Small Claims and Out of State Customer

What is the name of your state? FL

We have a customer in NY who signed a $2500 contract with us for advertising services. Our contract includes provisions that any claims would fall under FL jurisdiction and a personal guarantee. The contract and the provisions were originally written by our attorney.

The customer paid us with his American Express card at the onset. Once we completed the services, he went back to American Express and said he was not satisfied with the results. We responded to the dispute letter from Amex, but they debited us anyway.

Now we are trying to figure out the next steps. We can file in FL small claims court based on our contract. If he doesn't show up, we can get a default judgment. But NY courts won't accept an out of state default judgment and say we would need to refile in NY small claims court in order to proceed with any collections in NY.

Does this mean we shouldn't waste our time and money filing in FL and just file directly in NY?

Other important facts: the only information we have about the customer is his home address, business address and registered agent address along with phone numbers and email addresses. We do not have any banking information about him or his business or any other information about his assets. It seems the only way we could collect is to get a wage garnishment.

Is there anything I've overlooked?

Thanks for reading thru this long winded set of questions. I appreciate any sage advice offered.

Does this mean we shouldn't waste our time and money filing in FL and just file directly in NY?

On the information posted, I’d say yes to filing in NY.

Your attorney did the right thing in including the contract provision but, if you’re doing business across state lines for comparatively small amounts (i.e. within SC court limits), this is always going to be a problem. It’s a cost-benefit decision. Do you avail yourself of the convenience of suing at “home” and always have the additional expense and delay of domesticating your judgment elsewhere, in order to enforce, or do you just start “elsewhere”?

As you’ve been told, you’d have to domesticate your FL judgment in NY. Effectively, that’s a new filing (use the “search” function for the numerous questions about domestication) with all the attendant expenses. I’m not NY and don’t know what your filing and service fees would be times two (for FL and NY), but I suspect that it would favor filing in NY to start. You not only save money, you save time, and time is a critical factor in successful collections.

The other issue that you raise is about enforcement, and you seem to jump to a conclusion that may be unduly limited. If there is a registered agent, it suggests that the client is a corporation but, without any other information, it’s difficult to give you suggestions in that area. If “he” is the owner, a wage garnishment would be an option but may not be effective if ignored. Presumably, you know the nature of the business, and you would also be looking for a judgment against the enterprise. You might want to investigate whether you could get an assignment order in NY and whether it would be useful for the type of business involved. There are other ways to develop asset data but, without knowing more about the entity and the individual, that’s getting ahead of things pre-judgment.