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  1. #1
    drmoocow is offline Junior Member
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    Sep 2004
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    Can I sue a LLC? Business to Business issue:

    What is the name of your state (only U.S. law)? Georgia

    Short story: Customer gives us two checks, one day after another. Both check bounces because of insufficient funds. The customer had every intent to fraud. I wrote the customer a bad check letter demanding payment within 10 days and contacted the customer. The customer says to my face when I went to his business:

    "Haha, you're screwed. My company is a LLC so you can't touch me and I'm not going to pay you. Now get out of my business."

    The total amount is around $4000.

    I spoke to other similar businesses and they have also been a victim of check fraud from this person.

    So, am I able to sue the check writer (who owns the LLC)

    Thanks
  2. #2
    dcatz is offline Senior Member
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    Oct 2005
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    So, am I able to sue the check writer (who owns the LLC)

    Let’s just save time by going through some of the expected Q & A.

    Q. Can you sue the check writer directly?
    A. No, at least not immediately. The check writer is protected by the corporate shell. You sue the LLC.

    Q. If not immediately, can you ever sue the check writer personally?
    A. Yes, but you must first “pierce the veil” and establish that the shell and the individual (who is designated as a “manager”) are synonymous. That isn’t easy or inexpensive and success is not guaranteed. Also, you’d need legal assistance to try.

    Q. Does that mean you can’t collect from a LLC?
    A. Not at all, but it can be harder. Beyond that, you don’t give enough information abut the business to speculate on enforcement options, even if you were limited only to the LLC. Possible options are seizing and selling corporate assets or even the company or forcing an involuntary bankruptcy. Circumstances may allow less aggressive tactics.

    Look, LLCs were intended to afford many protections of the traditional corporate form. They weren’t intended to create shields for check fraud. You got stung and others got stung. Your LLC is possibly a one-man-band and your check writer is possibly general manager and the only manager (if there are other members, normally only one will have general authority to manage). All the businesses that were stung could assign their legal rights to a single entity. Maybe the $4K becomes $20K and a judgment is that much more potent. All those who were stung participate in the cost of a civil action and/or an effort to pierce the veil and in the costs of judgment enforcement.

    As an alternative, maybe you all join to file criminal complaints. Your situation alone is a felony. Maybe a business bounces a check on another sometime and that happens, but a District Attorney faced with multiple complaints and the same story about the same company is not going think that’s just an “oops”. Let the DA do the work to pierce the veil for you. It’s cheaper and there are more resources. Your state law provides for restitution and, for a check over $100 but less than $300, a fine of $1,000 or imprisonment for 12 months or both. Get together and make noise.
  3. #3
    johnacastro is offline Junior Member
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    Sep 2008
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    Dallas, TX
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    File a Small Claims

    Sometimes lawyers can complicate things more than they should be.

    Look, file a small claims and list both the individuals name and the LLC as the Defendants.

    Also, file a Motion for Substituted Service of Process to avoid the Constable fee asssociated the delivery of the Court Citation to the Defendant.

    Let's see how sneaky this guy thinks he is in Court. Let's see him explain to the Court why he laughed at you. This will get him officially on the record and possibly force him to commit perjury, which you can them definitely nail him on.
  4. #4
    dcatz is offline Senior Member
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    Sometimes lawyers can complicate things more than they should be . . . file a small claims and list both the individuals name and the LLC as the Defendants.
    And a pro se often doesn’t do his homework but still wonders why he lost.

    1) There is no SC Court in GA. Cases are heard in Magistrate Court (see GA Code Annotated, Title 15, Ch. 10)
    2) GA Civil Practice Act is inapplicable. Therefore, no court reporters unless you hire and bring your own and no “official record”.
    3) Proof of perjury undermines the credibility of the witness. That gets you nowhere in your collection action and litigants “mis-remember” regularly in SC. He is not going to be criminally charged with perjury for testimony in SC and there is nothing to “nail” him for. On the other hand, proceedings are initiated by [the OP] filing a verified statement of claim. Are you prepared to swear that he issued the checks, when they were on the LLC’s account?
    4) You file a claim against the LLC and the authorized manager. Checks were issued on the account of the LLC and signed by the party authorized to sign on that account. Other than that, you have no basis to allege personal liability as yet. It’s like a corporation issuing a bad check and you suing the corporation and the CFO, whose stamped signature appears on the check. So the first thing that happens is the Court asks why you named him or he asks for personal dismissal. Either way, the Court dismisses him and assesses his costs of response against you. Good plan.
  5. #5
    drmoocow is offline Junior Member
    Join Date
    Sep 2004
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    11
    Hello All,

    Thank you so much for your help! I am going to the magistrate's court on Monday!

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