at             (415) 250-8131       or [email protected]

 

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Photo credit: Flickr/Magharebia


What to Do If You Get Sued: Your 8 Step Plan

“You’ve been served.”

 

Those three words — indicating you’ve been served with a lawsuit — will send a chill down the spine of just about anybody.
If this has recently happened to you, first of all, I’m very sorry. Getting served with a lawsuit can be unnerving and seem very foreign. If you haven’t been sued before, you are probably wondering what you should do first.

The truth is, once you get advice and understand the basic steps and phases of a lawsuit, the actual process of being involved in litigation will become much less foreign.

If you have been sued, you should move swiftly to get your affairs in order.  What follows is a list of 7 specific steps you should take immediately after getting sued.

1.  Act Quickly.

If you’ve just been sued, you need to act quickly.  Now is not the time for delay. Every active lawsuit has strict deadlines and severe consequences for missing those deadlines.

2.  Find Out What Deadlines Apply.

When you begin interviewing attorneys (see Step #4 below), you should immediately ask what deadlines apply so that you know how much time you have before you need to make a decision. In most cases, you will need to file an answer or responsive document to the summons and complaint in a matter of days.

3.  Gather All Your Documents.

The next step is to compile all of your relevant documents, letters, emails, contracts, bills, photographs, and any other evidence which has anything to do with the dispute which is at the heart of the lawsuit. If you have a chain of emails between you and the person suing you, then you should save both print and electronic copies of all of these records.

4.  Begin Interviewing Attorneys to Represent You.

You should immediately ask friends, family, and trusted advisors for recommendations of an attorney to represent you. The State Bar of California also publishes a pamphlet titled “How Can I Find and Hire the Right Lawyer?” Check out the websites and/or blogs of any recommended attorneys and make sure they practice the area of law relevant to your lawsuit. Bring all of your documents you gathered in step #3 to your initial meeting.  Even if you don’t have the money to hire a lawyer, you should speak with a couple of attorneys because they may be able to work out a creative solution so that they can be paid and you can have legal representation. If there is an attorney’s fees provision in an applicable contract or statute, then you may be able to get an attorney to represent you for free, because their attorney’s fees would be repaid if you prevail.

5.  Get Access to Money.

It’s no secret that litigation is very expensive. If you have money that is tied up in CDs or mutual funds, you may need to call your financial advisor or bank to gain access to those funds. You may also need to borrow money from an equity line, family, or a retirement fund. Your attorney can advise you as to how much they think a vigorous defense will cost.

6.  Think About Settlement and/or Mediation.

Before you get too far into the case, you should think about settlement, whether through formal mediation or informal discussion. There is nothing wrong with calling up the person who sued you and seeing if you can work out your dispute with an out of court settlement. Of course, most disputes end up in court because this option didn’t work, but it’s also never too late.

Before you call the plaintiff however, talk this option over with your attorney. Even if you only pay the attorney for a few hours of their time, they may give you a negotiation strategy which could save you thousands on the settlement of the claim.

7.  Discuss Countersuit with Your Attorney.

If you have claims against the person who sued you, then you may want to file a countersuit against the person who sued you. There can be strategic advantages to filing a countersuit, although any advantages must be weighed against the increased costs and the chances that a countersuit will deepen tensions between you and the plaintiff.

8. Get Ready for Trial.

The vast majority of cases settle before going to trial, but nevertheless you should prepare yourself as if you are going to go to trial. Be sure your calendar is free of major obligations and vacations in the months ahead so that you are available to assist your attorney in preparations, and ready to appear for trial if in fact you do go to trial.

Photo credit: Flickr/couragextoxlive

How to Negotiate Like a Lawyer

lawyer negotiationIt’s not difficult to negotiate like a lawyer, if you prepare and educate yourself ahead of time.

The reason people hire lawyers to negotiate on their behalf (in addition to their legal training) is because lawyers are good at preparing, good at analyzing relative strengths and weaknesses of the negotiating parties, and go into every negotiation with a plan.

In fact, non-lawyers such as paralegals can negotiate just as well as a lawyer with the right background, experience and training.

The next time you need to ask for a raise at work, want to negotiate to buy an item at a flea market, or even have an argument with a friend or coworker, try out the following seven tips which will help you negotiate like a lawyer:

1) Prepare.  Then prepare some more.

If you are going into a negotiation over a new car, look up what your desired car is selling for at other nearby dealerships.

If you are going to negotiate a raise, then find out what others in your industry are being paid. You should also have a clear understanding of any laws or rules which are going to be relevant to the negotiation, because these will determine the parties respective bargaining leverage.

Attorneys also commonly go into a negotiation with a list of arguments they are going to use and rebuttals to the other side’s arguments.

2) Identify Your Bottom Line.

Before going into the negotiation, you should identify what you want and how much you want to pay. Ask yourself: what is your cut off point after which you would walk away?

Identify a higher end and a lower end which will define the parameters of your negotiation.

You should also identify creative compromises which can help seal the deal, such as creative payment plans or additional “perks” which can be made part of the final agreement.

3) Start Off by Focusing on Your Agreements.

Start off the negotiation by identifying all the areas where you and the opposing party agree, so that you can eliminate potential areas for dispute.

During this time you can also establish rapport and build good will so that the other side will want to sell to you.

You should work to establish a reputation for being reasonable and likeable, so that the other side will be willing to do a deal with you, even if they don’t get exactly the price they want.

4) Never “bid” first.

You should always wait for the other side to bid. If you are at a garage sale, ask what the seller’s “best price” is. While some people argue that it helps to make the first offer when you are negotiating salary, if you do so, you should be aware that you risk underbidding what the employer would be willing to pay.

Even if you think there is a certain common “market price” for the good or item, the seller or buyer on the other side of the table may not have the same understanding.

5) Ask for More Than You Would Accept.

If your goal is to sell a used car for $15,000, offer it for sale for $20,000. If a company is being sued for $30,000 for a breach of contract, and there is a good chance the company is at least partly liable for the breach, they should start any settlement offer low.

If they are willing to settle for $22,000 and no more, then they could start by offering $13,000 or $14,000, with the goal of settling for around $22,000.

6) Stay Calm and Allow for Give and Take.

I had a mediation professor during law school who described the mediation process as like watching two dancers doing a Latin American dance such as the tango or the mambo.

The point was a mediation is a delicate dance which allows for a great amount of give and take between the two parties.

There should be a balance throughout the negotiation – no one side should talk to much, and no one side should do too much of the “heavy lifting” trying to make a deal.

Trying too hard to make a deal happen can convey an air of desperation. Each side should give a little and each side should take a little.

7) Always Be Willing to Walk Away.

If the negotiation becomes bogged down and it doesn’t appear the other side will cave in, then one good negotiation tactic is to pick up your coat and things and start walking away.

Either you will avoid making a bad deal at a price you were unwilling to accept, or, frequently you will get a better deal later.

If you have already put in a good amount of time trying to reach a settlement, then it is common that one party will try again a few days later. Then you will definitely have the upper hand because you’ve shown a willingness to walk away.

No matter what kind of negotiation you are going into, make sure to keep your wits about you and remember that almost every negotiation involves a commodity which has its price. If you can’t forge an agreement, it may be better to end the negotiation and try again another day.

Like this entry? Sign up to receive the latest updates via RSS feed or email. Or check out the “Best of” California Law Report.

John Corcoran is an attorney with Plastiras & Terrizzi in San Rafael, California (Marin County).  He advises clients about various real estate and land use matters.  He can be reached at (415) 250-8131 or [email protected]

 

 

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Photo credit: Flickr/ Deputado Bruno Covas

How to Appeal a Small Claims Court Judgment

California small claims court is designed to make it easier for parties who have a dispute with another party to go to court and get a judicial ruling regarding their dispute.

After the judgment however, sometimes the parties are not satisfied by the result or they feel they did not get a fair hearing. If a party to a small claims court action wants to appeal, they have a right to appeal to the Superior court and to have a trial de novo, which means a new hearing.

However, there are a number of limitations which apply. A defendant may appeal if the small claims court’s judgment is against the defendant. However, a plaintiff who loses on their claim cannot appeal on that claim. The reason for this is when a plaintiff files a claim in small claims court, they agree to accept the result issued by the court.

The same rule applies for a defendant who was sued in small claims and then filed a counter-claim. If the court issues a judgment denying defendant relief on that claim, the defendant cannot appeal that decision.

However, if a plaintiff filed a small claims court action, the defendant filed a cross-claim, and then the small claims court issued a judgment in favor of defendant on defendant’s cross-claim, then the plaintiff could appeal that ruling.  Clear as mud? Probably. The general idea is if you file a claim in small claims court, you are agreeing that you will be bound by the ruling; however if you are sued in small claims court and get a ruling against you, then you should have some right to a second opinion on appeal.

Just like in small claims court, there is no right to jury during the appeal hearing. Another rule that applies to the appeal hearing is a different judge must hear the appeal. The same judge cannot rule on the appeal.

There are also risks to filing an appeal which any party should take into consideration before deciding to appeal. If you file an appeal after a judgment, and you lose, the prevailing party could file a motion for attorney’s fees and costs. If the court finds that the appeal was “without substantial merit” and not in good faith, but was intended to harass or delay, then the court may award up to $1,000 for reimbursement of attorney fees, plus up to $1,000 for lost earnings and transportation expenses.

Finally, the judgment of the superior court is the last word of the courts, and cannot be appealed. There is a split of authority however on whether a losing party at the court of appeal can file a petition for rehearing. And a court of appeal may entertain a petition for extraordinary writ, if there is a need for statewide precedent on an issue. However, this would be extremely rare, as the vast majority of small claims court actions are not going to give rise to an issue that needs to be addressed by the court of appeal.

John Corcoran is an attorney with Plastiras & Terrizzi in San Rafael, California (Marin County).  He advises clients about various real estate and land use matters.  He can be reached at (415) 250-8131 or [email protected]

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