Am I at fault?

[bond316]

What is the name of your state? Indiana

During the summer (May) I dealt with a guy that sold me electronics in NY (I was there visiting my parents). Throughout the summer we built up more of a friendship while trying to do business. So in June he asks me if he can use my paypal account to accept a payment from a woman for a deposit on 100 ipods. He said she would send $2500 into the account. So I trusted him and said okay. He then got the money but never gave her any ipods. So she went after him with detectives and got a warrant for his arrest. They both met and came up with a payment plan, he would pay her a certain amount per month until the balance was depleted. He defaulted on those payments. She cant find him and I cant get into contact with him...so she came after me. I got a summons that says Failure to Provide Goods for $2500. She is trying to serve me in NY but I live in IN. The transaction happened through paypal and no address is listed except hers. I have a receipt from him and emails from her, telling me about the situation between him and her. Does the court even have jurisdiction? What can I do?

 

[divgradcurl]

What is the name of your state? Indiana

During the summer (May) I dealt with a guy that sold me electronics in NY (I was there visiting my parents). Throughout the summer we built up more of a friendship while trying to do business. So in June he asks me if he can use my paypal account to accept a payment from a woman for a deposit on 100 ipods. He said she would send $2500 into the account. So I trusted him and said okay. He then got the money but never gave her any ipods. So she went after him with detectives and got a warrant for his arrest. They both met and came up with a payment plan, he would pay her a certain amount per month until the balance was depleted. He defaulted on those payments. She cant find him and I cant get into contact with him...so she came after me. I got a summons that says Failure to Provide Goods for $2500. She is trying to serve me in NY but I live in IN. The transaction happened through paypal and no address is listed except hers. I have a receipt from him and emails from her, telling me about the situation between him and her. Does the court even have jurisdiction? What can I do?

Pay the $2500, and then try and sue your former business partner. Whether you knew it at the time or not, when you go into business with someone -- even very informally like you apparently did here -- you have legally created a partnership, and in such a business partnership, each partner is liable for the actions of the other partner. So you are liable for the money whether your partner defaulted or not. You may have a cause of action to get reimbursed for what you paid out to the woman, but she doesn't have to try and locate this partner of yours -- she can go after you for the money. In fact, it makes more sense for her to go after you, since you were the one that recevied the money.

If your "partnership" was formed while you were in NY, NY may be the proper venue for this cause of action. Jurisdiction is trickier -- NY courts can't MAKE you come to NY for trial -- but there are other options. For instance, she could simply wait until you come back to NY, and serve you when you come back into the state. The statute of limitations does not run while you are out of state, so it's not like you can wait out the statute of limitations by avoiding NY. The other thing is if NY courts allow for service by publication, or other methods of service, she could perfect service even without you being in the state, and then potentially get a default judgment against you. It may be hard for her to collect if you are not in NY or own any property in NY, but it can screw up your credit big time even if you are not in NY.

Your best bet is to face the music, figure out how to get her the $2500 back, then try and figure out how to get your money back from your ex-partner.

 

[Ohreallynow?]

Good advice from divgradcurl

Just curious, you didn't meet this partner on the corner playing [URL="http://www.howtodotricks.com/colormonte.jpg"]THIS GAME?[/URL]

 

[bond316]

The thing is that we can not get into contact with him, he might be in jail or he might be out of the country. I never met the woman or spoke to her before hand. Would it have made any difference if I was in Indiana when she sent the money? I dont have the money to pay her, im a college student and broke as it is...

I had nothing to do with the transaction besides her sending the money to my paypal account though...

I cant say anything about fraud or innocence?

Thanks for the help

 

[divgradcurl]

The thing is that we can not get into contact with him, he might be in jail or he might be out of the country. I never met the woman or spoke to her before hand. Would it have made any difference if I was in Indiana when she sent the money? I dont have the money to pay her, im a college student and broke as it is...

Well, that's not her problem, it's yours. She gave your business money -- your business didn't deliver, so your business is responsible for giving her money back.

If she sues you in NY, you can accept service (let your parents accept if for you, or let her serve you in Indiana, or whatever), and then file a motion to dismiss based on lack of jurisdiction. If the court agrees, they'll throw out the case -- of course, if they don't, you'll either have to travel to NY to defend yourself or accept a default judgment.

If the case does get thrown out, then it will be up to her to refile in Indiana and sue you in Indiana -- which she can do it she wants to. Whether or not it will be worth it to her, who knows.

If she does get a default judgment in NY, like I said, that can screw up your credit for a long time. She could also attempt to get the judgment "domesticated" into Indiana, in which case she could enforce the judgment directly, either through garnishing wages or other methods.

In any event, you don't really have much of a defense, from what you have written -- you owe her the money. The fact that you might not be able to find the other guy, or that you don't have the money to pay, really isn't going to be a defense. Maybe you could offer to pay her in installments or something.

 

[divgradcurl]

I had nothing to do with the transaction besides her sending the money to my paypal account though...

By accepting her money, even if you weren't planning on forming a business with this other guy, from her perspective, you guys are in it together. She's entitled to get her money back, so she can go after either one of you, or both. It's not her problem to figure out what happened to the money once you guys received it -- that's for you to hammer out amongst yourselves.

And receiving the money isn't just some incidental role in this debacle -- it's a key part of the whole transaction, so you were a key player in this situation.

I cant say anything about fraud or innocence?

You can, but so what? The judge is going to see that she deposited some money in YOUR account expecting to receive an order of goods. She never received the goods, so now she wants her money back. The fact that YOU gave the money to someone else is irrelevant -- she gave the money to YOU, she received nothing, so now she wants YOU to give her the money back.

Again, YOU will have a right to seek repayment from your former business partner, if you can find him. But that's YOUR problem, not hers.

It's unfortunate, but you are not going to get out of this unscathed. Next time, before you leap to help someone out like this, consider all of the consequences first.

 

[bond316]

Will a default judgement hurt my credit right away? Even if i manage to pay her the money?

I dont have a job or own any property...

 

[acmb05]

Will a default judgement hurt my credit right away? Even if i manage to pay her the money?

I dont have a job or own any property...

Unless the lady herself reports it, not right away. The credit reporting agaencies do searches for judgements thru the courts every 3 months. When they do the search and your name comes up it will be put on your credit report. So depending on when the reporting agencies did theri last search you could possibly have up to 90 days before it shows up.

I personally dont think they should be allowed to do this. I think it should be up to the person who won the judgement whether they want to press it and report it. If they dont report it it should not go on your record. The problem is that once the debt is paid most people do not notify the reporting agencies that it was paid(unless you pay thru the court) and it can end up staying on as an unpaid debt for quite awhile.